Secure Your Space.
Help Canadian Businesses Buy Their Property.
Why do Businesses Need This Program?
Local Canadian businesses are increasingly being priced out of their spaces. A lack of affordable commercial rent prices and the unpredictability of rent hikes leave many brick and mortar businesses struggling to keep their doors open.
A helpful solution would be for business owners to buy a property to house their business – such as their storefront, cafe, or manufacturing facility. In fact, it’s a major reason why long-lived businesses last (think of that corner store laundromat!).
But right now, this is almost impossible to do.
Down payments being demanded are much too high, and lenders don’t want to take a risk on a business, even if it has a long track record of success.
The current commercial rental landscape is unsustainable, often leading to business closures, lost jobs, weakened local economies and the chainification of main streets.
It’s almost impossible for a retail store owner, restauranter or many types of main street business owners to buy real estate. Banks and other lenders simply won’t take the risk – even on proven businesses with long track records of success.
The Solution
Help small business owners secure their spaces through ownership. By creating a mortgage guarantor program administered by the Business Development Bank of Canada (BDC), business owners with a proven track record can achieve stability, growth, and long-term success by purchasing their space.
Businesses that own their buildings achieve greater predictability and security, freeing them from the uncertainty of rent increases and lease disputes (Toronto Star | Karon Liu). Local ownership also keeps more wealth within a community – improving the stability of that neighbourhood.
The Need for Business Stability
Businesses across Canada are grappling with rising rent costs, making it difficult to plan for the future. As rents rise, so do operating costs, often at the expense of growth, hiring, and even staying open. Here’s why businesses need the ability to own their space:
Rising Costs: Rent increases frequently outpace revenue growth, putting immense pressure on small businesses.
Local Jobs: Businesses certain of their future are able to pay more, offer benefits, and provide more consistent employment within a neighbourhood.
Uncertainty: Without control over their premises, businesses face the constant risk of displacement, disrupting operations and customer relationships.
Lack of Leverage: Small businesses often struggle to negotiate fair lease terms, with landlords holding most of the power.
If you want to keep your favourite local businesses in your neighbourhood – sign the petition and send a message to your MP that they MUST support the Secure Your Space program.
Secure Your Space FAQ
Can't business owners already buy their property?
Business owners, especially retailers and restaurateurs, often don’t qualify for mortgages – even if they’ve had many years of great success. Businesses have higher downpayment and eligibility requirements than residential property buyers.
Canada’s conservative banking system is a benefit in some ways – but it also means most brick and mortar business owners are never able to qualify for a commercial mortgage.
Creating a set of realistic qualifications that business owners can prove through aSecure Your Space program will help build community wealth and remove the uncertainty of renting a commercial space.
Is this corporate welfare / What is the government's role?
Nope – we’re talking about fair mortgage terms that are repaid just like any other mortgage.
Small businesses that support the local community would have a realistic chance to buy their property – just as others are fighting for the same on housing.
The government’s involvement through BDC would be to identify and approve qualified businesses – then connect them with the appropriate financial institution.
What eligibility requirements would businesses need to secure their space?
We think a track record of paying rent on time should count for something. Lenders say they are worried about the risk of giving a mortgage to business owners.
Being able to prove a record of making payments of a similar size (or more!) to a mortgage should make a business eligible to take on a monthly payment that goes towards owning a space.
We’d like to point out that our own federal government made this statement earlier this year when talking about making it easier for more people to buy a home!
Can't we just protect businesses from big rent hikes?
That would be nice! Unlike many residential renters, commercial rent can go up by any amount during a lease renewal – or in some cases right in the middle of a lease.
Predictable Rent Increases is an idea we support in our Commercial Renter Bill of Rights. Not every business wants to purchase their property which is why we created the Bill of Rights – to ensure there are guidelines for better deals between landlords and tenants.
For the businesses that do want to buy their space, aSecure Your Space program fits the bill. For everyone else, modernizing provincial commercial tenancies acts is critical.
What are the potential side-effects?
If you’re a chain looking to aggressively expand, you might have a couple less options.
Otherwise, we’re pretty sure this is a slam-dunk idea.
Would this make our main streets more commercialized?
Nope, for a few reasons.
First: A Secure Your Space program is not asking for zoning changes. Commercial areas are dictated by a municipality’s zoning plan. We expect zoning to stay the same, while ownership of existing commercial zones change.
Second: You may have noticed that more and more main streets feel pretty commercialized these days. It’s not necessarily that there are more businesses around. It’s more likely that more chain stores are moving into commercial zones, making it hard to miss that Starbucks, Rexall, and Dollarama that moved in.
Independent stores are each so unique that they create interest and character, while chain stores feel corporate and give a “commercial” feel.
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