Prime Minister Justin Trudeau announced today during his daily COVID-19 update that the federal government has reached a deal with all provinces and territories to to implement the previously-promised rent assistance program for businesses.
The programs, which look similar across all the provinces, will provide forgivable loans to eligible commercial property owners experiencing potential rent shortfalls because their small business tenants have been heavily impacted by the COVID-19 crisis. To receive the loan, property owners will be required to reduce the rental costs of small business tenants for April to June 2020 by at least 75 per cent and commit to a moratorium on evictions for three months.
To be eligible for these federal-provincial rent relief programs, businesses need to have paid less than $50,000 per month in rent, have had to temporarily close their operations, or have experienced at least a 70 per cent drop in pre-COVID-19 revenues. The program is also going to be available to non-profits and charities.
The Ontario government has also worked with the federal government to develop the Small and Medium-sized Enterprise Loan that will enable up to $40 billion in lending, supported through Export Development Canada and the Business Development Bank. This program will help businesses meet cash flow requirements through guaranteed loans.
In acknowledging that some businesses will be hard pressed to pay even 25 per cent of their cost of rent, Trudeau said, “"We recognize that COVID-19 is hitting some people harder than others, some areas harder than others, and unfortunately this is something we are grappling with… We are trying to help as many people as possible."
The government also announced it is offering a $40,000 government-backed loan to businesses. Of that, $10,000 can be non-repayable.
Following Trudeau’s announcement, Canadian Federation of Independent Business (CFIB) VP Laura Jones raised some concern in a statement: "As landlords do not have to participate and will be expected to accept some losses under the program, they may choose to ignore it, even if their tenants badly need it.”