Order Amending the Remission Order in Respect of Non-residential Leases and Licences of Occupation Under the Administration of the Parks Canada Agency: SI/2021-1
Canada Gazette, Part II, Volume 155, Number 1
SI/2021-1 January 6, 2021
FINANCIAL ADMINISTRATION ACT
P.C. 2020-1119 December 18, 2020
Her Excellency the Governor General in Council, considering that it is in the public interest to do so, on the recommendation of the Treasury Board and the Minister of the Environment, pursuant to subsection 23(2.1) footnote a of the Financial Administration Act footnote b, makes the annexed Order Amending the Remission Order in Respect of Non-residential Leases and Licences of Occupation Under the Administration of the Parks Canada Agency.
Order Amending the Remission Order in Respect of Non-residential Leases and Licences of Occupation Under the Administration of the Parks Canada Agency
1 (1) The portion of subsection 1(1) of the Remission Order in Respect of Non-residential Leases and Licences of Occupation Under the Administration of the Parks Canada Agency footnote 1 before paragraph (a) is replaced by the following:
1 (1) Remission is granted to the persons referred to in subsection (3) of 75% of the following amounts paid or payable by them in respect of the period beginning on April 1, 2020 and ending on September 30, 2020:
(2) Subparagraph 1(3)(a)(ii) of the Order is replaced by the following:
- (ii) provides to the Parks Canada Agency, no later than December 31, 2020, a signed attestation supporting their eligibility;
Coming into Force
2 This Order comes into force on the day on which it is made.
(This note is not part of the Order.)
Pursuant to subsection 23(2.1) of the Financial Administration Act, this Order amends the Order Amending the Remission Order in Respect of Non-residential Leases and Licenses of Occupation Under the Administration of the Parks Canada Agency (the second Remission Order, P.C. 2020-587, dated August 23, 2020) to extend the rent relief it provides to September 30, 2020.
The Remission Order in Respect of Non-residential Leases and Licenses of Occupation Under the Administration of the Parks Canada Agency (the first Remission Order, P.C. 2020-414, dated May 30, 2020) remits 75% of the rent and licence fees from April 1, 2020, to June 30, 2020, payable on commercial and municipal properties in national parks, national historic sites, and other program lands administered by the Parks Canada Agency. The second Remission Order extended this rent relief to July and August 2020.
The objective of the Order Amending the Remission Order in Respect of Non-residential Leases and Licenses of Occupation Under the Administration of the Parks Canada Agency (the third Remission Order) is to extend the rent relief available to Parks Canada’s commercial tenants through the first and second Remission Orders to September 30, 2020, and also extend the application deadline to December 31, 2020.
Parks Canada Agency tenants
Parks Canada’s real property portfolio is one of the largest and most complex among federal custodians. There are 766 commercial agreements and two municipal agreements (Town of Banff and Municipality of Jasper), who could potentially benefit from this third Remission Order. Less than twenty of these tenants are considered large corporations, such as major hotel chains and attraction providers (e.g. ski hills, mountain top attractions, skywalks, and other local attractions) who provide disproportionately employment and services to the largest numbers of people. The vast majority of Parks Canada’s tenants are small and medium sized businesses with a significant regional focus related to their location in the national park. The businesses range from convenience and grocery stores and professional services, to golf courses, small to medium-sized hotels, restaurants and more.
The Agency has a long-standing and important relationship with the businesses that operate on its sites, as they provide the critical accommodation, food and services that in many cases people require to complete their visitor experience. In addition, in many remote and isolated areas, Parks Canada places are the only source of visitor-generated revenue for these businesses.
Impact of the COVID-19 pandemic on Parks Canada’s tenants
The COVID-19 pandemic continues to have an adverse impact on tourism and hospitality-related businesses across the country. In the early stages of the pandemic, COVID-19–related restrictions imposed by multi-levels of government (e.g. social distancing requirements, closure of certain businesses) meant that normal visitor activities in national parks and historical sites were severely restricted.
On June 1, 2020, some parks gradually reopened (e.g. the grounds of Bellevue House National Historic Site, Bruce Peninsula National Park and Fathom Five National Marine Park), but at a reduced capacity (e.g. access was provided to some trails, day-use areas, green spaces, and some recreational boating). On June 17, 2020, Parks Canada announced that visitors would be able to access some camping services at certain national parks (e.g. Gros Morne National Park, La Mauricie National Park, Point Pelee National Park). However, access to some public toilets, change rooms, other visitor facilities and parking in some Parks Canada’s places across Canada remain closed or have restricted access (e.g. at Georgian Bay Islands National Park, day-tripper boat transportation services, roofed accommodations, and the park administration office in Midland still remain closed) and most of the revenue-generating programs (e.g. guided tours, exhibit space) remain limited.
