The federal government has reached an agreement in principle with all provinces and territories to implement the CECRA program for qualifying small businesses. Prime Minister Justin Trudeau announced this morning that eligible small businesses affected by Covid-19 will be receiving seventy-five percent (75%) in rent relief. Details released this morning include the following:
- Eligible Tenants. The commercial tenants eligible for this program will be those that are paying less than $50,000 per month in rent and have either temporarily ceased operations or have experienced at least a 70% drop in revenues. This will also include non-profit organizations. Further details are expected to be released for larger businesses requiring rent relief.
- Forgivable Loans. The CECRA will provide forgivable loans to qualifying commercial landlords to cover 50% of their monthly rent payments which are payable by the aforementioned eligible tenants.
- Forgiveness Agreement. The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible small business’ rent by at least 75% under a rent forgiveness agreement. This agreement will include a term not to evict the tenant while this agreement is in place.
- Percentage Breakdown. Following the above, the landlord would be responsible for covering 25% of the rent, the tenant another 25%, with the remaining 50% shared amongst the federal and provincial governments. The forgivable loans will be disbursed directly to the mortgage lender.
As previously reported, these loans are currently limited to rent for the months of April, May and June. The federal Canada Mortgage and Housing Corp. will administer and deliver the program which is expected to be operational mid-May. Therefore, property owners will be lowering the rents for April and May, retroactively, and for June.
For questions regarding the CECRA program or other issues with your lease please contact:
Tony R. Anderson
tanderson@owenbird.com
(604) 691-7528