British Columbia

Rent relief welcomed by Vancouver businesses but will everyone get it?

The federal and provincial governments are offering rent relief for many small businesses impacted by the COVD-19 pandemic. But some business owners worry about the program's limitations.

Lawyer says landlord and tenant agreements to qualify for rent relief should be in writing

Linda Levy, owner of L'Atelier Home is pictured outside of her store in Vancouver. She's hopeful a new rent relief program can help her stay afloat. (Ben Nelms/CBC)

Making rent as a small business in Vancouver is tough enough, Linda Levy says, so how do you do it when you can't even open?

Levy is the owner of L'Atelier Home, a furniture and home decor store, in Vancouver's Gastown.

The shop has been closed since March as B.C. and the rest of the world attempts to stop the spread of the COVID-19 pandemic, but she still has to pay her bills.

"Even just dipping down to 50 per cent [of normal sales] is massive… We don't have all these high margins where we have a lot of extra funds just lying around to sustain us," Levy said.

"Rent is obviously the biggest factor for us."

Linda Levy, the owner of L'Atelier Home, said her business has been closed since mid-March but the rent keeps coming. (Ben Nelms/CBC)

Levy is hopeful, however, that a new federal-provincial rent relief initiative for small businesses will help with her biggest expense.

There are some criteria and caveats for the program but it could reduce some business's rent by 75 per cent.

"It would help dramatically," she said. "It would be amazing. Let's just hope that it's as straightforward as it should be."

Other business voices are optimistic about the idea but also aware there are caveats.

'We're still very concerned'

The rent relief plan, known as the Canada Emergency Commercial Rent Assistance Program, will provide non-repayable loans to commercial property owners to cover 50 per cent of rent payments for April, May and June.

The loans will be forgiven if the property owner agrees to cut rent by at least 75 per cent for those months and promises not to evict the tenant. The small business tenant must cover the remaining 25 per cent of the rent. 

To qualify, small business tenants must pay less than $50,000 a month in rent. They also must have experienced a revenue decline of at least 70 per cent from pre-COVID-19 levels, or they must have been forced to close down because of pandemic restrictions.

The program is funded jointly by the federal government and the provinces. The B.C. government said in a statement the province is contributing $80 million of the $300 million B.C. businesses will receive from it.

The province said the federal government will administer the program through the Canada Mortgage and Housing Corporation.

Laura Jones is executive vice president of the Canadian Federation of Independent Business, an organization for small and medium-sized businesses. (Ben Nelms/CBC)

Laura Jones, executive vice president of the Canadian Federation of Independent Business, said it's a positive development but worries about some of the criteria.

"What happens to the business who's got a 60 per cent revenue loss or 50 per cent or 40 per cent?" Jones asked.

"These are still huge numbers for business owners, so we're still very concerned."

Dane Stevens, co-owner of Gastown bespoke jewellery store Cavalier, said his business needs to maintain a physical location if it's to get back on its feet after pandemic restrictions end.

He is concerned the relief program and other efforts might not be long-lasting enough.

"Ultimately, it is the taxpayers that pay for it," Stevens said. "It's much needed, of course. It's just that balance between how long can this go and how far are we willing to go?"

Co-operation, optimism

Commercial lawyer Bill Holder said business owners and landlords who want to enter the program should write up an agreement stating their intention to go into the program before altering rent payments.

He added it is entirely up to the landlord if they want to participate or not.

Commercial lawyer Bill Holder says he has seen many examples of commercial landlords and tenants co-operating when it comes to rent during the coronavirus pandemic. (Ben Nelms/CBC)

"They are getting 75 per cent of the rent. They are keeping a tenant, hopefully, for when things improve," Holder said. "I think the tenants and landlords would like to continue in business together. There's good reasons for both of them wanting to do that."

Stevens said he and his landlord have come to an agreement on rent reductions.

He keeps mentioning his optimism and thinks many businesses just need help in the short term to make it to brighter days.

His shop, for instance, has been hurt by many cancelled weddings, but added, "people are always getting married."

"At some point, people are going to want wedding rings."

With files from Tina Lovgreen and Kathleeen Harris