Canada Emergency Commercial Rent Assistance (CECRA)

With many Canadian businesses seeing a recent drop in revenue directly related to COVID-19, the Canadian government has listened to the concerns of business owners and created the Canada Emergency Commercial Rent Assistance (CECRA) program.

This program will lower small businesses’ rent by up to 75% for three months if their revenue has decreased 70% from pre-COVID-19 revenues.

The CECRA program will provide eligible commercial landlords and property owners with forgivable loans that can cover up to 50% of three monthly rent payments from eligible small business tenants who are experiencing financial hardship during April, May, and June.

These loans will be forgiven if the mortgaged property owner agrees to reduce the small business tenants’ rent by at least 75% under a rent forgiveness 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.

CECRA Eligibility Requirements

To use CECRA, you must be an eligible small business tenant and have an eligible property owner who will agree to the rent forgiveness agreement.

Small Business Tenant Eligibility:

  • 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); and
  • Have experienced at least a 70% decline in pre-COVID-19 revenues (comparing revenues in April, May, and June of 2020 to the same time period in 2019).

This support will also be available to non-profit and charitable organizations.

Property Owner/Landlord Eligibility:

  • Own or be the landlord of a commercial property which is occupied by one or more impacted small business tenants. (Commercial properties with a residential component would be eligible with respect to their small business tenants);
  • Enter (or have already entered) into a 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 impacted tenants includes a moratorium on eviction for the period of April, May, and June 2020; and
  • Have declared rental income on your tax return (personal or corporate) for tax years 2018 and/or 2019.

CECRA for small businesses does not apply to any federal, provincial, or municipal-owned properties.

When Can Businesses Apply to CECRA?

At the time of writing, Canada.ca states that it is expecting CECRA to be operational in the second half of May. How and when to apply for the program has not been released yet, but the current deadline to apply for CERCA is August 31, 2020.

  • Property owners can apply later, and the program will be applied retroactively (keeping in mind the current deadline to apply is August 31, 2020);
  • Property owners may still apply for assistance once the 3-month period has ended if they can prove eligibility during those months; and
  • Property owners must refund amounts paid by the small business tenant for the period.

Small business owners can keep apprised of CECRA updates from the Canada Mortgage and Housing Corporation by signing up for the CMHC newsletter.

How Can You Prepare to Apply for CECRA?

Although we currently do not know where or when businesses can apply, we do know the program will be administered by the Canada Mortgage and Housing Corporation through an online application process, which will ask for the following items to prove eligibility:

  • Proof of an existing rent reduction agreement;
  • Moratorium on eviction; and
  • Small business tenant financial hardship (i.e. attestation of 70% decline in revenue).

More details will be provided soon — including when and how to apply for CECRA for small businesses. Stay tuned to the Mentor Works COVID-19 relief page to learn about additional coronavirus-related funding programs or sign up for our newsletter to be notified of new COVID-19 funding announcements.

 COVID-19 Government Support for Canadian Businesses

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Written by

Matthew has a background in digital marketing, working with small business owners on their branding, digital marketing strategy, and the execution of their campaigns. As a Marketing Coordinator at Mentor Works, Matthew continues to help business owners by creating educational content on what Government funding opportunities are available to Canadian businesses. Follow Matthew Mongeon on Twitter or add him on LinkedIn for government funding updates.

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