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COVID-19: Canada Emergency Commercial Rent Assistance (CECRA)
In order to support small businesses and commercial building owners who have been affected by the COVID-19 pandemic in meeting their ongoing expenses, the Government of Canada has established the Canada Emergency Commercial Rent Assistance (CECRA). Here’s a brief overview of what you need to know about this program and how it can help you.
Objective
Allow eligible commercial building owners to reduce by 75% the rent payable by their tenants who are small businesses financially affected by COVID-19. At the same time, the program allows owners to continue to cover their operating expenses.
Financial Assistance
For affected businesses (including NPOs)
- Reduction of rents for April, May and June 2020 by 75%.
For owners
- Interest-free loan covering 50% of the cost of monthly rents payable in April, May and June by eligible small businesses in financial difficulty;
- The loan becomes a grant on December 31, 2020 if all conditions are met.
Eligibility
For affected businesses (including NPOs)
- The gross monthly rent must not exceed $50,000;
- Gross annual income must not exceed $20 million;
- Revenues must be at least 70% less than pre-pandemic COVID-19 revenues. Two methods of calculation are accepted:
- Compare the revenues of April, May and June 2020 to the revenues of the same period in 2019;
- Compare the income in April, May and June 2020 with the average income in January and February 2020.
For owners
- Be the owner of the commercial building that houses at least one affected small business tenant;
- Enter (or have already entered) into a legally binding rent reduction agreement for the period of April, May and June 2020, reducing the rent of the affected small business tenant by at least 75%;
- Ensure that the rent-reduction agreement with each affected tenant includes the following:
- A moratorium on evictions for the period targeted above;
- A declaration of rental revenue included in the attestation.
It should be noted that the FNQLEDC has validated with the competent authorities and obtained confirmation that owners of commercial buildings located on reserve, whether they are a band council or a private landlord, are eligible for the program if they meet the various criteria. The same applies to small business tenants.
How It Works
It is the owner of the commercial building who must apply to the program. The owner receives a loan equivalent to 50% of the rents from eligible businesses. With this loan, he must reduce the rents of these businesses by 75%. If all the conditions are met, this loan will be transformed into a non-refundable subsidy by December 31, 2020. This means that the owner will have to assume 25% of the rent reduction.
The advantage for the landlord is that he helps his tenants to survive the crisis. If his tenants go bankrupt, he will no longer receive rental income and may have difficulty finding other tenants after the pandemic.
To apply and for more information, visit the Canada Mortgage and Housing Corporation (CMHC) website, which administers the program.
For assistance, please do not hesitate to contact our Entrepreneurship Technical Advisor:
Frédérick Martel, CPA
Tel: 418-843-1488, ext. 1223
Email: fmartel@cdepnql.org
Note : L’information présentée a été simplifiée pour des fins de communication. Nous vous référons au site de la Société canadienne d’hypothèques et de logement (SCHL) pour avoir l’information détaillée.
Pour connaître les autres programmes d’aide qui pourraient venir en aide à votre entreprise, nous vous invitons à consulter notre application conçue à cet effet ainsi que la section COVID-19 de notre blogue.