The CECRA for small businesses application portal opens at 8:00 a.m. EST on May 25, 2020.

Canada Emergency Commercial Rent Assistance (CECRA) for small businesses provides relief for small businesses experiencing financial hardship due to COVID-19. It offers unsecured, forgivable loans to eligible commercial property owners to:

• reduce the rent owed by their impacted small business tenants
• meet operating expenses on commercial properties

Property owners must offer a minimum of a 75% rent reduction for the months of April, May and June 2020.

To qualify for CECRA for small businesses, the commercial property owner must:

• own commercial real property* which is occupied by one or more impacted small business tenants
• enter (or have already entered) into a legally binding rent reduction agreement for the period of April, May and June 2020, reducing an impacted small business tenant’s rent by at least 75%
• ensure the rent reduction agreement with each impacted tenant includes:
  • a moratorium on eviction for the period during which the property owner agrees to apply the loan proceeds, and  
  • a declaration of rental revenue included in the attestation.

The commercial property owner is not and is not controlled by an individual holding federal or provincial political office.

CECRA will not apply to any federal-, provincial-, or municipal-owned properties, where the government is the landlord of the small business tenant.

Exceptions

• Where there is a long-term lease to a First Nation, or Indigenous organization or government, the First Nation or Indigenous organization or government is eligible for CECRA for small businesses as a property owner.
• Where there are long-term commercial leases with third parties to operate the property (for example, airports), the third party is eligible as the property owner.
• Also eligible are post-secondary institutions, hospitals, and pension funds, as well as crown corporations with limited appropriations designated as eligible under CECRA for small businesses.

NOTE: Small businesses that opened on or after March 1, 2020 are not eligible.

* Commercial Real Property is defined as a commercial property with small business tenants. Commercial properties with a residential component and multi-unit residential mixed-use properties would equally be eligible with respect to their small business tenants.

NOTE: Properties with or without a mortgage are eligible under CECRA for small businesses.

What is an impacted small business tenant?

Impacted small business tenants are businesses — including non-profit and charitable organizations — that:

• pay no more than $50,000 in monthly gross rent per location (as defined by a valid and enforceable lease agreement)
• generate no more than $20 million in gross annual revenues, calculated on a consolidated basis (at the ultimate parent level)
• have experienced at least a 70% decline in pre-COVID-19 revenues **

NOTE: Eligible small business tenants who are in sub-tenancy arrangements are also eligible if these lease structures meet program criteria.

CMHC administers CECRA for small businesses on behalf of the Government of Canada.

The program offers assistance for the months of April, May and June 2020.

• Property owners can apply later and the program will be applied retroactively.
• Property owners may still apply for assistance once the 3-month period has ended if they can prove eligibility during those months. The end date for applications is August 31, 2020.
• Property owners must use the funds from CECRA to refund amounts in excess of 25% paid by the small business tenant for the period or at the option of the impacted tenant apply rent paid in excess of 25% to future rent owing by the impacted tenant. ***

*** If rent has been collected at the time of approval, a credit to the tenant for a future month’s rent (i.e. July for April) is acceptable — if the tenant chooses this option. This can be a flexible 3-month period.  

The deadline to apply is August 31, 2020.

CMHC will provide forgivable loans to eligible commercial property owners. Funds will be transferred to the property owner’s financial institution.

• The loans will cover up to 50% of the monthly gross rent owed by impacted small business tenants during the 3-month period of April, May and June 2020.
• The property owner will be responsible for no less than half of the remaining 50% of the monthly gross rent payments (paying no less than 25% of the total).
• The small business tenant will be responsible for no more than half of the remaining 50% of the monthly gross rent payments (paying no more than 25% of the total).

For more information, please click the following link:

https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business