FAQ for Elected Officials

Small businesses employ 63.8% of Canada’s workforce (Statistics Canada, Key Small Business Statistics 2024) – but rent instability forces their closures that eliminate local employment and reduce tax revenue. Commercial rent reform is fundamentally an economic development policy.

Toronto’s Ossington Avenue demonstrates what’s possible. Progressive landlords like Hullmark and 100 Group Corp prioritize a functional tenant mix (restaurants, services, retail) that builds neighborhood character over simply offering space to the highest bidders. The result is low vacancy, international brands like Carhartt WIP choosing Ossington over anywhere else in Toronto, property owners benefiting from sustained premium demand – and retailers who are supported. On Ossington, landlords and tenants have aligned around building district value to create a situation where businesses, landlords, workers and residents all win – instead of maximizing returns with a short-term, win-lose vision.

Stable business districts generate stronger local economic multiplier effects. Independent businesses recirculate 48-52% of revenue locally compared to just 13-14% for chain stores (Civic Economics, multiple studies, CFIB). When businesses have predictable costs, it becomes easier to reinvest profits into a stronger workforce, local suppliers and community enhancements – rather than extracting profits to distant corporate headquarters.

Employment preservation and growth: BWA’s 2022 research shows that over 50% of businesses expect to move or close at their next lease renewal without intervention. Rent stabilization prevents these disruptions while supporting business expansion – stable businesses with predictable costs can better plan for growth, innovation, and hiring.

Municipal tax revenue increases: Properties with long-term businesses tend to create more stable property tax revenue. Stable commercial districts create virtuous cycles where successful businesses attract complementary businesses, increasing foot traffic, .

Community investment attraction: Areas with thriving small business districts become destination neighborhoods. Mirvish Village in Toronto shows how strategic commercial development works – instead of only building large format retail spaces that can sit vacant for years, they created “25 move-in ready micro retail units” designed for small businesses.

Construction completes in 2025 and there is already high demand for the micro-retail spaces from a variety of businesses. The project’s integrated affordable residential rentals, micro-retail, and large scale anchor tenants offer the local community vibrant pedestrian-only high streets that can be easily accessed by public transit, cycling lanes, nearby parking, and accessible sidewalks.

Start with business turnover tracking. Contact your business licensing department for closure and relocation data. Survey local Business Improvement Associations, or use our handy local business survey, to gauge member business retention. Business closure rates above Canada’s standard 8% annually could indicate significant rent or other fixed-cost (insurance, utilities) pressure.

Key metrics include:

• Vacant storefront duration (over 6 months suggests rent-market disconnection)
• Business relocation patterns (tracking # of businesses leaving for cheaper locations)
• Employment changes in small business sectors
• Property tax revenue per square foot over time

Survey business owners directly using our research template asking about rent increases, renewal expectations, and relocation plans. This provides early warning about potential closures and identifies businesses needing support.

Commercial and residential affordability are interconnected through employment and local services. Stable local businesses provide nearby employment and essential services that support residential livability. When businesses face unpredictable rent increases, they reduce staff or relocate, eliminating local employment residents depend on.

Transportation cost impacts are measurable. Residents in walkable neighborhoods with transit options spend just 9% of income on transportation compared to 25% in car-dependent areas (The Impact of Transportation on Access to Affordable Housing). Stable local businesses provide essential services – grocery stores, restaurants, pharmacies – within walking distance, reducing car dependency. When these businesses get displaced, residents must travel farther for daily needs, increasing their overall cost of living.

Urban planning research suggests commercial stability influences neighborhood development patterns. Local business anti-displacement planning indicates that rapid commercial turnover can correlate with speculation-driven property changes, while stable, community-serving businesses support more gradual neighborhood evolution (Small Business Anti-Displacement Network research). The relationship is complex – thriving business districts can attract investment supporting neighborhood vitality while potentially creating affordability pressure. The key distinction is between organic, community-rooted development versus speculation-driven displacement.

