RENT - CANADIAN EMERGENCY COMMERCIAL RENT ASSISTANCE PROGRAM
New CECRA:
Today, Prime Minister Trudeau announced the much-anticipated Canada Emergency Commercial Rent Assistance (CECRA) program. Our federal government worked with provinces and territories to reach an agreement in principle to implement the new CECRA program. This program will lower rent by 75% for small businesses that have been affected by COVID-19.
Details about the CECRA program are as follows:
The program will provide forgivable loans to qualifying commercial property owners to cover 50% of three monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June.
The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible small business tenants’ rent by at least 75% for the three corresponding months under a rent forgiveness agreement, which will include a term not to evict the tenant while the agreement is in place. The small business tenant would cover the remainder, up to 25% of the rent.
Eligible small business tenants include those paying less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70% drop in pre-COVID-19 revenues. This support will also be available to non-profit and charitable organizations.
We expect that CECRA will be operational by mid-May, but funding will be provided for the months of April and May, retroactively, as well as for June. Further details will be shared by CMHC in the near future.
Our government continues to assess and respond to the impacts of COVID-19, and we are ready to take additional action as needed to stabilize the economy and mitigate the impacts of the pandemic.
You can also find more information in the Prime Minister’s News Release here.
Upon Further Clarification from Ottawa
Candidly, no statement required. You can state with 100% confidence that, “The federal government has confirmed that this is available to all landlords, regardless of whether or not they currently have a mortgage.” If you don’t have a mortgage, you can still access the loan. Mechanically it’s similar to taking out a new mortgage.
And for those who don’t have mortgages because the building/land cost is using a different debt mechanism (e.g. large commercial/industrial building tenants), those landlords will also be able to access it.
Where to start:
The Ministry of Small Business, Export Promotion and International Trade recommend consulting the following resources for more information about support for small businesses:
1) Visit our government’s COVID-19 Economic Response Plan website for information about supporting your employees and your business. It is updated regularly as the COVID-19 crisis evolves.
2) Contact your local financial institution. They are a good first place to start for help.
3) Consult the Canadian Business Resilience Network and Canadian Chamber of Commerce’s pandemic preparedness guide to help prepare your business in the days and weeks to come.
