Half of Canada’s small businesses aren’t able to pay June’s rent without further help from the government, according to a new survey by the Canadian Federation of Independent Business (CFIB).
And more than half (55%) say rent relief could make the difference between their business surviving COVID-19 or having to shut down.
On April 24, Prime Minister Justin Trudeau announced the Canada Emergency Commercial Rent Assistance (CECRA), a rent relief program to help businesses who are struggling to pay their landlords.
Businesses paying less than $50,000 per month in rent and have temporarily closed or suffered a 70% drop in pre-coronavirus revenues, as well as non-profit organizations, are eligible for the assistance program.
The CFIB is asking for more support for rent outside of the CECRA.
“We’ve been asking for rent relief since March. Even when CECRA applications become available we know that program will leave businesses without the help they desperately need. The closer we get to June 1, the more stressful things are getting and the more business failures we will see. We’re begging governments to move quickly to create additional help outside of CECRA,” said Laura Jones, CFIB’s executive vice president, in a statement.
This week, Trudeau announced the expansion of the eligibility of the Canada Emergency Business Account (CEBA) to include many owner-operated small businesses.
“If you are the sole owner-operator of a business, if your business relies on contractors, or if you have a family-owned business and you play employees through dividends, you will now qualify,” said Trudeau during his announcement on the small business loan.
But Jones said this expansion needs to be implemented soon.
“Expanding the Canada Emergency Business Account to cover many more businesses is a great start and it’s urgent this be implemented in time for June 1. We would now like to see government increase the forgivable portion of CEBA which would go a long way to cover the CECRA shortfall,” she said.
During its survey, the CFIB found that 67% agree that more CEBA money should be forgivable (it is currently at 25%), and 65% of small businesses say governments have been too slow in providing rent relief.
Twenty-two percent fear eviction, with 50% not able to pay June’s rent without additional government support.
For the hospitality sector, the number is even higher with 70% reportedly unable to pay June’s rent.
CFIB is advocating for rent relief measures that include: making CECRA available as quickly as possible, allowing tenants to access the 50% relief when landlords don’t intend to apply for the program, and increasing eligibility (currently only tenants with a 70% revenue drop qualify), and increasing the amount of the CEBA loan and the forgivable portion of the loan.
They are also advocating for reduction of property taxes by a minimum of 25%; and protecting commercial tenants, otherwise in good standing with landlords, from eviction during the COVID-19 crisis.
“We described April 1 as scary and May 1 as feeling like a nightmare on Main Street. I don’t want to think about the words we’ll have to find to describe June 1 if governments can’t get their acts together to help businesses at this crucial time,” said Jones.
“Even with reopening, too many businesses will go down with no rent relief.”