The Government of Canada has increased the wage subsidy from 10% to 75% in an effort to financially support businesses affected by COVID-19.
Rent Deferrals Needed Amid COVID-19 Chaos
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The impact of COVID-19 on the Canadian and global economy has led the Government of Canada to implement measures to help stabilize the economy and support Canadians facing hardship. Besides income support to workers and businesses, the government of Canada has also implemented measures to help ease the burden of certain expenses many Canadians face like mortgage deferrals and a moratorium on student loans. However, many Canadians who rent are now feeling unheard as no measures were taken to help them with their rent.
What Hasn’t the Government of Canada Introduced Deferred Rental Payments?
According to an article by CBC, the Government of Canada doesn’t have the ability to coordinate such a plan with landlords due to the lack of structure and management that banks possess. Moreover, according to CTV News, “the federal government said any relief on rent falls under provincial jurisdiction”. However, both the federal and provincial governments hope that landlords will not evict their tenants and be accommodating during this unprecedented and exceptional circumstance.
Why Do People Who Rent Need Deferred Payments?
As more and more businesses close and stop production in an effort to keep their business afloat, more and more Canadians are finding themselves jobless. The problem is, despite income stopping, payments like heating, water, electricity, mortgage, car, food, and other expenses don’t stop. As such, the government has provided homeowners with the ability to defer their mortgage payments. This combined with the Employment Insurance or Emergency Care Benefit, Canadians homeowners have the support they need to survive until the economy recovers.
On the other hand, in most provinces people who rent, currently don’t have that luxury, they are still required to pay rent, despite the average rent for a 1 bedroom apartment is $1,406, but can easily cost $2,240 in areas like Toronto. Even with the Emergency Care Benefit, Canadians will get a maximum 1,800, which may cover rent for some people but leaves barely enough for food and other essential expenses. According to a Global News article, people who rent account for 3.4 million Canadians and of those, 46% have savings that can only last them for about a month. In fact, 24% said they barely have enough savings to get them through a week without pay. So, how will renters cope, if they lose their jobs?
Can the Provinces Help?
As previously mentioned, rental laws are provincially regulated, so, any rent deferrals or rent freezes will be determined by each individual province. Currently, only Ontario, British Columbia, Quebec, and Nova Scotia have implemented measures that will help renters who are affected by COVID-19 from being evicted.
British Columbia – The BC Housing recently put up a bulletin addressing rent and eviction. The measures include a temporary moratorium on eviction for tenants in subsidized and affordable housing buildings. They have also included a temporary rent adjustment for BC residents who have experienced a job loss or reduced hours due to COVID-19. You can apply with BC Housing who will subsidize and re-calculate your rent based on your income loss.
Quebec – According to an article to the Regie du Logement, the Housing and Municipal Affairs Minister is suspending all evictions unless the “accommodation was re-let by the landlord before March 17, 2020”.
Ontario – According to CTV News, a representative of the Ministry of the Attorney General, said no new eviction notices will be issued and any current enforcement of evictions will be postponed in Ontario.
Nova Scotia – The government of Nova Scotia has implemented a ban on eviction on tenants who cannot pay rent due to income loss caused by COVID-19.
What About The Landlords?
The problem with freezing rent and deferring rent is that ultimately, landlords still have to pay. They may be able to defer the mortgage payments with their banks, but if not, they will face the burden. Moreover, according to the Edmonton Journal, the premier Kenney said: “barring landlords from collecting rent for two or three months could lead to a total collapse of the stock of housing that’s available to people”.
As COVID-19 continues to shut down the countries activities, we are likely to see more of the provincial governments implement measures to help their residents. Until things go back to normal, it is advised you keep up to date with the measures your provincial government and the federal government makes. This will allow you to prepare and organize your finances for the coming months.
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Margaret Johnson is in the business of helping Canadians tackle their debt, deal with credit issues, and regain control of their finances.