Updates on important programs

MAY 11, 2020

Rent assistance - some clarifications have been released

The rent assistance program helps companies with annual revenue less than $20 million and suffering a 70%+ decline in revenue (using the same measures used for the wage subsidy program). Application can be for each location with rent less than $50,000 per month. For the tenant, the benefit is that their rent for each location will be reduced by at least 75%. The government handles 50% and the landlord suffers a loss of 25%. This is much more helpful than the tentative, and thankfully dropped, plan released by Ontario a week ago that indicated the subsidy would only cover 75% of the “costs” from the landlords perspective. So, we have clarity now that it’s a simple calculation based on the gross rent.

The program requires that the property owner apply through the Canada Mortgage and Housing Corporation (CMHC). The landlord must accept the terms and complete an agreement with the tenant that describes the rent reductions and confirms that the tenant will not be evicted prior to June 30. The landlord initially borrows the funds from the CMHC and then that amount is forgiven when the landlord complies with the terms of the agreement. They have also announced that for properties that are mortgage-free the program will still be available.

The program covers April, May and June. The program recognizes that applications will occur in many situations after the rent has already been paid. A credit can be offered rather than refunding the amount provided the tenant and landlord agree. The CMCH website promises that the details and application process will be available soon. 

75% Wage subsidy extended

The government announced that the 75% wage subsidy program will be extended past June. This was not a surprise as the legislation was drafted to make it simple for the government to extend the subsidy through the summer. Details will follow – at this stage no announcement has been made on how long the program will be extended.

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