Some Manitoba business says bar for new federal rent relief subsidy is too high

By | April 25, 2020

It has been a bit of a tap dance for Tobi Léveillé to keep her St. Boniface dance studio running since she was forced to shut down in mid-March because of restrictions imposed by COVID-19.

Léveillé has been the artistic director and owner of Encore Studios on Marion Street, which offers dance classes and performing arts classes, for the past 15 years. 

She adapted by having her 16 employees deliver classes online. 

“We have worked twice as hard as we would be normally would be doing … but we know we are giving students hope because everything is closing around them,” said Léveillé.

But despite all that hard work, Léveillé says her revenue has dropped about 60 per cent over the same time last year because of the pandemic.

Paying $8,000 a month rent has been tough. And she says a new federal rent relief program won’t help business owners like her.

The new program, announced Friday, will provide 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 owner agrees to cut the rent by at least 75 per cent for those months, and promises not to evict the tenant. The small business tenant would then be responsible for covering the remaining rent.

But Léveillé says she would not qualify for the program because it only applies to tenants who have seen a revenue drop of at least 70 per cent from pre-COVID-19 levels, or who have been forced to close down because of pandemic restrictions.

“I think the bar is just too steep,” she said.

“I think everyone should have some kind of a pause option, regardless of how much business they have lost — because when you are fighting to stay open, you aren’t growing. And if a business isn’t growing, your potential for failure is that much greater.”

The Canadian Federation of Independent Business welcomes the rent relief program, but says it may disqualify some businesses that are taking a hit, like Léveillé’s.

Jonathan Alward, the director of provincial affairs for Manitoba with the Canadian Federation of Independent Business, says many small businesses that need the rent relief may not qualify. (CBC)

CFIB is also concerned the program may be too complicated and too reliant on landlords to administer. 

Tenants may badly need the rent relief, but landlords may decide not to participate in the program or ignore it, says Jonathan Alward, the director of provincial affairs for the Manitoba branch of CFIB.

“By and large, a lot of landlords are good to their tenants, and it makes good business sense to do it,” he said, but the requirements will be a concern for some.

“There might be many small businesses that desperately need the relief but might not get it with that condition.”

While Léveillé says she has a good landlord and considers herself lucky, she can see how it would be awkward for some businesses.

“I understand why they want to include the landlord as part of the solution. But it is the landlord who holds all the cards in this situation,” she said. 

“It’s a difficult situation for business owners to hope the landlord will get this help for them.”

Léveillé managed to pay this month’s rent with the help of  the federal government’s Canada emergency business account, or CEBA.

The program, first announced on March 27 to help small businesses struggling with the financial impact of the pandemic, provides interest-free loans of up to $40,000. If the loan is repaid by the end of 2022, a quarter of it will be forgiven.

But it has its own requirements, including that the business paid out at least $50,000 in salaries last year. That could exclude some self-employed people and other sole proprietors.

Alward says about one in six businesses in Manitoba don’t think they would qualify for CEBA. He’s worried about the number who won’t qualify for the new rent relief program either.

“Some will still fall between the cracks. In a survey we conducted, 51 per cent of Manitobans agreed that without additional assistance, they … can’t pay their rent.”

He adds only about a third of the thousands of businesses in Manitoba are still fully open. The remainder are partially closed or shut down completely. 

Alward doesn’t know how many will be unable to reopen once restrictions are lifted. He says the CFIB will lobby Ottawa to make changes to the rent relief program to make it more accessible.

In the meantime, Léveillé​​​​​​​ is optimistic.

“I am a natural optimist. I don’t know when the restrictions will be lifted, and normally we would be registering for fall now,” she said.

“It will be hard. But I will keep going for sure. If I can’t make rent, I will I will get some leeway from my landlord.”

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