The summer tourism season is when small and medium businesses generate a majority of their revenue (except for a few businesses that are able to generate more revenue in the winter, such as ski hills). However, temporary closures of Parks Canada’s sites in the first quarter of the year, and the gradual reopening/ongoing operational limitations have had an adverse financial impact on some businesses annual revenue. This decline in tourism is projected to persist until 2023.
The businesses located within national parks and historic sites are of significant economic importance to a number of rural and remote communities across the country. They have been particularly hard hit due to the following factors: (a) their revenue generation takes place primarily between May and September; (b) they are located in areas of low population density, but scaled to provide services to their level of visitation (they carry higher structural and fixed costs); and (c) international visitation, which is also another revenue driver, is not likely to restart anytime soon. Unlike businesses that have a formal production function or have an output that can physically be measured, tourism and hospitality businesses experience an unrecoverable operating loss every day that goes by without significant revenue.
Government of Canada rent relief measures
On March 27, 2020, the Minister of the Environment announced that rent and fee payments owed by Parks Canada’s commercial tenants, and due on or after April 1st, could be deferred without interest until September 1, 2020. This deferral period was later extended to October 1, 2020.
On April 16, 2020, the Government of Canada announced the Canada Emergency Commercial Rent Assistance (CECRA) program for small businesses. The program seeks to provide loans, including forgivable loans, to commercial property owners, who in turn will lower or forgo the rent of small businesses for the months of April (retroactive), May, and June 2020. Applicants had until August 31, 2020, to apply for the CECRA program for these three months. However, small businesses located in parks or historic sites are not eligible for the CECRA program because they pay rent to Parks Canada and not to commercial property owners with mortgages.
To address this, and pursuant to the first Remission Order, which was published in the Canada Gazette, Part II, on June 10, 2020, the Minister of the Environment announced that eligible Parks Canada tenants could apply for rent relief under the first Remission Order. Eligible Parks Canada’s tenants received a reduction in their invoiced annual rent and fees amounts for 2020–2021. The rent relief provided by the first Remission Order was aligned with the CECRA program in that the eligibility requirements are the same and it applied for the months of April, May and June 2020.
In July and August 2020, the Government announced two additional extensions of the CECRA program for July and August. The deadline for both July and August was September 14, 2020. In turn, a second Remission order was published in the Canada Gazette, Part II, on September 2, 2020, to provide rent relief to Parks Canada’s tenants for July and August as well.
On September 8, 2020, the Government announced an extension of the CECRA program for another month until September 30, 2020, to continue to support small businesses and property owners as the Canadian economy gradually reopens. The deadline to apply for the CECRA extension (for September) was October 30, 2020. Existing CECRA applicants needed to re-apply for the month of September. New CECRA applicants had the choice of applying for the three-month initial period, four months, five months or six months.
Given Parks Canada’s unique real property environment, and the uniqueness of its operations within the national park system, a customized rent relief solution is considered both necessary and warranted. Unlike many other commercial rent agreements, Parks Canada’s tenants separately bear the costs associated with constructing and equipping the land for use, including the building cost itself and related fit-up required, which usually results in a separate mortgage or financing arrangement that is paid to another third party.
The third Remission Order extends the reduction of a portion of the annual rents and fees due to Parks Canada for the month of September 2020 and provides for an extension to the current application deadline from September 14, 2020, to December 31, 2020. Since Parks Canada is not seeking approval for this proposal until after October 30, 2020, the Agency cannot align with the CECRA deadlines. Therefore, an extension of the application deadline until December 31, 2020, was sought. If a tenant has already submitted its application for the period covering April to August, it is automatically eligible for the September extension. However, if a tenant has not yet submitted an application, it would have until December 31, 2020, to submit its application for all six months.
It is estimated that approximately $300,000 would be remitted as a result of the third Remission Order. In line with the first and second Remission Order, the financial relief provided by the third Remission Order would continue to extend the same financial relief as provided for under CECRA, to eligible businesses operating in more than 150 national parks and national historic sites and other Parks Canada places across the country, as well as two municipalities (Jasper and Banff).
The third Remission Order would continue to help small businesses mitigate some of the financial pressures caused by the COVID-19 pandemic and it is considered in the public interest because it would help to support the longer-term maintenance of economic and tourism activities in Parks Canada sites.
No formal consultations were undertaken on the third Remission Order. However, stakeholders (e.g. business owners, chambers of commerce and local tourism officials) continue to proactively engage the Government to express that their financial viability is at risk. One hospitality association has further reached out to members of Parliament to express their concerns.
The extension of the rent relief provided through the third Remission Order continues to respond to stakeholder concerns and is aligned with the CECRA program. Accordingly, it is anticipated that stakeholders will be supportive of it.
Policy, Legislative and Cabinet Affairs
Parks Canada Agency