Tory slams landlords for refusing to apply for rent subsidy and leaving tenants 'high and dry'
Chris Fox, CP24.com
Published Friday, May 8, 2020 8:13AM EDT
Last Updated Friday, May 8, 2020 2:00PM EDT
Mayor John Tory says that there is just ‘no excuse’ for commercial landlords who refuse to apply for a federal rent subsidy program, leaving their tenants “high and dry.”
Last month, the federal and provincial governments announced a program which would provide commercial landlords a subsidy to cover up to 50 per cent of their tenants rent for a three-month period so long as they agreed to waive at least 25 per cent of the rent owed. The tenants would then be expected to cover the remaining 25 per cent themselves.
While the program was applauded at the time, many small businesses in Toronto have since said that their landlords have refused to participate in it, leaving them on the hook for thousands of dollars in rent.
At a news conference last week, the co-owner of the Glad Day book shop on Church Street told reporters that he is still expected to pay $18,000 in rent each month, despite being closed. He said that he “doesn’t know one business owner that is getting the rent subsidy from their landlord.”
“While the stats may say that 20 per cent of the landlords are using this I don’t know where they are. Maybe they are in Saskatchewan or Cornwall, Ontario but I don’t think they are in Toronto,” Michael Erickson said.
The federal program was intended to prop up businesses that have been shuttered for nearly two months as a result of the COVID-19 pandemic but given the low participation rates there are increasing concerns about the viability of small shops, bars and restaurants across Toronto.
In an interview with CP24 on Friday, Tory expressed frustration with what he referred to as the “spectacle” of landlords refusing to participate “because they say it is too complicated or doesn’t do enough for them.”
He said that landlords need to “step up and do whatever they can to help these businesses survive just a while longer.”
“They are leaving the tenants high and dry and I would just say that there is no excuse why any landlord of any size whatsoever should not be applying for this,” Tory said. “Small businesses are trying to hang on by their fingernails and these landlords should be doing everything they possibly can to cooperate.”
Councillor wants halt on commerical evictions
While the Ford government has temporarily halted residential evictions, commercial landlords retain the right to lock out their tenants 16 days after rent was due.
Speaking with CP24 on Friday morning, downtown city councillor Kristyn-Wong Tam said that the province should introduce an immediate moratorium on commercial evictions to “compel landlords do be much more motivated to work with their tenants.”
She said that the tenants should also be able to apply directly to the rent subsidy program.
“I think ultimately the program needs to be rethought. The reason being is that you are asking commercial landlords to apply for a benefit that is then bestowed on the tenant and overwhelmingly landlords are saying they are most not doing it,” she said.
The initial details for the program excluded landlords from applying if they didn’t hold a mortgage on the property, though the government now says that an “alternative mechanism will be implemented” for those property owners.
The program is also only reserved for landlords with tenants who have experienced at least a 70 per cent decline in revenue since the outset of the pandemic, which excludes some businesses.
“Landlords cannot commit to a program they don’t understand and there has been a lot of inconsistent confusing statements from the government,” tax lawyer Anna Malazhavaya told CP24 on Friday morning. “There just has not been enough (information) for landlords to make up their minds and say something definitive to their tenants.”
Asked about the program at a press conference at Queen’s Park on Friday, Ontario Finance Minister Rod Phillips said that it important that is “gets a chance," noting that it won't begin until May 15.
He said that while his government “maintains all options,” including implementing a moratorium on commercial evictions, the hope is that further steps won’t be necessary.
“We are hopeful and we certainly have had many, many landlords who have shown an interest but of course with anything we do we will have to see how that works,” he said.