Canada’s real estate operators call for improvements to national rent support program on behalf of businesses

Toronto, Canada, June 28, 2021 (GLOBE NEWSWIRE) -- Canada’s commercial real estate industry, represented by REALPAC, BOMA and NAIOP, is calling on the Government of Canada to enhance the Canada Emergency Rent Subsidy (CERS) program. The industry, which combined with residential real estate, is the largest contributor to Canada’s economy by GDP, suggests a series of changes it believes are essential for the Canadian business community’s reopening.

The commercial real estate industry across Canada appreciates the federal government’s efforts to support businesses during these challenging times. Tenants and landlords welcomed moves to improve the Canada Emergency Commercial Rent Assistance (CECRA) program with the subsequent CERS program. However, CERS in its current form is failing in its aim to get benefits out to the maximum number of impacted businesses, despite many property owners and managers actively working with tenants to ensure program benefits are promoted and properly accessed. Despite similar eligibility criteria, the popular Canada Emergency Wage Subsidy (CEWS) program has helped 447,750 businesses, while CERS has helped less than half that number: 192,560 unique applicants with approved claims.

In a jointly signed letter to the Ministry of Finance, REALPAC (the Real Property Association of Canada), a coalition of affiliate chapters of the Building Owners and Managers Association (BOMA), and the National Association of Industrial and Office Properties (NAIOP) Canada have requested that the Government of Canada continue to support tenants by reviewing the CERS program and consider its seven main suggested improvements:

  • Increase business education supports to allow businesses who have not yet applied to assess their eligibility,
  • Allow businesses who cannot pay 100% of rent as a condition of receiving their CERS grant to, at the landlord’s option, only pay the amount they received in rent subsidy,
  • Allow landlords the ability to, at their discretion, defer or abate rent after the September 27, 2020 effective date of the program without impacting tenants’ CERS benefits received (i.e., calculate CERS benefits on rents in place at the effective date of the program),
  • Grant support for new businesses that do not have qualifying period sales comparisons,
  • Increase the allowable expense limit for multi-location entities from $300,000 in eligible expenses to $1.8 million in eligible expenses,
  • Allow lockdown support to businesses with more than one location, irrespective of the number of locations of the tenant, and
  • Make all these changes retroactive to the effective date of the program.

The space from which a business operates is a key component of its successful operations. For many businesses, their lease is one of their largest expenses. In this context, landlords and tenants rely on each other as partners in a collective business. This reality has never been as apparent as it is now.

Throughout the pandemic and the public health orders, tenants and landlords across Canada have been working together on accessing and advising on government support programs. However, the role of the federal government as a policy partner is of paramount importance. A commitment to the review of CERS as a support tool would be welcomed by businesses across Canada. With the pandemic having lasted over 15 months, the impact of lengthy closures/restrictions have pushed businesses to the edge, with increased unpaid obligations (such as rent and other costs). This points to the importance of supporting Canadian business by implementing changes to CERS program eligibility, applied retroactively, to best support their chances for survival.

REALPAC, BOMA and NAIOP commercial real estate members are developers, owners, managers, and service providers active in the retail, office, industrial, and investment properties of every community in Canada. Their members have tenants in every industry of the Canadian economy. Considering the continued pressure on Canadian business, particularly on the small business community, we encourage the Government of Canada to review CERS and commit to an extended period of rent support.

CONTACT: Brooks Barnett