As our economy moves into the slow, recovery phase from this pandemic, measures and programs are still being undertaken to help relieve some of the burdens faced by businesses, landlords and tenants. Rosemary Barton had pointed out that eviction is still a reality in these difficult times, displaying disproval asking the question of acquiring new tenants in this difficult time.
Yet I get it, if you are selling a product, just because there is a pandemic, you don’t go and hand out your product for free. If renting space is the product you’re offering, pandemic or not, you also need to make money. The Government of Canada has also introduced programs to aid Canadians in these unprecedented times, the Trudeau phrase that has caught on like a bad disease (too soon?), programs such as the Canadian Emergency Business Account, to provide businesses with loans of up to $20K. Come on, Rosemary, it’s hard for everyone right now.
Although in order to address these concerns specifically, the government has introduced the Canadian Emergency Commercial Rent Assistance Program (CERAP), where to the tenant and landlord will pay 25% of the rent each, and the Federal Government covers the other 50%. This program will launch May 25th.
Here are some details about the CECRA program:
- Lowers rent by 75% for small businesses
- Loans may be forgivable
- Covers 50% of 3 monthly rent payments
- Payable to eligible tenants through April, May and June
- Loans will be forgiven if property owners reduce rent by 75%
- Owners, however, must reduce rent for 3 months in agreement
- Tenants must be paying less than $50K/month in rent for eligibility
- Must have had at least a drop in 70% of revenue or have stopped operating completely
Today, the Large Employer Emergency Financing Facility (LEEFF) has open access to applications today, This program is offered through the Canada Development Investment Corporation. You can apply here. Internationally, Spain has made mask wearing mandatory. To address the growing concern over mask wearing, we turn to Dr. Theresa Tam, Canada’s Chief Public Health Officer.
Dr. Tam has added that physical distancing, hand washing and cough etiquette is sufficient. Having a mask is going to add that extra protective layer, and if you are sick, then you must stay home. Yet jurisdictions would benifit if they were to do a risk assessment, as some regions haven’t had community transmissions, and in other there was definite community transmission. The exact nature of COVID-19 transmission from human-to-human, is not understood well enough, and because community transmission doesn’t occur everywhere at the same rate, issuing a mandatory statement to all Canadians isn’t appropriate as of right now.
Over time, Trudeau has emphasized that the LEEFF will provide bridge financing, they are loans and not bailouts. The last time I had checked, Trudeau has already spent 150 Billion dollars, and the economy hasn’t opened up. On average Canada spends 250 billion dollars a year, but with the economy not opening up as usual, you have to wonder if we are going to spend a lot of money this year, or perhaps there will be a huge surge in our monetary expenditure.
There is some fear about the economy possibly encountering deflation, and the risk associated with a deflation and how to combat deflation is not well known, as opposed to inflation. More on Deflation, the price of goods and why Canadian Economists prefer we encounter Inflation will be discussed in a separate and future article.