Posted March 30, 2020
After two weeks of pleas from residential tenants and small businesses worried about paying their rent on April 1, some landlords have agreed to extend some help.
Several of Canada’s biggest landlords say they’re committed to working with tenants who have lost their income due to the crisis, especially those in the hospitality industry, as many restaurants, entertainment venues and bars have been forced to close. But those without landlord support still want the government to intervene.
Nathan Hynes is one of many small-business owners across Canada asking the government to freeze rent for the hardest-hit. He has owned The Auld Spot Pub in Toronto’s Danforth neighbourhood for 16 years, and is in danger of seeing it close permanently.
Hynes said the restaurant industry is a month-to-month business, a “labour of love” with slim profit margins. Now, he and many of his peers will be unable to pay their rent on April 1 after losing two weeks of business.
“Everything just stopped on a dime,” he said.
Hynes is one of the lucky ones — his landlord has already said he won’t be evicted come April 1. But he doesn’t know how long that will last.
He said the loans and wage subsidies being offered aren’t enough, and that if the government doesn’t enforce rent freezes or provide other financial help, small businesses across Canada will close forever.
“This is really a brutal hanging out to dry of all small business, especially the hospitality business,” he said. “I just can’t believe it.”
Even without government intervention, some restaurant owners have received reprieves in the days leading up to April 1.
For example, First Capital REIT announced a $30-million program to help its qualifying small-business tenants defer some or all of their rent for the next two months. The company’s portfolio includes many restaurants.
“Small businesses play such an important role in the thriving neighbourhoods in which we invest,” said CEO Adam Paul in a statement. “Many of these businesses are also among the most impacted by the COVID-19 pandemic.”
However, Mark Kenney, CEO of Canadian Apartment Properties Real Estate Investment Trust, told Canadian Press that this is much more easily done by large companies. He’s worried about the roughly 80 per cent of landlords in Canada who are small-scale owners of units — they won’t have the same flexibility.
Meanwhile, a joint online petition by ACORN Canada, Leadnow, Change.org and several more organizations is calling for rent cancellation before April 1.
Kyle Meagher is the manager of a restaurant in Tofino, British Columbia. Ten days ago she laid off the business’s entire staff, including herself. She’s seeing the stress of both commercial and residential renters, and wants to see immediate action from the government.
Meagher signed the petition, which has gathered more than 840,000 signatures since it launched around a week ago. While some provinces will not allow landlords to evict tenants during the crisis, Meaghar wants to see rent and mortgage cancelled entirely.
“I don’t think incurring debt is a solution,” she said.
Leadnow senior campaigner Claire Gallagher said while some landlords — like Meagher’s — are taking it upon themselves to help their tenants, not all are in the financial position to do so.
“The solution at the moment is patchwork,” she said, referencing the amalgam of supports and announcements from the federal and provincial governments, as well as landlords. “We really need support for tenants right across the country.”
The Canadian Federation of Independent Businesses released a survey Monday of close to 10,000 businesses across the country that found a quarter of small businesses will not be able to pay their lease or mortgage in April because of the COVID-19 pandemic.
Hospitality businesses were indeed found to have been hit the hardest — 44 per cent said they could not meet their rent, according to the survey. Arts and recreation businesses have also been dealt a heavy blow, as have personal services such as nail salons.
In other words, the non-essential businesses that have been forced to close by the pandemic are the least likely to be able to pay their April rent, said Laura Jones, CFIB’s executive vice-president.
Jones said while the newly announced wage subsidy up to 75 per cent alleviates some of the stress on businesses, it doesn’t help with fixed costs like rent.
“If you’ve been ordered to close, the wage subsidy doesn’t help you,” she said.
The survey found only one in five businesses are fully open. Almost half are worried about having to close their business permanently, and the majority of small businesses want the government to make emergency money available to them to cover fixed costs like rent.
The CFIB is calling on provincial governments to provide substantial commercial property-tax relief during the crisis, and to create a fund providing up to $5,000 per month for three months for the hardest-hit businesses, such as small businesses at risk of closing permanently.
“What we’re really pushing governments for is to make sure that those businesses get the help they need,” said Jones.
The CFIB is also asking provincial governments to ensure commercial tenants aren’t evicted, and is calling upon the federal government to make $10,000 of its newly announced Canada Emergency Business Account is forgivable to cover fixed costs.
Jones said the CFIB is also encouraging all renters, leasers and landlords to work with each other — and for renters to pay what they can, even if it isn’t their full rent.
“I think what’s responsible and fair and reasonable is for everybody to do what they can,” she said.
Article by Rosa Saba for the Toronto Star