Canada’s two largest provinces are helping businesses that can’t pay their rent during the coronavirus shutdown after a federal aid measure failed to gain traction.
Prime Minister Justin Trudeau announced a plan in April to subsidize rents for small business, but not many landlords have applied. On Monday, Quebec gave them an incentive to participate by offering to shoulder a higher portion of the cost. In Ontario, Premier Doug Ford announced a temporary ban on commercial evictions.
“Your clients, your tenants need it. We’re counting on you,” Quebec Economy Minister Pierre Fitzgibbon said in an address to real estate owners during a press conference.
The program required landlords to swallow a temporary 25 per cent reduction in rent for some business tenants. In return, the federal and provincial governments agreed to pay at least half of a tenant’s rent in the form of a forgivable loan to the landlord.
Fitzgibbon said the new rules will reduce the obligation of Quebec landlords to a 12.5 per cent rent cut.
The program, which started running May 25, hasn’t proved popular so far. Applications as of June 4 covered only 26,000 tenants for a total of $90 million worth of subsidies, a far cry from almost $3 billion envisaged by Ottawa.
Quebec, which had also previously announced a moratorium on evictions, said the measures aim to give about 35,000 retailers and restaurants more financial room for maneuver.
The Chamber of Commerce of Metropolitan Montreal called it a “powerful incentive” and urged the federal and provincial governments to extend the aid from June to September to help struggling downtown businesses.
Ford’s ban, which applies to evictions from June 3 to Aug. 31, emulates similar moves in provinces including British Columbia and Saskatchewan.
“I’m here for the little guy,” the Ontario premier said, criticizing landlords who refuse to lose 25 per cent in rental income.
Lack of willingness is only part of the problem, according to the Canadian Federation of Independent Business. Another is the strict qualifying criteria: Tenants need have to lost 70% of revenue due to the pandemic. Tenants and landlords have also both complained that the application process is confusing, according to the business group.