July 20th, 2020
CECRA Must Be Fixed - Joint Letter to Ministers Ng and Morneau
Our letter today is concerning the deeply flawed Canada Emergency Commercial Rent Assistance Program (CECRA) and the failure of the government so far to address many of the concerns of small business owners across the country during this pandemic.
Rental assistance is an important part of keeping local economies running as we collectively come out of the COVID-19 shutdown. However, very few small business operators are able to access CECRA, either because they don’t meet the excessively high eligibility criteria or because their landlords simply won’t apply for it.
The lack of applications falls well below expectations and demonstrates how important it is to fix CECRA. As of early July, only around 24,500 entrepreneurs have received or applied for CECRA. Compared to the Canada Emergency Business Account (CEBA), which received over 630,000 applications, CECRA is simply failing to help Canadian businesses.
Your government can immediately address this by modifying CECRA to allow for tenants to apply without getting their landlord involved. The original intention to share the burden between tenants and landlords was well-meaning, but the goal of supporting small businesses with their rent is simply not achievable under the current eligibility.
We have heard from many concerned business owners that their landlords are using the pandemic as an opportunity to evict their tenants. Knowing their tenants can’t afford to pay their rent without CECRA, landlords are choosing not to apply, allowing new clients to move in and charge them a higher rent. Family-operated businesses are being forced out and replaced with chain stores and the difference is felt in the local economy. Allowing tenants to apply directly, instead of going through their landlord, would save these businesses.
Small businesses cannot get support if their property owner is their local municipal government or their provincial government. Many local governments are unable to offer financial support to their tenants and are excluded from applying. This is especially problematic in rural communities where many properties are owned by the town or reserve, where tenants may be evicted or take on extreme debt because they can’t afford their rent.
We further urge you to change the eligibility criteria of CECRA to reflect the revenue losses that businesses are experiencing. As former business owners or operators, we know that even small amounts of loss can force businesses to close. As we have previously stated in our letters to you setting the eligibility at 70% (revenue loss) for CECRA excludes thousands of businesses that need access to rent relief. Other programs, like CEBA and the Canada Emergency Wage Subsidy (CEWS) use reduced revenue-loss requirements to determine eligibility. Adjusting this excessively high criteria permits tenants from having to make the difficult decision to close their doors.
The recent announcement of extending CECRA is welcome but it simply will not be helpful unless the eligibility is expanded. Small businesses need help with rent, but they can’t receive it if the program doesn’t have their interests in mind. An extension does nothing for them if they can’t access it in the first place.
Please address these issues immediately. Small businesses and local economies depend on you to fix CECRA. We are always willing to work with you to address these concerns of small business.
Gord Johns, Member of Parliament for Courtenay-Alberni
Peter Julian, Member of Parliament for New Westminster-Burnaby