Photo: Nathan Denette, The canadian Press
The programme to support rent commercial, three-quarters will be borne by Ottawa applies to small businesses.
Nearly a month after the announcement, the federal government is finally ready to receive requests for assistance from companies unable to pay their rent business. But the main one bitching about the program remains the same: businesses are dependent on the will of the owner of their building to access it.
“If you’re an owner and that you and your tenant qualify, please, apply ! “, pleaded the prime minister Justin Trudeau on Wednesday. “We expect that real estate owners should be part of the solution “. It is that to qualify for the program, a business tenant must not only have seen his income decrease by 70 %, but especially get the participation of the owner of the building that it occupies. The latter should agree to offset a loss of 25 % on the rent. In return, the tenant pays 25 % of his rent as usual, Ottawa is paying 37.5% and Quebec, with 12.5 % of the rest.
Many, including the canadian Federation of independent business (CFIB), requested that this rent business is offered without the approval of the property owner is required. Why don’t you choose this option ? Mr. Trudeau did not respond directly, but argued that it was in the interest of the real estate owners to take part in the program.
It is the reduction of earnings that must be subjected to a business tenant to qualify for the program by the federal government.
“Many companies are not able to make ends meet and will sink and it will slow down the recovery of the economy. This will be bad for Canadians, but also for property owners who will see a slower recovery. And with several people who discover that they can work from home, there could be a lot of vacancy in the commercial space in the coming months or years. “In short, it is better to offset a loss of 25 % that a potential loss of 100 %.
This assistance program rent commercial should in theory cost $ 2 billion to the federal and provincial governments, of which three-quarters will be borne by Ottawa. It applies to small businesses. Justin Trudeau has promised that a form of help “for larger retailers,” is being developed.
The CFIB conducted a survey of its members and discovered that 50 % of the entrepreneurs could not pay their rent from June without financial assistance.
Ottawa has also officially opened its loan program for large enterprises (CUGE). This program provides repayable loans with interest companies who generate at least $ 300 million in annual revenues and who need liquidity to get through the crisis. The loans will be at a minimum of $ 60 million. There is no upper limit.
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The minister of Finance has indicated that Ottawa would take a few precautions to ensure its implementation. Thus, the federal government shall be deemed to be a creditor a priority on 20 % of the loan.
In addition, if the company is publicly traded, it will have to issue bills to allow the federal government to acquire a stake in the company equivalent to 15 % of the loan. If the company is not publicly listed, it will have to repay to Ottawa, a sum equivalent at the time of repayment, within five years. Thus, the company must not only repay the initial loan and the interest on the loan (5 % in the first year, 8 % the second), but also a premium of 15 %.
Ottawa will also impose as a constraint that the leaders of the companies beneficiaries of these loans limit their annual compensation to one million dollars each.
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