MEDIA: As the Canadian Emergency Business Account is Extended, What About the Rent?
Pleased to chat with the Canadian Press about today’s news of some of Canada’s COVID-19 business benefits programs being extended. Although the Canadian Emergency Business Account (CEBA) loan program has been extended until October 31, 2020, the lack of movement on the Canada Emergency Commercial Rent Assistance (CECRA) program may have many small businesses wondering how they will meet their obligations of September 1st and beyond.
It shouldn’t be surprising that expenses pertaining to a company’s premises are among the most significant, with, perhaps, only payroll representing a larger monthly obligation. COVID-19 has been a difficult period for companies of all sizes, and when CECRA was announced, the initial response was one of relief. Part of the challenge with this program is that landlords must apply to participate, leaving tenants in difficult circumstances if this did not occur. As at the end of July, 2020, just over $600 million in rent support had been provided, which is regarded as being well below the estimated program budget, expected to be in the billions of dollars. It is a reasonable expectation that many in the small business community are working overtime, in terms of considering their future and just what steps should be taken.
As Summer, 2020 comes to a close, Canada is facing a lot of unknowns, as it relates to COVID-19. With schools re-opening and the weather cooling, resulting in a movement indoors, a second, or even third wave of COVID-19 could occur. Many communities across Canada have recently experienced an increase in COVID-19 rates, even after periods of relative calm. How will small businesses chart this challenging territory in the months ahead?
We have already seen companies closing, unable to reach viability, or perhaps, simply not being up for operating in the new world of COVID-19. As leases end, companies may choose not to renew, and large businesses will undoubtedly be reconsidering their future office needs, as a remote workforce may become the new reality in many cases. Remember also that traffic at businesses such as retailers, restaurants, fitness centres, and personal services (spas, hairstylists, massage therapy, etc.) correlates with the level of consumer confidence: if people do not feel safe, they will stay home. As we approach what could be the brink of a significant increase in commercial vacancies, will governments and the business community be left to wonder if enough was done in this regard, to help companies remain viable during the unprecedented days of 2020? Stay tuned.
In the meantime, remember that advisors can help, not only through challenging times, but also to develop important strategies for your company’s future.
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