Commercial landlords can begin applying for a government rent relief program today, but struggling businesses say it will benefit few of them.
The government also announced today a new customized financial advice service to help small businesses recover from the pandemic. The free hotline is meant to help vulnerable businesses with pressing financial needs navigate tax regulations and government supports to plan a path to recovery.
Set up by the federal government in partnership with the Canadian Chamber of Commerce, the business resilience service hotline (1-866-989-1080) will be serviced by 125 business advisers and chartered accountants seven days a week.
Applications are staggered depending on the province where the property owner is located and how many tenants the landlord has; applications started today for property owners in Atlantic Canada, British Columbia, Alberta and Quebec, with 10 tenants or fewer.
Prime Minister Justin Trudeau said one of the biggest problems facing struggling businesses now is paying rent.
“Some are ready to open their doors as soon as they get the green light that it’s safe to do so. But for many more, getting back on their feet will be a challenge,” he said.
The rent relief plan, funded jointly with the provinces, provides non-repayable loans to commercial property owners to cover 50 per cent of the monthly cost.
The loans will be forgiven if the property owner agrees to cut the rent by at least 75 per cent for those months and promises not to evict the tenant. The small business tenant must cover the remaining portion of the rent, which would be up to 25 per cent.
To qualify, small business tenants must pay less than $50,000 a month in rent. They also must have experienced a revenue decline of at least 70 per cent from pre-COVID-19 levels, or they must have been forced to close down because of pandemic restrictions. Non-profit and charitable organizations are also eligible.
Small Business Minister Mary Ng urged landlords to take advantage of the program to help their tenants.
“This isn’t just about doing the right thing. It is also making financial sense for you as a landlord, because if your tenant declares bankruptcy and is evicted, you will lose all the steady stream of income you depend on, and you would face additional costs as you search for the new tenants,” she said.
Ng said the money is expected to flow next week.
The NDP say the structure of the program leaves business tenants at the “mercy” of their landlords.
NDP MPs Peter Julian and Gord Johns wrote a letter to Ng and Finance Minister Bill Morneau today asking for changes that would allow tenants to access the subsidy directly.
“Commercial tenants who close their doors due to the advice of a public health authority should not be penalized by absorbing up to 100 per cent of the rent because their landlord refuses to apply for CECRA,” the letter reads.
“We are urging the government to immediately look into this loophole so that small business tenants have the option of applying for the CECRA and paying 50 per cent of rent to their landlord. Besides that, we are also calling on the federal government to immediately negotiate with the provinces a nationwide moratorium on evictions so that commercial landlords have to come to the table in negotiations with their tenants.”
Businesses fear eviction
The Canadian Federation of Independent Business says many small businesses won’t be able to make June rent without more assistance. Through a survey of its members, the organization found that most commercial tenants don’t think they will qualify and don’t think their landlord will participate.
With many fearing eviction, the CFIB is calling on the government to provide direct access to the government portion of the program.
The Canadian Chamber of Commerce announced Monday it is launching a small business relief fund supported by the software company Salesforce. It will give 62 small businesses $10,000 grants to pay salaries, buy personal protective equipment, replenish materials or adapt business models to deal with COVID-19.
The chamber says the funding will go to the applicants who best demonstrate how the funds will help their businesses, their employees and their communities with economic recovery efforts.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
