May 26th, 2020
Letter to Ministers Calling for Significant Changes to Canada Emergency Commercial Rent Assistance Program (CECRA)
Minister Morneau and Minister Ng,
June 1 is only one week away, small business owners, many of them have already deferred their April and May rents, are now once again worrying how they are going to pay for their June rent.
Our offices have received many complaints from small business owners who found themselves unable to access the Canada Emergency Commercial Rent Assistance (CECRA) because the program itself is landlord-centered. These commercial tenants told us that when they approached their landlord or property management company about the program, the landlord was not interested in applying for CECRA because the landlord would need to absorb a 25% loss in rental revenue. Complaints like this are also being heard in our local chamber of commerce. We understand that the CMHC application website has a very thorough explanation for landlords why the 25% loss is still a good option for them, but the reality is, many landlords are not choosing this route.
Some small business owners who are receiving CEBA loans have told us that they are willing to pay 50% of the rent instead of 25% so that their landlords would be more willing to apply for CECRA. In fact, the Canadian Federation of Independent Business (CFIB) is calling on the federal government to create relief so tenants with landlords who do not intend to apply for the Canada Emergency Commercial Rent Assistance can access the 50% government portion of the rent relief directly. That way, tenants have the ability to apply for CECRA instead of being at the mercy of their landlord.
Small businesses are the beating heart of the Canadian economy. While we welcome the economic stimulus packages the government has implemented, there are many small business owners who fall through the cracks. Commercial tenants who close their doors due to the advice of public health authority should not be penalized by absorbing up to 100% of the rent because their landlord refuses to apply for CECRA. If the federal government realized, while drafting the CECRA policy, that so many landlords might be unwilling to participate, alternative mechanisms would have been in place to allow tenants to apply on their own and far more commercial tenants would be benefiting from the program.
We are urging your government to immediately look into this loophole so that small business tenants have the option of applying for the CECRA and paying 50% of rent to their landlord. Besides that, we are also calling on the federal government to immediately negotiate with the Provinces a nationwide moratorium on evictions so that commercial landlords have to come to the table in negotiations with their tenants.
Please feel free to reach out to us if you have any questions or feedback. We look forward to your reply to this urgent matter. Thank you.
Gord Johns, Member of Parliament for Courtenay-Alberni
Peter Julian, Member of Parliament for New Westminster-Burnaby