Governments urged to provide rent relief to small biz

By Staff | April 15, 2020 | Last updated on April 15, 2020
2 min read

As the Covid-19 shutdown drags on, there’s a growing call for governments to help small businesses pay rent.

A new report from CIBC Capital Markets recommends adapting a rent-relief program proposed by the Federation of Rental-Housing Providers of Ontario to the commercial space.

The program, CIBC suggested, would see the federal government offer time-limited, interest-free loans to small businesses for their rent payments.

Under the plan, tenants would sign a declaration to their landlords indicating that they can’t pay their rents in full. The federal government would pay the landlord the tenant’s unpaid portion of rent, and the tenant would repay the government as it resumes its operations.

CIBC said such a program, which could be administered through the income tax system, would help the federal government reduce the demand for the Canada Emergency Business Account.

The bank also suggested that rent relief would enhance the effectiveness of the 75% wage subsidy for businesses, since it would help businesses that are struggling to pay rent retain employees.

Meanwhile, the Canadian Federation of Independent Business (CFIB) is calling on provincial governments to help small businesses cover rent through hardship grants of up to $5,000 per month for as long as the Covid-19 shutdown lasts.

A CFIB survey found that the average small business rent is $10,000 a month, but there’s a “wide range” around that number, the association said.

“Small businesses take no joy in asking for government help but we are in extraordinary circumstances,” Laura Jones, the CFIB’s executive vice-president, said in a statement. “Without more lifelines, too many otherwise healthy businesses will be left drowning in debt.”

Saskatchewan and Nova Scotia are already providing one-time grants of up to $5,000 for small businesses, the CFIB noted.

“We would like to see other provinces adopt the Saskatchewan model and make grants widely available to all small businesses, especially vulnerable sectors such as retail, hospitality and personal services,” said Corinne Pohlmann, the CFIB’s senior vice-president of national affairs.

Advisor.ca staff

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.