The federal government launched the CECRA program to provide financial assistance to small businesses in respect of their commercial rent. The program is administrated by the Canada Mortgage and Housing Corporation (CMHC) on behalf of the Federal Government and its provincial and territorial partners. It offers commercial rent assistance for the months of April, May, and June 2020, with the option of extending assistance for the month of July.
The program has been available for application since May 25, 2020, and can be applied retroactively. Property owners are encouraged to participate in the program to assist tenants affected by COVID-19.
Commercial property owners will reduce rent by at least 75% for the months of April, May, and June 2020 for their small business tenants, with the option of extending the assistance for an additional month for July 2020.
CECRA will provide forgivable loans to qualifying commercial property owners to cover 50% of the rent, with the tenant paying up to 25% and the property owner forgiving at least 25%.
The loan will be forgiven on December 31, 2020, provided the property owner complies with the rent reduction agreement and ensures all attestations and supporting documentation submitted are accurate and truthful.
If the property owner files for bankruptcy, restructures, reorganizes, or dissolves their business, the loans will be needed to be repaid. Also, in the event of default, CMHC has full recourse to recover the CECRA funding from the property owner.
Property owners may still apply for assistance once the three-month period has ended if they can prove eligibility during those months. If rent has been collected at the time of approval, a credit to the tenant for a future month’s rent (e.g., July for April) is acceptable if agreed upon by both the property owner and the tenant. Property owners have until August 31, 2020, to apply.
The CECRA will provide forgivable loans to eligible commercial property owners, rather than direct rent relief to impacted small business tenants or subtenants.
Commercial property owners will need to apply. To qualify, they must meet the following requirements:
However, the CECRA will not apply to any federal, provincial, or municipal-owned properties, where the government is the landlord of the small business tenant, with some exceptions.
Only those tenants approved in the April, May and June application are eligible for the July extension. If a business had an average revenue decline of 70% or more in April, May and June, then they are deemed eligible for the additional month of rent relief. But not all tenants in the original application need to be included for the July extension.
The tenant must be considered a small business tenant, including a non-profit and charitable organization, that:
*To determine the extent of the decline in revenues, a small business that was operating between April and June 2019 will use a comparison of gross revenues earned in April, May, and June 2020 to the same months in 2019. A small business that was not operating during April, May, and June 2019 will compare its average gross revenues from April, May, and June 2020 to an average of gross revenues earned over January and February 2020.
Please note that a small business that opened on or after March 1, 2020 is not eligible for the CECRA.
If both the landlord and small business tenant together qualify for CECRA, the property owner can apply for the commercial rent assistance through the CMHC portal.
The application is a two-step process:
Step 1. Property owners must register and create an account; and
Step 2. Property owners must complete an application and upload supporting documentation, including:
The deadline to apply is August 31, 2020. Rent assistance can be applied for retroactively.
As of June 30, the Federal Government has simplified the application process for all applicants by removing the requirement to claw-back insurance proceeds and provincial rent supports from the CECRA forgivable loan amount. Existing applicants who are affected will be notified and will have any previously clawed-back amounts restored to their forgivable loan.
The application portal opened on May 25, 2020. Property owners are asked to register on a staggered basis: