With the COVID-19 pandemic resulting in business closures across
British Columbia (BC), both the BC and federal governments are
taking steps, including those to address real estate-related
concerns, to support businesses struggling with the economic
fallout of COVID-19. Below is a roundup of these recent real estate
developments relating to COVID-19 that are of relevance to
businesses in BC.
Reduction of School Tax Rates for Commercial Properties
On March 23, 2020, the BC government introduced its $5 billion
COVID-19 Action Plan, which includes a real estate tax reduction
for businesses. Specifically, the BC government announced a
reduction to the provincial school property tax rate for commercial
properties (Classes 4, 5, and 6) by 50% for the 2020 tax
year.1 It is anticipated that this reduction will
provide $500 million in immediate relief for businesses that own
their property and will allow commercial landlords to pass these
savings onto their tenants in triple-net leases.2
Reduction of Commercial Property Tax Bills
On April 16, 2020, the BC government announced that it is
“providing further support by making additional temporary
property tax changes to provide province-wide relief for business
and local governments.”4 Specifically, the BC
government introduced a further reduction to the provincial school
property tax rate for commercial properties to achieve an average
25% reduction in the total property tax bill for most
businesses.5 This new reduction enhances the previously
announced 50% reduction to the provincial school property tax rate,
discussed above.
Additionally, the BC government postponed the date that late
payment penalties apply for commercial properties in Classes 4, 5,
6, 7, and 8 to October 1, 2020.6 This postponement will
provide businesses and landlords with more time to pay their
reduced property tax, without penalty.
Canada Emergency Commercial Rent Assistance
On April 16, 2020, Prime Minister Justin Trudeau unveiled the
Canada Emergency Commercial Rent Assistance program. The program is
intended to provide rent support to small and medium-sized
businesses that have been impacted by COVID-19 for the months of
April, May, and June 2020.7 The federal government will
be working closely with the provincial governments to bring the
program to fruition. Additionally, the Minister of Finance, Bill
Morneau, stated that the federal government would be offering
loans, including forgivable loans, to commercial landlords who
offer rent reductions to businesses across Canada. Further details
on the program are anticipated in the upcoming days.
The Cassels
Real Estate Group is continuing to monitor the developments
relating to COVID-19 that impact businesses and will provide
updates as they become available.
Additional resources related to the impact of the COVID-19 pandemic
can be found here.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Footnotes
1. Government of British Columbia, “COVID-19 Action
Plan: BC’s first steps to support people, businesses”
(March 23, 2020), BC Government (website), online: https://news.gov.bc.ca/releases/2020PREM0013-000545.
2.Ibid.
3.Government of British Columbia, “New COVID-19 supports for
businesses, local governments” (April 16, 2020), BC
Government (website), online: https://news.gov.bc.ca/releases/2020FIN0020-000703.
4.Ibid.
5.Ibid.
6.Kerri Breen, “Coronavirus: Trudeau promises rent relief for
small and medium-sized businesses” (April 16, 2020),
Global News (website), online: https://globalnews.ca/news/6826484/coronavirus-trudeau-business-rent/.
7.Ibid.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
