Canada Emergency Commercial Rent Assistance (CECRA) will be offered for a sixth month, Finance Minister Chrystia Freeland confirmed today. The announcement comes eight days after the portal for new applications to the relief program appeared to be closed.
For now, Canada Mortgage and Housing Corporation’s (CMHC) administrative website still gives instructions exclusively for the previously approved recipients who had until September 14 to opt in for July and August, but updated details about the broader reopening for applications are promised for tomorrow. September CECRA coverage has been termed the final extension.
“While small businesses’ needs are evolving, many still require support to face the challenges of the COVID-19 pandemic. That is why we are extending the rent relief provided through CECRA by an additional month,” Freeland said.
As of September 7, the government reports $1.32 billion in federal-provincial/territorial support had been disbursed to more than 106,000 qualifying tenants, who have obtained 75 per cent rent coverage through the combination of a 50 per cent subsidy and 25 per cent forgiveness from their landlords. It also states that “thousands of applications worth hundreds of millions of additional dollars of support” are still being processed.
It’s widely expected that a successor program will be announced as part of the federal government’s promised COVID-19 action plan once parliament reconvenes later this month. In the interim, the extension will help some landlords recoup a greater portion of September rent than they had otherwise foreseen.
“We see the one month CECRA extension as a political stop-gap, but there is a strong incentive for landlords to participate if they have hard-hit tenants who can’t even muster 75 per cent of the rent. For them, this will be a net positive,” observes Michael Brooks, chief executive officer of REALPAC, an organization representing many of Canada’s largest commercial property owners. “The administrative burden of reapplying monthly is considerable. However, for landlords who have participated in CECRA thus far, they are getting good at it.”
Today’s announcement reiterates the federal government’s support for the prohibition on commercial evictions that provincial governments have enacted during the pandemic period. The Canadian Federation of Independent Business (CFIB) also urges that those measures be left in place until other program adjustments can be made. Specifically, it asks that relief funds be conveyed directly to tenants, and that qualifying tenants get retroactive access if their landlords did not participate in the program.
“The Canadian Federation of Independent Business welcomes today’s news that the Canada Emergency Commercial Rent Assistance program will be extended until the end of September, but is disappointed that no fixes to the flaws in the program have been announced,” says CFIB executive vice president Laura Jones. “Many businesses have been shut out of participating in the program due to lack of landlord participation. The deep unfairness that has existed in the program since it was launched needs to be addressed. We are pleased the new finance minister continues to indicate she is aware there is a problem with the existing rent relief program and is continuing to listen to small business.”
Nevertheless, Brooks notes the government could be trading one program delivery challenge for another if it begins to channel rent relief funds directly to tenants.
“The federal government will have to ensure that rent relief monies applied for by the tenant, actually get to the landlord, and actually is owing,” he says. “The anti-fraud parts of this will be daunting for them to figure out. That was possibly why it was originally structured through the landlord.”
Barbara Carss is editor-in-chief of Canadian Property Management.