Rent strikes loom across Canada as coronavirus kills daily-wage jobs

Choice Properties Real Estate Investment Trust

06/04/2020 20:58

By Moira Warburton and Denise Paglinawan
    TORONTO, April 6 (Reuters) - Landlords across Canada should
brace for rent strikes in May unless the government steps in
with rental subsidies for occupants as the outbreak of new
coronavirus decimates wages, industry groups and tenants said on
Monday.
    Restrictions aimed at curbing the virus' spread has hit the
restaurant and retail industries hard, making rent payment a
flashpoint expense for both employers and employees.
    A rent strike is gathering steam in Ontario, the country's
most populous province. Keep Your Rent Toronto's private
Facebook group accrued over 5,000 members in less than two
weeks, and its organizers said their platform has been used to
send over 100,000 letters to landlords in Toronto, stating that
they would not be paying rent.
    Renters make up 32% of households in Canada, according to
the 2016 census, and many businesses rent their brick-and-mortar
locations.
    CIBC economist Benjamin Tal estimates that about 70% of rent
due in April was collected, based on preliminary information.
    "The focus is now shifting to May and to provincial
governments which, with the exception of British Columbia (BC),
haven’t yet formalized any policy related to renters," Tal said
in a research note.
    Restaurant Canada, the national industry lobby group,
estimates that 10% of restaurants have closed permanently across
the country, and another 18% will close permanently within a
month if current conditions continue.
    "It's a carnage, (a) business bloodbath," said Daniel
Lefebvre, a regional vice president of Restaurants Canada,
noting many landlords were willing to negotiate in April, but
that the goodwill may not continue. "If this was to last four or
five months, we would need to get into other kinds of measures."
    Ottawa is offering one-year interest free loans of up to
C$40,000 ($28,347) for small businesses but has not yet proposed
specific rent measures. Residential evictions in BC, Alberta and
Ontario have been halted, and the premiers of Alberta and
Ontario said they expect landlords to be understanding of the
situation facing businesses and tenants.
    The federal loan isn't enough for small businesses, said
Sammy Piccolo, who owns eight coffee shops in B.C.'s Lower
Mainland, noting that taking on more debt is not ideal.
    "Everything should just be forgotten," Piccolo said. "Nobody
should owe anybody anything until we get through this crisis."
    Major landlords RioCan Real Estate Investment Trust
 REI_u.TO  and Choice Properties Real Estate Investment Trust
 CHP_u.TO , are offering 60 day rent deferrals, some automatic.
    RioCan and Choice count grocery retailers like Loblaw Cos
 L.TO  and movie chain Cineplex  CGX.TO  among their tenants.
    Canadian Federation of Independent Businesses CEO Dan Kelly
said that anything other than provincial and federal breaks on
property taxes and rental subsidies will simply delay
bankruptcies, not avoid them.
    Canadian restaurateur Jen Agg, who owns five restaurants and
bars in Toronto, said she would not be paying rent for her
businesses.
    "We have culled all unnecessary expenses, but the big one is
inescapable: rent," she wrote in a Globe and Mail newspaper
column. "How can I pay rent when I have no income?"
    
($1 = 1.4111 Canadian dollars)

 (Additional reporting by Nichola Saminathar in Toronto and
Kelsey Johnson in Ottawa
Editing by Nick Zieminski)
 ((Moira.Warburton@thomsonreuters.com; 416-687-7996;
437-771-3124;))