Front Burner - Making rent during a pandemic

Episode Date: March 31, 2020

For many Canadians, rent is due on the first of the month. But nearly half of the households in this country have lost work due to the pandemic, and emergency government benefits are not yet in people’s pockets. Today on Front Burner, an anxious Vancouver tenant on her concerns about making rent, and Toronto lawyer Caryma Sa’d on what is being done to keep tenants housed as their incomes evaporate.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hello, I'm Jamie Poisson. So tomorrow is April the 1st, and for millions of Canadians, the first of the month usually means a rent check is due. But with the coronavirus, so many people have been put out of work, and the thought of making rent can be daunting, if not completely impossible. Today on FrontBurner, I'm talking to lawyer Karima Saad about what's being done to keep tenants housed as incomes evaporate. But first, Zaina Hassan is a renter in Vancouver who's

struggling with anxieties over rent herself. She was working in the city's film and television industry as an actress and in costumes. But by the middle of March, all her bookings were cancelled, as nearly all productions came to a halt. I asked her what that would do to her ability to pay rent. It's really hard to pay the rent and be able to live. I have enough to pay, like, just this month, but then i have nothing like i'd be like almost zero like i have nothing to live off after this and people be saying like oh well like you no one can affect you if you let's say if i paid just like partial of the rent and i keep the rest to eat or pay my other bills they cannot kick you you out of your home. But then if we do that, we're going to have debt accumulated when this is over.

This is many provincial governments across the country are saying that people can't be evicted at this time. But what you're worried about is how this could accumulate for you in the months to come. And, you know, I also know you're in B.C. where the government is offering $500 to help renters cover their rent. Help people. The supplemental check will be there to help people get through the coming months. And we want to make sure that we do this in a way that makes the most impact for the greatest number of people. And the federal government is also rolling out an emergency benefit of $2,000 a month. And do you think that you will qualify for those?

And will those make a difference? I really hope I do. Because I've been so anxious and stressed. I basically don't even sleep very well anymore. But when it comes to those benefits, when I've been so stressed and someone sent me this link about this $2,000 and the $500 going to the landlord. And if I get qualified for it, which is we don't know yet, and I'm really hopeful based on what I read that I will be, it will be a huge relief. based on what I read, that I will be, it will be a huge relief. If they took off $500, that means I just have to pay around like $1,300,

and then I have $700 to live off. That means I probably shouldn't spend more than $20 a day to be able to survive for the rest of the month. I think I just have to eat very cheap, and I have to not spend a lot of money on grocery if I want to pay my rent and I'll take that like I'm grateful for that. And when will you find out if you qualify for that what are those benefits expected to come through? Based on the CRA and Service Canada website, it will be unfolded within the first week of April. Okay. And I just hope that works.

Have you had a chance to talk to your landlord to explain this situation to him or her? I honestly emailed them right away when this happened because I like to be proactive. And I was like, okay, this is gonna happen um are you guys gonna give us like some sort of help by either freeze the rent right now or like delay the rent until we figure out what's gonna happen and their response was no like we're gonna charge you full amounts as everyone else like there's nothing you're gonna do and you haven't heard anything from them since no no and my my neighbor who also freelancer actress uh called them and they said listen there's nothing we can do our building is not owned by individual people none more it's like by a company so the company does what the company does, right? So they're not going to care much.

Oh, they didn't show they cared, to be honest. Right. I imagine that's been very stressful for you. It's very stressful because, I don't know, I know a life to build a home, and you're tired of running around from place to another. And when you finally get it, and you finally feel home, and you say, things just happen, and it's not only to you, to everyone else, and you don't know, do I have to pack right now? And or do I have to just live on debt? And I'm trying to be proactive. I applied for jobs. But then you apply for a job and go out and make this issue more complicated. Or do you just do what the government and what the right thing to do is stay in? Right? You know, You're struggling with all of these choices. I'm sorry that you're facing so much uncertainty right now. I'm sorry for

everyone who faced that and I'm sorry for everyone who had to go out as well. It's hard. Do you approve of the way the government has been handling this, or do you wish things were being handled differently? I wish things had been more clear in terms of benefits and in terms of what are we going to do, and in terms of, like, these links should have been active earlier than when the rent is due, right?

We should have been a little bit more prepared, but I guess it is what it is right now, and we're just going to go through this all together, and we're going to learn from what's going on right now. When we can be putting claim on others, the best we can do is focus on what we have and on what we can do to help each other and to help ourselves. Okay, Zaina, thank you so much.

