COVID-19: Update on the Canada Emergency Commercial Rent Assistance (CECRA) program
The Canada Emergency Commercial Rent Assistance Program (CECRA) provides forgivable loans to commercial property owners to cover up to 50% of rent payments payable by eligible small business tenants that are undergoing financial difficulties due to COVID-19. Under the program, the tenant must pay between 0% and 25% of their normal monthly gross rent and the government provides an additional 50%. Accordingly, property owners receive between 50% and 75% of the normal monthly rent and the remainder is forgiven. The property owner agrees not to evict the tenant during the months they receive funds from the program in return for the forgiveness of the government loans. Please see our earlier article for more detail on the CECRA program.
CECRA originally covered the period from April to June 2020. On June 30, 2020, the Governments of Canada and Ontario announced the program was being extended to cover July rent as well. Property owners and tenants that were previously approved for the April to June period can opt in for the July payment without providing additional documents or assessing whether their tenants’ revenue declined in July by at least 70%. The new forgivable loan for July is based on the average gross rent claimed for the April to June period and not on actual July rent. The dollar value of rent forgiveness must also stay the same, regardless if the actual rent due went up or down in July. The deadline to opt-in is September 14, 2020.
The program is also accepting new applications for both the three-month period of April to June, and the new four-month period of April to July. All new applications must be submitted by the original deadline of August 31, 2020. Opt-ins and new applications can be submitted via the Canada Mortgage and Housing Corporation (CMHC) website.
In addition to the one-month extension, the claw-back on insurance proceeds and provincial rent supports received was removed for all existing and new applications. Any amounts previously clawed back will be paid out and added to the forgivable loan.
On June 17, 2020, the Ontario government passed legislation temporarily banning and reversing evictions of commercial tenants eligible for CECRA for the period of May 1 to August 31, 2020. The Ontario government has been actively encouraging property owners and tenants to cooperate and apply for the program.
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