Williams HR Law LLP

Applications Have Opened for the Canada Emergency Commercial Rent Assistance Program

May 26, 2020

On Monday, May 25, 2020, applications for the Canada Emergency Commercial Rent Assistance (“CECRA”) program, which was first announced in April, opened for commercial property owners with up to 10 tenants in British Columbia, Alberta, Quebec and Atlantic Canada.

Applications for property owners with up to 10 tenants in Saskatchewan, Manitoba, Ontario, and the Territories opened on Tuesday, May 26. Later this week, applications will also open for landlords with more than 10 tenants.

The CECRA provides rent relief in the form of forgivable loans to commercial property owners covering 50% of the monthly gross rent owed by impacted tenants. Businesses and non-profit/charitable organizations that generate $20 million or less in gross annual revenues, pay $50,000 or less in monthly commercial rent payments and experienced a reduction in revenues of at least 70% in April, May and June 2020 are eligible for the program.

Under the CECRA program, the property owner must reduce rent by at least 75% for the months of April, May and June, and the tenant is expected to cover the remaining portion (up to 25%) of the rent. The loans will be forgiven as long as the property owner complies with all the program’s terms and conditions, including not evicting tenants during the months of April-June and not recovering forgiven rent amounts when the program is over.

To apply, landlords must provide a legally binding rent reduction agreement and attestations from both the landlord and tenant regarding their eligibility for the program. Applications can be submitted until the end of August 2020, and the program will be applied retroactively to the months of April-June 2020. If rent for those months has already been collected, the tenant has the choice of receiving either a reimbursement for rent paid in excess of 25%, or a credit for future rental payments.

Eligible small businesses and organizations should contact their landlords to determine whether they plan to apply for CECRA, as this program would provide considerable financial relief to businesses that have experienced significant losses due to COVID-19.

If a landlord does not apply for CECRA, small businesses may still access support through other government programs, including the Canada Emergency Business Account (“CEBA”) and the Business Credit Availability Program (“BCAP”). For more information on these programs, please see our recent articles on the CEBA and the BCAP.

This blog is provided as an information service and summary of workplace legal issues. This information is not intended as legal advice.