New Rent Relief Program
CBJ — The federal government has announced a new rent relief program will be forthcoming to aid companies that continue to struggle financially, with a situation likely to worsen with the second wave of the COVID-19 pandemic now seemingly upon a significant portion of the country.
Finance Minister Chrystia Freeland made the announcement in Ottawa alongside Prime Minister Justin Trudeau.
“The difficult reality is that the health measures we are taking to contain COVID-19 mean there are some businesses that simply cannot operate at full capacity, and some are closed down by public health orders,” Freeland said.
This new rent relief program will be a revised mechanism from the original program, which was not used nearly as much as hoped due to landlords refusing to take a 25% loss. The deal was that the government would pay 50% of a company’s monthly rental costs, with the company kicking in 25% and the landlord to absorb the 25% loss. However, there was no mandate requiring landlords to participate, and as such few did. That initial program was largely deemed a failure and expired last month with very little notice.
Companies hoping to use this new rent relief program can apply directly through the Canada Revenue Agency website until June 2021.
The new rent subsidy will support businesses, charities and non-profits that have suffered revenue decline by subsidizing a percentage of their expenses on a sliding scale, up to a maximum of 65% of eligible expenses, until December 19. A top-up emergency rent subsidy of 25%, in addition to the 65%, will be available to organizations temporarily shut down by a mandatory public health order.
Ottawa has also announced the expansion of its loan program by increasing the forgivable amount. The update increases the Canada Emergency Business Account loan to a maximum of $60,000, up from $40,000 for eligible enterprises. A total of $20,000 of the loan would be dropped if the balance is repaid by December 31, 2022. Nearly 800,000 business have been approved for the program, with more than $30 billion in loans handed out.