Mixed-use development viability depends on commercial stability. Transit-oriented development and missing middle housing projects rely on ground-floor commercial income to make residential units financially viable. When commercial spaces experience high turnover due to rent instability, developers face revenue uncertainty that can lead to higher residential rents or reduced housing supply.

Strategic retail design supports both development and community goals. Projects like Mirvish Village demonstrate how “25 move-in ready micro retail units” designed for small businesses create stable commercial tenancies while serving residents’ daily needs. This approach provides developers with predictable income streams and residents with walkable access to services. In contrast, large format retail spaces may sit vacant longer or attract businesses that serve regional rather than neighborhood needs, reducing the community benefits that make mixed-use development successful.

Direct municipal tools:

• Zoning for small business success: Require 400-1000 square foot retail spaces in new developments rather than large format spaces that local businesses can’t afford
• Development fee incentives: Waive application fees, reduce parking requirements, or provide expedited permitting for projects that include affordable commercial space or retain existing small businesses
• Business improvement area (BIA) support: Expand BIA authority to include tenant-landlord mediation, provide research funding for market rate studies, and support business retention programs
• Municipal land development: Include affordable commercial space requirements when developing city-owned properties
• Partnership programs such as Baltimore County’s model: property owners get interest-free improvement loans while businesses receive move-in grants
• Tax increment financing: Direct property tax increases from improved commercial districts toward business retention programs. Chicago’s $60 million Small Business Improvement Fund TIF allows municipalities to support small businesses without raising taxes or using general funds.

Provincial advocacy opportunities:

• Municipal association resolutions like in Toronto (May 2024) or at the BC Federation of Municipalities (September 2024).
• Stakeholder coalitions connecting landlords, tenants, and community groups around shared solutions via policy improvements and potential incentives as described above. BIAs can be connectors for stakeholder events.

Legislative committee submissions providing local evidence to higher orders of government about commercial rent impacts.

Effective commercial rent regulation focuses on predictability rather than price controls, following international models that prevent business displacement while preserving property owners’ ability to earn reasonable returns. The key is balancing tenant stability with property owner income through graduated implementation and clear frameworks.

BWA’s Commercial Renter Bill of Rights framework provides four core areas:

Predictable rent increases: Annual graduated increases (typically inflation + 1-3%) rather than unlimited rent hikes. This allows businesses to budget and plan while giving property owners predictable income growth.

Affordable dispute resolution: Tribunals handling landlord-tenant conflicts outside expensive court systems. Currently, most jurisdictions don’t have commercial landlord-tenant boards, forcing businesses and landlords into costly court proceedings for basic disputes like repair issues or lease interpretations.

Standard lease terms: Basic fairness requirements that eliminate harmful clauses like excessive personal guarantees or unclear operating cost calculations. This reduces legal complexity and surprise expenses for both parties.

Right to withhold rent without eviction: When landlords fail to fulfill obligations (such as emergency repairs), businesses can deduct repair costs from rent without facing eviction. Currently, small businesses risk losing their locations within 15 days in most provinces if they attempt to withhold rent – regardless of how much money a landlord may owe their tenant.

There are many misconceptions about residential vs. commercial tenant rights.  In fact, many business owners and members of the public believe that both residential and commercial tenants have the same rights.  However, the reality is far from this and the protection gap between residential and commercial renters is significant. As an example, here are protections in the province of Ontario:

This explains why 50%+ of businesses expect to move or close at lease renewal – they have virtually no protection against displacement despite often investing heavily in renovations to their locations and serving as community anchors.

Small businesses often spend tens – or even hundreds – of thousands of dollars upgrading their leased space. Think signage, lighting, fixtures, HVAC, accessibility ramps & washrooms, often paid out of their own pockets. These improvements make the property better, not just for the tenant but for the landlord too.

When the lease ends, the landlord can raise the rent to reflect those upgrades – or simply refuse renewal – effectively pricing out the tenant who paid for the improvements. Suddenly, what was meant to grow the business turns into a sunk cost that only benefits the landlord.

This puts real strain on cash flow and discourages long‑term investment by independent businesses. Without assurances that they’ll reap the rewards of their own investment, tenants stay stuck in uncertainty – and the community loses too.

