A coalition of Canada’s largest retailers and commercial property owners is lobbying Ottawa for a rent relief package that could see major landlords slash rent by one-third for their distressed tenants and walk away from billions of dollars in revenue, while providing loans to retailers to cover the rest of their rent.
The group, which includes Hudson’s Bay Co., Indigo Books & Music Inc. and Cadillac Fairview, is proposing that landlords provide an abatement on one-third of the rent for 10 months to retail tenants whose revenues have declined significantly. The companies have also asked the government to establish a low-interest loan program to help retailers cover the other two-thirds of the rent, according to people with knowledge of the proposals. The Globe is not identifying the sources because they were not authorized to speak publicly on the matter.
The proposal is designed to help large retailers that aren’t covered by Ottawa’s rent relief program for small businesses. That program provides taxpayer funds for half of small tenants’ gross rent as long as the tenant has lost a minimum of 70 per cent of its revenues due to the novel coronavirus pandemic and pays $50,000 or less in monthly rent.
Indigo CEO Heather Reisman and Cadillac Fairview chief executive John Sullivan are leading the efforts on behalf of the coalition of big retailers and commercial real estate owners. The group includes Cineplex Inc., Aritzia Inc. and GoodLife Fitness Centres Inc.; as well as property owners such as RioCan REIT, SmartCentres REIT, Oxford Properties and Ivanhoé Cambridge Inc.
The coalition has been collectively advocating for the measures in order to show broad industry support. But the loans could apply to any retailers designated as non-essential by governments that have been forced to close. Many larger retailers are in need of rent relief, but don’t qualify for the small business relief program. The measures would not apply to retailers such as grocers, which have not suffered deep enough revenue declines during the pandemic.