Federal financial assistance programs for Canadian businesses are slated to conclude in June
The future of Canada’s commercial property market remains unclear, as many small- and medium-scale businesses that were forced to take on more debt during the early months of the COVID-19 outbreak will soon be at a disadvantage against new enterprises that didn’t incur such legacy debt, according to economist Josh Nye.
This is largely because programs like the Canadian Emergency Wage Subsidy and the Canada Emergency Rent Subsidy are scheduled to end soon.
“Business that have taken on a lot of debt will have limited opportunities to expand, and that is a concern as the government reduces support programs,” Nye told BNN Bloomberg in an interview.
Already-burdened ventures will be forced to play a game of catch-up with nearly impossible odds once these programs conclude.
“It will come down to who can maintain their revenue once the federal assistance is removed,” said George Benchetrit of Chaitons LLP.
The combination of the pandemic’s economic impact and the current policy environment has given larger enterprises a lopsided lead. Per the Companies’ Creditors Arrangement Act, only large corporations that hold debt totalling $5 million or more are eligible to seek protection from creditors.
“That has been the theme of the pandemic. Larger corporations have had a lot more leeway and the ability to play in this situation,” said Alex Berlyand, co-founder of the BC-based park-tour operator Parkbus. “They can bounce back from the impact of debt.”
