COVID-19: Canada Emergency Commercial Rent Assistance (CECRA) program

Matthew Downey • June 09, 2020

There are few certainties in life, but one thing we can always count on is that rent will be due on the first of the month. For Ontario small businesses struggling due to the COVID-19 pandemic, the Canada Emergency Commercial Rent Assistance (CECRA) program was created to provide much needed assistance with this obligation. The program, a joint effort between the Ontario and Federal governments, is specifically targeted at reducing their monthly commercial rental costs.

Program Highlights

The program provides property owners with unsecured, forgivable loans which must be used to reduce the rent of their small business tenants who have been impacted by COVID-19. Applications opened on Monday, May 25th. Program details, as set out by the Canada Mortgage and Housing Corporation (CMHC), are summarized as follows:

  • Property owners are provided with a forgivable loan for 50% of the monthly gross rent the tenant would normally pay. They may still charge the tenant up to 25% of the normal gross rent. Accordingly, the loan provides between 50% and 75% of the gross monthly rent property owners would normally receive. The remaining portion of the rent must be forgiven and cannot be collected at a later date.
  • The program period covers rent for April, May and June 2020. Property owners have until August 31, 2020 to apply to receive retroactive payments.
  • Small business tenants must meet the following criteria to be eligible for the program:
    • Normally pay monthly gross rent not exceeding $50,000 per location (evidenced by a lease agreement)
    • Earn annual gross revenue not exceeding $20 million
    • Experience at least a 70% drop in revenue in April, May and June 2020 compared to the same period in 2019[1]
  • If a tenant has already paid more than 25% of their rent for any of the covered months, program funds must be used to refund the excess to the tenant, or if the tenant prefers, applied to future rent.
  • Property owners may not evict a tenant during the months for which they are receiving funds from the program.
  • Forgiveness of the loans will occur on December 31, 2020 provided the property owner has complied with the program terms and conditions.
  • Property owners can apply for the program through the CMHC. Rent reduction agreement(s) and landlord and tenant attestations must be provided with the application.

Remaining Challenges for Property Owners and Small Business Tenants

With at least 25% less gross rent being received than in a normal month, many property owners will still face challenges as their operating cost and debt-service requirements have likely not been similarly reduced. Property owners must weigh the cost-benefits of their other options such as entering into a rent deferral arrangement or evicting the tenant. However, evictions may no longer be in the table, as on June 8, the Ontario government announced proposed changes to the Commercial Tenancies Act to temporarily ban property owners from evicting small business tenants that are eligible for federal/provincial rent assistance. If the proposed legislation is passed, it will be illegal to evict such tenants until August 31, 2020 and any evictions that occurred on or after June 3, 2020 will be reversed.

Meanwhile, tenants enduring financial hardship have been left in limbo as they are unable to independently apply to the program for rent relief, and what will happen once the proposed eviction ban ends is unknown.

Whether the CECRA provides sufficient support to property owners and tenants to allow them to remain viable during this challenging time remains to be seen. However, we do know that Ontario property and small business owners are resilient and are working every day to rebuild the Ontario economy.

About the Author

Matthew Downey, CPA, CA, CBV, CFF, is a Manager in our Valuations team.  He can be reached at 416-645-6513 or

Click here to download a .pdf copy of this article.

[1] If the business was not open during that time, the average revenue earned in January and February 2020 is used for the comparison. Revenue must be forecasted for future months.


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