2023 Commercial Rent Round-Up

Where we started on the path to creating new rights for brick and mortar business owners

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Commercial Rent Round-Up Introduction
The Road to Queen’s Park
Queen’s Park Lobby Day – May 16, 2023
Downtown Ottawa Revitalization Task Force
Telling Stories – Even When It’s Scary
What’s Next on Commercial Rent Reform

Commercial Rent Round-up Introduction
Written by: Jessica Carpinone

By the time my business joined the Better Way Alliance in 2017, I had been grappling with the financial puzzle that loomed over my small business in the four years prior. Every time I felt like I was getting ahead, something would knock me down:

  • a broken mixer
  • a batch of bread gone wrong
  • or a surprise rent adjustment

If you’re a small business owner with a brick & mortar space, that last point probably doesn’t surprise you anymore. “Annual adjustments” are just one of the ways in which the commercial leasing system keeps tenants like us in a state of precarity and financial vulnerability. 

Commercial leasing is an unregulated and unbalanced system. It forces small business tenants to hedge their bets on whether their landlord will act in good faith.

This reality has forced me, many times, to question whether to invest more time, energy, and money into my business. It feels downright unfair that even though my business has a strong track record – yet I don’t have agency over the space that we call home.

At the Better Way Alliance, we’re bringing businesses together (like you!) to demand a better system–one that allows us to make sound investments into our businesses, our team, our neighbourhoods, and our financial future. 

I became involved in the BWA as a staff member in the fall of 2022, and since then, I’ve witnessed some real momentum and growth in the Commercial Rent campaign. Keep reading and I’ll fill you in on some of the highlights and lessons learned since we launched this project – and where we’re going with you next.

– Jess Carpinone
Bread By Us / Better Way Alliance

The road to queen’s park

On May 16th 2023, a group of BWA delegates visited Queens Park and met with MPP’s from all 4 political parties. The road to preparing for Queen’s Park was long and full of insights along the way. Since Summer 2022, we’ve met with several elected officials from various levels of government who are sympathetic to the issue.

These meetings helped us understand what kind of support is out there for Commercial Rent Reform and allowed us to sharpen the way we communicate about this issue.  One of my main takeaways from these early meetings was that we need to build a broad coalition of stakeholders and supporters. This insight propelled us to think bigger, and to broaden the types of people we bring into the conversation about commercial leasing.

In that spirit, we met locally with a leader in the affordable housing sector, the CEO of a real estate investment firm, Board of Trade members, and BIA representatives to gauge their appetite on engaging with the BWA on the issue of rent regulation. The outcomes of these conversations were varied, but always insightful– more on that later!

We had reason to believe that PC MPPs would hold fast to a “free-market” approach to commercial leasing. Free-market economic policy is often a pillar in Conservative politics while regulation can be seen as interfering with forces of a free market. However, for a market to function, it needs to ensure all parties are engaging equally.  In commercial leases, most business owners would disagree that the market is fair.

Queen’s Park Lobby Day, May 2023

With that in mind, we went into our meeting at Queen’s Park with PC MPP Rudy Cuzzetto.

We outlined the issue from the vantage point of small business tenants. Rudy remains open to seeing how we could work together towards a path forward, or as he put it: “How can we ensure a win/win for both tenants and landlords.” Promising!

Through that conversation, we discovered new framing on the issue that could connect with a wider audience. On a personal note, I found the process of engaging directly with a PC MPP particularly interesting.

In my past advocacy work, I never had the chance to bring my issues directly to a PC politician, especially one in the ruling party because what I was advocating for was too far removed from the party’s priorities. But as an advocate working with a business group, that reality has shifted.

This meeting in particular was a reminder that every politician, no matter the party, wants to be known as a supporter of small business.

In each of our meetings with the NDP, Liberals, and Greens, we had strong commitments from each MPP that they would take action on the issue.

There seemed to be a real appetite among the opposition parties to work together on legislation. The BWA will continue to stay connected with MPPs who have expressed a desire to actively support the commercial rent campaign, and we’ll do everything we can to keep the Commercial Rent Reform ball rolling in Ontario!

Here are a few final highlights from Queen’s Park that I think you’ll be happy to know:

 

  • NDP MPP Chris Glover spoke about the commercial rent campaign during Question Period (peep the video, starting at minute 62), and highlighted the issue very well.

     

  • We had delegates join us for Lobby Day from BWA businesses, but also from the Canadian Women’s Chamber of Commerce, and B-Corp. It is great to see allyship forming across multiple like-minded business groups.

     

  • Over 30 staffers & MPPs from all parties joined our evening reception to meet our business members & staff.  Special thanks to Mary-Margaret McMahon, Chris Glover, Mike Schreiner & Marit Stiles for speaking at the reception.

Queen’s Park photos

See More Photos Here

Downtown Ottawa Revitalization Task-force

With the idea of coalition-building in mind, we set out to engage in local communities on the issue of place-making. An issue that small business resiliency and commercial leasing is directly tied to. The City of Ottawa has seen dramatic changes to its downtown and invited us to join their Downtown Ottawa Revitalization Task Force.

The main commercial landlord in Ottawa’s downtown core is the Federal Public Service, and the entire downtown has centered around the daily ebb and flow of public servants for decades. When covid lockdowns went into place, our downtown emptied out in a very big way. To say this impacted small businesses would be an understatement. 

Many held out hope that commercial real estate demand would climb back up to normal levels in downtown Ottawa.  But 3 years on, it is evident that the way workers operate has changed permanently. Ottawa’s downtown core is now economically depressed with high commercial vacancies. People from across sectors came together to ask: What’s next? How do we rebuild this part of our city? And what opportunities are lurking in the wake of the pandemic’s impact?

