Qualifying commercial tenants and businesses operating in owned premises will be eligible for direct subsidies of up to 65 per cent of their fixed property expenses through the new Canada Emergency Rent Subsidy (CERS). Deputy Prime Minister and Finance Minister Chrystia Freeland announced the widely expected successor to Canada Emergency Commercial Rent Assistance (CECRA) earlier today, and reaffirmed the Throne Speech pledge for an extension of the Canada Emergency Wage Subsidy until June 2021. Legislation is promised later this month to enact both measures.
“With the country now in the second wave of this virus, our government knows businesses and workers need continued support,” Freeland observes.
That includes a built-in contingency for businesses faced with future compulsory shutdowns for COVID-19-related public health reasons. They will be eligible for a 25 per cent top-up subsidy in addition to the base CERS amount.
As outlined, qualifying businesses, charities and not-for-profit organizations can receive coverage to a maximum of 65 per cent of the cost of rent or interest on commercial mortgages until December 19, 2020. Further extensions “to be adapted and targeted as needed” are expected to June 2021. Retroactive support is also available for the period from September 27 to October 24, 2020.
“The new program is very ambitious. We will look closely at details, such as how the rent subsidy part actually finds its way to the landlord, but, all in all, it’s very encouraging,” says Michael Brooks, chief executive officer of REALPAC, an organization counting many of Canada’s most prominent commercial landlords among its membership. “A tenant-side rent bank or rent subsidy is what REALPAC has been asking for from the outset. We are also encouraged that mortgage support is also apparently available in this version of the program.”
The federal government reports approximately $1.8 billion has been dispersed to more than 130,000 business through the landlord-focused CECRA program as of early October. In addition, approximately 765,000 loans, equating to more than $30 billion, have been allocated through the Canada Emergency Business Account (CEBA) in the same period.
CEBA, which provides partially forgivable loans of up to $60,000 to qualifying small and mid-sized businesses, will continue to accept applications until December 31, 2020. However, loan candidates will be required to provide attestation of their financial losses due to COVID-19.
“As we get through this difficult situation, we will keep taking action to support our businesses, protect jobs and keep Canadians safe and healthy,” Freeland asserts.