Anita Agrawal is CEO and designer of Jewels 4 Ever and Best Bargains, and professor, School of Business, Centennial College. She is also a founding member of the Better Way Alliance, a network of small businesses that employ more than 30,000 Ontarians.
Last week’s Throne Speech laid out the government’s plans to manage the coming months of the COVID-19 pandemic. For small-business owners, there was a glaring gap: no mention, no plans and no programs to deal with the growing commercial rent crisis.
Business after beloved business has shuttered since this pandemic began – many forced to close because of insurmountable rent costs.
For most small businesses, rents were so high even before COVID-19 that most months it was a tight race to make rent and still break even or pocket away a small profit.
With highly reduced business traffic, or no business traffic at all for some, small businesses went through those savings pretty quickly. And without any effective government programs or supports to help small businesses with rent costs, most are just barely hanging on, and it’s inevitable that many more will close.
Small businesses have been clear from the start that the Canada Emergency Commercial Rent Assistance (CECRA) program wasn’t going to meet our needs. Requiring landlords to apply, and distributing funds to them rather than directly to tenants, meant CECRA wasn’t even on the table for most small-business owners. The paperwork is cumbersome and eligibility rules are counterintuitive. Requiring a 70-per-cent drop in revenue is so extreme that most businesses that tried to pivot to keep operating during lockdown, or reopen at reduced capacity, are shut out, even though they are experiencing such a significant revenue loss that paying rent is impossible.
For the limited number of businesses that were able to access CECRA, the federal government has said the program will wind down at the end of September, and it hasn’t provided any clarity on what will replace it. Small-business owners like me can’t wait.
Since the pandemic, I have lost 62 per cent of revenue. This means I had to let go of three of my eight staff whose salaries I could no longer afford. Some good landlords, like mine, did actually try to get their tenants CECRA funds, but whether they were successful or not, most small businesses had to do what we did: work 14-hour days and rely on the Canada Emergency Response Benefit (CERB) for several months before staff hours and payroll could begin to normalize.
Businesses want to bring their staff back for at least some hours, but even with other subsidies, they can’t without knowing they can pay their rent this month, and for the coming months of whatever COVID-19 might throw at us.
COVID-19 didn’t create this problem, but it did worsen it. Restaurants, mom-and-pop shops and many others could not afford the rent in Toronto and other parts of Canada before the pandemic. This is largely because there is no legislation protecting commercial tenants anywhere in Canada. While temporary eviction bans are appreciated, they do little to help business owners in the long term or to address the underlying issues of affordability. We are at the mercy of our landlords when it comes to astronomical rents and rent increases, evictions, maintenance costs and more.
After six months of consistent feedback about the program’s shortcomings, the federal government has had an opportunity to fix CECRA. Yet the Throne Speech still didn’t address the biggest expense and stressor of most small businesses during this pandemic.
In order to survive the pandemic, commercial rent assistance needs to be targeted to those who need it: small businesses, not their landlords. It needs to be easily accessible and available to all small businesses whose rent rates are disproportionate to their current revenue.
Everyone has a role to play in pandemic recovery, and small business is crucial in maintaining jobs and services in our communities. It’s time that the federal government addressed in a meaningful way the growing gap in high commercial rent rates and COVID-19 restrictions for small businesses.
If we don’t step up to level the playing field, it may be that by the end of the pandemic, there will be no small or independently owned businesses left on Main Street. Only big chains and multinational companies will have the resources to make rent.
Small businesses bring vitality and diversity to our cities and they create valuable local jobs and community bonds. As jurisdictions begin to tighten restrictions on businesses and reimpose lockdown measures, there’s no time to waste.
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