Rent relief measures for federal building occupants: Committee of the Whole—July 8, 2020
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Context
Public Services Procurement Canada (PSPC) has put in place measures to alleviate financial pressure on its commercial tenants during a period of low-building occupancy brought on by the COVID-19 pandemic.
Suggested response
- PSPC is committed to providing its building occupants and employees with healthy and productive work environments
- The department has taken steps to allow tenants to defer their rent payments for a 3-month period effective April 1, 2020, for those businesses whose income has been affected by the COVID-19 containment measures
- On April 24, 2020, the prime minister also announced additional details regarding the Canada Emergency Commercial Rent Assistance (CECRA) Program aimed at commercial property owners who are experiencing financial hardship during April, May, and June
- PSPC is committed to continue implementing measures, in alignment with guidelines provided by the Treasury Board of Canada Secretariat (TBS) that support a whole-of-government approach
Background
Given the health and safety measures put in place to contain COVID-19, buildings under PSPC’s management are largely empty. As a result, commercial tenants may have experienced reductions in their business volumes.
In line with March 31, 2020, guidance from TBS on rent relief to external tenants, PSPC has taken steps to allow tenants to defer their rent payments for a 3-month period effective April 1, 2020, for those businesses whose income has been affected by the COVID-19 containment measures. To date, rent deferrals were sought by 126 tenants for a total of $1.4 million for the 3-month period.
On April 24, 2020, the prime minister announced that the federal government had reached an agreement in principle with all provinces and territories to implement the CECRA targeted for small businesses and non-profit organizations. This program will lower rent by 75% for businesses that have been affected by COVID-19 for a 3-month period (April to June 2020).
On April 25, 2020, TBS assistant comptroller general sent a communique stating that, although CECRA does not apply to PSPC, as a custodian, it is required to ensure a whole-of-government approach to the implementation of the program. As such, custodians are expected to extend similar flexibilities to provide eligible tenants with appropriate rent relief. TBS’s guidance will follow to ensure a consistent approach. Based on expected program criteria, it could equate to a total rent relief of up to $2.8 million (75% of $3.6 million in revenues from 327 leases).