Canada’s two largest provinces are helping businesses that can’t pay their rent during the coronavirus shutdown after a federal aid measure failed to gain traction.
Prime Minister Justin Trudeau announced a plan in April to subsidize rents for small business, but not many landlords have applied. On Monday, Quebec gave them an incentive to participate by offering to shoulder a higher portion of the cost. In Ontario, Premier Doug Ford announced a temporary ban on commercial evictions.
“Your clients, your tenants need it. We’re counting on you,” Quebec Economy Minister Pierre Fitzgibbon said in an address to real estate owners during a press conference.
The program required landlords to swallow a temporary 25% reduction in rent for some business tenants. In return, the federal and provincial governments agreed to pay at least half of a tenant’s rent in the form of a forgivable loan to the landlord.
Fitzgibbon said the new rules will reduce the obligation of Quebec landlords to a 12.5% rent cut.
The program, which started running May 25, hasn’t proved popular so far. Applications as of June 4 covered only 26,000 tenants for a total of C$90 million ($67 million) worth of subsidies, a far cry from almost C$3 billion envisaged by Ottawa.
Quebec, which had also previously announced a moratorium on evictions, said the measures aim to give about 35,000 retailers and restaurants more financial room for maneuver.
The Chamber of Commerce of Metropolitan Montreal called it a “powerful incentive” and urged the federal and provincial governments to extend the aid from June to September to help struggling downtown businesses.
Ford’s ban, which applies to evictions from June 3 to Aug. 31, emulates similar moves in provinces including British Columbia and Saskatchewan.
“I’m here for the little guy,” the Ontario premier said, criticizing landlords who refuse to lose 25% in rental income.
Lack of willingness is only part of the problem, according to the Canadian Federation of Independent Business. Another is the strict qualifying criteria: Tenants need have to lost 70% of revenue due to the pandemic. Tenants and landlords have also both complained that the application process is confusing, according to the business group.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
