B4| REPORTONBUSINESS O THEGLOBEANDMAIL| FRIDAY, MARCH 27, 2020
DILBERTTwo of the provinces hit hardest by the coro-
navirus pandemic have banned residential
tenant evictions until the crisis ends, but with
no promises about what will come afterward,
tenants, landlords and activists face bureau-
cratic chaos, gridlock and potential mass evic-
tions.
“The reality is there is going to be a lot of
people who aren’t able to pay their rent on
April 1,” said Kenneth Hale, director of legal
services for the Advocacy Centre for Tenants
Ontario, which provides legal advice to renters.
“When the crisis is over, how is this going to
be straightened out?” Mr. Hale asked. “What
has happened so far, putting human need first,
is a good place to start.”
As of March 17, Ontario placed a moratori-
um on eviction hearings and enforcement in
order to keep renters from being made home-
less during the pandemic. On Wednesday
night, British Columbia also banned evictions
until the crisis has passed and went further:
offering $500 a month in rental support to be
paid directly to landlords starting on April 1.
In Ontario, landlords andgovernment offi-
cials are telling tenants that the eviction ban is
not the same thing as a moratorium on rent.
“It’s important to be clear that tenants must
still pay rent as they normally would, to the
best of their abilities,” said Ministry of Munici-
pal Affairs and Housing spokeswoman Rachel
Widakdo. “We encourage tenants that are hav-
ing challenges paying rent due to COVID-19 to
speak with their landlords about possible de-
ferral of rent payment or agreeing to other
payment arrangements.”
“I’m an out-of-work carpenter right now, I
will not be able or willing to pay my rent,” said
Bryan Doherty, a member of Parkdale Orga-
nize and a Toronto spokesman for the “Keep
Your Rent” movement that has gathered force
across Canada and the United States. Tenant
advocates have zeroed in on an ambiguity in
the government’s statements: What if “the
best of your ability” isn’t enough?
“There’s no indication from the province,
the feds or the city that anyone is safe from
evictions” once the moratorium is lifted, Mr.
Doherty said.
“We are not advising [anybody] to not pay
their rent; that would be irresponsible,” said
Alejandra Ruiz-Vargas, a member of ACORN
Canada (Association of Community Organiza-
tions for Reform Now), an activist organiza-
tion for low- and moderate-income families.
“We are askingthe government to do as they
did in France and Italy, [which have suspended
some rent, mortgage and utility payments].”
“People need a break; this is life and death,”
Ms. Ruiz-Vargas said. ACORN has 130,000
members across the country.
“I’m talking to a lot of tenants going be-
tween getting a loan to pay rent and getting a
loan to pay for food,” said Geordie Dent, exec-
utive director of the Federation of Metro Ten-ants’ Associations in Toronto. His group wants
to see all residential rent payments cancelled
on April 1, and has gathered more than 18,000
signatures on a petition since last weekend.
“That kind of stimulus is the best kind of
stimulus: a consumer-spending stimulus,” Mr.
Dent said. “And if you don’t do this, what do
you think the courts are going to look like in
six months? It’s going to be chaos.”
Harry Fine, a paralegal and former adjudi-
cator with Ontario’s Landlord Tenant Board
(LTB), thinks a government-funded rent bank,
where landlords could claim some assistance
for skipped payments, would provide vital
help. Otherwise, tribunals that rule on renter
issues will be overwhelmed by eviction appli-
cations after the pandemic, he said.
“Let’s say rent applications [the first step in
obtaining an eviction order] are 80 per cent of
the LTB’s bread and butter,” Mr. Fine said.
“That’s about 75,000 applications per year.”
“Imagine this movement gets 150,000 peo-
ple to withhold rent. That triples the number
of ... rent applications to the LTB,” he said.
“The current LTB delay is averaging about four
months from the time you file for a hearing
[to] the hearing itself. If the LTB shutdown is
two months, that brings the average time to
six months.”
“It could easily take two years to have my
rent application heard, maybe more,” Mr. Fine
added. “There is no way in the world – without
tripling the number of adjudicators – that the
LTB could handle this.”
Those kind of delays could also be crushing
for smaller landlords. Many of them are still
required to make mortgage payments. Renters
and landlords agree that provincial and federal
officials need to be clearer about how impend-
ing clashes will be resolved.
“I just want to know what my rights are.
What I can say to my tenants that’s going to be
honest and legal,” Jacqui Snyder, who rents out
a triplex in Toronto and lives in Collingwood,
Ont., where she operates Adventourus, a travel
agency focused on active lifestyles.
