Ontario joined a growing list of provinces who have placed moratoriums on commercial rent evictions to help small businesses cope with the economic pummelling they’ve received due to the COVID-19 pandemic.
Premier Doug Ford, in a news conference to announce the launch of Stage 2 of the province’s relaunch strategy, said everyone is eager to get things back to normal “and no one wants to get the economy going and get people back to work more than I do.”
“We need to get people back to work. We need to get the economy going and to do this as quickly as possible. For many small business owners today’s announcement is good news because our small businesses are struggling right now and for them making rent is top of mind. That’s why we worked to get $900 million to help businesses with commercial rent relief,” said Ford.
He said commercial landlords have to be “fair and help out everyone, but we still heard about some landlords who just didn’t get the message. Well, I’m here for the little guy. That’s why I ordered legislation to ban commercial evictions for those who qualify for the commercial rent relief program. The ban would take effect for evictions on or after June 3 and last until August 31. Our small business owners are the backbone of our communities and now more than ever we all need to support them.”
Most regions in Ontario will be allowed on Friday to proceed to Stage 2 in the province’s relaunch during COVID.
“We are pleased to see Premier Ford making good on his commitment from a couple of weeks ago that if landlords wouldn’t step up on rent, he would step in,” said Karl Littler, Senior Vice President, Public Affairs at the Retail Council of Canada.
In a joint statement, Ryan Mallough and Julie Kwiecinski, both Directors of Provincial Affairs, Ontario, for the Canadian Federation of Independent Business, said the organization applauds the Ontario government’s announcement to finally put a temporary halt to commercial tenant evictions.
“CFIB has been calling for a commercial eviction ban for tenants in good standing since the beginning of the COVID-19 pandemic. We are relieved that no more struggling small businesses will find locks on their doors because their landlords are unwilling or unable to participate in the Canada Emergency Commercial Rent Assistance (CECRA) program,” said the statement.
“We will continue to urge the provincial and federal governments to make much-needed improvements to CECRA to either make it easier for landlords to apply, or to pass the financial relief directly to small business tenants. CFIB also welcomes the details provided today on Stage 2 business reopenings. After months of decreased revenues and mounting bills, retail businesses in malls, the personal services sector, and bars and restaurants in most regions in Ontario will finally start down the long road to economic recovery.
“We also appreciate the government’s cautious, yet sensible approach to regional reopening, not holding back businesses from opening their doors to customers sooner in areas where warranted by COVID-19 statistics. We look forward to working with the Ontario government on a healthy and strong economic recovery.”
On Friday, Alberta and Saskatchewan also announced moratoriums on rent evictions.
“It’s been clear for months that an evictions ban has been a necessary step, which is why so many countries did this in late March. I feel awful for the people who have lost their businesses or experienced extreme stress due to the delays in provincial action. We expect many more landlords to consider CECRA now. But attention must now turn back to the federal Ministry of Finance and the CMHC (Canada Mortgage and Housing Corporation) to significantly reduce CECRA’s complexity. With eviction bans in place, that will be the biggest factor in limiting rent relief for small business,” said Jon Shell, co-founder of the grassroots coalition Save Small Business, supported by about 40,000 small businesses across Canada.
The CFIB said 44 percent of Canada’s small businesses are now fully open, up from 38 percent two weeks ago, but many regional and sectoral differences remain and some sectors, particularly restaurants and hospitality, continue to be largely closed. Only 15 percent of small firms report their sales have returned to normal, said the organization on Monday.
It said New Brunswick (59 percent) and Alberta (54 percent) lead the way with the largest share of open businesses, while Newfoundland and Labrador (24 percent) continues to trail the rest of the country. In Ontario, 37 percent of businesses are fully open and only 12 percent said their sales have returned to normal.
“There are definite signs that economies are awakening, with more than half of small businesses reporting they are fully open in some provinces,” said CFIB president Dan Kelly. “However, for many recovery is another question as just opening your doors does not guarantee your customers will return.
“I am deeply worried about the future of businesses in sectors like transportation, health and social services, arts and recreation and restaurants/hospitality as fewer than one in 10 of these firms have sales at or near normal. Our main street businesses will need a lot more support, both from government and from consumers, before the crisis is behind them.”
The CFIB said only 13 percent of hospitality/restaurant businesses and 21 percent of arts and recreation businesses are fully open, compared to 44 percent of retailers and firms in the personal services sector. Additionally, certain personal services businesses, like hairdressers, remain closed in most provinces.
CECRA for small businesses will lower rent by 75 percent for small businesses that have been most affected by COVID-19.
It will provide forgivable loans to qualifying commercial property owners to cover 50 percent of three monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June. In this way, CECRA for small businesses will provide relief for small businesses paying less than $50,000 per month in gross rent that have either been forced to close due to the pandemic or have had their revenues severely impacted by at least 70 percent, says the CMHC which will administer the program on behalf of the Government of Canada and provincial and territorial partners.