© Reuters. During the worldwide outbreak of coronavirus disease in Toronto, a sign is posted on a light pole announcing a rental strike
By Moira Warburton and Denise Paglinawan
TORONTO (Reuters) – Landlords across Canada should be prepared for rent strikes in May unless the government intervenes with rent subsidies for residents as the outbreak of the new corona virus declines wages, industry groups and tenants said on Monday.
Restrictions aimed at curbing the spread of the virus have hit the restaurant and retail industries hard, making rent payments a focus for employers and workers alike.
A rental strike is underway in Ontario, the country's most populous province. Keep Your Rent Toronto's private Facebook (NASDAQ 🙂 group has amassed more than 5,000 members in less than two weeks. The organizers indicated that over 100,000 letters were sent to Toronto landlords on their platform, stating that they would not pay rent.
According to the 2016 census, tenants make up 32% of households in Canada, and many companies rent out their residential locations.
CIBC economist Benjamin Tal estimates that, according to preliminary information, around 70% of the rent due in April has been collected.
"The focus is now shifting to May and to provincial governments that, with the exception of British Columbia (BC), have not yet formalized tenant policies," Tal said in a research report.
Restaurant Canada, the industry's national lobby group, estimates that 10% of restaurants across the country will close permanently and another 18% will close permanently within a month if the current conditions persist.
"It's a carnage, a business bloodbath," said Daniel Lefebvre, a regional vice president of Restaurants Canada, and found that many landlords were willing to negotiate in April, but the goodwill may not persist. "If this were to take four or five months, we would have to take other measures."
Ottawa offers up to $ 40,000 ($ 28,347) of interest-free loans to small businesses for one year, but has not yet proposed specific rental measures. Evacuation of residential buildings in BC, Alberta and Ontario has stopped, and Alberta and Ontario Prime Ministers expect landlords to understand the situation of businesses and tenants.
The federal loan is not enough for small businesses, said Sammy Piccolo, who owns eight coffee shops on BC's Lower Mainland, and found that raising debt is not ideal.
"Everything should be forgotten," said Piccolo. "Nobody should owe anyone anything until we get over this crisis."
Major landlords RioCan Real Estate Investment Trust (TO 🙂 and Choice Properties Real Estate Investment Trust (TO 🙂 offer 60-day rent delays, some automatically.
RioCan and Choice include groceries such as Loblaw Cos and film chain Cineplex among their tenants.
Dan Kelly, CEO of the Canadian Federation of Independent Businesses, said anything other than provincial and federal breaks in property taxes and rental subsidies would simply delay and not avoid bankruptcies.
Canadian restaurateur Jen Agg, who owns five restaurants and bars in Toronto, said she wouldn't pay rent for her business.
"We have eliminated all unnecessary expenses, but the big one is inevitable: rent," she wrote in a newspaper column by Globe and Mail. "How can I pay rent if I have no income?"