Understanding Canada Emergency Commercial Rent Assistance (CECRA)

Updated May 25, 2020

On April 16, 2020, the Prime Minister announced a new program to support small businesses by providing rental assistance for the months of April, May, and June: the Canada Emergency Commercial Rent Assistance (CECRA).

Who manages this program?

This program is administered by the Canadian Mortgage and Housing Corporation, on behalf of the Government of Canada.

What will the program cover?

The program will seek to provide loans to commercial property owners who in turn will lower or forgo the rent of small businesses for the months of April, May, and June.

The loans will be forgiven if the property owner reduces their tenants’ rent by at least 75% for the months of April, May, and June, under a rent forgiveness agreement.

The tenant would be responsible for up to 25% of their rent, the lessor would be responsible for 25%, and the federal government loan will cover the remaining 50%.

Who is eligible?

Property owner eligibility

In order to apply for the program, the property owner must meet the following eligibility requirements:

• Own property that generates rentla revenue from commercial real property located in Canada;
• Have a mortgage loan secured by the commercial real property, occupied by your small business tenant;
• Have entered into a rent reduction agreement for the period of April, May, and June, that reduces rent by at least 75%. This agreement must include a moratorium on eviction for the same periods.
• Have declared rental income on your 2018 and/or 2019 tax returns.

Tenant eligibility

In order to apply for the program, the tenant must meet the following eligibility requirements:

• Pay less than $50,000 in monthly gross rent per location (as defined by your lease);
• Generate no more than $20 million in gross annual revenues (at the parent level);
• Have temporarily ceased operations (e.g. generating no revenue whatsoever), or have experienced at least a 70% decline in pre-COVID-19 revenues. This comparison is measured in the same way at the CEWS 75% wage subsidy calculation.

What if rent has already been paid?

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 agreed upon by both the property owner and the tenant. This can be a flexible 3-month period.

Are these forgivable loans?

As per the CMHC: “CECRA for small businesses loans will be forgiven if the property owner complies with all applicable program terms and conditions including to not seek to recover rent abatement amounts after the program is over.”

How do I apply?

The property owner must apply, and the deadline for application will be August 31, 2020. Applications will be accepted through the Canada Mortgage and Housing Corporation (CMHC) website.

When do applications start?

• Monday, May 25: Property owners who are located in Atlantic Canada, British Columbia, Alberta, and Quebec, with up to 10 tenants who are eligible for the program.
• Tuesday, May 26: Property owners who are located in Manitoba, Saskatchewan, Ontario, and the Territories, with up to 10 tenants who are eligible for the program.
• Wednesday, May 27: All other property owners in Manitoba, Saskatchewan, Ontario, and the Territories.
• Thursday, May 28: All other property owners in Atlantic Canada, British Columbia, Alberta, and Quebec.
• Friday, May 29: All property owners across Canada.

For more information

• COVID-19 April 16 update: Trudeau addresses Canadians, Special coverage (cbc.ca, April 16, 2020)
• CECRA applications now open (pm.gc.ca, May 25, 2020)