Federal government tables legislation for new rent subsidy

The federal government tabled legislation today establishing a series ofnew financial supports to help businesses survive the pandemic including a redraftedcommercial rent subsidy program to replacethe federal government's much-criticized rent assistance benefit.

"The only way we are going to get through this crisis is by ensuring Canadians are supported especially our essential, hard-working small business owners across Canada. This legislation is an important next step in delivering the emergency help they need," Minister of Small BusinessMary Ngsaid in a statement.

Today's measures include the introduction of the Canada Emergency Rent Subsidy, CERS,whichreplacesthe theCanada Emergency Commercial Rent Assistance (CECRA) program. It also includesa new "lockdown support" to aid businesses ordered to closeby a public health order. The legislation alsoextends the Canada Emergency Wage Subsidy until June 2021.

"Extending CEWS to June 2021 recognizes the longevity of the crisis that we are in, especially for the businesses that are not going to be able to recover as quickly as others," saidAlla Drigola, director of parliamentary affairs for the Canadian Chamber of Commerce.

The previous rent support scheme,CECRA,covered up to six months of rent by extending forgivable loans for up to half the value of the monthly rent, in exchange for the landlord agreeing to reduce the rent.

Tenants participating in the program still had to pay 25 per cent of their pre-pandemic rent, while their landlords had to accept a 25 per cent loss on total rent paid. The main complaintfrom businesses was that they could only accessthe benefit iflandlords chose to participate.

The newCERSallowsbusinesses to apply directly for the benefit without having to go through landlords.

"We were really pleased to see that funds will now be flowing through to tenants. That was something we heard a lot from businesses was a big hindrance for them being able to access the program," said Drigola."You're going to see a lot more pick-up and uptake because of that change."

'It's a really positive shift'

Dan Kelly, president and CEO of the Canadian Federation of Independent Business, told CBC Newsthe new measures aregood news for businesses and alignbroadly with what the federal government had promised.

Kelly said the CFIB set three priorities for the new legislation:it wanted the rent relief support to be extended until the spring,it wanted the financial relief to go straight to the tenant rather than the landlord and it wanted assurances ofsupport for all businesses, regardless of how much their business has declined.

Watch:Mary Ng says newrent subsidy will not apply retroactively to businesses that did not use previous program:

Minister of Small Business on proposed rent subsidy

4 years ago

Duration 1:03

Minister of Small Business Mary Ng says the new commercial rent subsidy will not apply retroactively to businesses whose landlords wouldn't buy in under the previous program.

The new program meets that last condition, Kelly said,by allowing a companyto receive thebenefit based onthedecline inbusiness it'sexperienced, rather than only allowing abusinessto qualify if it'sexperienced arevenue drop of at least 70 per cent since the pandemic began.

"It's a really positive shift to a functioning rent support program that we just did not have before, with additional support for those that are subject to further rounds of business closures as a result of the second wave," hesaid. "They got a lot of the principals right."

The lockdown support

Kellysaid he was disappointed, however, that the program was made retroactive only to October. He saidthat because the previous program required landlord buy-in, many businesses were unable to get the benefit and now that unpaidrent is acting like an"anvil around the necks" of businesses trying to get back on their feet.

The CFIB did, welcome the news that commercial mortgage interest for companies that own their own properties will also be eligible for the new rent subsidy.

Drigola also broadly welcomed the new rent assistance program but said the Chamber took issue with the subsidy limit.

"In the original program, one of the biggest complaints that we heard that prevented folks from being able to qualify for it was the revenue cap," she said."In this new version, they went from a revenue cap to a subsidy cap, so if you are a business that has 20 locations across metro Vancouver, the GTA, Ottawa and Calgary, you may have rent of significantly more than the $300,000 capthey have in there."

Drigola told CBC News that the cap is unfair because a company that has incorporated each of its locations individually could get the benefit,while another businessthat has incorporated all of its locations under one company wouldnot.

"We think it's unfair for someone who structured their company one way to be receiving less subsidy than someone who structured their company another way," she said.

The federal government says the new lockdown support promises businesses up to an additional 25 per cent in rent support if their enterprises"must shut their doors or significantly limit their activities under a public health order issued under the laws of Canada."

Kelly saidthe lockdown support has been well designed but worries about how complicated it will be to calculate the support forbusinesses that can open partiallybut are stillprevented by public health measures from opening fully.

Watch:Singh says the Liberals didn't give his party an advance copy of legislation:

Singh on proposed rent subsidy

4 years ago

Duration 0:59

NDP Leader Jagmeet Singh says the Liberals didn't give his party an advance copy of the legislation that would implement a new commercial rent subsidy.