TORONTO – Canadian landlords must prepare for a rent strike in May unless the government takes steps to subsidize rent for its residents when a new coronavirus outbreak reduces wages, industry and tenants said on Monday.
Restrictions aimed at limiting the spread of the virus have hit the restaurant and retail industries violently, making rental payments a lightning burden on employers and employees.
Rental strikes are ongoing in Ontario, the most populous province in the country. Let Your Rental Toronto’s private Facebook group add more than 5,000 members in less than two weeks, and organizers say their platform has been used to send more than 100,000 letters to landlords in Toronto, stating that they will not pay rent.
Tenants make up 32% of households in Canada, according to the 2016 census, and many businesses rent out their brick and mortar locations.
CIBC economist Benjamin Tal estimates that around 70% of rent due in April is collected, based on preliminary information.
“The focus is now shifting to May and to the provincial government which, except British Columbia (BC), has not formalized any policies regarding tenants,” Tal said in a research note.
Restaurant Canada, the national industry lobby group, estimates that 10% of restaurants have been permanently closed throughout the country, and another 18% will be permanently closed within a month if current conditions continue.
“This is a massacre, (a) the bloodshed of business,” said Daniel Lefebvre, regional vice president of the Canadian Restaurant, noting that many landlords would negotiate in April, but the good intentions might not continue. “If this lasts for four or five months, we need to take other actions.”
Ottawa offers a one-year interest-free loan of up to $ 40,000 ($ 28,347) to small businesses but has not yet proposed specific rental measures. The eviction of housing in BC, Alberta and Ontario has been stopped, and the prime ministers of Alberta and Ontario say they expect landlords to understand the situation facing businesses and tenants.
Federal loans aren’t enough for small businesses, said Sammy Piccolo, who owns eight coffee shops in Lower Mainland, noting that taking more debt isn’t ideal.
“Everything must be forgotten,” Piccolo said. “Nobody has to owe anyone until we get through this crisis.”
The main landlords of RioCan Real Estate Investment Trust and Choice Properties Real Estate Investment Trust, offer 60 days of deferral leases, some automatic.
RioCan and Choice counts wholesale retailers such as Loblaw Cos and Cineplex film chains among their tenants.
The CEO of the Canadian Independent Business Federation Dan Kelly said that apart from provincial and federal reductions in property taxes and rental subsidies would only delay bankruptcy, not avoid it.
Canadian restaurant owner Jen Agg, who owns five restaurants and bars in Toronto, said he would not pay rent for his business.
“We have wiped out all unnecessary expenses, but the big one is inevitable: rent,” he wrote in the Globe and Mail newspaper column. “How can I pay rent when I have no income?”
(Additional reporting by Nichola Saminathar in Toronto and Kelsey Johnson in Ottawa; Editing by Nick Zieminski)
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