COVID-19 – Canada Emergency Commercial Rent Assistance (CECRA)

COVID-19 – Canadian Tax and Business News, release #11


Our COVID-19 Canadian Tax and Business News updates are our way of informing our clients, friends and business associates with recent information that may help businesses and individuals while coping with the outcomes from the COVID-19 pandemic.  

Our goal is to monitor the news and release relevant information as it becomes available.


“True wisdom comes to each of us when we realize how little we understand about life, ourselves, and the world around us.”

– Socrates


Canada Emergency Commercial Rent Assistance (CECRA) & Ontario CECRA (OCECRA)

On April 24, 2020, Prime Minister Trudeau announced the CECRA which is a joint effort between the federal government and provinces and territories to implement rent support for small businesses. The program is expected to lower rent by 75% for businesses that have been affected by COVID-19. 

The program is expected to be operational by mid-May. Commercial property owners are encouraged to lower the rents of their small business tenants retroactively for the months of April and May as well for June. There was no indication by the federal government if the program would be extended beyond June. However, the Ontario government announced the OCECRA program will accept applications until September 30, 2020. The OCECRA will be administered by the Canada Mortgage and Housing Corporation (CMHC).

The federal and Ontario governments provided preliminary details on the joint OCECRA discussed below. 

What Support Will Be Provided?

The program aims to provide forgivable loans to qualifying commercial property owners to cover up to 50% of monthly rent payments payable by eligible small business tenants experiencing financial hardship during April, May, and June.

The loans will be forgiven if the mortgaged property owner agrees to reduce the tenants’ rent by at least 75% for the three corresponding months covered by this program. The tenant would be responsible for covering 25% of the monthly rent, the property owner 25%, while the federal government and provinces would share the remaining 50%. 

The Ontario government specified that tenants and landlords are expected to pay 25% of the “before profit costs”. As a result, they are expecting property owners to forego profit for a three-month period.

The Ontario government provided the following example in their announcement:

For example, assume monthly rent for a small business is $10,000. In this example, assume the landlord doesn’t make a profit. The landlord forgoes $2,500 (25 per cent of rent). The small business would be responsible for paying $2,500 (25 per cent of rent). The government would cover the remaining $5,000, with $3,750 from the federal government (37.5 per cent of rent) and $1,250 (12.5 per cent of rent) from the provincial government.


Impacted small business tenants are businesses, non-profit organizations and charities that:

  • are paying less than $50,000 per month in rent; and 
  • have temporarily ceased operations or have experienced at least a 70% drop in “pre-COVID-19 revenues”. This term has not been defined by the federal government. However, the Ontario government announced that the decline is determined by comparing revenues in April May or June to the same month in 2019 or alternatively compared to average revenues for January and February 2020

For a landlord to eligible to benefit from the OCECRA:

  • The property owner must be the registered owner and landlord of the residential or commercial real estate property;
  • They must enter into a rent forgiveness agreement with the tenant wherein they agree reduce the tenant’s monthly rent by at least 75% cent; and
  • The rent forgiveness agreement must include moratorium on eviction. Landlords will not be able to evict tenants while the agreement is in place.

The Ontario government further announced that commercial properties with a residential component and residential mixed-use properties with a 30% commercial component would be equally eligible for support with respect to their commercial tenants. They also provided the following exclusions:

  • Entities owned by individuals holding political office;
  • Entities that promote violence, incite hatred or discriminate on the basis of race, national or ethnic origin, color, religion, sex, age or mental or physical disability; and,
  • An entity in the Lenders special accounts or Restructuring Group prior to March 1, 2020.

Receiving the CECRA

The forgivable loans would be disbursed directly to the mortgage lender and will be administered by CMHC. The Ontario government is encouraging property owner’s that do not have a mortgage secured by a commercial rental property to contact the CMHC to discuss program options, which may include applying funds against other forms of debt facilities or fixed cost payment obligations (e.g. utilities).

Further details are expected to be provided by the federal and Ontario governments. We will provide additional information once it becomes available.


PM Announces Rent Assistance for small businesses

Ontario-Canada Emergency Commercial Rent Assistance Program

As we all try to stay safe, we need to remind ourselves business will get back to normal but in the meantime let’s all do our part to get to normal as soon as we can. If you have any questions or require further information, don’t hesitate to reach out to us.

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