Canada Emergency Commercial Rent Assistance Initial Information

Posted
April 24, 2020
in

After announcing the program on April 16th, 2020, the Federal Government provided the initial details on the Canada Emergency Commercial Rent Assistance (CECRA) program on April 24th, 2020.  The program will lower rent by 75% for eligible small businesses for April, May and June by offering forgivable loans to qualifying commercial property owners.

Eligibility

  • Businesses that are paying less than $50,000 per month in rent

AND

    • Have ceased operations; OR
    • Have had their revenues reduced by at least 70% as compared to pre-COVID revenues
  • Non-profit and charitable organizations may also be eligible

Execution

The CECRA program will provide forgivable loans to qualifying commercial property owners to cover 50% of the monthly rent payments that are payable by eligible small business tenants for April, May and June.  The tenant will still be responsible for paying 25% of its monthly rent for these months and the property owner will absorb the remaining 25% of the monthly rent.   These loans will be forgiven if:

  • The property owner agrees to reduce the eligible small business tenant’s rent by at least 75% for the months of April, May and June

AND

  • The property owner agrees to place a moratorium eviction

The CECRA program is expected to be operational in mid-May with property owners reducing the rent for April and May retroactively and for June.  The Canada Housing and Mortgage Corporation is administering the program and funds will be disbursed directly to the mortgage lender.  CECRA related support for larger businesses will be announced in the coming days.  Similar to previous government announcements during this pandemic, additional details are forthcoming including the applicability of CECRA for commercial properties which have no mortgages.

Stay in Touch!

Sign up for our newsletter and receive tax, accounting, and COVID-19 resources for your business!


crossmenu