*Retaliation protection means landlords cannot raise rent, refuse lease renewals, or evict tenants in response to legitimate complaints about property conditions, requests for contractually obligated repairs, or difficulty during lease negotiations. This prevents landlords from punishing tenants who assert their rights.

Well-designed commercial rent policies attract property investment by creating predictable market conditions and reducing costly tenant turnover. The key is balancing tenant stability with property owner returns.

Tenant replacement can cost property owners $100,000-$200,000 for typical 2,000 square foot retail spaces (NAI Elliott research) – this can exceed income from rent increases that trigger business displacements. Predictable policies reduce these costs by prompting stronger relationships between landlords and tenants – and gradually increasing property prices instead of increases via market volatility.

Investment-friendly design principles:

• Predictable increase formulas (inflation + 1-3%) providing property owners with planned income growth
• Professional dispute resolution reducing costly legal conflicts between landlords and tenants

Include property owners in policy development through structured consultation processes. Many landlords support predictable rent policies because they reduce tenant management costs and improve property investment returns.

Start with pilot programs in specific commercial districts, allowing time to assess impacts and adjust policies based on real-world results. This approach reduces stakeholder resistance while demonstrating effectiveness to both property owners and provincial policymakers.

Rent reform is an approach to  economic development that benefits everyone – it is not tenant advocacy. Focus on job preservation for local residents: small businesses create a large portion (38%) of new employment – and often hire first-time labour participants to work in restaurants, cafes and retail stores located on main streets. Rent displacement can eliminate local employment opportunities for first-time workers.

Small businesses and SMEs are the engine of new job growth in Canada. In 2023, small enterprises (1–99 employees) employed nearly half (46.5%) of all private-sector workers (ISED, Small Business Stats 2024). Historically, small businesses have accounted for 43% of job gains and, between 2003 and 2017, generated over 85% of new jobs in the Canadian economy.

Property owner engagement: Highlight tenant retention benefits. Stable tenants provide predictable income streams improving property financing and valuations. Chicago’s Building Owners & Managers Association is proposing a self-imposed tax to improve security, cleaning and revitalization. Ossington in Toronto has high levels of collaboration between landlords, tenants, and their BIA – allowing for greater business performance, job retention, and potential longevity.

Use local examples: Identify businesses facing rent pressures and highlight their community contributions – employment, local sourcing, community events. Personal stories make policy impacts tangible.

BIAs are natural partners representing both landlords and tenants. Their existing structure provides implementation mechanisms for local solutions including tenant-landlord mediation, market research, and business retention programs.

How BIAs Can Deepen Their Impact

• Tenant – Landlord Mediation Hub: BIAs already convene landlords and tenants around shared improvement goals. They can extend this role by funding or hosting neutral mediation services when rent disputes or renewal negotiations stall.
• Data-Driven Rent Monitoring: With existing budgets for local market research, BIAs could fund regular rent monitoring reports, offering transparency on rate trends in retail, storefront, and service corridors.
• Incentivized Stability Programs: Leveraging their community funding mechanisms, BIAs could create rent stabilization grants or lease-extension incentives – for example, subsidizing access to legal or lease consultants for small tenants.

Communications & Community Trust: BIAs can educate landlords about the financial upside of tenant retention – how retention-oriented planning lowers turnover risk, improves predictable cash flow, and sustains local economic stability.

Municipal tools include:

• Zoning requirements for small business-friendly development
• Development incentives and tax increment financing
• Business licensing conditions supporting tenant stability
• Partnership programs supporting both landlords and tenants

Toronto’s Small Business Property Tax Subclass is a powerful demonstration of these tools at work. Starting in 2022, this policy provides a 15% property tax reduction – applied municipally and matched provincially to eligible small commercial properties.

In 2023, 84% of commercial properties within Toronto’s BIAs qualified, signaling real ground-level impact in Main Street corridors. Unlike direct rent control, this approach eases operating costs and gives small tenants indirect respite from rent pressure without requiring landlords to lower rent directly.

