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Dear Neighbour,

The big
announcement today is the commercial rent relief program. In a partnership with the Government of Canada, Ontario will be delivering support to small businesses and landlords affected by the COVID-19 pandemic through the Ontario-Canada Emergency Commercial Rent Assistance Program (OCECRA). Please find below a Q & A of the program that the Ontario government has released.

Ke
y highlights of OCECRA

  • This is a cost sharing program between the government (50%), landlord (25%) and small business (25%). 
  • A total of $900M will be provided through this program.
  • The landlord would apply for a forgivable loan which is contingent on the signing of a rent forgiveness agreement between impacted tenant and landlord.
  • Rent for occupants must be lowered 75%.
  • This would also include a moratorium on evictions for three months.
  • An eligible small business tenant: 
    • Pays monthly rent not exceeding $50,000 in gross rent payments; and
    • A non-essential small business that has temporarily closed, or who is experiencing a 70 per cent drop in pre-COVID-19 revenues
  • Not-for-profit organizations and charitable entities would also be considered for the program.
Two areas have already been identified by many as barriers:
  1. It relies on landlords to decide to apply and if they do, they’ll lose 25 per cent of their income.
  2. Only landlords whose commercial tenants have lost 70 per cent of their income will qualify.

Given the program is quite complex, I am very interested in how implementation will unfold. If you are a small business, I would like to know: is 70% lost revenue the right benchmark? Is your landlord on board with this? If you are a landlord, please let me know: will you apply for this?

The Canadian Federation of Independent Businesses said the program may rely too much on landlords to administer, and may not provide adequate support to hard-hit businesses. We are also already hearing reports that some landlords have already declined to participate.

I want to thank all the small business owners and our community members for pushing both the federal and provincial government for going beyond wage subsidies and loans and acting on commercial rent relief. I was proud to
advocate alongside local business owners to receive support through this crisis. I would like to acknowledge the incredible work our local BIAs are doing advocating for local businesses. While it is promising to see support for commercial renters, I know this measure won't help everyone. I will continue to advocate to address the gaps in this program and protect all small businesses. The work continues!

Similarly, we have to work together for action on rent relief for tenants. As you know, my colleagues and I are fighting for an 80% rent subsidy for renters, up to $2,500/month. The Ontario government must provide relief. May 1 is only a week away.

As always, wash your hands. Stay home (unless you must work). Be kind. We are all in this together!

Warmly

Bhutila Karpoche,
MPP for Parkdale—High Park
New Emergency Order - Mental Health and Addictions
  • The government has introduced a new measure to allow mental health and addictions agencies to redeploy staff within different locations or between programs, and employ extra part-time staff, temporary staff or contractors in order to ensure people continue receiving the high quality care they expect and deserve during the COVID-19 outbreak.

  • Agencies would be required to provide appropriate training and education to achieve the purposes of a redeployment plan.

Extension of Emergency Orders
  • Ontario has extended all emergency orders issued to date under s.7.0.2 (4) of the Emergency Management and Civil Protection Act until May 6, 2020. This includes the closure of outdoor amenities in parks and recreational areas, non-essential workplaces, public places and bars and restaurants, along with restrictions on social gatherings and limiting staff from working in more than one retirement home or long-term care home. A full list of emergency orders can be found here.
Updates on Long-term Care
  • As previously shared, the Province of Ontario has requested the support of the Canadian Armed Forces medical personnel in selected high-need long-term care homes. The Federal government has granted this support and the CAF will provide support in the following facilities:
    • Orchard Villa, Pickering
    • Eatonville, Etobicoke
    • Altamont Care Community, Scarborough
    • Hawthorne Place, North York
    • Holland Christian Homes’ Grace Manor, Brampton
Q&A: Ontario-Canada Emergency Commercial Rent Assistance Program

How does the program work?
The program has been developed to share the cost between small business tenants and landlords. Small business tenants and landlords would each be asked to pay 25 per cent of the before profit costs and the provincial and federal government would cost share the remaining 50 per cent.

For example, a monthly rent for a small business is $10,000. In this example, assume the landlord doesn't make a profit. The landlord forgoes $2,500 (25 per cent of rent). The small business would be responsible for paying $2,500 (25 per cent of rent). The government would cover the remaining $5,000, with $3,750 from the federal government (37.5 per cent of rent) and $1,250 (12.5 per cent of rent) from the provincial government.

To receive the loan, property owners will be required to reduce the rental costs of small business tenants for April to June 2020 by at least 75 per cent. The loan would also be contingent on the signing of a rent forgiveness agreement between impacted tenants and landlords. This would also include a moratorium on evictions for three months.

How long would a commercial property owner have to apply for OCECRA?
The OCECRA would be administered by the Canada Mortgage and Housing Corporation (CMHC) and would be available until September 30, 2020. Support would be retroactive to April 1, covering April, May and June 2020.

Are there any eligibility requirements for commercial property owners?
The OCECRA would apply to commercial properties with small business tenants. Commercial properties with a residential component, and residential mixed-use properties with a 30 per cent commercial component, would be equally eligible for support with respect to their commercial tenants. The property owner must be the registered owner and landlord of the residential or commercial real estate property. If a property owner does not have a mortgage secured by a commercial rental property, the property owner should  contact CMHC to discuss program options, which may include applying funds against other forms of debt facilities or fixed cost payment obligations (e.g. utilities).

What are the eligibility requirements for small businesses?
An eligible small business tenant is one that:

  • Pays monthly rent not exceeding $50,000 in gross rent payments; and is,
  • A non-essential small business that has temporarily closed, or who is experiencing a 70 per cent drop in pre-COVID-19 revenues (determined by comparing revenues in April, May or June to the same month in 2019 or alternatively compared to average revenues for January and February 2020). 
  • Not-for-profit organizations and charitable entities would also be considered for the program.

Are commercial properties that also have apartments eligible as well?
Commercial properties with a residential component, and residential mixed-use properties that have a 30 per cent commercial component, would be equally eligible for support with respect to their commercial tenants only.

Does the OCECRA program factor in profits for the commercial property owner through the loan period?
The forgivable loan would be conditional on the property owner and tenant entering into a rent forgiveness agreement (including a moratorium on eviction for three-months) pursuant to which the property owner would reduce the tenant's monthly rent to 25 per cent of rent that relates to fixed costs for three months. The property owner would be responsible for the remaining 25 per cent. For certainty, government funding, and remaining monthly tenant rent payment obligations (i.e. 25 per cent), would not cover the property owner's profits derived from rental income - that is, in applying for this program, the property owner agrees to forego profit for a three-month period.

Are any small businesses excluded from the OCECRA program?
The following exclusions would apply:

  • Entities owned by individuals holding political office;
  • Entities that promote violence, incite hatred or discriminate on the basis of race, national or ethnic origin, color, religion, sex, age or mental or physical disability; and,
  • An entity in the Lenders special accounts or Restructuring Group prior to March 1, 2020
Reminder: For the most up-to-date information please visit Toronto Public Health, Ontario Ministry of Health, and the Public Health Agency of Canada. Contact information is available on my website here.
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While our office will be closing to the public as part of our efforts to manage the COVID-19 virus, we will continue to provide services for constituents via phone and email. Thank you for your patience and flexibility during this time. 

Phone: 416-763-5630
Email: BKarpoche-CO@ndp.on.ca 
BhutilaKarpoche.ca
Copyright © 2020 MPP for Parkdale—High Park, All rights reserved.


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