NOW Toronto: Trudeau unveils 75 per cent commercial rent relief program, but some say the plan falls short

Posted April 27, 2020

Rent relief is coming in Ontario for small businesses and residential tenants and landlords – but not everyone is relieved.
 
Today, the federal government and provincial government announced they've partnered on a commercial rent relief program, 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. 
 
 
***
Article by Richard Trapunski for NOW Toronto
 
 

Sign up for ACORN's newsletter