WINNIPEG -- As the pandemic drags on, businesses are continuing to face pressure paying rent.
While Manitoba has eased restrictions, restaurants have yet to fully reopen and some retail stores have seen a drop in sales.
That has the Canadian Federation of Independent Business calling for changes to the federal government’s commercial rent assistance program.
It wants Ottawa to consider expanding the eligibility to include businesses that haven’t suffered the severe losses the program requires. It also says when landlords refuse to take part, businesses should be able to access the money directly.
“We’re hoping the federal government will really broaden that and offer that 50 per cent subsidy without those strings attached,” said Jonathan Alward, CFIB Manitoba director.
Under the program, businesses can qualify for a rent reduction of 75 per cent for April, May, and June. The catch is their landlord must agree to eat 25 per cent of the costs, while the government covers the other 50 per cent but the program may not work for everyone.
“(Landlords) have to give up 25 per cent of the rent which they can never collect again so that’s a big hit,” said Wes Schollenberg, managing director and commercial real estate broker at Avison Young.
Schollenberg works with both landlords and tenants and sees the program as a last resort. He said while some rent is better than none, landlords may be hesitant to take part if the relationship with their tenant is already strained.
“A lot of times the landlords and tenants both acting reasonably can usually work out something,” he said. “If a tenant was weak, to begin with, or behind in the rent then they’re not going to get too many goodies. It’s going to be a ‘a-ha moment.’”
Into The Music reopened earlier this month after a five-week shut down due to COVID-19.
The Exchange District record shop continued doing online sales, delivery, and curbside pickup but the slowdown hit hard. The store’s business dropped 80 percent while it was closed.
“The volume of your business is a fraction of what it would normally be,” said owner Greg Tonn, describing the impact of the pandemic.
Fortunately, it’s only on the hook for 25 per cent of its regular monthly rent for April, May, and June. Tonn said that’s thanks to the rent assistance program and a good relationship with his landlord.
“We’ve been able to access through our landlord, the program, and we’re moving forward with that,” he said.
While the program isn’t officially accepting applications yet, not everyone has had the same experience. With rent payments piling up and sales down, the CFIB said more retailers and restaurants may shut their doors permanently.
“Somewhere around five per cent are very concerned or expecting their business may be closing for good which doesn’t seem like a lot off the top but one in every 20 small businesses is a very concerning number for the province,” said Alward.
On top of needing a landlord’s involvement, only businesses that have lost more than 70 per cent of revenues qualify.
After public health restrictions were eased, business at Into The Music bounced back but sales still haven’t returned to what they were prior to the pandemic.
“We’re doing everything we can do keep the party going,” said Tonn.
Schollenberg said the majority of tenants he works with have been able to find ways to pay their rent.
The federal government said the application process for the rent assistance program will officially open in the second half of May.
