Rent assistance portal to open on Monday
The application portal for the Canada Emergency Commercial Rent Assistance (CECRA) program for small businesses will be available as of Monday, May 25.
The program, which reduces rent by 75 per cent for commercial tenants, is designed to provide relief for small businesses experiencing financial hardship due to the COVID-19 pandemic. It offers unsecured, forgivable loans to eligible commercial property owners so that they can reduce the rent owed by their impacted small business tenants while also meeting operating expenses of commercial properties.
To qualify, property owners must offer a minimum of a 75 per cent rent reduction for the months of April, May and June 2020. In addition to the 25 per cent of the rent that is payable by the tenant to the landlord, the CECRA program will cover 50 per cent of the rent, with the property owner forgiving the remaining 25 per cent of the rent.
While the government admits that the reduction in rental income is considerable, notes on the CECRA website explain that the alternative of having a tenant declare bankruptcy would reduce that income to zero, and the building could sit vacant for a considerable period of time, costing more than the temporary rent reduction.
The program is available to help small business tenants paying less than $50,000 per month in gross rent in a given location, with annual revenues of less than $20 million (at the ultimate parent level), and who have experienced at least a 70 per cent drop in pre-COVID-19 revenues.
“The COVID-19 pandemic continues to have a profound impact on Canadians. We thank and commend the many property owners who have already taken action to help their tenants during this crisis,” stated Bill Morneau, Minister of Finance. “With CECRA, the Government of Canada is stepping up to support Canada’s small businesses. The forgivable loans will significantly lower the rent for small business tenants and keep them prepared to bounce back when this crisis subsides.”
All provinces and territories have agreed to implement CECRA. Applications will be accepted through the Canada Mortgage and Housing Corporation website beginning on May 25, although application documents are already available on the site.