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covid19 stories

90% of small businesses cannot qualify for government rent subsidy

Several programs that were touted to help many get through the coronavirus pandemic have not been nearly as helpful as anticipated.

A $3 billion business subsidy program created by the Trudeau government is so difficult to qualify for that 90% of Canadian businesses cannot apply.

According to Blacklock’s Reporter, the Canada Emergency Commercial Rent Assistance program has only given out $39 million so far, with new estimates suggesting that only $483 million will be given out in total – only 16% of what was originally budgeted.

The rent subsidy gives commercial landlords a 50% rent grant if they agree to cut rent to tenants facing insolvency.

The tenant has to show a decline in revenue of at least 75% to qualify, but the landlord must also apply for the subsidy in order to receive the payout.

In April the restaurant industry told MPs that the program was not going to work.

Restaurant owner Andrew Oliver told the finance committee that many restaurants in Canada have not had any revenue during the pandemic, making a program that only pays part of their rent useless.

“If you don’t have a catastrophic category for those whose sales are down 99% plus, where they don’t pay any rent but instead are asked to pay let’s say 25 percent rent, you might actually have a wave of restaurants say, ‘I’m out; the government doesn’t understand my business and I cannot hold on any longer,’” said Oliver. 

Conservative MP Kyle Seeback took issue with the requirement that landlords must consent to the program, saying it puts small businesses at the mercy of their landlords.

“By putting all the burden on the landlord – or all of the privilege – whether they choose to apply for this rent subsidy or not, they are putting small business in this country in serious jeopardy,” he said.

“When landlords are behaving badly, why are we not helping small business tenants?”

Despite unprecedented spending and borrowing in 2020, several programs that were touted to help many get through the coronavirus pandemic have not been nearly as helpful as anticipated.

Only a small fraction of the $76 billion Canada Emergency Wage Subsidy has actually been claimed, with poor timing and difficult requirements cited as the cause of the program’s failure.

In May, Canada’s unemployment rate hit a record 13.7%, with around 3.2 million losing their jobs since the pandemic began.

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