Commercial landlords will activate rent relief levers for small business and not-for-profit tenants under the terms of the Canada Emergency Commercial Rent Assistance (CECRA) program. Newly unveiled details sketch out a four-way cost-sharing formula that will enable small tenants, paying less than $50,000 monthly, to receive a 75 per cent discount on rent for April, May and June.
The program is targeted to mortgaged commercial properties housing tenants that have either been forced into a COVID-19 related shutdown or suffered a minimum 70 per cent drop in revenues since the outbreak began. Commercial landlords must agree to reduce rents by 75 per cent and halt evictions for the three stipulated months. In turn, they will be eligible for a forgivable joint federal-provincial loan of up to 50 per cent of the monthly rent, which Canada Mortgage and Housing Corporation (CMHC) will channel directly to their lenders.
“We thank and commend the many property owners who have already taken action to help their tenants during this crisis,” adds Finance Minister Bill Morneau.
The federal and provincial/territorial governments have reached an agreement in principle to proceed with the program, which Prime Minister Justin Trudeau announced earlier this month. Funds are expected to start flowing by mid-May, and will be retroactive to April 1. Ontario is committing $241 million for its 25 per cent share of the program, while British Columbia’s and Alberta’s contributions are estimated at $80 million and $67 million respectively within their provinces.
“While many small businesses have closed their doors to help keep people safe and healthy, this has not stopped the bills from coming in,” observes Carole James, B.C.’s Minister of Finance. “British Columbia is pleased to partner with the federal government on the CECRA, a welcome next step that will help thousands of commercial property owners and tenants in British Columbia.”
Meanwhile, Ontario Premier Doug Ford hints there is more collaboration to come.
“I want to thank the federal government for partnering with us to help our small businesses and commercial landlords,” he says. “I look forward to working together to also provide much-needed support to residential renters ahead of May 1.”