Half of Canadian Small Businesses Will Not Be Able to Pay June Rent: Survey
With June now just weeks away, the first of the month looms over countless Canadian small businesses who will be unable to pay their rent due to COVID.
In fact, according to a new survey from the Canadian Federation of Independent Business (CFIB), half of small businesses will not be able to pay their June rent without further assistance from the government.
Last month, Prime Minister Justin Trudeau announced the Canada Emergency Commercial Rent Assistance (CECRA) program, which will help lower rents by 75% for small and medium-sized businesses that have been impacted by COVID-19, for April, May, and June rents.
However, the CFIB is calling on all levels of government to “move quickly” to create additional help outside of the CECRA program.
“We’ve been asking for rent relief since March. Even when CECRA applications become available we know that program will leave businesses without the help they desperately need. The closer we get to June 1st, the more stressful things are getting and the more business failures we will see,” said Laura Jones, CFIB’s executive vice-president.
This comes as Prime Minister Trudeau announced the federal government is expanding the eligibility of the Canada Emergency Business Account (CEBA) — which provides Canadian small businesses and not-for-profits interest-free loans of up to $40,000. The expansion of the program will now include many owner-operated small businesses and will now be available to businesses with sole proprietors, those that rely on contractors, and family-owned businesses that pay employees through dividends rather than payroll.
To give more businesses access to the support they need so they can help protect workers and the jobs they rely on, the Government of Canada is expanding the eligibility criteria for the Canada Emergency Business Account. Learn more: https://t.co/rwGavSQuOm #COVID19 pic.twitter.com/knHa14NMdd
— CanadianPM (@CanadianPM) May 19, 2020
While expanding the CEBA program is “a great start,” Jones says the newly announced changes need to be implemented soon to be ready for the start of the new month.
“Expanding the Canada Emergency Business Account to cover many more businesses is a great start and it’s urgent this be implemented in time for June 1st. We would now like to see government increase the forgivable portion of CEBA which would go a long way to cover the CECRA shortfall,” explained Jones.
Through the survey, CFIB found that 67% of businesses agree that more CEBA money should be forgivable. At the same time, another 65% of small businesses said the government has been “too slow” in providing rent relief.
Another 55% of respondents said rent relief could make the difference between their business surviving COVID-19 or having to shut down — which is as high as 80% for the arts and recreation sectors. What’s more, 50% of respondents said they won’t be able to pay their upcoming June rent without further help — which is as high as 70% for the hospitality sector.
Another 22% said they now fear eviction, which is highest for small businesses in Newfoundland, Labrador, and Alberta.
With June 1st just weeks away, the CFIB is continuing to call on all levels of the government for help and is asking for CECRA to be available “as quickly as possible” and to allow tenants to access the 50% relief when landlords don’t intend to apply for the program, and increasing eligibility (currently only tenants with a 70% revenue drop qualify).
The CFIB is also asking for an increase in the amount of the CEBA loan and the forgivable portion of the loan and ensuring that loans from regional development authorities include a forgivable portion and are easy to apply for with a minimum of qualification criteria.
The group is also asking the government to reduce property taxes by a minimum of 25% and to protect commercial tenants, otherwise in good standing with landlords, from eviction during the COVID-19 crisis.
“We described April 1st as scary and May 1st as feeling like a nightmare on Main Street. I don’t want to think about the words we’ll have to find to describe June 1st if governments can’t get their acts together to help businesses at this crucial time,” said Jones, adding, “even with reopening, too many businesses will go down with no rent relief.”