Liberals Extend Commercial Rent-Relief Program for Last Time 

The federal government is extending its commercial rent relief program one last time. The Liberals say the program that aims to help small businesses with their rent or lease costs will be extended for this month, unveiling the details one week after rent was due.

In a release, the government says the one-month lifeline is a “final extension” for the program and that officials are looking at other options to help small businesses. The rent-relief program provides forgivable loans that cover half of rent for eligible small businesses, and also requires landlords to waive a further one-quarter of what they’d otherwise be owed.

Property owners have to apply for the help, but take-up has lagged expectations and spending is projected to fall far short of the nearly $3 billion the Liberals have budgeted. The government says that as of the start of this week, the program had provided over $1.32 billion in aid to more than 106,000 small-business tenants.

CECRA for small businesses

Source: CBC

Ottawa to Extend Business-Loan Program

On August 31 the federal government extended two pandemic business-loan programs. Ottawa will now accept applications for interest-free Canada Emergency Business Account loans of up to $40,000 for small businesses until Oct. 31, and said that its Business Credit Availability Program for larger businesses would be extended until June, 2021.

The CEBA program lets entrepreneurs apply for up to $40,000 through their financial institutions – a quarter of which can be forgiven and effectively turned into a grant if the loan is repaid by the end of 2022. The qualifications for the CEBA loan program were also expanded to include entrepreneurs who use personal accounts to run their business.

CFIB had been advocating for changes to CEBA while Mr. Morneau was finance minister, including to open access to entrepreneurs using personal accounts, though Mr. Kelly said he was not receptive to any suggestions. “I’m absolutely thrilled that Minister Freeland’s presence has made a big difference already,” CFIB’s Mr. Kelly said.

The $65-billion Business Credit Availability Program, which helps medium-sized and larger businesses with operating costs in conjunction with Export Development Canada and the Business Development Bank of Canada, was extended through June, 2021. Depending on their size, businesses can apply for BCAP loans of up to $80-million.

Canada Emergency Business Account (CEBA)

Source: Globe and Mail

Business Rent Aid to Fall Short of Budget, PBO Says as Credit Program Expands

The federal Liberals threw a credit lifeline to small businesses on the eve of rent coming due, extending a loan program as new figures showed a rent-relief effort is going to fall well short of expectations. A report on August 31 from the parliamentary budget officer said the program aiming to provide rent relief to small and medium-sized businesses will cost $931 million after it was extended through to August. The updated spending projections still put the program on a track to provide less help than the nearly $3 billion the Liberals had budgeted.

The program provides forgivable loans that cover half of rent for eligible small businesses, and also requires landlords to waive a further one-quarter of what they’d otherwise be owed. Property owners have to apply for the help, and the Liberals have for months repeatedly asked landlords to use the aid — a request Finance Minister Chrystia Freeland reiterated.

The Canadian Federation of Independent Business has asked the government to allow tenants to directly apply for help, or make changes to a small-business loan program so that more of the outstanding amount could be forgiven if paid back on time. The group’s executive vice-president warned some companies are ready to close with September rent due and hoped that Freeland, newly minted in the finance portfolio, would make amendments.

“You qualify for the support, except that someone outside of your business and government have to nod their head and agree to it,” Laura Jones said in an interview on August 31. “It’s just so fundamentally unfair that I have a hard time believing that anyone with common sense and smarts wouldn’t see that unfairness and want to fix this.”

NDP small business critic Gord Johns said Freeland needs to fix the program because asking landlords to apply isn’t working. “The program’s getting a fraction of expected use, not because small businesses are thriving, but because those that need the help can’t access it,” he said in a statement.

While many have reopened as restriction relax, their revenues are still low even if fixed costs like rent remain at 100%, which is why many had looked to the Liberals to make a change to the program by now. “There are many businesses out there who are anxiously awaiting for a response from us,” said Small Business Minister Mary Ng, seated alongside Freeland at the phone-in press conference, “and I just want to assure you, we’re absolutely working on that.”

Jenifer Bartman, a Winnipeg-based business consultant, said some landlords may not be applying for the program because they feel other supports may be able to help companies afford their rent. Others, she said, may be worried about their own loans and mortgages given the economic uncertainty. But without getting help to companies, some may opt not to renew their leases, close down and eliminate jobs, said Bartman. “That’s what I see as the real danger,” she said. “Companies go out of business … then the spaces are empty, and landlords try to fill them in what could be the worst of times.”

Aiming to help businesses in a different way, the Liberals on August 31 announced an extension of the Canada Emergency Business Account until the end of October. Freeland also said that the government is working with financial institutions to expand eligibility to companies that have been shut out of the program, including those who use personal rather than business bank accounts.The government had said in mid-May that it was working to address that particular issue. Freeland said details about eligibility changes will be released in the coming days, including a new process to open a business account.

Conservative small business critic James Cumming said in a statement that the Liberals needed to put a concrete timeline around a simplified application process. “Small businesses can’t operate on ‘soon’ and they definitely can’t plan for a future in such uncertain terms,” he said.

The government said the business loan program has provided more than $29 billion in credit through more than 730,000 loans. Eligible businesses can receive interest-free loans of up to $40,000 through the program, and have one-quarter of the outstanding amount forgiven if the balance is repaid by Dec. 31, 2022.

Source: Toronto Star