Canada Emergency Commercial Rent Assistance Program

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Canada Emergency Commercial Rent Assistance Program

Last updated July 30, 2020. We will update blog posts when more information is released.

Prime Minister Justin Trudeau is promising rent relief for small businesses and commercial property owners.

The Canada Emergency Commercial Rent Assistance (CECRA) program will provide unsecured, forgivable loans (up to 50%) to commercial property owners if their small business tenants have been heavily impacted by the COVID-19 pandemic.

Who Qualifies for The Canada Emergency Commercial Rent Assistance program?

To receive forgivable loans, commercial property owners must cut their tenant’s monthly rent by at least 75% in April, May and June. They must also agree not to evict the tenant during this time. UPDATE: The government extended CECRA to include rent for the month of July.

The commercial property owner would receive 50% of the tenant’s rent from the CECRA program, paid directly to their mortgage lender.

For the remaining 50%, the tenant would pay 25%, and the commercial property owner would forgive 25% of the rent.

Impacted small business tenants are businesses, including non-profit and charitable organizations, who have ceased operations or experienced at least a 70% drop in pre-COVID-19 revenues and are paying no more than $50,000 monthly gross rent per location.

The 70% drop would be determined by comparing revenues in April, May and June of 2020 to the same period in 2019. They can also use an average of their revenues earned in January and February 2020.

Small business tenants must not earn more than $20 million in gross annual revenues.

Eligible small business tenants who are in sub-tenancy arrangements are also eligible, if these leases meet program criteria.

How Does the Program Work?

The program offers assistance for April, May, June 2020, and the program has been extended to include July 2020.

Property owners are responsible for applying and will need to provide attestations, rent, and loan forgiveness agreements.

If property owners have not previously applied for April – June, they have until August 31st to enter the program, and it will be applied retroactively if they can prove eligibility during those months.

Here’s an example of how the program works:

  • A monthly rent for a small business tenant is $10,000.
  • CECRA for small businesses will cover $5,000 (50%)
  • The small business tenant will pay $2,500 (25%)
  • The property owner forgives 25% ($2,500)
  • The property owner receives up to 75% of the rent or $7,500 of rent per month for April, May and June

The program will be administered by the Canada Mortgage and Housing Corporation (CMHC).

The CMHC has provided sample documents to help prepare for the application. Legal versions will be available in the portal when it opens:

  • Tenant or Sub-Tenant Attestation (tenants are responsible for attesting to their eligibility) (sample PDF)
  • Property Owner Attestation (sample PDF)
  • Rent Reduction Agreement (sample PDF)
  • Forgivable Loan Agreement (sample PDF)

How do I apply?

The application portal is open for registration as of May 25, 2020.

The CMHC is expecting a high volume of applications, so they are asking property owners to register on specific days based on their location and their number of eligible tenants:

  • Monday: Atlantic Canada, BC, AB, and QC, with up to 10 eligible tenants

  • Tuesday: MB, SK, ON and Territories, with up to 10 eligible tenants

  • Wednesday: All other property owners in MB, SK, ON, and the Territories

  • Thursday: All other property owners in ATL Canada, BC, AB, and QC

  • All: Once registered, the portal will be available 24/7 for applicants to input data and upload documents

How do I apply for July rent relief?

Property owners with approved tenants for April – June must log in and opt-in for July rent relief. No additional documentation is required.

An impacted tenant who met the April – June revenue decline will automatically qualify without the need to re-assess revenue decline for July.

In addition, the calculation of the forgivable loan and required 75% reduction of an impacted tenant's rent will also be based on the April – June period (i.e. an average of the rent roll for that period will be used to calculate the payment due to the property owner to extend rent relief to their impacted tenant).

Property owners have until September 14, 2020 to apply for July extensions only.

Contact FBC

If you’d like to learn more about this or other COVID-19 programs for Canadian businesses, please call us at 1-800-265-1002 or email [email protected] Unlimited consultation related to tax matters is a key benefit of FBC Membership. You can also book an appointment.

Visit our COVID-19 Resource Centre for the latest information, advice and insights for small business owners.

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