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Rent relief 'paramount' for St. Albert small businesses

Quarter of businesses said they are unable to pay April's rent: CFIB
0404-essentialbiz
A closed sign posted to the front door of a business on Perron Street in St. Albert. BRITTANY GERVAIS/St. Albert Gazette

Small business owners in Alberta already hit hard by COVID-19 are bracing themselves for the next wave of impacts as deadlines for monthly rent payments loom. 

According to a recent poll from the Canadian Federation of Independent Business (CFIB), 23 per cent of business owners surveyed said they are unable to pay their lease or mortgage payments in April. 

Close to half of respondents, 42 per cent, said they are worried they may have to close their business permanently. 

"Last week brought good news for many with respect to an increased wage subsidy but the next big bill looming for many is commercial rent," said Laura Jones, CFIB's executive vice-president, in a press release.

"Business owners - both leasers and landlords - are worried as everyone has bills to pay."

In Alberta, a majority of small businesses - 68 per cent - agree the government should take more action to protect commercial renters from being affected.

This is coupled with 82 per cent who agree the government should be providing emergency relief to cover rent and other fixed costs, according to Annie Dormuth, CFIB Alberta director. 

While deferring education property tax is needed relief for small businesses, Dormuth said the CFIB is calling on the province to take the next step by providing a direct benefit for rental costs.

"Two of the greatest urgencies or calls for the government to act on would definitely be relief for rent and other fixed costs, as well as looking at making some changes to the employment standards code to better accommodate the COVID-19 crisis," Dormuth said.

Cerulean Boutique owner Jill Bulmer said the local store was able to pay off April's rent in full, but there's concern about future months with no revenue coming in. The clothing boutique temporarily laid off its staff and closed its doors to in-store customers on March 15. 

"We really pride ourselves on making sure we have great cash flow to pay for all these extras, but it does put a huge strain on us, especially at this time of year when we ordered our products six to eight months ago," Bulmer said, calling the savings the store's "hopefully-we-move-forward" fund.

"When these little bumps come along, we can handle them, but when they go on for three to four months, that'll be a problem."

Being able to pay rent in the future is "paramount" for the small local retailer, Bulmer said, adding people who are self-employed seem to have been "glazed over" by provincial and federal supports. 

"I hear from everyone that the government is offering these supports, but you can't use them," she said. 

If the business is eligible, Bulmer said she is hopeful the new Canada Emergency Business Account (CEBA) fund will help bridge the gap. She said she is also looking into whether she can apply for the federal government's Canada Emergency Response Benefit, which is geared toward workers who are self-employed.

The federal CEBA program will provide funding to eligible financial institutions so that they can provide interest-free loans in the form of lines of credit of up to $40,000 to small businesses and not-for-profits with payrolls between $50,000 and $1 million.

A quarter of this loan, up to $10,000, is eligible for complete forgiveness, which the CFIB argues should be directly allocated toward covering rent and other fixed costs.

As a complement to the CEBA, the province should create a hardship fund with additional emergency money for businesses with significant revenue losses or cost increases, up to $5,000 per month for three months, according to the CFIB. 

This money would aid businesses that may not qualify for the federal loan or need additional assistance. For example, small new start-ups may not be able to meet the CEBA's minimum $50,000 payroll requirement to apply for the loan.

"We have been hearing that some businesses, sole proprietors, for example, aren't eligible for a lot of this (federal) funding," Dormuth said.

According to a survey asking whether they believe their landlord is being reasonable, 21 per cent of Alberta businesses strongly agreed while 13 per cent disagreed.

Landlords are business owners too, and CFIB advises landlords and tenants to communicate and work out arrangements around rental agreements.

"(Having) that communication and conversation with your landlord is really important," Dormuth said.

Concept Jewelry Design owner Carmen Bokenfohr said their landlord called the small business at 20 Perron Street to let them know they had decided to waive April's rent for their tenants on March 18, following up with a notice in writing. 

Bokenfohr said she was "overwhelmed with gratitude" when she was told she wouldn't have to worry about rent in April.

"It's been huge as far as taking the stress off," she said, noting the help has allowed her to keep employing two people at the store. "The stress is still there, there's no question, but it's definitely helped in the short-term." 

St. Albert Gazette reached out to the landlord's representative, who wished to remain anonymous to "respect the privacy of their tenants." 

"We respect that other landlords and their tenants may work out a different arrangement, just like the province of Alberta has recommended for residential tenancies," the representative said. 

"We're very proud of our tenants, we've had them for a very long time, and we would expect that they are most concerned about their future. We're in this boat together." 

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