VICTORIA -- Prime Minister Justin Trudeau announced details Friday of the federal government's promised rental assistance program for businesses.
First unveiled last week, the Canada Emergency Commercial Rent Assistance program will lower rent by up to 75 per cent for eligible small businesses that have been impacted by COVID-19. The program is meant to help small businesses cover their rents for April, May, and June.
"This is an event that put us into a deep freeze, put us into hibernation as it were, and everyone had to stop and hold while we let this wave of COVID pass through," said Trudeau. "We know at the end of this people will need to travel for work, for pleasure. People will need to go to restaurants, people will need to become tourists again… That is our focus on trying to get through this moment of hibernation.”
With rent for May due next week, news of the subsidy is welcome relief. Although businesses in Greater Victoria don't have the cash in hand yet, it is a light at the end of a very dark tunnel that has seen closures due to the COVID-19 pandemic.
"April 1st was a big cliff for a lot of small businesses and May first was going to be another big cliff," says Greater Victoria Chamber of Commerce CEO Catherine Holt. "The fact that they know they can look forward to this – they don't have it in hand, but they can look forward to a substantial subsidy – is a life-support system for small business to continue."
The B.C. government has agreed to share up to 25 per cent of the total cost and facilitate the implementation of the program.
Businesses renting their spaces will still be required to pay 25 per cent of their monthly rent; the property owner will have to pay 25 per cent, and the federal government and provinces will cost-share the remaining 50 per cent.
"After wages, rent is the biggest fixed cost that most businesses have," says Holt. "We already have a 75 per cent wage subsidy from the federal government so that's a big piece of the puzzle for a lot of small businesses. Rent is the second-biggest cost for most of them so this will be the other big expense that they need help with in order to survive."
According to a release from the federal government, the program includes a moratorium on evictions and a “rent forgiveness agreement.” The specifics of the rent subsidy are still to be worked out, and landlords are being urged to be flexible and work with their small business tenants in the meantime.
"It's a substantial subsidy," says Holt. "There are businesses in every kind of circumstance now so it will matter to a lot of businesses and there are a lot of businesses that will still be in difficulty."
The Canada Mortgage and Housing Corporation will administer the program, which is set to be in place by the middle of May.
Commercial property owners are being asked lower rents for their tenants now and be paid retroactively for April and May. The government urges commercial property owners to participate in the rent subsidy program because if they don't, they run the risk of seeing their tenants fold leaving empty store fronts when the economy restarts.
