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COVID ECONOMICS


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#61 Victoria Watcher

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Posted 24 April 2020 - 02:05 PM

lots of ifs. Maybe the landlord can still agree to defer the 25% payment from the tenant.

I don’t think we should assume so many restauranteurs have absolutely no money.
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#62 Redd42

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Posted 24 April 2020 - 02:10 PM

For the tenant / landlord to qualify under Trudeau's new program revenue has to have dropped 70%+ and even then the landlord has to write off 25% and the tenant has to come up with 25%. So if a restaurant or retailer moved to take-out or delivery then they may not qualify if they did not have a 70% drop in revenue. If they went to zero then they probably don't have money to pay the 25%. 

 

I was talking about residential rents, not commercial leases. 



#63 Redd42

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Posted 24 April 2020 - 02:13 PM

For the tenant / landlord to qualify under Trudeau's new program revenue has to have dropped 70%+ and even then the landlord has to write off 25% and the tenant has to come up with 25%. So if a restaurant or retailer moved to take-out or delivery then they may not qualify if they did not have a 70% drop in revenue. If they went to zero then they probably don't have money to pay the 25%. 

 

This does remind me though that in order to qualify for the business hydro credit, you have to be completely closed, not trying to get by on delivery (or in my case by appt). 


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#64 spanky123

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Posted 24 April 2020 - 02:44 PM

So the Feds estimated that 2M people would apply for the CERB. At the time I said they were lying and it would be closer to 6M. Today the National Post is reporting that two weeks in the number of applicants has reached 7.1M and in just over two weeks the Government has spent the entire program budget. At this pace they will spend $100B and not the $25B they estimated.

 

Add in EI and we are up to nearly 50% of the working population collecting an unemployment benefit. At the worst point of the Great Depression it was 25%


Edited by spanky123, 24 April 2020 - 02:45 PM.

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#65 Victoria Watcher

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Posted 24 April 2020 - 02:49 PM

Edit. Oh ya.

just goes to show we are addicted to welfare.

no back to work protests yet.

Edited by Victoria Watcher, 24 April 2020 - 03:02 PM.


#66 tanker

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Posted 24 April 2020 - 04:48 PM

The commercial rent subsidy is what should have been done instead of the wage thing. That along with increased cerb payments and you'd have an ok deal until the stupid lockdown experiment is over.
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#67 Matt R.

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Posted 24 April 2020 - 05:19 PM

Which part? The part about it being up to the property owner? Or that it is assumed the property owner has a mortgage?

The residential rent relief depends on the landlord replying to the govt e-mail. I can imagine many situations where that is going to be difficult to obtain.


Yes, the mortgage part. What if the landlord has no mortgage?

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#68 Matt R.

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Posted 24 April 2020 - 05:22 PM

This does remind me though that in order to qualify for the business hydro credit, you have to be completely closed, not trying to get by on delivery (or in my case by appt).


Generally restaurants, even closed, wouldn’t qualify for this hydro rebate at you need to be a SGS customer. Any restaurant owners I have spoken to are MGS.

Matt.
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#69 Casual Kev

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Posted 24 April 2020 - 06:17 PM

I have a feeling the CRA will be working lots and lots of overtime after the fact. You know many recipients will conveniently forget the benefit is taxable, but I'm not sure how they plan (if at all) on spotting people who aren't eligible but collected CERB anyways. 


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#70 Victoria Watcher

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Posted 24 April 2020 - 06:21 PM

it's not going to be hard to track it in terms of the taxable benefit.  it's tied to your SIN so it produces a T-whatever.

 

now as far as those claiming it but not eligible that will be much much harder.  how do you prove a person did not earn a salary over certain weeks?  cra does not generally have that level of information about you.  they just find out once per year what you made for the whole year.


Edited by Victoria Watcher, 24 April 2020 - 06:21 PM.


#71 Matt R.

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Posted 24 April 2020 - 06:36 PM

We are already gearing up for the inevitable payroll audit, keeping notes of phone calls and webpages and detailed spreadsheets.

Matt.
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#72 Rob Randall

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Posted 24 April 2020 - 07:20 PM

Picking up my cake at the Dutch Bakery yesterday it seemed like things were almost back to normal in the 700 block of Fort. Crust Bakery is back open, as are Tim Hortons, Browns The Florist and Russell Books, where dozens of bags were laid out on the floor waiting for pickup. It's likely the most lively area of Downtown. 


