Canada emergency commercial rent assistance program

APRIL 24, 2020

The government has provided some details around the Canada Emergency Commercial Rent Assistance (CECRA) program. The specifics referred to below are gleaned from announcements as the formal legislation has not been released – accordingly, there remains some uncertainty.

Qualified small businesses, charities and NPOs paying less than $50,000 a month in rent and suffering a 70% drop in revenues will be able to reduce rent expense by 75% for April, May and June. The intent is that rent will be covered up to 25% by tenants and 50% by the government, leaving landlords with a hit for the difference. The program will be operational by mid-May.

The government’s 50% share will be in the form of a forgivable loan and the loan will be forgiven if the property owner agrees to reduce the rent by at least 75% for the three months. The agreement will include a pledge not to evict the tenant while the agreement is in place. The forgivable loan will go directly to the mortgage lender.

There appears to be some uncertainty if a tenant and landlord are not able to agree on the amount of the rent forgiveness. That uncertainty will likely be resolved as more details are released. 

The government is also considering rent relief for larger businesses, additional information is expected next week.