Feds extend COVID-19 rent relief for small businesses

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The federal government has announced that Canada Emergency Commercial Rent Assistance (CECRA) for small businesses will be extended by one month to help eligible small businesses pay rent for September.

All provinces and territories continue to participate in this initiative and collaborate with the federal government to provide rent supports to small businesses in need. Current CECRA application deadlines are also being extended to accommodate this extension.

As of September 7, 2020, over 106,000 small business tenants have been supported by the program, representing 994,000 employees, for a total of over $1.32 billion in rent support.

The government is continuing to process thousands of applications worth hundreds of millions of additional dollars of support. Property owners are encouraged to continue to make use of CECRA for eligible tenants and to work to provide flexibility where possible to tenants. The federal government also continues to support the provincial banning of commercial evictions during the pandemic.

This will be the final extension of this program as the government explores options to support small businesses as they face the ongoing challenges of the COVID-19 pandemic including the challenges of fixed costs at a time when health concerns and precautions prevent many businesses from operating at full capacity.

Businesses who qualified for CECRA based on existing program parameters will be able to apply soon for the additional one month based on having at least a 70% revenue decline for April, May and June, without reassessing whether they continue to have at least a 70% revenue decline in July, August or September.

Participation in the one-month extension is voluntary. Both existing applicants to the CECRA and new applicants are able to opt for the September rent reduction.

CECRA provides forgivable loans to qualifying commercial property owners, whether they have a mortgage on their property or not. The loans cover 50% of three to six monthly rent payments for eligible small business tenants during April, May, June, July, August and September.

The loans will be forgiven if the qualifying property owner agrees to reduce their small business tenants’ rent by at least 75% 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% of the rent.

Existing applicants will need to reapply for the month of September. New applicants will have the choice of applying for the three-month initial period, four months, five months or six months.

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 experienced at least a 70% drop in pre-COVID-19 revenues on average for the period of April, May and June.

Details on the September extension will be available on the CMHC website beginning Wednesday September 9.