The Downtown Ottawa Revitalization Task-force was set up to explore these questions. The organizers–elected officials, business leaders, affordable housing advocates, Indigenous leaders, and developers–invited the general public to participate in the process. With that invitation, we saw an opportunity to bring the perspective of BWA Businesses to the table. 

As a first step, we submitted a proposal to the task force that centered around commercial rent affordability and the importance of creating opportunities for small businesses to take root and thrive in downtown Ottawa. Beyond the written submission though, an opportunity remained to engage with a group of influential decision-makers and leaders who were in the midst of trying to shape the future of our city. In discussion with members of the task-force, Jess Carpinone hosted 1-on-1 meetings with local stakeholders. The systemic challenges that small businesses face are directly tied to the BWA’s Commercial Rent campaign.

Two major insights came out of that pursuit:

  1. Among small businesses the frustration with bad-faith landlords is a nearly universal experience.

 

I nudged my way into a small-business round-table discussion group that was led by the task-force organizers, and the issue of rent affordability and stability came up over and over again. The discussion group was attended by a dozen or so creative thinkers in the small business community. I met some great peers and allies through that experience.

 

Two major insights came out of that pursuit:

2. Landlords and developers, even ones who position themselves as “change-makers” are wary of any kind of talk to regulation. I landed a meeting with the CEO of a real-estate investment company who is involved in the downtown revitalization task force.

Considering that person’s ostensible commitment to the interests of the City at large, I anticipated a level of openness to hearing about commercial tenancy issues from the perspective of small businesses. However, off the bat, he came out strongly against the BWA’s commercial rent campaign.

Ultimately, that person laid out his deeply held beliefs that regulation of commercial leasing would disincentivize commercial landlords from investing in real estate (a common refrain from residential developers as well). By the end of the conversation, I think I helped him see that the status quo is flawed, and that perhaps there was a way forward that made sense for all parties involved.

I left that meeting with an appreciation for how ingrained the idea that “free-market capitalism is the only right way to govern economic policy. Even though that conversation was difficult, it gave me, Lili, & Aaron a lot to think about, and led to some really important internal conversations about how to frame the issue effectively for different audiences, without diluting our goals. 

Telling our stories: Even when it’s scary

One of the challenges that the BWA continues to face when we try to take stories public or to the media is that there is a lot of fear from business owners around speaking out about their tenancy issues.

Many have been in this situation – it’s hard to balance the desire to bring awareness to the issues while being mindful of preserving a relationship with a landlord. Many times, business owners just bear the stress and keep a low profile.

As small business owners who lease commercial space, so much of our livelihood hinges on maintaining good rapport with our landlords because there isn’t much protection for us if relations go south. Speaking out can be very fraught, and frightening. This challenge came up most recently when Karla Briones was trying to write her column about commercial rent regulation.

Getting our stories out there is an important way to build support for our campaign and garner widespread support. If you want to tell your story or contribute to the campaign, but have reservations about it, get in touch with us. There are various ways to tell your story while balancing your need for privacy. Don’t be left out of the conversation!

Telling the story: Media Success

One of the business owners that I had the pleasure of connecting with through the DT revitalization task force is Karla Briones. Karla is the owner of two pet-food stores, and has previously owned businesses in foodservice. She is also involved in the Ottawa Board of Trade, and works as a business consultant supporting underrepresented entrepreneurs.

After the Downtown Ottawa Revitalization Task Force roundtable, Karla used her platform as an Ottawa Citizen columnist to highlight the issues that commercial tenants face, and how we might start to carve out a path towards something more equitable.

The first article, entitled “How about a vacant unit tax for commercial properties, Ottawa?” explores using a municipal tool to incentivize landlords to rent out their spaces rather than holding on to empty units.

The second article, entitled “Commercial rent free-for-all is hurting Ottawa’s small businesses” is a scathing review of the current system. This piece blows the issue of lack of commercial rent regulation wide open in a major news outlet.

Meeting Karla and being a part of the process of communicating the issue to the broader public has been an exciting experience. We hope to continue to find journalists and folks in the media who are willing to amplify and explore this topic with us. 

what’s next on commercial rent reform

With all of the momentum we’ve built in the last year, the road ahead is full of optimism. Here’s what we’ll be up to in the coming months: 

 

  • We are working on revamping the commercialrent.ca site! Already, we’ve seen lots of traffic on the site, and made many connections through it. That said, we want the site to speak to a wider audience and for it to be more action-oriented. Our new site will outline ways that business owners, elected officials, and journalists can engage with the campaign.
  • We are developing a resource in collaboration with a lawyer that aims to help first-time tenants navigate commercial leasing. The resource will follow a Q & A style format, and have oodles of information that should help people go into leases and negotiations from a more confident and informed position. Our goal is to reach as many prospective business owners as possible, including newcomers to Canada, who often come at commercial leasing from an even more challenging position. Our aim is for the resource to be available in several languages.
  • We’ve made some great inroads with elected officials, but there are so many people we could still reach! We will continue to try and speak & meet with as many MPPs as possible in the coming months to help them understand the issue, and to continue creating widespread awareness and support for the campaign.
  • Alongside making new connections, it is important that we continue to nurture the ones we have already made. We will continue to urge action from elected officials who have already expressed support for our campaign, and work with them on strategy and policy. 
  • Continue to collect stories from business owners. First hand experience and storytelling is an invaluable tool in this campaign. At Queen’s Park, we saw this first hand. One of our delegates was brave enough to tell the story of his decades-old business facing a massive rent increase from new landlords, and the impact on MPPs was palpable. We want to use all of our platforms (website, social media, traditional media) to get your stories out there. Get in touch if that might be you!