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The Canada Emergency Wage Subsidy
Updated September 10, 2020
On September 9th, the government announced that the Canada Emergency Commercial Rent Assistance program would be extended one final time. The program now covers the months of April, May, June, July, August and September, 2020.
Program Information
Applications from landlords in Ontario with up to 10 tenants eligible for the Canada Emergency Commercial Rent Assistance program open on Tuesday, May 26th. All other property owners in Ontario can apply beginning Wednesday, May 27th. Detailed information on the program requirements and the application forms are available through the CMHC website.
Before Applying
To be eligible for CECRA, tenants will need to demonstrate a 70% reduction in their monthly revenue in April, May and June compared to the same months in 2019, or for the average of January and February of this year. Revenue forecasts for June will be accepted.
Landlords must agree to reduce an impacted small business tenant’s rent by at least 75% for the months of April, May and June. The federal and provincial governments will cover 50% of the rent for those months by way of a forgivable loan. The remaining 25% of the rent must be covered by the landlord.
What you will need to apply
A signed attestation from the tenant that they are eligible for the program – see sample. To be eligible, tenants will need to demonstrate a 70% reduction in their monthly revenue in April, May and June compared to the same months in 2019, or for the average of January and February of this year. Revenue forecasts for June will be accepted.
A signed attestation from the property owner confirming their eligibility – see sample. Landlords must agree to reduce an impacted small business tenant’s rent by at least 75% for the months of April, May and June.
Property owners must submit a signed Rent Reduction Agreement – see sample.
Property owners must also submit a signed Forgivable Loan Agreement – see sample.
Additional information needed from the landlord:
- property address
- property type
- property tax statement
- latest rent roll for each property
- number of commercial units
Additional information needed from the tenant:
- contact information
- registered business name
- lease area and the monthly gross rent for the period of April, May and June 2020
Applications must be made for all three months at the same time.
Program details
Hard-hit small and mid-sized businesses, with monthly rent of $50,000 or less, may be eligible for a 75% reduction in rent for the months of April, May and June, so long as the landlord chooses to participate in this program.
Since it was announced, many details on the program have started to come to light. They include:
- To be eligible, tenants will need to demonstrate a 70% reduction in their monthly revenue in April, May and June compared to the same months in 2019, or for the average of January and February of this year. Revenue forecasts for June will be accepted.
- The program will be applicable to commercial properties with a residential component, and residential mixed-use properties.
- The monthly rent maximum of $50,000 is for each location. A franchise owner with numerous locations could still take advantage even if total monthly rent exceeds $50,000 for the business.
- Landlords can participate in the program even if the commercial property is not mortgaged.
- The annual revenue for the tenant cannot exceed $20,000,000 for a consolidated group of companies.
- The application deadline is August 31, 2020 and support would be retroactive to April 1.
- Tenants and landlords that are non-arm’s length (such as related parties) may also qualify for this program, provided they meet the criteria and there is a valid lease in place at market rates, prior to the crisis.
- Finally, the property owner must have reported rental income in 2018 or 2019 on their tax returns. If the property is newly constructed or recently purchased, you may be still eligible for CECRA for small business, provided the other program requirements are met. This includes having entered into a lease with the eligible tenant on or before April 1, 2020.
- Charities and not-for-profits will also be eligible for the program.
Under the program, the federal and provincial governments will cover 50% of the rent and 25% will be covered by landlords. Tenants are still responsible for paying 25% of the monthly rent.
Commercial landlords will benefit from the program through forgivable loans to cover 50% of the rent payments they would have normally received in April, May and June. To benefit from the loan being forgiven, landlords must agree to reduce the rent on their property by at least 75% for three months. The plan also includes a moratorium on tenant evictions.
