Toronto, Canada, June 28, 2021 (GLOBE NEWSWIRE) – Canada’s commercial real estate industry, represented by REALPAC, BOMA and NAIOP, is calling on the Canadian government to strengthen Canada’s Emergency Rental Subsidy (CERS) program. The industry, which, combined with residential real estate, contributes the most to Canada’s economy by GDP, is proposing a number of changes it believes are necessary to get the Canadian business community back on track.
The commercial real estate industry across Canada appreciates the federal government’s efforts to support business during this challenging time. Tenants and homeowners welcomed the steps to improve the Canadian Commercial Lease Emergency Assistance Program (CECRA) followed by the CERS program. However, CERS in its current form falls short of its goal of providing benefits to as many affected businesses as possible, despite the fact that many property owners and managers are actively working with tenants to ensure program benefits are promoted and access is appropriate. Despite similar eligibility criteria, Canada’s popular Emergency Wage Subsidy (CEWS) program helped 447,750 businesses, while CERS helped less than half of that number: 192,560 unique applicants with approved requirements.
In a jointly signed letter to the Treasury Department, REALPAC (Real Estate Association of Canada), a coalition of affiliated chapters of the Building Owners and Managers Association (BOMA) and the National Association of Industrial and Office Real Estate (NAIOP) of Canada. have asked the Government of Canada to continue supporting tenants by reviewing the CERS program and reviewing seven major proposed improvements:
- Increase support for business education to allow businesses that have not yet applied to assess their eligibility,
- Allow businesses that cannot pay 100% of the rent as a condition for a CERS grant, at the option of the landlord, to pay only the amount they received as a rental subsidy,
- Allow landlords, at their discretion, to defer or reduce rent after the effective date of the program on September 27, 2020, without affecting the tenants’ CERS benefits (i.e., Calculate CERS benefits on rent in effect on the effective date of the program),
- Provide support to new businesses with no qualification period sales comparisons,
- Increase the eligible spending cap for multi-office organizations from $ 300,000 in eligible expenses to $ 1.8 million in eligible expenses,
- Allow support blocking for businesses with more than one location, regardless of the number of tenant locations, and
- Make all these changes retroactive before the effective date of the program.
The space in which a business operates is a key component of its success. For many businesses, rent is one of the biggest costs. In this context, landlords and tenants rely on each other as partners in a collective business. This reality has never been as evident as it is now.
During the pandemic and public health regulations, renters and homeowners across Canada worked together to access and advise on government support programs. However, the role of the federal government as a political partner is of paramount importance. The commitment to the CERS review as a support tool will be welcomed by businesses across Canada. As the pandemic lasted more than 15 months, the impact of prolonged closures / restrictions pushed businesses to the extreme as the number of unpaid obligations (such as rent and other expenses) increased. This highlights the importance of supporting Canadian businesses through retroactive changes to CERS eligibility to maximize their chances of survival.
The REALPAC, BOMA and NAIOP commercial real estate members are developers, owners, managers and service providers of retail, office, industrial and investment real estate in every area of Canada. Their members have tenants in all sectors of the Canadian economy. Given the ongoing pressure on Canadian businesses, especially the small business community, we urge the Canadian government to review the CERS and commit to extending the lease support period.