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Ottawa extends rent relief for small businesses

Ottawa: Finance Minister Bill Morneau yesterday announced that the Canada Emergency Commercial Rent Assistance (CECRA) will be extended by one month to cover eligible small business rents for July.

In addition, to simplify the application process for all applicants, the government is removing the requirement to claw-back insurance proceeds and provincial rent supports from the CECRA forgivable loan amount for both existing and new applicants. Existing applicants who are affected will be notified and will have any previously clawed-back amounts restored to their forgivable loan, said a Department of Finance Canada media statement.

The government has agreed with all provinces and territories to implement the one month extension. This will provide important relief for small businesses that continue to experience financial hardship, and also allow property owners to maintain rental income and keep tenants in their commercial properties as the economy gradually restarts. Applications will continue to be processed through the Canada Mortgage and Housing Corporation website  (CMHC), it said.

“The government continues to monitor the effects of the pandemic on the economy and how the historic support we have provided through the COVID-19 Economic Recovery Plan is working. We are boosting our support for small businesses and property owners by extending the rent relief provided through CECRA by an additional month to ensure that they are poised to rebound in the post-pandemic recovery,” said Morneau.

Quick Facts

  • Those who qualified for the CECRA based on existing program parameters will be able to apply soon for the additional one month based on having a 70% revenue decline for April, May and June, i.e., without reassessing whether they continue to have a 70% revenue decline in July. Participation in the one-month extension is voluntary. Both existing applicants to CECRA and new applicants are able to opt for the July rent reduction. This program is designed to support businesses that have been hit hard by the pandemic while encouraging them to reopen when possible.
  • CECRA provides forgivable loans to qualifying commercial property owners, whether they have a mortgage on their property or not. The loans cover 50 per cent of three or four monthly rent payments that are payable by eligible small business tenants who have and are experiencing financial hardship during April, May, June and July.
  • The loans will be forgiven if the qualifying property owner agrees to reduce the small business tenants’ rent by at least 75 per cent under a rent reduction agreement, which will include a term not to evict the tenant while the agreement is in place. The small business tenant would cover the remainder, up to 25 per cent of the rent.
  • Existing applicants need to reapply for the month of July and have until September 14, 2020. New applicants have the choice of applying for the three-month initial period or four months, but need to do so by the original date of August 31, 2020.
  • Impacted small business tenants are businesses that are 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 on average for April, May and June.
  • The government is removing the requirement that the forgivable loan amount paid to property owners exclude non-repayable proceeds received by the property owner or tenant from existing rental support programs or other abatements, provided by any level of government, and insurance proceeds, if applicable.


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