A Burnaby tenant says the federal government’s rent relief program for small businesses is too narrow and leaves many businesses behind.
Antonio Simoes with Deer Lake Law Group rents an office at a City of Burnaby property at Deer Lake, and because the city has no mortgage on that property, the office is not eligible for the Canada Emergency Commercial Rent Assistance (CECRA) program.
The program, announced last week, is an agreement between commercial landlords and the federal government to co-fund a reduction of rent for small businesses by at least 75% for April, May and June. The government’s share comes in the form of a forgivable loan covering 50% of the business’s rent.
Simoes said he asked the property manager about getting in on the benefit after CECRA was announced.
“The property manager just responded and told me that the program is not available to the city because the city doesn't have its properties mortgaged,” he said.
Simoes said he reached out to city manager Lambert Chu and asked if the city would be offering rent relief to its commercial tenants, but he was turned down, as the city faces its own financial woes.
A parallel program will be announced for small businesses renting on properties without mortgages, according to the federal government’s website. But it’s still not clear what that will entail, and it doesn’t help businesses that might have been teetering on the edge ahead of the May 1 rent day.
The problem isn’t just for tenants of the city, said Simoes, who acknowledged that not everyone will be particularly sympathetic to the financial woes of lawyers. But it will also affect small mom-and-pop businesses.
“Some guy who’s owned a commercial property for 30 years no longer has a mortgage, and so his tenant doesn’t qualify for this kind of rent subsidy,” he said. “There are lots of people that fall through the cracks, and … I'm not the only business that has fallen through the cracks in that regard.”
It’s an issue both Peter Julian, MP for New Westminster-Burnaby, and Paul Holden, Burnaby Board of Trade president, say they’ve heard plenty about.
Holden said the board was pleased to hear about the rent assistance program, saying rent is typically the second-highest cost for small businesses, after salaries.
“However, as with any government program, the devil is in the details, and there are some challenges with this program that are going to limit how many businesses it can help and how quickly it can help them,” Holden said in an email statement.
He added, however, that the government has generally been open to suggestions on programs like CECRA.
Julian has been in the trenches on issues like CECRA, as a member of Parliament’s finance committee and as the NDP’s finance critic. He said his office’s phones have been ringing off the hook with issues similar to what Simoes is facing – and he said it’s a symptom of a larger problem.
While the federal government has introduced some of the largest benefit packages ever seen in Canada, Julian said they can be bogged down by being made too complex.
The restrictions on CECRA and on the small business wage subsidy – in which Julian notes a business that lost 29% of its revenue cannot apply, but one that has lost 30% can – are similar to the complexities around the Canada Emergency Response Benefit (CERB), an extension of employment insurance.
“The federal government is being very restrictive in each of these programs they're putting into place. They're basically finding the narrowest margin possible,” Julian said.
“For small businesses, it's the same problem. When you restrict it and you put in a whole series of conditions, what you end up doing is not providing the supports that are needed. That's not what other countries have done.”
Julian pointed to the wage subsidy, which he noted in many European countries was made more widely available to “freeze the economy in place” until physical distancing restrictions can be lifted.
“The goal is to make sure small businesses weather the storm and you can come out and start contributing to the local economy again,” Julian said.
