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Duty free shops on Canada-U.S. land border say they don’t qualify for commercial rent break

The federal government is encouraging commercial landlords to give their tenants a break on rent, but some tenants of the federal government say they’re not being offered the same deal.

“Some have been offered deferrals by some of the government entities but some have been offered nothing … there’s no consistency,” said Barbara Barrett, executive director of the Frontier Duty Free Association that represents 33 duty free shops on the Canada side of the land border with the United States. 

“The recent program that came out, the CECRA program, the stores don’t qualify for that, that have the federal government as their landlord,” Barrett told CBC News Network’s Power & Politics Friday. 

The Canada emergency commercial rent assistance program (CECRA), which is jointly funded by the provinces, offers landlords non-repayable loans to cover 50 per cent of their rental revenue for April, May and June. The landlord is responsible for 25 per cent while the tenant is responsible for the remaining 25 per cent. 

To be eligible, property owners must cut the rent they collect by 75 per cent and promise not to evict their tenant. If they can follow those rules, the government will forgive the loans. 

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 must have been forced to close down because of pandemic restrictions.

Barrett said she wants to be supportive of the federal government’s efforts because she realizes the enormity of the challenge it is facing; but for duty free shop owners, time is running out. 

“What we’re asking for is for them to get this aligned … they need to do (this) quickly because the stores are on the brink,” she said. 

Market access

For Simon Resch, the owner of Emmerson Duty Free in Emmerson, Man., rent is not the issue. But because he is prohibited from selling the stock in his warehouse to anyone but cross-border travellers, he is sitting on a vast quantity of goods that he has paid for but cannot sell.

According to the Canada Border Services Agency, there was an 88 per cent drop in the number of people crossing at Canada’s land border from May 11 to May 17 compared to the same time last year. 

Resch said he fully supports the federal government’s decision to close the border to non essential traffic.

“I would certainly not recommend a family member, or friend, or anybody else go down there,” he said of the U.S. “What I mean is, we have to be able to sell our inventory. We recognize that we cannot sell it to an international market right now under normal circumstances. That’s a requirement in our program. 

“These are abnormal circumstances and we are definitely asking government to work with us and find some market access to it,” Resch added.

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