New COVID rent relief program won’t help struggling businesses until next month, group says

New COVID rent relief program won't help struggling businesses until next month, group says-Milenio Stadium-Canada
Many small businesses are having trouble meeting rent or mortgage payments due to the economic slump caused by the COVID-19 pandemic. (Evan Mitsui/CBC)


The federal government is prepared to offer small businesses rent and mortgage relief for October — but that money won’t actually get into the hands of business owners until November, says one prominent Canadian business group.

In the meantime, many small businesses are scrambling to make rent or mortgage payments in the midst of the economic slump caused by the COVID-19 pandemic.

“It’s really challenging. We’ve heard from businesses. They are putting it on their credit cards, they’re borrowing from friends and family, they’re going to the bank but they’re really uncomfortable taking on more debt,” said Laura Jones, executive vice-president of the Canadian Federation of Independent Business.

“There’s no question that it’s creating some additional stress for business owners.”

A long wait for a ‘better’ program

Last Friday, the federal government unveiled a revamped program to help small businesses cover rent costs during the pandemic. While the previous program depended on landlords applying for the small business rent relief, the new program is supposed to make it easier for businesses to obtain rent and mortgage relief by allowing them to apply directly to the Canada Revenue Agency.

Jones said the new program is “so much better” than its previous incarnation. But it needs new legislation to take effect and Parliament isn’t sitting this week. Even after MPs return on Oct. 19, it will take time for the bill to be debated — including any late amendments — and for it to pass through both the House of Commons and the Senate.

The CFIB has been told by government officials that applications for the program won’t open until November, Jones said. The previous incarnation of the program ended in September.

“That leaves people with both their October rent to worry about and also their November 1st rent to worry about,” said Jones.

Small Business Minister Mary Ng-Milenio Stadium-Canada
Small Business Minister Mary Ng says the new rent relief program will be backdated to October. (Sean Kilpatrick/The Canadian Press)

A spokesperson for Finance Minister Chrystia Freeland’s office said the government’s proposal ensures rent and mortgage support will be easy to access because it will go directly to small businesses — not through their landlords.

Officials did not respond to repeated questions from CBC News about the application process beginning in November. The only reference to a timeline in any of the comments from Freeland’s office was a commitment to “quickly introduce legislation”.

Small Business Minister Mary Ng also tried to offer assurances in an interview with CBC News Power & Politics last week.

“Businesses will be getting rent relief for the month of October,” Ng said, adding relief would be backdated.

“We will do it as soon as we possibly can,” she said. The minister did not answer a question about whether the government should recall the House of Commons to speed up the process.

‘Of course it took too long’

Jones said her members are pleased the new program will offer a “sliding scale” of rent relief. Businesses that have seen at least a 70 per cent drop in revenues can get up to 65 per cent of their rent covered under the program.

Businesses with more modest losses will still be eligible for some relief, although it won’t be quite as much; that subsidy level hasn’t been confirmed yet.

Businesses will also be eligible for even more help if they’re been temporarily shut down by a public health order. Those businesses could receive up to 90 per cent of their rent or mortgage costs from the government.

While Jones said the new program is a substantial improvement over the old one, the government is taking far too long to implement it.

“Of course it took too long,” she said. “We’re seven months into the crisis and some businesses still don’t have rent relief. That’s too long.”

Businesses want aid to be retroactive

One key reason for introducing a new program is the fact that so many businesses were left out of the old one.

One estimate by the CFIB suggested 47 per cent of small business tenants who needed rent assistance couldn’t get it through the original program. The program was given a $3 billion budget back in April; only about $1.8 billion had been spent as of early October, according to the government’s own figures.

Covid-19-Milenio Stadium-Canada
The sign on a store window indicates it is closed due to the pandemic on April 22, 2020 in Ottawa. (Adrian Wyld/The Canadian Press)

Some of the businesses that have had to go months without rent assistance would like to see the government offer retroactive subsidies for the period prior to October.

“We paid rent for the past six months. That expense never went away for a lot of small businesses,” said Jeff Clarke, president of Murdoch Travel in Barrie, Ont.

Clarke said businesses had no control over whether their landlords opted to participate in the previous program and some had to take out personal loans to pay their bills.

He implored the government to offer retroactive assistance to cover the months when he and other businesspeople were missing out.

“You have a program. You have the money budgeted for it,” he said. “Let’s use that.”

Freeland indicated last week that retroactivity beyond October isn’t in the cards. She described the new rent relief as a “going forward program” meant to keep the businesses operating today viable, and to help them through the second wave.

“”It seems sensible to us to be looking ahead and to what businesses are doing and how they are operating in the future,” Freeland said.


Redes Sociais - Comentários


Artigos relacionados

Back to top button


O Facebook/Instagram bloqueou os orgão de comunicação social no Canadá.

Quer receber a edição semanal e as newsletters editoriais no seu e-mail?


Mais próximo. Mais dinâmico. Mais atual.
O mesmo de sempre, mas melhor!