Federal rent relief program no perfect fit

Hey there, time traveller!
This article was published 08/06/2020 (1941 days ago), so information in it may no longer be current.

A local gym owner wants to see changes to the federal government’s small business rent relief initiative after learning the program fails to do any of the promised heavy lifting.

Paul Taylor is the owner of Brickhouse Gym, which has two locations in Winnipeg and celebrated 12 years of business in the depths of the provincial response to the COVID-19 pandemic.

His two gyms were shuttered in mid-March, days before provincial public health officials ordered the closure of fitness facilities province-wide.

In the months that followed, Taylor said revenue streams went completely dry but $40,000 in rent is still owed to his landlords.

“Ultimately in a couple of months from now, hopefully we will be back to normal and some of these restrictions are lifted, but I’m going to have all this extra debt on my shoulders in an uncertain environment where I don’t know if they’ll shut me down again, and it’s super tough,” Taylor said.

“A lot of gyms have closed and I don’t plan to do that, but at some point I don’t want to just be saddled with constant debt just because I’m trying to exist in this arena.”

Hoping to take advantage of the Canada Emergency Commercial Rent Assistance program and with support from his landlords, Taylor set out to complete the needed application forms to apply to the federal government to cover half of his rent.

Under the program, the federal government in partnership with the provinces will pay for half of a small business owner’s monthly rent if the tenant agrees to pay a quarter and the landlord forgives the rest. The government began accepting applications on May 25.

The program applies to the months of April, May and June and business owners have to demonstrate a total revenue loss of at least 70 per cent over the three months.

Last Monday, Brickhouse Gym tentatively reopened its doors and welcomed back clients with extensive COVID-19 precautions in place as part of Phase 2 of Manitoba’s economic reopening plan.

Even at half capacity, Taylor is projecting his revenue streams to return to normal in the month of June, increasing his revenue above the 70 per cent threshold and disqualifying him from participating in the rest-assistance program.

“Would it have been more financially responsible of me to not open my business when I was allowed to and continue to stop people from being able to exercise?” Taylor mused. “I’ve had so much demand from people… I felt compelled, I had to open.

“The idea that I now don’t qualify because my business was only decimated for two months instead of three because restrictions were lifting in my province, it just seems insane,” he said.

Jonathan Alward, prairie region director with the Canadian Federation of Independent Business, said less than five per cent of Manitoba businesses surveyed by the federation say they will access the federal program.

A combination of caveats restricting landlords from being eligible, a complex and sometimes confusing application process, and the high standard for revenue decline has turned off applicants, he said.

The federation has asked for significant changes to the program to allow more business owners to tap in with less resistance.

“If you look at two of the other big pillar programs, the (Canada Emergency Business Account) and the (Canada Emergency Wage Subsidy), at first there were gaps and we had identified them, and identified more,” Alward said. “We’re going through the same process but it has certainly taken longer for the federal government to fix a lot of the problems with this program.

“If you don’t think you’d qualify, especially if you think your landlord would participate, talk to your Member of Parliament, write to them, call them and let them know your concern because I don’t think it’s too late to make important changes.”

Taylor meanwhile said a sliding scale system that ties rent relief to revenue, or evaluating rent relief on a month-by-month basis, could be two solutions to the barriers small businesses are hitting when trying to access the emergency funds.

“There’s businesses that if they lose 30 per cent, they’re in a tough spot just from that alone,” Taylor said. “It’s not one shoe fits all and different provinces are in very different positions.

“It has to be more versatile. It has to be a little more pliable, on the whole.”

In an emailed statement, a spokesman for the federal government said it strongly encourages landlords to apply for rent assistance through the Canadian Mortgage and Housing Corporation.

“The program will support small businesses experiencing incredible difficulties and [that] have seen, to the best of their knowledge, their revenues decrease by 70 per cent on average for the months of April, May, and June 2020,” said Ryan Nearing, press secretary and regional advisor with the office of the Minister of Small Business, Export Promotion, and International Trade. 

“CECRA is just one of the wide range of supports our government has brought in to help businesses retain and rehire their employees, and keep up their operating costs and cash flow.”

 

danielle.dasilva@freepress.mb.ca