Ms. Snyder says one of her three tenants, a
costume designer who has seen her work dis-
appear, has warned she cannot pay her rent on
April 1. She suggested Ms. Snyder apply for a
mortgage deferral.
Their last conversation about the matter
turned into a shouting match, Ms. Snyder said,
and her tenant accused her of being greedy. “I
don’t intend to evict anybody,” Ms. Snyder
said. “She’s a victim of the circumstances.”
“But the point of [a] mortgage moratorium
is not to give tenants free rent,” Ms. Snyder
added. “When she hears that from me ... she
thinks I’m being dishonest to her. I would like
somebody to state the truth of what the matter
is.”
Even B.C.’s plan, the most generous in the
country, is silent on what landlords can do to
recoup losses after the pandemic.
“Some landlords are going to have to accept
they are not going to get 100 cents on the dol-
lar,” Mr. Hale said. Even some of the biggest
commercial tenants in North America are ne-
gotiating rent cuts.
Whatever happens next, Mr. Hale thinks
renters need to be heard and not simply told to
pay up.
“The tenant voice and consumer voice
needs to be part of those conversations – so it
isn’t justgovernment and business making de-
cisions for everybody,” he said.A poster calling for a rent protest is displayed in Toronto on Tuesday. As of March 17, Ontario has
placed a moratorium on eviction hearings and enforcement to protect renters from homelessness
during the pandemic.FREDLUM/THEGLOBEANDMAILResidentialtenants
worryaboutfuture
afterpandemic
Someadvocates,landlordsfear
howgovernmentswillrespond
to‘chaos’thatcouldfollow
onceevictionbansareliftedSHANEDINGMAN
REALESTATEREPORTER
TORONTOExecutive compensation spiked
atCanadian Pacific Railway Ltd.
last year, but pay gains were more
muted at Canadian National
Railway Ltd., which paid zero bo-
nuses to its leaders.
At CP, chief executive Keith
Creel made $15.15-million, up
from $12.49-million the previous
year. CP gave Mr. Creel share and
options awards worth $9.5-mil-
lion last year, up from $6.8-mil-
lion in 2018. His bonus of slightly
less than $3-million was about
$150,000 lower than a year earlier.
In a letter to shareholders,
board chair Isabelle Courville
said CP had record revenue and
its best-ever operating cost num-
bers. It increased capital expendi-
tures while also raising its divi-
dend by 27.5 per cent and buying
back shares.
CP has been honing its pay ap-
proach for several years, after it
lost a shareholder say-on-pay ad-
visory vote in 2016, when former
CEO Hunter Harrison was at the
helm. CP got nearly 96-per-cent
approval at its shareholders’
meeting in 2019.
Most CP executives saw an in-
crease in total compensation in
2019 because the company boost-
ed their stock awards. CP sets a
target amount for stock awards
that’s a percentage of executive
salaries. In 2019, it raised those
target percentages, and its six
top-paid executives, including
Mr. Creel, received $18-million in
share and option awards, versus
$13-million in 2018.
At CN, CEO Jean-Jacques Ruest
made $8.94-million, compared
with $8.49-million in 2018, when
he became the company’s top ex-
ecutive mid-year. His bonus fell to
zero from slightly less than $1.6-
million in 2018.
CN said it failed to meet all five
of its financial goals, tied to reve-
nue, profit, cash flow and return
on capital, and it also failed to
meet its two safety-related goals
(based on the rate of accidents
and injuries). Since the company
missed its corporatewide finan-
cial targets, it also didn’t pay any
executive bonuses based on indi-
vidual performance.
CN’s workers went on strike for
a week in November, cutting into
CN’s sales and profits.
The two other CN executives
among the top-paid who served
in their roles in both 2018 and
2019 saw their total pay decline;
each had received bonuses of
more than $900,000 in 2018.
CP shares rose 38 per cent in
2019, while CN gained just 7 per
cent.
The compensation figures, re-
leased in proxy circulars to share-
holders in recent days, include
millions of dollars in stock
awards that have now fallen in
value in the current economic cri-
sis.CANADIAN PACIFIC RAILWAY (CP)
CLOSE: $308.95, UP$10.38
CN RAILWAY (CNR)
CLOSE: $109.35, UP$3.35CPRailexecutivessawbig
payjumpin2019asCN
headshadmoremutedgains
DAVID MILSTEAD
INSTITUTIONALINVESTMENT
REPORTER
She added, more ominously, that
the path of the S&P 500 resembles
late 2008 – when stocks recovered
some lost ground in September
and October, only to plunge fur-
ther over the next several months
as the financial crisis intensified.
The S&P 500 is still down 22 per
cent from its February highs, and
the TSX is off 25 per cent.
