Canadian Commercial Property Owners Urge Direct Small Business Aid Over Blanket Eviction Bans

A prominent new coalition representing commercial property owners throughout Canada is proactively calling on provincial governments to shift their approach to pandemic-related economic relief. Instead of implementing broad, non-eviction measures, the coalition advocates for direct financial support channeled specifically to struggling small businesses. Their argument is clear: existing non-eviction rules, particularly for landlords actively participating in the Canada Emergency Commercial Rent Assistance (CECRA) program, inadvertently penalize property owners. These measures make it exceedingly difficult for landlords to collect essential rent payments, thereby jeopardizing their ability to meet critical financial obligations such as payments to lenders, municipal property taxes, and utility costs.

The Economic Impact of COVID-19 on Commercial Real Estate

The COVID-19 pandemic unleashed unprecedented challenges across the global economy, and Canada’s commercial real estate sector was no exception. Small businesses, the vibrant heartbeat of communities and the primary tenants for countless commercial properties, found themselves on the front lines of economic uncertainty. Lockdowns, reduced consumer spending, and operational restrictions led to significant revenue shortfalls, making it incredibly challenging for many to meet their rental obligations. In response, governments at various levels introduced a range of support programs and regulations, including the federal CECRA initiative and various provincial non-eviction mandates, all aimed at staving off widespread business failures and homelessness.

While well-intentioned, the coalition argues that some of these measures have created unintended consequences. CECRA, designed to provide rent relief by sharing the burden between landlords, tenants, and the federal government, was intended to be a collaborative solution. However, when paired with blanket non-eviction policies, the system, according to property owners, created a perverse incentive structure that undermined its effectiveness and placed an undue burden on landlords.

Why Blanket Non-Eviction Measures Fall Short

Members of the coalition emphasize their commitment to supporting their hardest-hit tenants and confirm their intent to apply to the CECRA program where needed. However, they firmly believe that blanket non-eviction measures are counterproductive and ultimately harmful to the entire commercial ecosystem. “In comparison,” the coalition asserts in a recent statement, “blanket non-eviction measures only punish property owners who participate in the CECRA by drying up income from those tenants who can afford to pay their rent, while doing nothing to help struggling tenants pay their bills.”

This critical distinction highlights a core issue: not all tenants were equally impacted by the pandemic, and some businesses, while perhaps facing reduced revenue, still possessed the capacity to meet their rental commitments. When a blanket non-eviction policy is in place, it can inadvertently empower tenants, regardless of their financial solvency, to withhold rent without immediate consequence. This creates a challenging situation for property owners who, unlike their tenants, do not receive direct government subsidies to cover their operational costs. “This harms the ability of property owners to pay their mortgage, property taxes, maintenance and utility costs,” the coalition explains, detailing the cascading financial strain placed upon them.

Property owners themselves are integral parts of the economy, often operating on tight margins and carrying substantial debt obligations related to their commercial properties. Their ability to pay property taxes contributes directly to municipal services, while mortgage payments are crucial for the stability of financial institutions. When rental income—their primary source of revenue—is disrupted, the entire financial chain is affected, potentially leading to widespread instability that extends far beyond individual landlord-tenant relationships.

A Call for Targeted Support: Learning from Provincial Successes

The coalition is advocating for a more nuanced and effective approach, one that focuses on direct, targeted financial assistance to small businesses. They are specifically calling on all provincial governments to follow the lead of Saskatchewan, Manitoba, and Nova Scotia, which have already implemented direct payment programs. These provinces have instituted payments ranging from $5,000 to $6,000 to help struggling small businesses, a measure that directly assists them in meeting their 25 percent rental obligation under the CECRA program.

