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Rental relief for small businesses: Canada Emergency Commercial Rent Assistance (CECRA)

As part of the federal government’s economic response plan to COVID-19, the Canada Emergency Commercial Rent Assistance (CECRA) is intended to provide rent relief for small businesses. The program offers forgivable loans to eligible commercial property owners for the months of April, May and June. Rent owed by small business tenants can be reduced by at least 75%.


  • This program is intended to reduce rent by 75% for small businesses who have been severely impacted by the economic downturn caused by COVID-19.
  • The federal government is working with the provinces and territories to implement the program. The federal government is also jointly funding the program with each province and territory.
  • It will be administered through the Canada Mortgage and Housing Corporation (CMHC).

How it works

  • The CECRA will provide forgivable loans to commercial property owners (landlords) to cover 50% of commercial rent for the months of April (retroactive), May, and June.
  • The loan to the landlord will be forgiven if they provide the commercial tenant with rent forgiveness equal to at least 75% of their rent. The tenant would cover the remainder.
  • The landlord has until August 31, 2020 to apply for the CECRA (i.e. it does not need to apply during April, May and June 2020; it can apply thereafter). If the landlord does receive the CECRA after the 3-month eligibility period, it can either:
    • refund the 75% portion of the rent to the tenants for April, May and June, or
    • provide the tenant with a credit, if agreed upon by the tenant and landlord.


  • A commercial tenant normally pays $10,000/month of rent.
  • The landlord applies for the CECRA and receives 50% of its regular rent, $5,000/month, as a forgivable loan (i.e. $15,000 total for the three months) through the program.
  • To be eligible for the loan forgiveness, the landlord must reduce the commercial tenant’s rent by at least 75%. The tenant now pays $2,500/month in rent.
  • On a monthly basis, the landlord has received $2,500/month from the commercial tenant and $5,000/month as a forgivable loan. Since the landlord has provided the commercial tenant with the 75% rent savings, the loan would be forgivable. The other 25% of monthly rent (i.e. $2,500) is foregone by the landlord.

Tenants: Who is eligible?

  • Small business tenants that pay less than $50,000 per month in rent, per location, as per a valid and legally enforceable rental agreement.
  • The small business tenant must have temporarily ceased operations or have experienced a 70% decrease in pre-COVID-19 revenues.[1]
  • The small business tenant must generate no more than $20 million in gross annual revenues, on a consolidated basis (at the ultimate parent level).
  • NPOs and charities will also be considered.

Landlords: Who is eligible?

  • The landlord must generate rental revenues from a commercial real property located in Canada
  • There must be a rent reduction agreement in place for each of April, May and June 2020, providing rent reduction of at least 75% each month. The agreement must also include a moratorium on eviction for the same three months.
  • The landlord must have declared rental income on their tax return for 2018 and/or 2019.
  • The landlord must agree that it will not attempt to recover the foregone rent after the 3-month period is over.
  • A landlord that does not have a mortgage on the property may still be eligible. Further details to be provided, likely from CMHC.

Information specific to Ontario

The Government of Ontario has released additional information on the CECRA program specific to Ontario, known as the Ontario-Canada Emergency Commercial Rent Assistance (OCECRA) program:

  • Mixed-use properties: The government of Ontario is stating that a property that has a residential component and/or residential mixed-use of 30% commercial component can also qualify for the OCECRA for their commercial tenants only.
  • Tenant eligibility: The following commercial tenants are not eligible to participate:
    • Entities owned by individuals holding public office,[2]
    • Entities that promote violence, incite hatred or discriminate on the basis of race, national or ethnic origin, color, religion, sex, age or mental or physical disability; and,
    • An entity in the Lenders special accounts or Restructuring Group prior to March 1, 2020.
  • OCECRA does not cover profit: The program will specifically cover rent relating to fixed costs. Funding through OCECRA will not cover any profit element of the landlord.
    • For example, if rent is normally $10,000/month and $1,000 was the profit element, the program would only cover $9,000. This means the landlord would receive a forgivable loan for 50% of this amount per month ($4,500/month) and the tenant would be required to pay 25% of this amount ($2,250/month). In Ontario, the landlord would be foregoing the other 25% of rent that covers fixed costs ($2,250) as well as the $1,000 of profit. Total foregone is $3,250.

There is no guarantee  the other provinces will administer their programs in the same way as Ontario, although it would make sense that there be consistency with these programs across the provinces.

How to apply

As the program is being administered by the CMHC, the application will likely be available on their website.

It is expected that the application will be available in mid-May.

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[1] The decline in revenue is to be determined by comparing the commercial tenant’s current month’s revenue to either: (i) the revenue of the same month of the previous year, 2019, or (ii) the average revenue for January and February 2020. This method is similar to how it is determined under the Canada Emergency Wage Subsidy.

[2] Ontario has not provided specifics as to whether there is a minimum percentage ownership that the individual holding public office must have in the entity in order for it not to qualify. Further clarification may be provided.

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