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432-00701 (Economy and finance)

Paper petition

Original language of petition: English

PETITION TO THE GOVERNMENT OF CANADA AND THE HOUSE OF COMMONS IN PARLIAMENT ASSEMBLED

We, the undersigned, RESIDENTS OF THE PROVINCE OF BRITISH COLUMBIA, draw the attention of the Government of Canada and the House of Commons to the following that:

The current CERS legislation does not allow rent subsidy for non-arm's length tenants. We have been in tourist retail business for 22 years, leasing 4 retail units from a Landlord who is a family member. We have 4 legal lease agreements and both the Landlord and tenant have their own corporations. The tenant pays market rent, has never missed a payment and has never received a concession on rent. We conduct our business relationship in a 100% arm's length manner. Both corporations pay corporate tax independent of one another. The tourist industry has been affected more than most businesses. 90% of our revenue comes from international travellers. Our business is falling through the cracks and we may fail to make it through the pandemic without the rent subsidy. Rent is our largest business expense.

Therefore, your petitioners request the Government of Canada and the House of Commons to please change this legislation so that businesses like ours qualify for the CERS rent subsidy.

Response by the Deputy Prime Minister and Minister of Finance

Signed by (Minister or Parliamentary Secretary): The Honourable Chrystia Freeland

The Government thanks the petitioners for expressing their views about changes to the Canada Emergency Rent Subsidy legislation. As the Government announced on April 19th in Budget 2021, the government in proposing to extend the rent subsidy until September 25, 2021. This is a program that provides simple and easy-to-access rent support directly to small businesses. Businesses currently benefit from the up 65% rent subsidy. Combined with the lockdown support, a business can have up to 90% of their rent covered.

The Canada Emergency Rent Subsidy, including the Lockdown Support, was created to help organizations pay their commercial rent while facing the economic and health challenges caused by the COVID-19 pandemic. The rent subsidy delivers direct, targeted, and accessible rent support to qualifying organizations affected by the pandemic without the need to work through their landlords, and further extends this support to include property owners. This means that the rent subsidy generally not only covers commercial rent expenses, but also property taxes, property insurance, and interest on commercial mortgages. As of April 18, 2021, 162,470 organizations have received support from the CERS and Lockdown Support, representing $2.97 billion paid out since the launch of the programs.

To ensure that the rent subsidy is focused on providing relief to organizations in need of support, specific requirements apply to the expenses that qualify for the program. In particular, only expenses paid or payable to an arm’s-length party are eligible under the program - for example, this could include rent to an arm’s-length landlord, or property ownership costs such as mortgage interest. This rule supports the integrity of the program by preventing subsidies from being paid in circumstances where there may be no outflow of funds from a group of non-arm’s length parties. For example, where one company owns a building that is rented to another company and both companies are wholly owned by the same entity, such companies are considered to be not at arm’s length. In such cases, the “rent” is simply a transfer of funds from one entity in the group to another and does not represent a real economic cost. However, the actual costs borne by the group of non-arm’s length parties, including mortgage interest, property taxes and real property insurance paid by the corporation that owns the building could be eligible expenses for the rent subsidy.

Overall, the government has made sure that the rent subsidy is helping as many businesses as possible, while ensuring program integrity and targeted support.

The government has taken other actions to help businesses that have been highly impacted by the pandemic, including those that may not be able to access certain support programs. Through the regional development agencies and the Community Futures Network of Canada, the $2 billion Regional Relief and Recovery Fund provides loans to eligible businesses unable to access emergency liquidity programs, including the Canada Emergency Wage Subsidy, the rent subsidy, and the Canada Emergency Business Account. The government has directed the Regional Relief and Recovery Fund to provide $500 million in support for businesses. As of March 4, 2021, the Regional Relief and Recovery Fund had helped protect more than 126,000 jobs and supported over 20,800 businesses.

Presented to the House of Commons
Laurel Collins (Victoria)
March 23, 2021 (Petition No. 432-00701)
Government response tabled
May 6, 2021
Photo - Laurel Collins
Victoria
New Democratic Party Caucus
British Columbia

Only validated signatures are counted towards the total number of signatures.