This model, according to the coalition, is far more equitable and efficient. By providing direct aid to tenants who genuinely need it, these programs ensure that rent payments can be made, supporting both the tenant’s continued operation and the landlord’s ability to maintain their properties and meet their financial commitments. This approach fosters a spirit of collaboration rather than confrontation. “Far more preferable is direct support to small businesses,” states the coalition, “making it easier for tenants, commercial property owners and commercial lenders to reach accommodation by working together to adjust agreements.” This targeted support not only prevents unnecessary financial hardship for landlords but also empowers small businesses to regain their footing and contribute to a more robust economic recovery.

Addressing the CECRA Forgivable Loan Agreement

Beyond advocating for direct provincial support, the coalition has also identified a significant flaw within the federal government’s Property Owner Forgivable Loan Agreement under the CECRA program. They call for crucial changes to this agreement, as it “appears to claw back direct provincial government supports to small businesses.” This clause effectively negates the positive impact of provincial aid by reducing the federal contribution if a tenant receives other government funding. This situation creates a disincentive for provinces to offer additional support, as it simply shifts the burden rather than providing cumulative relief.

Such a clawback mechanism undermines the spirit of comprehensive relief and creates unnecessary complexity and friction between federal and provincial initiatives. The coalition argues that if the goal is truly to help small businesses survive and thrive, all layers of government support should ideally be complementary and additive, not offset against each other. Rectifying this aspect of the CECRA agreement is seen as a vital step towards streamlining aid and ensuring its maximum effectiveness for the businesses that need it most.

Fostering Collaboration for Sustainable Recovery

The coalition passionately argues against policies that pit tenants against property owners, especially during a crisis that demands unity. “At a time when all Canadians need to do their part and pull together to fight COVID-19, it has not been helpful to see tenants pitted against property owners,” the coalition laments. They highlight the discredit this brings to property owners’ genuine efforts to work closely with small businesses, who are unequivocally recognized as “the lifeblood of the commercial real estate sector.” Many landlords have already extended accommodations through rent deferrals and abatements under CECRA, demonstrating a willingness to partner with their tenants through difficult times.

Furthermore, the coalition stresses that if arbitrary measures like non-eviction mandates are imposed on property owners, making it harder for them to collect rent and pay their bills, then a similar expectation of leniency should apply to commercial lenders. “If arbitrary measures like non-eviction measures are placed on property owners, making it harder for us to collect rent and pay our bills, then commercial lenders should also be required to show leniency when it comes time to collect mortgage payments,” they state. This call for a holistic approach underscores the interconnectedness of the financial ecosystem, where pressure on one segment inevitably ripples through others. True economic stability requires all stakeholders – tenants, landlords, lenders, and governments – to share the burden and work collaboratively towards mutually beneficial solutions.

Who is Behind the Push? The Coalition of Property Owners

The coalition represents a broad and significant cross-section of Canada’s commercial property ownership landscape, indicating widespread concern across the industry. Members include:

In Ontario: Sealink Properties, Molinaro Group, Beaux Properties, and Britannia Properties.
In Quebec: Vista Properties and Groupe Harden.
In British Columbia: Altus Group.
In Prince Edward Island: Macro Investments.
In Manitoba: Capital Commercial Real Estate Services and UM Properties.
In Alberta and Saskatchewan: Melcor Developments.
In Alberta: Cameron Development Corp.

This diverse representation from coast to coast amplifies the message that the proposed policy changes are not merely a regional or niche concern, but a national imperative for the health of Canada’s commercial real estate sector and the small businesses it supports.

Conclusion: Paving the Way for a Resilient Future

The unified voice of Canadian commercial property owners sends a clear message: effective economic recovery from the COVID-19 pandemic requires targeted, direct support for small businesses, rather than blanket measures that inadvertently create new problems for landlords. By advocating for provincial direct payment programs and necessary adjustments to federal aid mechanisms, the coalition seeks to foster a more stable and collaborative environment for all parties involved. This approach promises not only to alleviate immediate financial pressures but also to lay a stronger foundation for the long-term resilience and growth of Canada’s vital small business community and the commercial real estate sector that houses it. A pragmatic, cooperative strategy is essential to navigate ongoing economic uncertainties and ensure a vibrant future for Canadian enterprises.