Prime Minister Justin Trudeau announced that the federal government has reached an agreement in principle with all provinces and territories to implement the Canada Emergency Commercial Rent Assistance (CECRA) program to reduce small business rent costs by up to 75 per cent and support property owners in covering these costs. The new program is expected to:
- Provide forgivable loans to qualifying commercial property owners to cover 50 per cent of three-monthly rent payments for eligible small business tenants who are experiencing financial hardship during April, May and June.
- These loans will be forgiven if the property owner agrees to reduce the eligible small business tenants’ rent by at least 75 percent for the three corresponding months under a rent forgiveness agreement, which will include a term not to evict the tenant while the agreement is in place.
- Small business tenants would cover the remainder, up to 25 percent of the rent.
- Eligibility will be limited to small business tenants or businesses paying less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70 percent drop in pre-COVID-19 revenues. This support will also be available to non-profit and charitable organizations.
In summary, under this program, a commercial property owner can receive 50% of regular monthly rent in the form of a loan from the government. This loan will be forgiven if the property owner agrees to reduce rent for those months by at least 75%. The property owner will then pay the additional 25% of the normal rent rate, and the tenant will pay the other remaining 25% of the normal rent rate.