New COVID rent relief program won’t help struggling businesses until next month, group says

New COVID rent relief program won't help struggling businesses until next month, group says

The federal authorities is ready to supply small companies lease and mortgage aid for October — however that cash will not really get into the palms of enterprise house owners till November, says one outstanding Canadian enterprise group.

Within the meantime, many small companies are scrambling to make lease or mortgage funds within the midst of the financial hunch brought on by the COVID-19 pandemic.

“It is actually difficult. We have heard from companies. They’re placing it on their bank cards, they’re borrowing from family and friends, they will the financial institution however they’re actually uncomfortable taking over extra debt,” mentioned Laura Jones, govt vice-president of the Canadian Federation of Impartial Enterprise.

“There isn’t any query that it is creating some further stress for enterprise house owners.”

A protracted wait for a ‘higher’ program

Final Friday, the federal authorities unveiled a revamped program to assist small companies cowl lease prices through the pandemic. Whereas the earlier program relied on landlords making use of for the small enterprise lease aid, the brand new program is meant to make it simpler for companies to acquire lease and mortgage aid by permitting them to use on to the Canada Income Company.

Jones mentioned the brand new program is “so significantly better” than its earlier incarnation. Nevertheless it wants new laws to take impact and Parliament is not sitting this week. Even after MPs return on Oct. 19, it’ll take time for the invoice to be debated — together with any late amendments — and for it to cross via each the Home of Commons and the Senate.

The CFIB has been informed by authorities officers that purposes for this system will not open till November, Jones mentioned. The earlier incarnation of this system led to September.

“That leaves individuals with each their October lease to fret about and in addition their November 1st lease to fret about,” mentioned Jones.

Small Enterprise Minister Mary Ng says the brand new lease aid program can be backdated to October. (Sean Kilpatrick/The Canadian Press)

A spokesperson for Finance Minister Chrystia Freeland’s workplace mentioned the federal government’s proposal ensures lease and mortgage assist can be straightforward to entry as a result of it’ll go on to small companies — not via their landlords.

Officers didn’t reply to repeated questions from CBC Information concerning the software course of starting in November. The one reference to a timeline in any of the feedback from Freeland’s workplace was a dedication to “shortly introduce laws”.

Small Enterprise Minister Mary Ng additionally tried to supply assurances in an interview with CBC Information Energy & Politics final week.

“Companies can be getting lease aid for the month of October,” Ng mentioned, including aid could be backdated.

“We are going to do it as quickly as we probably can,” she mentioned. The minister didn’t reply a query about whether or not the federal government ought to recall the Home of Commons to hurry up the method.

‘After all it took too lengthy’

Jones mentioned her members are happy the brand new program will supply a “sliding scale” of lease aid. Companies which have seen not less than a 70 per cent drop in revenues can stand up to 65 per cent of their lease lined underneath this system.

Companies with extra modest losses will nonetheless be eligible for some aid, though it will not be fairly as a lot; that subsidy stage hasn’t been confirmed but.

Companies can even be eligible for much more assist in the event that they’re been briefly shut down by a public well being order. These companies might obtain as much as 90 per cent of their lease or mortgage prices from the federal government.

Whereas Jones mentioned the brand new program is a considerable enchancment over the outdated one, the federal government is taking far too lengthy to implement it.

“After all it took too lengthy,” she mentioned. “We’re seven months into the disaster and a few companies nonetheless haven’t got lease aid. That is too lengthy.”

Companies need assist to be retroactive

One key motive for introducing a brand new program is the truth that so many companies have been omitted of the outdated one.

One estimate by the CFIB prompt 47 per cent of small enterprise tenants who wanted lease help could not get it via the unique program. This system was given a $three billion finances again in April; solely about $1.eight billion had been spent as of early October, in response to the federal government’s personal figures.

The signal on a retailer window signifies it’s closed because of the pandemic on April 22, 2020 in Ottawa. (Adrian Wyld/The Canadian Press)

Among the companies which have needed to go months with out lease help want to see the federal government supply retroactive subsidies for the interval previous to October.

“We paid lease for the previous six months. That expense by no means went away for lots of small companies,” mentioned Jeff Clarke, president of Murdoch Journey in Barrie, Ont.

Clarke mentioned companies had no management over whether or not their landlords opted to take part within the earlier program and a few needed to take out private loans to pay their payments.

He implored the federal government to supply retroactive help to cowl the months when he and different businesspeople have been lacking out.

“You have got a program. You have got the cash budgeted for it,” he mentioned. “Let’s use that.”

Freeland indicated final week that retroactivity past October is not within the playing cards. She described the brand new lease aid as a “going ahead program” meant to maintain the companies working in the present day viable, and to assist them via the second wave.

“”It appears wise to us to be wanting forward and to what companies are doing and the way they’re working sooner or later,” Freeland mentioned. 

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