The backdrop to this week’s
gains certainly remains grim.
Cases of COVID-19 are rising, the
death toll is surging and large
parts of the North American econ-
omy remain shuttered.
In the United States, nearly 3.3
million people filed for unem-
ployment claims last week alone –
a record. And Ottawa expects that
4 million people will apply for fi-
nancial relief under its new Cana-
da Emergency Response Benefit.
But investors tend to place
more emphasis on the future, and
they may be speculating that the
current economic crisis will abate
because of central bank monetary
stimulus,government relief pack-
ages and hope that widespread
lockdowns will beat the novel cor-
onavirus pandemic relatively
soon.
Optimists can point to a pickup
in insider buying by key corporate
executives as a potentially bullish
indicator. “Insider buying and
selling are far from perfect signals
that a company’s stock will rise or
fall. But sometimes, large pur-
chases by corporate leaders at key
times have profited investors who
followed suit,” said Ed Yardeni,
chief investment strategist at
Yardeni Research.
Mr. Yardeni added that insider
buying is now ramping up again.
Among S&P 500 companies, 18 ex-
ecutives have made purchases of
10,000 shares or more so far in
March, up from just seven insider
buys in February and two in Janu-
ary.
These savvy insiders – who
know their businesses better than
anyone – may believe that panic
driving the recent sell-off is over-
estimating the real risks their
companies face. They have some
support. Goldman Sachs analyst
Noah Poponak argued in a note
released on Sunday that investors
should buy shares of Boeing Co.
The beleaguered aerospace gi-
ant’s share price has fallen as far
as 70 per cent during the down-
turn, and it has become a centre-
piece of the bear market. But Mr.
Poponak argued that the compa-
ny will thrive after travel returns
to normal – a view that is not re-
flected in its beaten-up stock.
“Sentiment is near an all-time
low, expectations are near an all-
time low, and a lot of bad news is
priced in,” Mr. Poponak said in his
note.
Boeing shares have nearly dou-
bled in price this week. As for Can-
adian banks, a recent note from
Fitch Ratings underscores both
threats and the staying power of
Canada’s largest lenders. Yes, fi-
nancial stress on Canadian house-
holds is bad for banks and interest
rate cuts will erode their profit-
ability. Fitch revised its credit rat-
ing outlook on Canada’s banks to
negative from stable.
But some perspective also
helps. “Fitch notes that Canadian
bank ratings are among the high-
est in Fitch’s bank universe and
continue to benefit from a system
concentrated in a relatively small
group of banks with a national
presence, characterized by diver-
sified business models and high
market share,” the rating agency
said.
Analysts at National Bank Fi-
nancial looked at battered Cana-
dian real estate investment trusts
(REITs). Their unit prices have
been hit especially hard during
the downturn because of con-
cerns that their liquidity – or abil-
ity to tap financial markets for
new loans – would likely dry up in
a sustained downturn.
But the bank’s analysts con-
clude that the REIT sector’s ability
to tap funding is holding up.
“With the significant liquidity
measures employed by central
banks and CMHC [Canada Mort-
gage and Housing Corporation],
we have heard from most man-
agement teams that lenders have
been supportive when it comes to
extending/refinancing debt.”
Despite the encouraging mar-
ket rebound and some optimistic
analyses, there is no clear signal
that North American stocks are
on the mend. “As bear markets go,
the February/March swoon in the
S&P 500 has been brutally quick
but remarkably average in terms
of its scale,” Shaun Osborne and
Juan Manuel Herrera, foreign ex-
change strategists at Bank of Nova
Scotia, said in a note.
The S&P 500 plummeted 35 per
cent in just 25 days in this crisis.
But the magnitude of the decline
merely matches the average bear-
market since 1980, and pales next
to the 52-per-cent decline during
the 2008-09 financial crisis.
Ms. Calvasina of RBC Dominion
Securities is cautious for a couple
ofkey reasons. She believes that
investor sentiment is still fragile
and most market bottoms take
time to form. “We are growing in-
creasingly skeptical about the V-
shaped recovery thesis in stocks ,”
Ms. Calvasina said.
Christopher Wood, a strategist
at Jefferies Group, is similarly
skeptical of a sustained rebound,
given how overvalued U.S. stocks
were at the outset of the down-
turn. “The price-to-sales ratio had
never been so expensive, while
U.S. earnings were being distorted
by financial engineering in recent
years,” Mr. Wood said in a phone
interview, pointing to massive
share buybacks by many leading
companies. “My base case is that
this is a three-to-four month af-
fair,” he said.Markets:Insiderbuyingramping
upagain,strategistsays
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