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B.C. businesses closed by coronavirus crisis say government needs to help with rent
The Canadian Federation of Independent Businesses says many businesspeople across Canada are concerned the crisis will have them unable to pay their April commercial leases and it wants the government to step in and provide more financial help.Commercial lawyer Bill Holder stands in front of a vacant shop in Vancouver. Many businesspeople and landlords are…
The Canadian Federation of Independent Businesses says many businesspeople across Canada are concerned the crisis will have them unable to pay their April commercial leases and it wants the government to step in and provide more financial help.
J.P. Mass' business horror story began on Friday the 13th: the day Vancouver's film industry essentially shut down due to the coronavirus pandemic.
Mass' Burnaby prop business, Charron Custom Props and Effects, makes on-screen items for TV shows like Riverdale, Arrow and Supernatural.
Now, productions are suspended, leaving his business shuttered but rent and other bills piling up.
“There's no Wizard of Oz who's in charge of it all. So we're just waiting,” Mass said of his shop. “The biggest fear is that I just keep paying and paying and paying until I run out of money. And then my business closes.”
Mass says he's okay for the immediate future but if the crisis drags on, the $8,000 he pays for rent every month for his 6,500 sqft. shop might reach a breaking point.
Mass isn't alone, according to the Canadian Federation of Independent Businesses.
The federation says many businesspeople across Canada are concerned the crisis will have them unable to pay their April commercial leases and it wants the government to step in and provide more financial help.
‘How do we repay that?'
Federation executive vice president Laura Jones wants governments to provide help in several ways: a hardship fund for businesses at risk of closing worth up to $15,000 per business; property tax relief; and protections from eviction.
“Everyone is stressed. Everyone's in crisis mode right now,” Jones said. “Will my business survive this? That's what we're hearing from business owners.”
Jones said it's good that the federal government is making more businesses eligible for wage subsidies but says rent support is also needed, especially for businesses in arts and entertainment, hospitality and personal services.
Jag Sandhar is the co-owner of a hard-hit personal services business: Stripped Wax Bar, which has been ordered closed for weeks while accruing tens of thousands of dollars in rent for five Lower Mainland locations.
“There hasn't been anything significant to really help,” Sandhar said, adding he believes the federation's proposals are both reasonable and likely necessary.
“Even the healthiest of businesses can't operate with zero-dollar revenue figures for multiple months at a time.”
Jennifer Salt, co-owner of Vancouver Italian restaurant Autostrada Osteria, said government help might be needed long-term.
“Even if we get a break in our rent … those bills are still there for us,” Salt said. “And when we're only operating about 10 per cent of typical revenues, how do we repay that?”
‘Any solution will have its ugly features'
“We face a real conundrum as an economy,” said Tom Davidoff, director of the Center for Urban Economics and Real Estate at the Sauder School of Business at UBC.
Governments are already paying large portions of many businesses' labour costs during the crisis, he said, and now may need to pay many of their rents.
That might make landlords and mortgage holders happy, he said, but might not be a good use of money compared to spending it on workers who are likely less well-off. On the other hand, a wider financial collapse is best avoided.
“Any solution will have its ugly features.”
Davidoff said a third option might be to share the damage between financial institutions holding the mortgages, landlords and businesses to some degree or other.
Commercial lawyer Bill Holder says he's heard from both businesses and commercial landlords worried about evictions and rent non-payment.
Nobody wins if businesses get evicted, he said, because in a slow economy the landlords will have a hard time finding new tenants. That should incentivize give-and-take.
“Communicate with each other. Take a deep breath,” he advised. “Let's get through April, let's see how things work out for May.”
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