Canada Emergency Commercial Rent Assistance (CECRA)
What is it?
The program provides relief for small businesses experiencing financial hardship due to COVID-19. It offers unsecured, forgivable loans to eligible commercial property owners to:
- reduce the rent owed by their impacted small business tenants, and
- meet operating expenses on commercial properties
Property owners must offer a minimum of a 75% rent reduction for the months of April, May and June 2020.
How does it work?
The Canada Mortgage and Housing Corporation (CMHC) administers CECRA for small businesses on behalf of the Government of Canada and their provincial and territorial partners.
The program offers assistance for the months of April, May and June 2020.
- Property owners can apply later and the program will be applied retroactively.
- Property owners may still apply for assistance once the 3-month period has ended if they can prove eligibility during those months. The end date for applications is August 31, 2020.
- Property owners must use the funds from CECRA for small businesses to refund amounts in excess of 25% paid by the small business tenant for the period or at the option of the impacted tenant apply rent paid in excess of 25% to future rent owing by the impacted tenant.
NOTE: If rent has been collected at the time of approval, a credit to the tenant for a future month’s rent (i.e. July for April) is acceptable — if the tenant chooses this option. This can be a flexible 3-month period.
CMHC will provide forgivable loans to eligible commercial property owners. Funds will be transferred to the property owner’s financial institution.
- The loans will cover 50% of the monthly gross rent owed by impacted small business tenants during the 3-month period of April, May and June 2020.
- The property owner will be responsible for no less than half of the remaining 50% of the monthly gross rent payments (paying no less than 25% of the total).
- The small business tenant will be responsible for no more than half of the remaining 50% of the monthly gross rent payments (paying no more than 25% of the total).
Who is eligible?
Eligible Property Owners:
In order to be eligible, the commercial property owner must:
- own commercial real property which is occupied by one or more impacted small business tenants (see below for more information)
- NOTE: This can include commercial properties with a residential component and multi-unit residential mixed-use properties so long as there are also small business tenants.
- enter (or have already entered) into a legally binding rent reduction agreement for the period of April, May and June 2020, reducing an impacted small business tenant’s rent by at least 75%
- ensure the rent reduction agreement with each impacted tenant includes:
- a moratorium on eviction for the period during which the property owner agrees to apply the loan proceeds, and
- a declaration of rental revenue included in the attestation
What is an impacted small business tenant?
Impacted small business tenants are businesses — including non-profit and charitable organizations — that:
- Have opened before March 1, 2020.
- pay no more than $50,000 in monthly gross rent per location (as defined by a valid and enforceable lease agreement)
- generate no more than $20 million in gross annual revenues, calculated on a consolidated basis (at the ultimate parent level)
- have experienced at least a 70% decline in pre-COVID-19 revenues
- NOTE: Small businesses can compare gross revenues in April, May and June of 2020 to that of the same period in 2019 to measure revenue losses. If the small business was not open during April – June 2019, they can compare their average gross revenues for April, May and June to also use an average of their gross revenues earned in January and February of 2020.
How do I apply?
Eligible property owners can apply via the online portal, which can be accessed here.
Property owners are to register according to the following schedule:
|Day||Who should register?|
|Monday||Property owners who are located in Atlantic Canada, BC, Alberta and Quebec, with up to 10 tenants who are eligible for the program|
|Tuesday||Property owners who are located in Manitoba, Saskatchewan, Ontario and the Territories, with up to 10 tenants who are eligible for the program|
|Wednesday||All other property owners in Manitoba, Saskatchewan, Ontario and the Territories|
|Thursday||All other property owners in Atlantic Canada, BC, Alberta and Quebec|
The application is a 2-step process:
- Register and create an account by clicking the link to the online portal above.
- Complete an application and upload supporting documents, which are listed below and which can be accessed in the online portal.
- Tenant or Sub-tenant’s Attestation:
Property owners must have each of their eligible commercial small business tenants and/or subtenants sign an attestation. Tenants are responsible for attesting to their eligibility with the program requirements.
- Property Owner’s Attestation:
Property owners must sign an attestation confirming the information relating to the property owner and the property provided in the application is correct and attest to their eligibility with the program requirements.
- Rent Reduction Agreement:
Property owners must enter into a legally binding rent reduction agreement with each impacted tenant to confirm the rent reduction in accordance with the program terms and conditions. This agreement is conditional upon final approval of the application for CECRA for small businesses.
- Forgivable Loan Agreement:
Property owners must agree to the terms and conditions in the application and outlined in the forgivable loan agreement.
Property owner information
- Property information includes: property address, property type, property tax statement, latest rent roll for each property and the number of commercial units
- Applicant information includes: banking information (including bank statement), property owner contact information, co-ownership information and contact details for co-owners
- Tenant information includes: tenant contact information, registered business name, number of employees, consolidated revenues, lease area and the monthly gross rent for the period of April, May and June 2020
For more information: https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business