OTTAWA -- Prime Minister Justin Trudeau has announced that an agreement has been reached with all provinces and territories to implement the promised rent assistance program for businesses. It will lower base rent by up to 75 per cent for eligible small businesses that have been impacted by COVID-19, if their landlords agree to take part.

First unveiled last week with few details, the federal government is collaborating with the provinces and territories to launch a Canada Emergency Commercial Rent Assistance program. It is meant to help small businesses cover their rents for April, May, and June.

Commercial property owners are being offered forgivable loans to cover 50 per cent of three monthly rent payments. The loans will be forgiven if the property owner agrees to reduce eligible businesses’ rent by at least 75 per cent for the three months. The forgivable loans would go directly to the mortgage lender.

The businesses eligible for this rent relief are those that have to pay less than $50,000 per month in rent, have had to temporarily cease operations, or have experienced at least a 70 per cent drop in pre-COVID-19 revenues. The program is also being made available to non-profits and charities.

A key detail for business owners: the federal government said that the rent relief is off of base rent, and not net or total rent costs, which for some small businesses will still be a sizeable bill to pay monthly. 

The prime minister said that many businesses — including those that now have had to close up shop to abide by health guidelines or don’t have much money coming in because people aren’t spending as much — will now need help to reopen once the pandemic passes.

“This is an event that put us into a deep freeze, put us into hibernation as it were, and everyone had to stop and hold while we let this wave of COVID pass through. And our ability to hold well depends on many things but including government's ability to support people," Trudeau said.

"We know at the end of this people will need to travel for work, for pleasure. People will need to go to restaurants, people will need to become tourists again… That is our focus on trying to get through this moment of hibernation.”  

The provinces and territories have agreed to share up to 25 per cent of the total cost and facilitate the implementation of the program. That means that businesses renting their space will still be required to pay 25 per cent of their monthly rent, the property owner will have to pay 25 per cent, and the federal government and provinces cost-share the remaining 50 per cent. 

The government says the Canada Mortgage and Housing Corporation will administer the program, which is set to be “operational” by mid-May. The intention is to have commercial property owners lower rents for their tenants now and be paid retroactively for April and May.

NEED LANDLORD BUY-IN

“Final terms” are still being sorted out, but landlords are being urged to “provide flexibility” in the meantime. This new plan also includes a “rent forgiveness agreement,” which includes a moratorium on eviction, according to a government release.

With May rent coming due in a week, time is of the essence for many small- and medium-sized businesses who have been unable to operate under the public health restrictions and have been without any substantial income for at least a month. Some landlords have already issued eviction notices for businesses that didn't pay in April and Friday’s announcement is leaving some skeptical.

“There’s a bunch of desperate businesses out there,” said Canadian Federation of Independent Business (CFIB) President Dan Kelley in an interview on CTV News Channel Friday morning prior to Trudeau’s remarks.

He said, even with the wage subsidy application opening up on Monday and the ability for some businesses to access government-backed loans, rent is a “giant” expense and many businesses aren’t able or interested in going deep into debt while waiting out the pandemic which, so far, has no end in sight.

In a follow-up statement, the CFIB said they were pleased to see the relief offers rent forgiveness but are concerned the program may be too complicated and restrictive as to who will meet the threshold of a 70 per cent revenue reduction.

And, the biggest outstanding concern is the reliance on landlords to buy in.

“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,” the business organization noted.

According to CFIB survey results, more than 50 per cent of small businesses are not able to pay their rent on their own at the moment and 33 per cent do not trust their landlord to be reasonable. 

And while the program is available for non-profits and charities, the Health Charities Coalition says that for many of its members, income is down on average 50 per cent, which doesn’t meet the federal threshold for eligibility. They are calling for a grant program to cover operational costs. 

The federal NDP have been pushing for rent relief for weeks, saying the help is needed immediately and have said the onus should be on the government to step in, rather than businesses or landlords.

Speaking to the need for landlord buy-in, Finance Minister Bill Morneau said the federal government views this plan as a “very good” incentive for both sides, even with the landlord having to cover 25 per cent of their tenants' rent for three months.

Trudeau also committed that more help is in the works for larger businesses, and Small Business Minister Mary Ng said additional measures are in the works for entrepreneurs and sole-proprietors.  

'OFFERING BILLIONS' FOR FRONT-LINE

Trudeau is set to speak with premiers later on Friday, where the joint federal and provincial plan to top-up the salaries of some front-line workers is set to be on the agenda.

As many of these essential staff continue to work, waiting and wondering when this measure will come to fruition, talks have been ongoing about the details of this plan.

Trudeau said on Friday that the federal government is “offering billions of dollars to provinces to top-up the pay of essential workers and make sure that elderly Canadians get the support they deserve”

Canadians in long-term care homes are facing difficult and complex circumstances, but not all provinces are experiencing the same issues and so the desire and need for help on this front varies, Trudeau said.

“A number of provinces want to move forward very quickly, others had a few questions about how it would apply in their province where the pandemic is hitting less-hard, where budgetary constraints are different, choices are different. We are getting very close to having an agreement with all provinces and we should be able to move forward soon,” Trudeau said. 

What’s known so far is that in collaboration with the provinces and territories, wages are going to be boosted for essential workers who are making less than $2,500 a month.

Details on which staff will be deemed essential and would be eligible for this new funding is still being worked out, but the federal government estimates it could help “several million workers.”

This new temporary top-up will be distributed through a transfer to the provinces, with the cost shared, and intended to keep as many of these workers on the job as possible.