Details of the Canada Emergency Commercial Rent Assistance Program Released


On April 29th the Government announced new details concerning the CECRA program.  Please visit our more recent article to learn more.

On April 17, 2020, we published an article summarizing the announcement from Prime Minister Trudeau that the Government of Canada would be introducing the Canada Emergency Commercial Rent Assistance program (CECRA) for small businesses. On April 24, 2020, the Government announced the initial details of its partnership with the provinces and territories of Canada for implementation of the program. The press release outlining these details can be found here.

The CECRA will be available to eligible small businesses, meaning small business tenants that pay less than $50,000 per month in rent, that have temporarily ceased operations or experienced a 70% drop in pre-COVID-19 revenues, and which rent their commercial space from mortgaged property owners. This includes non-profit and charitable organizations.

The CECRA will provide forgivable loans to qualifying, commercial property owners to cover 50% of the rent otherwise payable by eligible small businesses during April, May and June. These loans will be forgiven if the owner agrees to reduce their tenant’s rent by at least 75% for the three months. The CECRA requires that the rent forgiveness agreements include the following terms:

  • the tenant will be responsible for paying 25% of its monthly rent;
  • the owner will be responsible for covering 25% of the monthly rent that would otherwise be paid to it; and
  • the federal government and provinces will share responsibility for the remaining 50% by way of a forgivable loan disbursed directly to the owner’s mortgage lender.

The rent forgiveness agreement must also include a term not to evict the tenant while the agreement applies.

It appears that the CECRA will be in place by mid-May, meaning that it will provide retroactive relief for April and May and further relief for June, 2020.

It remains unclear at this time if there will be relief for small businesses in respect of properties that are mortgage-free, but it is suggested that owners of such properties contact the Canada Housing and Mortgage Corporation to discuss options in that regard.

We will keep you advised of further details regarding the CECRA as they become available.

For more legal analysis of how COVID may affect your business, or personal affairs, visit Clark Wilson’s COVID-19 Resource and FAQ pages