Zoning levers and permitting are foundational municipal tools that directly impact rent and tenant stability. Municipalities can establish or preserve small business‑friendly zones, streamline permitting processes, or require “right-sized retail” in ground‑floor commercial retail in new developments (like Mirvish Village) to safeguard affordable space for local businesses.

Provincial authority is required for: Direct rent regulation (such as graduated increases or right to withhold rents), commercial tenancy tribunals, standardized lease requirements. However, municipalities can advocate and prepare implementation frameworks.

Build evidence-based coalitions rather than lobbying individually. Effective strategies include municipal association resolutions, economic impact research, stakeholder coalitions, and pilot program proposals.

Shift from vague timelines to evidence-based pacing and iterative modeling:

Use structured policy cycles to guide progress. Most frameworks – including Canada.ca’s approach – emphasize that policy development is iterative, consultative, and can be time-consuming, especially when requiring consensus across sectors and governments. Read more about this from the Association of Municipalities of Ontario.

Leverage implementation strategy models, which typically outline a 4-year transition, detailing responsibilities and sequencing (e.g., pilot → evaluation → scale).

Communicate expectations with clarity: Rather than saying “2–3 years,” position reform as a multi-phase process – starting with planning and stakeholder engagement, followed by piloting in select districts, evaluating mid-term, and scaling based on results.

Balancing the expectations of the general public with reality can be difficult – clear communication and expectations can help temper impatience.

Track the essentials: vacancy rate, lease turnover vs. renewal, small-business closures/moves to other areas, employment numbers. A simple survey (like ours!) can catch trends early. Add context by comparing your data with peer municipalities to uncover actionable opportunities.

Commercial vacancy rate – tracks how many spaces are empty and highlights areas under stress.
Lease turnover vs. renewal rate – shows whether tenants are staying or being priced out.
Net effective rent – this is the real rent landlords get (after incentives); Statistics Canada tracks it via the Commercial Rents Services Price Index (CRSPI).
Small-business closure & move counts – identifies distress early before it snowballs.
Supplement with surveys – a short survey (like ours) to keep tabs on business confidence and risk can catch warning signs.
Benchmarking — compare these indicators with similar cities via tools like Statistics Canada’s Centre for Municipal and Local Data dashboard.

If it’s landlord’s responsibility: Document the problem with photos, send written notice referencing specific lease clauses and requesting action within reasonable timeframes, keep copies of all communications. If landlord doesn’t respond, you may need legal action through Small Claims Court (under $35,000) (Ontario Courts) or Superior Court for larger issues.

Calculate total occupancy costs including base rent, property taxes (in net leases), insurance, CAM charges, and utilities. Don’t just look at base rent – Triple Net leases can add 30-50% to your total costs. Factor in annual increases when projecting multi-year budgets.

Two modern tools stand out.

1. Main Street Metrics Dashboards (Canadian Urban Institute)

These dashboards turn complex trends – like foot traffic, spending behaviors, business turnover, demographics, and civic assets – into clear, visual insights with real-time data feeds. The Canadian Urban Institute’s dashboard helps users understand how patterns can shift weekly, benchmark effectiveness, and tailor strategies like revitalization or tenant retention accordingly. Cost-effective tier packages suit varying budgets – read more here.

2. 2024 BIA Financial Operations Manual (TABIA)

Created by Liberty Village BIA, this award‑winning template offers clear guidelines for financial governance, internal controls, and compliance – with built-in safeguards for transparency, fraud prevention, and policy alignment. It was honored with both a TABIA Member Award in 2024 and an OBIAA Award of Excellence in 2025. Find out about it here.

You have the right to negotiate these restrictions before signing. Don’t accept restrictive clauses just because they’re in the landlord’s standard lease – everything is negotiable in commercial contracts. Ensure permitted use clauses are broad enough for your business model and planned expansions. Negotiate specific signage rights including size, lighting, location, and streamlined approval processes for changes. Remember: what’s not explicitly permitted in your lease may be prohibited, so negotiate proactively for the operational freedoms your business needs.