Business rent aid to fall short of budget, PBO says as credit program expands

Business rent aid to fall short of budget, PBO says as credit program expands

Business rent aid to fall short of budget, PBO says as credit program expands

OTTAWA — 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 Monday 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 Monday.

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 on Tuesday 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 Monday.

“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.

Speaking in Toronto, Freeland said the government would adapt aid programs as needed, and committed to listening and supporting small businesses to help them bridge tough times.

While many have reopened as restriction relax, their revenues are still low even if fixed costs like rent remain at 100 per cent, 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 Monday 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.

This report by The Canadian Press was first published Aug. 31, 2020.

Jordan Press, The Canadian Press

Business

Just Posted

COVID-19 test kit. (Black Press Media file photo)
Red Deer businesses can order COVID testing kits from the Chamber

Kits are being provided through a partnership with the Alberta government

(Advocate file photo)
Pastor, candidate under restraining order arrested for allegedly breaking COVID laws

CALGARY — A Calgary mayoral candidate who is under a restraining order… Continue reading

Pro-Palestinian protesters run from police following a demonstration in Montreal, Sunday, May 16, 2021. THE CANADIAN PRESS/Graham Hughes
Tensions flare at Israel-Palestinian demonstrations in Montreal, Toronto

Tensions ran high at competing demonstrations over the Israeli-Palestinian conflict in both… Continue reading

Maj.-Gen. Dany Fortin, then-vice-president of logistics and operations at the Public Health Agency of Canada, participates in a news conference on the COVID-19 pandemic in Ottawa, Friday, Jan. 15, 2021. An expert in military affairs says the sudden departure of the  general in charge of Canada's vaccine rollout is unlikely to have any impact on the high-profile program. THE CANADIAN PRESS/Justin Tang
Canada to get 4.5M vaccine doses as questions swirl around immunization effort

OTTAWA — Canada is set to receive a large infusion of COVID-19… Continue reading

Israelis take cover as a siren sounds a warning of incoming rockets fired from the Gaza Strip, in Ashkelon, southern Israel, Sunday, May 16, 2021. (AP Photo/Heidi Levine)
Israeli strikes hit Gaza tunnels as diplomats work for truce

GAZA CITY, Gaza Strip (AP) — The Israeli military unleashed a wave… Continue reading

Mayor Rick Bonnett. (Screenshot)
WATCH: Ponoka council calls on gov’t to support rural small businesses

Ponoka council is calling on the provincial government to increase funding to… Continue reading

Calgary Flames players celebrate the team's overtime win against the Vancouver Canucks during an NHL hockey game in Vancouver, B.C., Sunday, May 16, 2021. THE CANADIAN PRESS/Darryl Dyck
Lindholm OT winner gives Flames 6-5 win over Canucks despite blowing four-goal lead

VANCOUVER — In a game with little to play for besides pride,… Continue reading

In this photo taken on May 13, 2021, Russia's performer, Manizha, smiles during an interview after rehearsing at the Eurovision Song Contest at Ahoy arena in Rotterdam, Netherlands. For many, the stage and global television audience of millions is a chance to express messages of inclusion, strength and positivity. Manizha has a message of strength for women in her song whose lyrics include the lines: "Every Russian Woman. Needs to know. You're strong enough to bounce against the wall." (AP Photo/Peter Dejong)
Eurovision Song Contest returns despite coronavirus pandemic

ROTTERDAM, Netherlands (AP) — Pounding beats? Check. Uplifting lyrics? Check. Huge, backlit… Continue reading

Serena Williams of the United States returns the ball to Italy's Lisa Pigato during their match at the Emilia Romagna Open tennis tournament, in Parma, Monday, May 17, 2021. Serena Williams earned her first victory in more than three months by beating 17-year-old qualifier Lisa Pigato 6-3, 6-2 in the first round of the Emilia-Romagna Open. Williams accepted a wild-card invitation for the Parma tournament after losing her opening match at the Italian Open last week. (AP Photo/Marco Vasini)
Serena Williams posts 1st victory in more than 3 months

PARMA, Italy (AP) — Serena Williams earned her first victory in more… Continue reading

In this Oct. 21, 2014 file photo, people pass an AT&T store in New York's Times Square. AT&T will combine its media operations that include CNN HBO, TNT and TBS in a $43 billion deal with Discovery, the owner of lifestyle networks including the Food Network and HGTV. The deal announced Monday, May 17, 2021, would create a separate media company as households increasingly abandon cable and satellite TV, looking instead at Netflix, Amazon Prime Video, Facebook, TikTok and YouTube. (AP Photo/Richard Drew, File)
AT&T, Discovery join media brands as cord-cutting encroaches

NEW YORK (AP) — AT&T will combine its massive media operations that… Continue reading

The Minnesota Wild celebrate their overtime victory over the Vegas Golden Knights in Game 1 of a first-round NHL hockey playoff series Sunday, May 16, 2021, in Las Vegas. (AP Photo/David Becker)
Eriksson Ek’s OT goal lifts Wild past Vegas 1-0

LAS VEGAS (AP) — Joel Eriksson Ek’s goal at 3:20 of overtime… Continue reading

Toronto Blue Jays' Lourdes Gurriel Jr., celebrates after hitting a double against the Philadelphia Phillies during the third inning of a baseball game Sunday, May 16, 2021, in Dunedin, Fla. (AP Photo/Mike Carlson)
Girardi, Segura have confrontation as Phils lose to Jays

Blue Jays 10 Phillies 8 DUNEDIN, Fla. (AP) — The injury-depleted Philadelphia… Continue reading

New York Islanders' Kyle Palmieri (21) returns to the bench after scoring during the first period in Game 1 of an NHL hockey Stanley Cup first-round playoff series against the Pittsburgh Penguins in Pittsburgh, Sunday, May 16, 2021. (AP Photo/Gene J. Puskar)
Palmieri’s OT winner lifts Isles by Penguins 4-3 in Game 1

PITTSBURGH (AP) — The New York Islanders brought Kyle Palmieri home at… Continue reading

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, speaks during a Senate Health, Education, Labor, and Pensions hearing to examine an update from Federal officials on efforts to combat COVID-19, Tuesday, May 11, 2021 on Capitol Hill in Washington. (Jim Lo Scalzo/Pool via AP)
Fauci says pandemic exposed ‘undeniable effects of racism’

ATLANTA (AP) — The immunologist who leads the COVID-19 response in the… Continue reading

Most Read