>, while premier Doug Ford also said he'll ask the federal government to work
with the province on a residential rent relief deal.
In his daily conference this morning, prime minister Justin Trudeau announced
details of the Canada Emergency Commercial Rent Assistance (CECRA), which will
cover 75 per cent of rent relief for April, May and June for small businesses
impacted by the coronavirus pandemic.
The province, which gave the program its own acronym, the Ontario-Canada
Emergency Commercial Rent Assistance Program (OCECRA), is covering $241 million
of relief money of the total $900 million in aid in Ontario. In
an interview with Bloomberg, federal finance minister Bill Morneau said the overall cost to Ottawa is
estimated to be $2 billion. The announcement follows calls for greater aid from
small business owners across the city and country. Earlier this week,
the Broadview-Danforth BIA revealed the results of a COVID-19 impact survey of
small businesses across the city that found
61 per cent of small businesses could close within three months without relief. Another survey from Restaurants Canada found that
one out of every two independent restaurants is expected to close if things don't change during this pandemic. "This is not the home run small
business owners had wanted. It looked like a home run," says Toronto city
councillor Paula Fletcher, who led
a media conference on the plight of small businesses earlier this week, adding "but the umpire stopped us at first base." Here's how the program will
work. The Ontario and federal governments will provide 50 per cent of three
monthly rent payments in the form of forgivable loans to the property owner,
with the money split between the federal and provincial government.
The landlord will absorb the remaining 25 per cent and must agree to reduce
the eligible small business tenants' rent by at least 75 per cent for the
three months. The landlord must also agree not to evict the tenant while the
agreement is in place.
The small business tenant would then pay the remainder, up to 25 per cent.
Eligible businesses are those paying less than $50,000 per month in rent and
who have temporarily ceased operations or have experienced at least a 70 per
cent drop in pre-COVID-19 revenues. Fletcher says that for the people who have
campaigned relentlessly to save small businesses, the scope of the program is
not wide enough. "As well-intentioned as this might be, it doesn't seem to
cover small, main street businesses in the way that we hoped," she says. The
program, which will be administered by the Canada Mortgage and
Housing Corporation (CMHC), applies to businesses with mortgages. If a
property owner doesn't have one, they
can arrange other options directly with the CMHC that include applying funds against other debt
facilities or fixed cost payment obligations like utilities. Fletcher notes
the program is dependent on the landlord rather than funnelling bailout money
upwards through the tenant, and a number of commercial landlords from the BIAs
Fletcher has been talking tell her program won't work for them. For those who
are not eligible, there are still wage subsidies and loans, but those are only
effective if the business is still operational.
Ottawa says the CECRA will be operational by mid-May, but the exact timing
is still unclear, along with the details of the application process, how
quickly businesses can get set up and other aspects of eligibility. Many
small businesses are feeling a sense of urgency with rent due next Friday.
Fletcher says the plan is to regroup and see what might need to be fixed
with the program, then push for that.
Ontario puts residential rent relief on the agenda
With May 1 rapidly approaching, there have been similar campaigns to
enact residential rent relief measures. Ford added that he will "push
the federal government" on residential rent relief. "Today, I’ll ask the
prime minister to work with us on a program for residential tenants," he
said.
Fifteen per cent of Canadian tenants were unable to pay their rent in last month, and with job losses
mounting that number is just expected to go up. Eviction orders are
frozen in Ontario, but landlords are still able to send eviction
notices. The province advised renters to speak with their landlord to
negotiate a possible deferral or discount, but many "are getting
harassed or gouged with rent increases by their landlord," says
Alejandra Ruiz Vargas, a
Toronto ACORN (Association of Community Organizations for Reform Now) member. The
Federation of Metro Toronto Tenants' Associations (FMTA) has lead
a letter-writing campaign to get action from the province, while similar petitions and campaigns
have been started by renters' groups. The FTMA's Geordie Dent
says Ford's promise follows months of pressure from renters' groups with
little response. There have also been rumblings that the federal
government is also putting together a program, he says.
About 10 per cent of renters in Toronto didn't pay rent last month,
and that number will likely rise in May. CERB provides $2,000 to those
who have lost their job, but average rent in Toronto is now $2,250.
"There's an eviction ban right now, but what happens in
three-to-six months?" asks Dent. "If [the province] doesn’t have a
package available, we could have one of the largest sets of mass
evictions in Ontario we’ve ever seen." And that could exacerbate the
homelessness crisis and could also strangle the economy when the crisis
is over, with many renters in the city unable to spend.
The pandemic has brought pre-existing rental housing issues to the
forefront, and now they're too big to ignore. "If the government doesn't step in
now, it will be at their own peril," Dent says. In an email, Toronto
councillor Josh Matlow called on the premier to provide a clear strategy
that includes rent forgiveness for vulnerable tenants, a full ban on
eviction notices as well as orders and no rent increases. So what kind
of relief is coming? Renters in the city will be watching carefully to
find out.
https://nowtoronto.com/lifestyle/real-estate/commercial-rent-relief-plan-ontario/