“I mean I just don’t understand the big Texas part, like maybe he’s from Texas? I want to know the back story.”


#73 Redd42

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Posted 24 April 2020 - 09:41 PM

Yes, the mortgage part. What if the landlord has no mortgage?

Matt.

 

Not the part that I would have guessed. :)  But weird that the govt assistance depends on the landlord being in debt. Yeah, not all property owners have mortgages. My friend with the suite that I help hasn't had a mortgage in 20 years. And I don't know for sure, but my guess is that the folks who own my retail space don't have a mortgage either.



#74 Redd42

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Posted 24 April 2020 - 09:45 PM

Generally restaurants, even closed, wouldn’t qualify for this hydro rebate at you need to be a SGS customer. Any restaurant owners I have spoken to are MGS.

Matt.

 

After you mentioned that I checked, and we are SGS. But then I saw the requirement to prove we are not open to any business in order to get the credit. Oh well, at least my hydro bills are much lower not trying to heat a retail space most of the last 5 weeks!


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#75 Mike K.

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Posted 25 April 2020 - 05:41 AM

Not the part that I would have guessed. :) But weird that the govt assistance depends on the landlord being in debt. Yeah, not all property owners have mortgages. My friend with the suite that I help hasn't had a mortgage in 20 years. And I don't know for sure, but my guess is that the folks who own my retail space don't have a mortgage either.

The assumption is if you don’t have a mortgage you’re in a financial position to assist your tenants without government interference.

All this talk of not paying a lease or rent sidesteps the reality facing most landlords, in that they too have a financial obligation to another entity like a bank or a lender. Not making payments puts them at a huge risk due to the commercial nature of the loan because of how quickly they can lose a commercial asset.

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#76 Victoria Watcher

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Posted 25 April 2020 - 05:48 AM

these are sophisticated business people though. doing business means assuming some risk.

few business owners or landlords will become homeless due to missed lease or mortgage payments.

so why should ordinary people like you and I step into these private arrangements with our tax money? rather than just let owners and lenders and leaseholders all work it out like the adults they all are?

#77 Victoria Watcher

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Posted 25 April 2020 - 05:50 AM

certainly one thing the DVBA and the chamber should be doing now is phoning their memberships just to see who plans to be in operation next month. or just wait until May 5th and they might get some idea via disconnected phone lines.

I think mike is right most tourism is doomed this year already. who is going to make travel plans before they know 80 or 90% of the attractions will be open? instead of committing people will likely stay closer to home.

hopefully someone like the museum that is paying all their staff anyway is among the first to open - with necessary measures in place.

Edited by Victoria Watcher, 25 April 2020 - 05:54 AM.


#78 Awaiting Juno

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Posted 25 April 2020 - 06:58 AM

Apparently the rent relief does not require the landlord to hold a mortgage, but it does require the landlord to take the loan.  I'm a little unclear if the loan is for the full amount of the rent, or is 50%, it would make sense for the loan amount to be just the part that is forgiveable, but its not worded like that.  So if the landlord must take the loan at 100% of the rent, reduce rent by 75%, get 25% from the tenant (if they can), and the pay back the loan with 50% forgiven.  I just don't think this is going to have much uptake on it - particularly with the caveat that qualifying businesses must have lost 70% of their revenue.  As always, I'm a little dumbfounded at government's love of cliff effects - a business that lost 65% of business is out in the cold, but if you've lost 70% you might get help.  Why couldn't it be a sliding scale with progressively more help for those who have been more impacted.  Same goes with the CEWS.  Cliff effects everywhere!


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#79 VIResident

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Posted 25 April 2020 - 07:07 AM

Equity, most have huge equity in their properties and may have to dip into that.  Overheard something along the lines of under the circumstances you are better off to pull down on a bit of equity to bridge the gap, make move-out arrangements for tenants who are not likely to recover, prepare space for new tenants down the road.  Do all this without taking a penny of gov. funds.  Empty space is a write-off, borrowing against equity has its benefits at tax time too - and no red flags for gov. to look at you sideways and order an audit.  Not sure if any of that is true, always consult with appropriate professionals for advice yadda yadda yadda.


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#80 Victoria Watcher

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Posted 25 April 2020 - 07:08 AM

yes like the amount too.  if your lease is $52,000 you are out of luck,.  but $49,500 and you get the full program.


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