Canada Emergency Commercial Rent Assistance (CECRA)
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This page was last updated on April 27, 2020.
The Canada Emergency Commercial Rent Assistance (CECRA) program provides forgivable loans to commercial property owners who in turn will lower or forgo the rent of small businesses, nonprofit organizations and charities for the months of April (retroactive), May, and June. The program is intended to cover 75% of commercial rental costs for businesses who pay less than $50,000 per month in rent and have either temporarily ceased operations or whose revenues have decreased by 70% or more from pre-COVID-19 levels.
It is expected that the program will be operational by mid-May with commercial landlords lowering rents for their eligible tenants retroactively for April and May, and prospectively for June.
The Prime Minister has indicated that relief for larger businesses is still under discussion with the provinces, but is expected to be announced soon.
How the program works
Commercial landlords will be eligible for forgivable loans to cover up to 50% of the monthly rent payments from eligible tenants for April, May and June. These loans will be forgiven provided that the landlord agrees to reduce the rent for eligible tenants by at least 75% for the three months and does not evict the tenant. These loans will be available through financial institutions and will be administered by CMHC.
To illustrate how the program works, let’s assume a small business normally pays monthly rent of $10,000 and has seen its revenues decline by more than 70% due to COVID-19. If the landlord reduces rent by 75% to $2,500 per month, the landlord will be eligible for a $15,000 forgivable loan ($10,000 rent x 3 months x 50%). The end result will be that the small business itself funds 25% of the rent, the Federal and Provincial governments cover 50% of the rent (i.e. the loan forgiveness), and the landlord covers the remaining 25%.