Thank you. I appreciate it. Have a wonderful day. All right, now Karima Saad, a lawyer. She's in Toronto, and she represents both landlords and tenants. Hi, Karima. Thank you so much for coming on the podcast. Thank you for having me. So we just heard from an anxious tenant in Vancouver, and I know that you represent both landlords and tenants. And I wonder, what are you hearing from these two groups right now? Overall, there is a lot of anxiety about the uncertainty of what happens next. From the tenant perspective, I'm hearing really sort of existential questions about affording rent and still being able to make ends meet. And on the landlord side of things, it's concern about their investment, in some cases,

potentially losing their investment if this goes on for a long time and they don't have any rent to cover the mortgage. So we are hearing a lot of concern and worry. Can you paint a picture of the financial situation many renters are in? Do we have those statistics? Do we know? So the Centre for Policy Alternatives recently published a report that sheds light on exactly this question. And it turns out that nearly half of Canadian renters are essentially living paycheck to paycheck. So the situation is bad. People were barely making it work before the pandemic. And now with these widespread job losses, concerns about health and safety, the government directives to stay at home wherever possible.

You know, there's a lot of people who don't know what to do next because their source of income may have been cut off or they are physically unable to work and are now still getting pressure in some cases from their landlord to make that rent payment. Let's go through some of the measures that governments have introduced for those who are anxious about paying their rent right now, starting with, you know, the more urgent issues, and that's evictions. And we just briefly talked about this with Zaina. And so can you tell me briefly what's been announced in that regard? So the good news is that the majority of provinces have put a hold on the enforcement and issuance of evictions. No one will be evicted April 1 for non-payment of rent. I repeat, no one will be evicted at the beginning of the next month for non-payment of rent. I repeat, no one will be evicted at the beginning of the next month for

non-payment of rent. Civil enforcements of evictions currently underway for tenants for non-payment of rent will be suspended until April 30. And that includes folks... There are a few exceptions, but aside from that, tenants can at least have some security in knowing that for the time being, an eviction can't be formally enforced. If you have a choice between putting food on your table or paying rent, you're putting food on your table. And the government of Ontario will make sure that no one gets evicted. We stand by that. However, there has been total silence on what happens to rent payments. And for tenants who cannot or are not able to pay their rent, although they may not have the sheriff knocking at their door,

at some point down the line, we can expect that these arrears will accumulate, and eventually the tribunals will open up again. And that could put tenants in a very precarious spot where they have accumulated debt and, you know, have to work themselves out of a hole effectively. Right. So I know that housing is a provincial issue, but the federal government is promising money to people who have had their income dry up at this time. And I know that it's not specific to rent, but they do say that it should help with that rent. We know that there are significant pressures on Canadians right across the country who are facing bills coming in, who are facing pressures on caring for their families.

That is why we are working extremely quickly to get money out the door into the pockets of Canadians during this extraordinary time. What are you hearing from renters around these measures? The federal government is promising money to some people. So the qualification and who actually is eligible, we will see that in the coming days. And we'll see what the application process is like and how many people are actually able to access these funds. But the amount that's being offered, $2,000, is very close to what a lot of people pay in rent. So if the federal government had in mind that this sum of money could be used for essentials, to cover what may be higher cost of groceries in some cases, or other needs, if it's meant to cover rent as well, that amount will dry up very,

very quickly. So it's not really, I don't think, adequate relief. For Zaina, she's living in Vancouver and her rent is $1,700 a month. She's also eligible for $500 in like a rebate from the province of BC. What about these measures? Are we seeing this across the country? Is this helpful? BC is one of the few, if not the only province to announce that kind of relief. And I do believe that the money gets paid directly to the landlord once the tenant applies. So again, there are some procedural steps that need to be taken and it will help, but I don't believe that it really alleviates the full burden. And in this conversation, I don't want it to be lost that landlords who have investment properties

are investors and investors always take some level of risk. So when we are talking about paying rent, I do think that the conversation needs to acknowledge that these investors may not get 100 cents on every dollar. And there's another sort of player here in the game who has not been talked about a whole lot. And that's the banks who are holding these mortgages. Let's talk about that for a moment, because the banks have essentially announced that they will allow deferrals on mortgage payments. And so is this a way to help out landlords and then by proxy help out tenants because it could trickle down to them? If we look at what the banks are actually offering these deferrals,

first of all, it's on a case-by-case basis. And I also believe that it applies to a primary residence. So unless the landlord lives in one part of the house and they're renting another portion to a tenant, they actually won't necessarily qualify for a deferral on the property. And also important to note that interest will still accrue during this deferral period. So anyone who tries to use this relief in the long run will end up paying more. So it's really not a full measure. And I think that that's part of the problem, because landlords still feel

the pressure of their financial obligations that they assumed when they made this investment. And that's not entirely the same thing. It's not really fair to say that that's equivalent to the stress that tenants are feeling, because a tenant who loses their housing becomes homeless or is otherwise in a much more precarious spot in the midst of the pandemic, right? So someone losing their investment, while we should prevent that as much as possible, it's not really apples to apples here. But I do know that what's currently on the table is not enough for landlords and by extension will not be enough for tenants

because when we talk about trickle down, the pressure trickles down for sure. In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. One thing we've heard from some in government is that tenants should speak to their landlords and come to some kind of agreement. For example, a spokesperson for the Ontario Housing Minister put out a statement saying to tenants who are having challenges paying

