P.E.I. small business owner urges changes to COVID-19 rent aid program

A P.E.I. small business owner is calling for changes to a COVID-19 relief program that helps pay for a portion of her rent.

Shawna Ryan, who owns Tangerine Hair and Spa in Charlottetown, says her landlord has to apply for the Canada Emergency Commercial Rent Assistance (CECRA) program in order for her to get assistance, but so far that hasn't happened. 

The program offers subsidies from the federal government to help reduce a business tenant's rent by up to 75 per cent. The federal government covers 50 per cent of the rent, with the landlord forgiving another 25 per cent.

Ryan wants to be able to apply to Ottawa for the program herself, rather than relying on her landlord to do so.

"We all want to get through this and we want to stay in business, but a few hard months for many businesses can mean the difference between your doors staying open or closing forever, unfortunately," Ryan said.

Rent deferred still needs to be paid

Due to COVID-19, Ryan's shop had to close in mid-March for two months. 

She had to lay off 13 employees, and because her shop was closed, she had no income. 

Ryan applied for the provincial rent deferral program. That meant she didn't have to pay her $6,500 rent for the months of April, May and June.

But because it's a rent deferral program, she will now have to pay a higher rent — more than $6,700 — for the next five years.

That's why she wanted to apply for CECRA. She said her landlord, APM Group, has not given her a reason why it won't apply for the program.

'We were under the impression you couldn't double dip'

Tim Banks, CEO of the APM Group, said he worked with many of his tenants, including Tangerine Hair and Spa, on the provincial rent deferral program.

But he said none of his other tenants asked his company to apply for the federal rent assistance program.

"We were under the impression you couldn't double-dip, meaning you couldn't have one program and have the other as well. I don't necessarily know if that's true or not so we're checking into that," Banks told CBC News.

Officials with the P.E.I. government told CBC News on Thursday that changes announced to the federal rent assistance program on June 30 mean businesses can apply for the federal program even if they have taken part in the provincial rent deferral program. But time is running out. The deadline to apply for the program is Aug. 31. 

"Everybody has to work together here and we don't want to terminate a tenant, or kick a tenant out, or lose a tenant," said Banks. "That'd be just silly on our part, so if we had to give up 25 per cent, we'd certainly do that. However, I think they would have to come forward with a business plan to us to try to justify why we should be giving up part of our revenue while they are operating."

Banks said he's prepared to meet with Ryan to discuss her request. He added that APM Group lost tenants and projects because of the global pandemic and that will cost the company anywhere from $600,000 to $1 million in profits, including rental income.

"We never laid anybody off, we never kicked anybody out. We have no intentions of doing either." 

'Program is poorly designed'

Louis-Philippe Gauthier with the Canadian Federation of Independent Business said Tangerine Hair and Spa is not alone in its inability to access federal rent assistance. He said many small business owners are in the same situation; they want to access the program but their landlords won't apply.

"In the update that ex-finance minister [Bill] Morneau brought to Canadians a few weeks ago, it was clearly evident that with only 12 per cent of the funds that were brought to the businesses used in the program … the monies weren't reaching the businesses," said Gauthier.

"The program is poorly designed and doesn't respond to the needs of all landlords or all tenants."

The federation is lobbying the federal government to allow tenants to be able to apply directly for the program.   

In July, Charlottetown MP Sean Casey acknowledged flaws in the program, adding, "There is no question that because the program is voluntary and not all landlords have chosen to participate, that there has been a negative impact."

Ryan said her business is doing well now but she is worried about the future and what a second wave of COVID-19 may mean for her business. She said the federal rent assistance program would help ease those concerns.  

"It would mean a great deal. It would mean that I could rest assured that if there is another closure, that I will still be able to pay my rent and stay in business and employ my staff, so it is a huge thing for me."

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