On April 24th, the federal government announced the Canada Emergency Commercial Rent Assistance program (“CECRA”). The program will reduce rent by 75% for eligible small and medium-sized businesses that have been significantly affected by COVID-19.
The program will provide forgivable loans to eligible commercial property owners to cover 50% of three monthly rental payments that are payable by eligible small business tenants. The loans will be paid directly to the owner’s mortgage lender. The loans will be forgiven if the owner enters into a rent forgiveness agreement with the tenant under which the owner agrees to reduce monthly rent by at least 75% for each of April, May and June of 2020. The rent forgiveness agreement must include a term which prohibits the owner from evicting the tenant while the agreement is in place.
Commercial tenants are eligible if they pay less than $50,000 in monthly rent and have temporarily ceased operations or experienced a reduction of at least 70% in pre-COVID-19 revenues. Charities, not-for-profits, and non-governmental organizations will also be eligible for the program. It is expected that the program will be operational by mid-May, with commercial property owners lowering the rents of small business tenants for the months of April and May, retroactively, and for June. The CECRA will be administered and delivered by the Canada Mortgage and Housing Corporation, a collaboration between the federal government and provincial and territorial governments.
The specifics of the program remain uncertain. Further details on eligibility, how to apply, and when the benefit can expect to be received are forthcoming.