Federal Government Introduces the Canada Emergency Commercial Rent Assistance Program

The Government of Canada has announced that they have reached an agreement in principle with all provinces and territories to implement the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses, including nonprofits and charities.

The program will provide forgivable loans to qualifying nonprofits and charities who own commercial property. It will cover 50% of three monthly rent payments for eligible small business tenants who are experiencing financial hardship during April, May, and June. If the mortgaged property owner agrees to reduce the eligible small business tenant’s 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 loans will be forgiven.

The commercial property owner will be responsible to cover 25% of the rent, the tenant will cover 25%, and the federal government and provinces would share the remaining 50%. For a nonprofit or charity to be eligible, they must be paying less than $50,000 per month in rent and have temporarily ceased operations or experienced at least a 70% drop in revenue.

The CECRA program will be administered and delivered by the Canada Mortgage and Housing Corporation (CMHC). Alberta, along with all provinces and territories, have agreed to cost-share total costs of up to 25% and facilitate the implementation of the program. The program will be operational by mid-May, and will be retroactive for the months of April, May, and June.

Although details of the CECRA program are still being finalized, the program may provide some rent relief for nonprofits and charities that are struggling. However, there are issues in the details that have been provided which may leave out some organizations. The program relies on the property owners to participate and accept some losses. Some property owners may choose to ignore the program regardless of tenants’ need for relief during this time. Similar to the debates for the eligibility rules for the Canada Emergency Wage Subsidy (CEWS), the threshold for a revenue drop eliminates a number of nonprofits and charities. CCVO will be providing more information as it becomes available.

Click here for the Government of Canada news release or here for the Government of Alberta news release.