rent, please speak to your landlord about whether it can be postponed or if other payment arrangements can be arranged. And BC Premier John Horgan has said something along the same lines. We're calling on landlords and tenants to have that sense of cooperation as in, let's figure this out with each other, household by household, right across the province. That's the only way we can come through this. Zaina tried this approach with no luck. And so in your experience as a lawyer, what do you make of that suggestion? Is it a realistic one? I think that's an ineffective way to tackle things. What we need right now are strong directives from the government,

not wishy-washy statements about, well, let's ask the landlords to maybe exercise some restraint or indulgence. And I also want to address sort of the notion that this is all about kind of small scale landlords and it's very easy for a tenant to approach them. And, you know, there's a good relationship and they know one another. That's not the case for a lot of renters. A lot of renters, another. That's not the case for a lot of renters. A lot of renters, their landlord may be a big conglomerate who is faceless. And in that circumstance, I would be skeptical whether you could actually achieve results from just reaching out to your landlord. And even as far as investors who are out of city or out of province, even out of country in some cases, you're not going to necessarily see that kind of sympathy. So it's a myth to think that everyone has sort of this friendly face-to-face interaction with their landlord.

Not true. I want to ask you what you think should happen here. So there's a petition going around, it's got more than 700,000 signatures. It's calling for a rent freeze, the suspension of rent in the midst of this crisis. And what do you make of that proposal? Is that even possible? You know, who is even allowed to make that decision? So from a jurisdictional standpoint, it is the province and the province does intervene already in some ways, for example, with rent control. So we already know that the province has the power to step in, pass laws, pass legislation. Now, what's being asked for a rent freeze for April, maybe even rent forgiveness for April, I don't think that's an unrealistic suggestion, considering everything that has

happened in the past few weeks, and taking into account the importance of people actually staying at home. And so I do think that forgiveness would be ideal. Now, is there a way to structure something so that landlords who lose out on this rental income, and if it's not covered by business interruption insurance or any other measures they may have in place, those landlords should be able to apply, whether to a provincial program or something set up by the federal government or funded by the federal government, to recover, at least in part, if not in full, the lost rent. And the reason I say that landlords should be the ones applying rather than tenants, simple fact is that there are far more tenants than there are landlords. So from an administrative

standpoint, just in terms of numbers, I think that that should be easier to handle. And I also don't want it lost that tenants sort of have varying degrees of literacy, English or French fluency, familiarity with these types of procedures. familiarity with these types of procedures. So there are people who will fall through the cracks if it is left on the shoulders of tenants to scramble and apply or come up with the solution. On that note, do you even think that renters understand some of the measures that have been announced so far, or all renters? To be fair, this is an unprecedented situation. So I think that I want to give everyone the benefit of the doubt that we're all trying our best to figure things out in these shaky waters. But the fact is that over the past, let's say, two weeks, several different iterations of what the federal government plans to subsidize or provide as payment,

or this will be in place of your EI, or this is a different type of EI, and that's changed. I wouldn't blame anyone for not knowing what the current rules are. And in fact, that application process still hasn't been announced. So obviously people are confused the canada emergency response benefit will provide two thousand dollars a month for the next four months for workers who lose their income as a result of covid 19 this will replace the two benefits we announced last week, the emergency care benefit and the emergency support benefit, in order to streamline the process. And we should note, even for people who have a clear understanding of what they need to do right now, rent is due on April 1st, and it does seem like we're talking weeks before money can get into people's pockets as well. And those weeks are crucial weeks for

tenants who, if they were to pay rent on April 1st and there's no other money coming in for who knows how long, it's expensive to survive. I also want to say to Quebecers, you don't have to be ashamed to go to a food bank. It's not your fault if you lost your job in these last days, these last weeks. What will you be watching for as a lawyer who represents both tenants and landlords as this pandemic drags on? And as eventually things get back to normal? drags on and as eventually things get back to normal? One thing I'm a little bit concerned about in the short term is whether some landlords may try a do-it-yourself approach. So take matters into their own hand, just go and change the locks, lock their tenant out. And I think that that could escalate into a bad situation.

So I really hope that we don't see any of that. And speaking at least in the Ontario context, it's treated very, very seriously by the Landlord and Tenant Board. As things get back to normal, it really depends. If there is no real consideration given to the idea of forgiving rent or at the very least establishing lenient payment plans, I think we might see an exodus from some of the major centers where people lose their homes because they cannot pay the large amount of arrears within the mandated time and can't afford to remain in that neighborhood or community or maybe even city. So I think that that's a concern as well that I have. And the way to avoid that would be to either eliminate part of what is owed or offload that responsibility onto a layer of government or to ensure that payment plans are structured so that they're not unduly burdensome on tenants who are already doing their best just to make it through. Okay. Karima, thank you so much.

Thank you. All right. That's all for today. Thank you so much for listening to FrontBurner, and we'll talk to you all soon.