“With just making doughnuts in that space, I was pretty much spinning my wheels to pay rent,”
A recent Globe and Mail article showcased business owners finding creative ways to adapt – like co-locating or sharing lease space to stay afloat. It’s a compelling read. But behind the feel-good stories, there’s a harsher reality: business owners are forced to collaborate not because the market rewards it, but because the commercial rental system is pushing them to the brink.
Just ask Melanie Laverick, owner of Empire Donuts in Victoria. After closing a side venture, she had extra kitchen space – and invited Benjo’s Tacos, a local business recovering from a fire, to share it. What started as a short-term pop-up turned into a thriving partnership. But the reason? Laverick couldn’t keep up with what she described as “astronomical” rent on her own. “With just making doughnuts in that space, I was pretty much spinning my wheels to pay rent,” she told The Globe.
That’s a story we hear across the country. From Nanaimo to Toronto, unpredictable rent hikes and vague lease terms are undermining business survival – regardless of how strong the concept or how loyal the customer base. It’s not just restaurants either. Shared production facilities, cooperative storefronts, group purchasing – these are all signs of small businesses adapting, not necessarily scaling. And while collaboration can be powerful, it shouldn’t be a last resort to keep the lights on and rent paid.
Dave Gens from Merchant Growth notes that while inflation remains a top concern, “what often starts as a quick fix is turning into something bigger. SMBs are leaning into collaboration as a way to stay resilient, and in some cases those tactical moves are evolving into longer-term partnerships.” But when nearly half of Canada’s restaurants aren’t breaking even, celebrating survival tactics while ignoring what’s driving fundamental costs can only go so far. The biggest fundamental non-labour cost? Rent.
If you’ve ever rented an apartment, you know your landlord can’t raise the rent beyond a certain amount each year. Your favourite cafe has zero of those protections.
Businesses often face:
- Rental increases of 50% or more between lease terms
- Hidden fees or lack of transparency in Common Area Maintenance (CAM/TMI) charges
- Take-it-or-leave-it renewal terms with 30 days to decide
Toronto retail rents jumped 142% from 2019 to 2024 in a completely unregulated market. That’s not a functioning market. That’s a system designed to extract maximum value from businesses that can’t easily move. France caps many retail rent increases to an index. Australia requires transparent fee structures. Ontario protects residential tenants. But retail tenants like the flower shop or donut store? They’re on their own.
Lease modernization isn’t complicated. Plain-language contracts. Predictable increases tied to inflation. Fair renewal terms. Transparent fees. Not radical policy – just basic fairness so businesses can plan beyond next quarter. Melanie Laverick’s story shouldn’t be about finding a creative workaround. It should be about running a successful doughnut shop without spending every dollar on rent.
Collaboration is powerful when it’s a choice. Right now, for too many business owners, it’s the only option left. Let’s fix the foundation.
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