A new assistant program aimed at supporting small businesses amid the novel coronavirus pandemic has begun to accept applications, but a small business owner in London, Ont., says her landlord was not enthusiastic to apply.
The Canada Emergency Commercial Rent Assistance (CECRA) program was launched to keep more small businesses in operation and more people employed during the pandemic.
Acceptance for applications began in the last week of May, but Melanie O’Brien, the owner of Madison’s Boutique, says she and fellow small businesses in the same plaza had to “put pressure” on their landlord in order for them to agree to apply for the program.
“I was in communication with my landlord, and (they) said they didn’t qualify for the program… but after discussing issues with my fellow tenants, we wrote a letter to the landlord,” O’Brien told Devon Peacock on 980 CFPL’s Morning Show Friday.
“(We) wrote to our landlord asking for some rental assistance, and my landlord actually offered us 50 per cent reduction.”
Despite having her rent cut in half, O’Brien says it was still a struggle.
“Even at 50 per cent, when I’m making probably $50 a month in sales right now, it’s not realistic for me to be able to pay $1,500 a month for rent.”
According to a statement issued by the provincial government on May 29, small business landlords would be asked to “… forgive at least 25 per cent of the tenant’s total rent, tenants would be asked to pay up to 25 per cent of rent and the provincial and federal government would share the cost of the remaining 50 per cent.”
4:44 New initiative offers small businesses financial support from RSPs of Canadians
O’Brien says her landlord has now agreed to apply for the program, which will provide her small businesses tenants with additional support, “but that’s only three months, so I have no idea what’s going on after that,” O’Brien said.
“We’ve had to put pressure on these landlords — they don’t want to apply for this program, and I don’t know why.”
Mike Wallace, the executive director of the London Development Institute, said on the Morning Show Friday the reasoning behind it may have connections to the process of applying and being accepted, which can be “complicated.”
“My impression from my members is (estimating) the revenues. Businesses have to be down in business by 70 per cent before they even qualify. They have to get that information to the landlord, for the landlord to apply,” explained Wallace.
“The actual property owner is the one who’s applying for this program, and not the individual business.”
He says submitted information must be verified to be accurate and justified in order for an application to be accepted, and it is the landlord’s responsibility to fix any issues during the application and approval process.
Wallace says another possible reason why landlords may turn a blind eye to this program is because it is a loan and not a grant.
9:26 Reinventing Your Small Business During COVID-19
For O’Brien, she says her business, which opened a year ago in May 2019, may shut its doors for good if support doesn’t arrive soon.
“We’ve put our life savings and our blood, sweat and tears into our little business and it’s going to be taken away because of COVID-19… it’s awful.”
The shop has employed four part-time workers, and “they’re losing income as well,” said O’Brien.
The CECRA will be available until Aug. 31, 2020. Support will be retroactive to April 1, covering April, May and June.
The Ontario government says the province is committing $241 million to the program, which will provide more than $900 million in support for small businesses across Ontario during the pandemic.
© 2020 Global News, a division of Corus Entertainment Inc.