Unallocated CECRA funds necessitate program extension

Unallocated CECRA funds behind August extension

Thursday, August 6, 2020

Landlords can now apply for a newly available fifth month of Canada Emergency Commercial Rent Assistance (CECRA). Extension of the joint federal-provincial/territorial program was announced late last week to offer the 50 per cent subsidy of qualifying tenants’ rent for August.

“As a lot of small businesses across the country are gradually and safely reopening, further support is needed for those businesses hardest hit,” acknowledged federal Finance Minister Bill Morneau. “We’ve listened to the concerns of small businesses and we are extending the rent relief provided through the CECRA by an additional month.”

Approved recipients or landlords who have already applied under the original eligibility criteria — which required documentation to show tenants suffered a minimum 70 per cent decline in revenue during April, May and June — will not need to submit further proof for July and August. However, the CECRA extension is not automatic. Commercial landlords will have to reapply by September 14.

Meanwhile, new applicants can opt in for three, four or five months, but they will have to meet the original August 31 deadline for registering and supplying required documentation.

“By extending support for commercial rent at the same time most of the province is in stage three, the province of Ontario is helping more businesses get through this challenging period so they have an opportunity to recover and welcome back their customers,” said Ontario Minister of Finance Rod Phillips.

Business advocates note there are still more than $2 billion of unallocated CECRA funds available, based on the number of tenants confirmed for assistance thus far. As of July 30, it’s reported that 63,000 qualifying businesses or not-for-profit organizations had been collectively approved for about $613 million worth of commercial rent relief, while the program administrator, Canada Mortgage and Housing Corporation (CMHC), continues to work with large landlords to process applications for more than 20,000 additional recipients.

Given the volume of untapped funds, the Canadian Federation of Independent Business (CFIB) urges more flexible rules to enable a broader range of distressed businesses to qualify. Failing that, the organization calls on provincial/territorial governments to step away from the joint program and, instead, directly disburse their share of the funds within their own jurisdictions.

“We are concerned Canada’s finance ministers are waiting to see if more landlords apply for CECRA before the application deadline at the end of August. That would be a big mistake. Businesses that need help cannot wait that long. Rent relief needs an overhaul now,” CFIB executives Laura Jones and Corinne Pohlmann wrote in a July 27 letter to the federal and provincial/territorial finance ministers.

2 thoughts on “Unallocated CECRA funds behind August extension

  1. Hello, I received the cecra for the month of April,May ,June, but not for July and August. The thing is, I didn’t know there was a extension and may landlord never told me anything. I paid full rent for July and August. Assuming my landlord had applied for the extension, would it be a possible for the landlord to keep the funds for him self and make me pay full rent for July and August? Assuming he did not apply for the extension, what are the chances that I could make my old landlord apply for me as the property got sold to the new landlord as of August 18? Could I ask the new landlord to apply for me for the month of July and August? Thank you so much for your help.

    • The July and August extensions are not automatic. It is voluntary, so it is left to landlords to decide whether or not to obtain it. Landlords who have already been approved or are in the process of getting approved for April, May and June have until September 14 to reapply for July and August. I am not certain how it affects the situation if a building has been sold to a new owner since CECRA was originally received. Perhaps one of our readers who practices commercial real estate law will be able to answer that question?

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