Rent Strike by Canadian Restaurants on the Horizon

Food businesses continue to be closed to the public and struggle to pay the bills.
Food businesses continue to be closed to the public and struggle to pay the bills.

April 7, 2020 — As food retail businesses such as restaurants, bars and pubs continue to remain closed due to COVID-19, many are struggling to pay the incoming bills. This is especially difficult for the large amount of food businesses in Canada that rent brick-and-mortar locations for their operations. These businesses are asking a very important question: How can they pay rent if they have no income?

Many food businesses were able to pay rent for the month of April, with CIBC economist Benjamin Tal estimating about 70% of rent was collected. But uncertainties continue about what is to come when rent is due again in May. A rent strike is looming in the province of Ontario, with many food businesses stating that they simply cannot continue to pay rent if their closures continue on. David Lefebvre, regional vice president of Restaurants Canada has stated that landlords have negotiated for April, but emphasizes, “If this was to last four or five months, we would need to get into other kinds of measures.”

Some measures have been taken in Ottawa, which has offered interest free loans for one year of up to $40,000 for small businesses; unfortunately, rent measures have not been implemented yet. Some food business owners are stating that the federal loan just simply is not enough to help in the current crisis.

Other major landlords, including RioCan Real Estate Investment Trust and Choice Properties Real Estate Investment Trust, are offering 60-day rent deferrals. These landlords have grocery stores like Loblaws among their tenants, so those retailers will get some relief. However, there are numerous small and large food businesses that are still not going to get any assistance or relief unless something changes.

These are desperate and concerning times for restaurants, as their options for business continuity are extremely restricted in the current climate. Food service businesses are hoping that more assistance will be coming soon, as they only have so much funds to keep themselves afloat during closure. Others are simply refusing to pay rent until the COVID-19 pandemic passes, effectively risking losing their location for good.