Today, the federal government announced that applications for the CECRA will open on May 25, 2020 at 8:00 am EST.
Canada Emergency Commercial Rent Assistance (CECRA) for small businesses 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
- 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.
What is CECRA?
With CECRA for small businesses, as a landlord, you still collect a portion of your gross rent.
For a tenant paying $10,000 per month:
- CECRA for small businesses will cover 50% of the rent ($5,000).
- Your tenant will pay up to 25% of the rent ($2500).
- You forgive 25% of the rent ($2,500).
This means you get up to 75% of the rent or $7,500 of rent per month for April, May and June.
CECRA for small businesses offers you a forgivable loan for 50% of the value of your small business’ rent each month. The loans will be forgiven if you comply with all applicable program terms and conditions – including agreement to not recover (the 25%) forgiven rent amounts when the program is over.
Details about eligibility can be found here, and are summarized below:
|What is an eligible property owner?||What is an impacted small business tenant?|
|The commercial property owner must:
|Impacted small business tenants are businesses — including non-profit and charitable organizations — that:
NOTE: Eligible small business tenants who are in sub-tenancy arrangements are also eligible, if these lease structures meet program criteria.
** Small businesses can compare revenues in April, May and June of 2020 to that of the same period in 2019 to measure revenue losses. They can also use an average of their revenues earned in January and February of 2020.
How to apply
Property owners will be able to register for access to the portal and application form beginning May 25, 2020, on the following staggered schedule. The deadline to apply for the CECRA after registering is August 31, 2020.
|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|
What you need to apply
There are a number of documents property owners will need to prepare as part of the application process. Sample documents can be found here. CMHC has advised that these sample documents are for illustrative purposes only. The final versions of the documents will be available when the application portal opens.
When applying, a property owner will need to submit the following documents:
- Tenant’s or Subtenant’s Attestation and Integrity Declaration
- Property Owner’s Attestation and Integrity Declaration
- Rent Reduction Agreement
- CECRA Small Business Property Owner Forgivable Loan Agreement
Property owners should reach out to tenants who may qualify for the CECRA to determine if those tenants are eligible, and rent reduction agreements and attestations should be drafted for all Eligible Tenants once the form of those documents are finalized in accordance with the CMHC portal.
HGA recommends that legal counsel from HGA Law sought to advise and assist with the drafting and execution of those agreements.
Other questions about CECRA can be directed to firstname.lastname@example.org.