More provinces have announced moratoriums on commercial rent evictions to help retailers and small businesses across the country survive the economic challenges of the COVID-19 pandemic but Ontario has still not ventured in that direction.
Saskatchewan and Alberta were the latest provinces to announce that initiative.
Jon Shell, co-founder of the grassroots coalition Save Small Business, supported by about 40,000 small businesses across Canada, said it has been obvious to many in the small business community since late March that moratoriums on commercial rent evictions are both critical for the recovery and a moral obligation.
“But provincial dithering has led to massive unnecessary stress for small business owners. Many simply gave up while Premiers waited to act. Some were evicted. No one should be proud of this — they should be embarrassed at how long it took them to take this logical action,” he said.
“In Ontario, Doug Ford continues to yell at landlords on TV instead of acting. He continues to abandon small business without explanation. Hopefully now that every other province is coming around he will finally choose to follow.
“We are hearing very positive signs from B.C. landlords looking at CECRA now that the evictions ban is in place. It’s incredibly important that rent relief is paired with an evictions moratorium and we are not at all surprised to see more uptake of the program in B.C. now that it’s in place.”
Karl Littler, Senior Vice President, Public Affairs at the Retail Council of Canada, said that although Ontario does not have one yet, the province is looking seriously at it.
“The reason a moratorium is helpful is by temporarily suspending the landlord’s ability to threaten — or actually conduct — an eviction while seeking to extract more rent than the tenant can afford to pay, not only will that lead to a more balanced position in negotiation on rent as between landlord and tenant but it is also likely to have landlords take a serious second look at the value of the 75 percent rental income under the CECRA (Canada Emergency Commercial Rent Assistance) program,” said Littler.
“A landlord who takes the position that it doesn't matter that my tenant has been shut by public order for weeks or months and has had little or no income from the property is being unrealistic — and in RCC's view . . . is subordinating both their tenants' and their own medium and long-term economic interests to the impulse to try a cash-grab by threatening eviction.”
On Friday, the Alberta government said many Alberta businesses are facing challenges paying their rent during the COVID-19 pandemic and will continue to feel the economic pressure even as their businesses reopen.
To help ease the economic pinch, the government is planning legislation to ensure commercial tenants will not face rent increases or be evicted for non-payment of rent due to the COVID-19 public health emergency. The new measures will help address shortfalls in the current Canada Emergency Commercial Rent Assistance (CECRA) program, and will give eligible business owners peace of mind as they reopen and help with the provincial economic recovery. Additional details are expected to be finalized during the current summer session, it said.
“It’s great that provinces are moving on commercial eviction protection. We’ve been asking for this since March and it’s a critical protection, particularly since landlords have all the power in the CECRA program. Having said that, rent relief is still a giant mess that needs a clean up. Commercial eviction protection is part of the clean up but other things need to happen too. CMHC (Canada Mortgage and Housing Corporation) needs to clean up their long wait times and complicated application process. And the federal government needs to make more money available directly to tenants through programs like CEBA (Canada Emergency Business Account),” said Laura Jones, executive vice-president of the Canadian Federation of Independent Business.
The Retail Council of Canada said it applauds the governments of Alberta and Saskatchewan for listening and responding to the needs of small and medium-sized retail businesses with the recent announcements of moratoriums on commercial tenant evictions.
Rent relief remains a priority issue for RCC as retailers of all sizes with severely-reduced revenues have no ability to pay their rent. With many landlords across the country choosing to ignore the involuntary nature of the Canada Emergency Commercial Rent Assistance (CECRA) program, store closures are inevitable, it said.
Over 225,000 Albertans and 68,000 Saskatchewanians worked in retail stores in 2019. That's why the Alberta and Saskatchewan moratoriums on commercial rent evictions are such important investments into the provinces' economic futures, added RCC.
“We are grateful to the Alberta and Saskatchewan governments for their swift action in helping Alberta's 17,500 and Saskatchewan's 4,900 retail businesses continue to survive and operate during these extraordinary times," said Diane Brisebois, President & CEO, Retail Council of Canada. "Eliminating the fear and threat of eviction over unpaid rent allows business to focus on their recovery. We encourage all provinces to follow suit in enacting a similar moratorium in the interests of retailers across the country.”
Michael Kehoe, Lead Ambassador in Canada for the New-York based International Council of Shopping Centers, said commercial landlords have the ability to enforce their ability to collect rent under their leases and many have been doing so during the COVID-19 lockdown period.
“In an era where tenant retention is critical to ensure that consumers have stores and restaurants to return to as the safety measures are being lifted the legal may be different from the practical,” said Kehoe, a veteran of more than 40 years in the industry and broker/owner of Fairfield Commercial Real Estate in Calgary.
“Everyone in the commercial real estate transactional chain should be working together at this critical time to avoid jeopardizing the survival of small business. I do not feel that provincial government mandated moratoriums on commercial evictions are practical. Our consumer real estate industry has been built on a free market economy and now is not the time for government mandated controls on tenant and landlord matters.
All parties must be working together with communication channels open at this critical time to ensure the survival of our favourite shopping and dining venues.”
The Alberta government also announced Friday that it is committing up to $200 million in funding for eligible businesses and non-profits to access up to $5,000 to offset a portion of their relaunch costs. These funds can be used for implementing measures to minimize the risk of virus transmission, (such as physical barriers, personal protective equipment, and disinfecting supplies), rent, employee wages or replacement of inventory. The program’s online application is expected to be available in the coming weeks. Program details, including eligibility, are being confirmed.
