Small Business Desperate for Rent Relief: PollSource: www.torontosun.com
More than half of all small businesses are teetering on the edge of permanent closure as the COVID-19 shutdown continues.
A survey undertaken by the Canadian Federation of Independent Business (CFIB) underlines an urgent need for rent relief as dramatic revenue declines continue to plague small firms.
Half of the small businesses polled say they will not make May rent without assistance. That figure (58%) is better than double the 25% who expressed misgivings about the rent due April 1.
There are still 37% who say they are able to pay rent in May.
About 93% of those polled strongly support the federal government’s announcement that it will work with the provinces to help with rent.
The CFIB has called for costs to be shared by governments, landlords and tenants.
“Commercial rent support is the number one issue with small business right now,” confirmed John Kiru, executive director of the Toronto Association of Business Improvement Areas (TABIA).
“Businesses and business people are really starting to struggle as they realize they could be losing their livelihood.”
It’s not just the financial element, Kiru added, but the years invested and the contributions people have made. It’s what they’ve built over their lifetime.
“The health focus right now is all COVID-19, but it would be useful if there was anything for mental well-being, a place where someone could go to have a conversation. Stress levels can only increase as people realize they may not recover from this.”
He added: “The number one issue is how quickly we can get money into the hands of people so there’s a light at the end of the tunnel. And keep in mind that many landlords are also small business people.”
Kiru’s own survey, just completed (and available this week on the TABIA website), shows the situation is worse in Toronto, likely as property values and rents are higher. His poll of more than 500 businesses shows 72% of respondents are not likely to be able to pay full rent in May, and 61% said they would have to shut down for good within three months.
That figure rises to 76% within five months.
On the landlord side, fully 74% did not receive all of April’s rent from tenants; 82% feel they will not receive all of May’s rent. The situation is dire for all concerned.
About a third of all landlords have been accommodating, said Kiru.
“Once this is over, there will be any number of vacancies in any neighbourhood, so it would behoove a landlord to try to keep people in place. When the switch is flipped back on, everyone can just get back to work, rather than having to compete to find the next tenant.”
There were vacancies before COVID-19, Kiru added.
“The traditional mom and pop shops were already being impacted. This pandemic may just be the proverbial straw that broke the camel’s back.”
Meanwhile, he said deferrals of payments and available loans “have to give way to debt forgiveness, which means we can’t do this without upper levels of government.”
Based on 6,881 responses, the CFIB’s poll is considered accurate within 1.2%, 19 times out of 20.