Several MPPs from Ontario’s NDP party hosted a Small Business Roundtable on November 28, 2024. The ONDP was interested in hearing the policy issues on the minds of Ontario small business owners, and gathering ideas for how the party could help create a fairer marketplace for small businesses.
We were chuffed to be invited to the event and to work with the NDP party to assemble business owners from our network. We aren’t a partisan organization, so we don’t support one party over others, but we are advocates who believe in speaking up whenever we can in order to build the conditions for us to thrive. Therefore, we were very excited for the opportunity to speak up about one of our main concerns: the commercial rent system that is making investing in our growth and our people harder each year.
Ontario’s small businesses are the backbone of our economy, creating two-thirds of private-sector jobs and recirculating 2–4 times more revenue locally than large chains. Yet, the commercial rent system is stacked against them:
- Unfair Rent Hikes: Businesses face rent increases of up to 200–300%, often without notice. Since 2020, retail rents in Toronto are up 67%, industrial is up 100%.
- Opaque Leasing Practices: Long, complex leases favor landlords, leaving small tenants in the dark about their rights and obligations.
- No Dispute Resolution: Small businesses lack affordable ways to challenge unfair fees or practices outside costly, time-consuming court battles.
- Unbalanced Risks: Tenants are forced to pay full rent—even when landlords fail to meet their obligations for repairs or maintenance.
The result? Main streets lose hard-working entrepreneurs and the jobs they create as local businesses are displaced by chains. Under the current system, small business investments in workforce development, new equipment or expansion are stagnating as rents have risen by double digits.
Here is what we proposed to the Ontario NDPs as solutions to fix this existential issue.
Building a Fairer Commercial Rent System
We can improve Ontario’s difficult rent situation by creating a fairer, more balanced commercial rent system that helps small business owners thrive through four proposed reforms:
Make Rent Increases Predictable
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- Ensure rent increases are reasonable, protecting businesses from sudden, unaffordable spikes – creating stability for tenants.
- Safeguard tenants from unexpected rent hikes during property sales, ensuring stability through ownership transitions.
Why It’s Fair: Small business owners deserve stability to plan for growth, just as landlords need reliable income.
Standardized Commercial Leases
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- Develop accessible, standardized lease templates with clear terms, fair responsibilities, and availability in multiple languages to meet the needs of Ontario’s diverse entrepreneurs.
Why It’s Fair: Transparency levels the playing field, empowering small business tenants to make informed decisions and improve the chances of long-term success.
Affordable Dispute Resolution
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- Create a tribunal under the Commercial Tenancies Act to resolve disputes quickly and affordably, focusing on maintenance issues and lease terms. This reduces burdens on both parties and Ontario’s court system.
Why It’s Fair: Justice shouldn’t depend on the ability to absorb high costs or wait years for court decisions. A specialized tribunal ensures landlords and tenants resolve conflicts efficiently, saving time and money for all parties – while removing these cases from Ontario’s backlogged general court system.
Protect Tenants When Landlords Neglect Responsibilities
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- Introduce clear guidelines that allow tenants to temporarily withhold rent when landlords fail to fulfill their obligations, with clear rules and timelines for reimbursement of essential repair costs.
Why It’s Fair: Tenants should not bear the financial burden or uncertainty of urgent repairs or ongoing maintenance issues. Clear rules protect small businesses from financial strain while giving landlords a fair framework to address their responsibilities promptly.
How would this help small businesses and shape a better economy for everyone?
These policies would go a long way in making the marketplace much fairer for small businesses – the ones who employ the majority of Ontario’s workers, and who circulate money through our local neighbourhoods. But not just small businesses would stand to benefit. A market that supports fair, affordable commercial rent supports:
- Small Businesses: Stability to grow, fair bargaining power, and resilience.
- Communities: Thriving main streets, local job creation, and stronger productivity.
- Workers: Greater local employment, on-the-job training, and career development
- Landlords: Predictable income streams and stronger relationships with long-term tenants.
Retail rents are up 67% between 2020 and 2024, affecting Toronto’s small businesses
Fair Commercial Rent: The Human Cost of Unfair Practices
Ontario’s brick and mortar businesses are at a breaking point, as we’ve outlined on our sister site, commercialrent.ca. We’ve heard stories from Ontario small business owners that highlight the urgent need for reform. These are just a sample:
Vince Addante, Shim & Metal Processing Ltd.
“Rent control should be mandated by law.”
- Vince’s industrial lease costs rose from $766,500 (2015–2019) to $1.5 million (2020-2025) and is going to $2.5 million (2025–2029)—a staggering increase of over 200% in just two lease renewals.
- Forced to move once already at a cost of $250,000, Vince faces the impossible choice of relocating again or closing his business.
- Vince employs 20 workers at above-average wages but warns that rising rent forces stagnant pay and reduced benefits, undermining his ability to support his team.
Christy (Anonymous Business)
“It’s anti-Canadian to jack up rent by insane prices.”
- Christy acquired her industrial business in 2020 but has seen her rent double in just four years. Rent rose from $62,000 annually to $130,000 projected for next year.
- Moving locally is nearly impossible due to specialized equipment
- Additionally, her insurance premiums have risen, and her deposit was doubled.
- Lease negotiations now consume significant time, distracting from running the business.
- Christy is considering relocating to the U.S. where costs are lower—a sentiment shared by other tenants in her industrial park.
Rick (Anonymous Business)
“If rent becomes too high, I’ll have to lay off my apprentice.”
- Rick rents a 1,650 sq. ft. industrial unit, where his rent has increased from $11.50/sq. ft. to $16.50/sq. ft., a nearly 50% rise.
- His space supports his woodworking business and provides a hub for mentoring new tradespeople. Without affordable rent, Rick could lose the ability to train the next generation of skilled workers.
- Moving would devastate his operations, as the specialized space allows him to share resources and tools with apprentices.
We’re not stopping there. We’ll be knocking on municipal & federal doors, too.
At the municipal level, we believe there are levers that can help small business tenants, so we plan on exploring Incentives for affordable small business (commercial & industrial) spaces. This includes asking municipal officers to consider developer incentives for building small commercial spaces suitable for local independent businesses, and incentives such as tax breaks, for keeping these spaces intact during negotiations.
We’d like the federal government to explore Federal tools to create more commercial spaces, affordably. Our work here will involve advocating with the federal government to develop a Commercial & Industrial Building Accelerator Fund to incentivize local governments to promote building of these spaces. We also might suggest the addition of Commercial and Industrial pre-approved designs to reduce permitting time to enable more of these spaces to be constructed quickly, similar to its pre-approved housing catalogue.
If these actions sound like they’d create a better scenario for you and your business, you can take action by asking MPPs what they plan to do about the commercial rent situation when they come knocking to drum up votes. One of the best things you can do is let them know that this is a big problem for your small business, and that it will influence the way you vote!
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