CANADA EMERGENCY COMMERCIAL RENT ASSISTANCE (CECRA)

November 23, 2020

On November 1, 2020 the CECRA website was updated to provide some wrap-up comments. It noted the following:

  • The financial assistance provided by CECRA for small businesses is forgivable as of December 31, 2020, which is conditional on continued compliance with all program requirements.

  • No notification of forgiveness will be provided.

July 28, 2020

The CECRA program for small businesses has been extended through to the end of July:

  • If you have previously been approved, you automatically qualify and no additional documents are required;

  • Not all tenants in the original application need to be included for the July extension;

  • Participation in the one-month extension is voluntary;

  • You must login to the portal and opt-in for your impacted tenants;

  • Property owners must notify each of their tenants in writing once they have requested the extension on their behalf;

  • Property owners can only opt-in once and no new tenants can be added; and

  • If you have not yet applied for CECRA for small businesses you can apply for July as part of your entire application.

The CECRA FAQ on the CMHC web-site has been updated to provide additional guidance, including the topics sub-tenancy, non-arm’s length tenants, month-to-month leases, expiring leases, new property owners, June revenue forecast and sub-leases.

For more details regarding the July extension and FAQ, click on the following link:
https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business

May 26, 2020

Since our last update on May 4, 2020, the federal government has extended and expanded certain previously announced COVID-19 economic measures, as well as clarifying program rules and administrative issues through the Frequently Asked Questions section of CRA’s website.

On May 8, 2020, Ontario clarified  that it is not requiring landlords to forego all profit for April, May and June 2020 or that the tenant be a non-essential workplace.

On May 19 and May 20, 2020, Canada Mortgage and Housing Corporation (CMHC) issued updated information.

Highlights:

The rental assistance will be available regardless of whether the property has a mortgage.

Landlords and tenants who are not at arm’s length will be included in the CECRA for small businesses so long as there was a valid and enforceable lease agreement in place prior to April 1, 2020 on no greater than market terms

The CECRA online application portal opened on May 25, 2020 with staggered registration dates based on geographic location. 

Key documents that are required to be submitted include:

  1. A tenant or sub-tenant attestation regarding eligibility requirements;

  2. A property owner attestation regarding eligibility requirements;

  3. A rent reduction agreement; and

  4. A forgivable loan agreement.

For full details of the eligibility requirements and application process, click on the following link to CMHC’s website: 
https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business

May 4, 2020

On April 24, 2020, the federal government, in partnership with the provincial governments, provided further details with respect to the CECRA program.
Certain non-essential small businesses will be eligible for a 75% reduction in rent for April, May and June. The federal government will cover 50% of the rent, with the remaining 25% to be absorbed by the commercial property owner.
In particular:

  1. The program will provide forgivable loans to qualifying commercial property owners to cover 50% of the rent to which they would otherwise be entitled to collect from eligible tenants for April, May and June. 

  2. The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible tenant’s rent by at least 75% for April, May and June under a rent forgiveness agreement, which must provide that the tenant cannot be evicted while the agreement is in place. 

  3. The tenant would cover the remaining 25% of the rent. 

  4. Eligible non-essential small business tenants are those paying monthly rent of less than $50,000, who have temporarily ceased operations or have experienced at least a 70% drop in their pre-COVID-19 revenues. 

  5. Consideration is also being given to extending this program to certain non-profit and charitable organizations.

Details of the Ontario-Canada Emergency Commercial Rent Assistance program can be found here: 
https://news.ontario.ca/opo/en/2020/4/ontario-canada-emergency-commercial-rent-assistance-program.html

Additional information with respect to the eligibility requirements for both commercial property owners and small business tenants can be found here: 
https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business  

April 21, 2020

Since our last update, the Government has continued to expand its COVID-19 relief measures for Canadians. Highlights are as follows:

  1. This program will be introduced in partnership with the provincial and territorial governments.

  2. The program is intended to provide relief to small businesses with respect to their property rents by providing loans and/or forgivable loans to commercial property owners that either lower or forgo their rent from small businesses during April, May and June.

  3. Additional program details are expected to be available soon.