Ottawa: Finance Minister Bill Morneau yesterday announced that the Canada Emergency Commercial Rent Assistance (CECRA) will be extended by one month to help eligible small business pay rent for August.
All provinces and territories continue to participate in this initiative, and collaborate with the federal government to provide rent supports to those small businesses most in need, said a media statement.
Despite the gradual lifting of restrictions and re-opening of businesses across the country, many small businesses continue to require assistance with their fixed costs to support them as they adapt to a new reality. This extension will help provide Canadian small businesses most impacted by the shutdown with an extended bridge to recovery, it pointed out.
As of July 30, some 63,000 small business tenants have been supported, representing over 616,000 employees, for a total of over $613 million in rent support. Additionally, CMHC is working with large property owners to help provide CECRA to more than 20,000 small businesses. Thousands of new applications continue to be regularly submitted, demonstrating a strong interest in CECRA from property owners and small business tenants and the importance of this one month extension as businesses get through this challenging period.
“As a lot of small businesses across the country are gradually and safely reopening, further support is needed for those businesses hardest hit. The Covid-19 Economic Response Plan is working, and we’ve listened to the concerns of small businesses, and we are extending the rent relief provided through the CECRA by an additional month,” said Morneau.
- 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 per cent revenue decline for April, May and June, without reassessing whether they continue to have a 70 per cent revenue decline in July or August. Participation in the one-month extension is voluntary. Both existing applicants to the CECRA and new applicants are able to opt for the August rent reduction. This program is designed to support businesses that have been hit hard by the pandemic while encouraging them to reopen when possible.
- The 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 to five monthly rent payments that are payable by eligible small business tenants during April, May, June, July and August.
- The loans will be forgiven if the qualifying property owner agrees to reduce their 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 August and have until September 14, 2020 to do so. New applicants have the choice of applying for the three-month initial period, four months or five months, but need to do so by the original date of August 31, 2020.
- Eligible 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.