Further details regarding the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses were announced today.  This program will be a joint effort between the Federal and Provincial governments.  Some of the key aspects of the CECRA applicable for Ontario commercial properties are outlined below:

  • Landlords of eligible small business tenants will be required to reduce rental costs for April, May, and June 2020 by at least 75%, including forgoing any profit component.
  • Compensation to the landlords would be in the form of a forgivable government loan of up to 50% of rental costs; effectively requiring the landlord and tenant to each bear 25% of rental costs.
    • For example, assuming $12,000 monthly rent for an eligible small business tenant including a $2,000 monthly profit component, each party would be impacted as follows:
      • The landlord would forgo $4,500 ($2,000 profit component plus 25% of the remaining $10,000 monthly rent);
      • The small business tenant would be responsible for paying $2,500 (25% of the $10,000 monthly rent, net of profit);
      • The federal and Ontario government, in combination, would cover the remaining $5,000.
    • The forgivable loan will require a rent forgiveness agreement including terms where the tenant will not be evicted during these three months.
      • It appears that the amount of forgivable loan will be taxable income to the landlord when forgiven.
    • To be eligible, small business tenants will be required to:
      • Normally pay less than $50,000 per month in rent; and,
      • Either a non-essential business that has temporarily closed or a business that has experienced at least a 70% drop in pre-COVID-19 revenues.
        • The same comparison for revenue that is used for the Canada Emergency Wage Subsidy (CEWS) appears to be intended for the 70% revenue decrease condition.
      • For-profit, non-profit, and charitable organizations may be eligible for the CECRA.
      • Applications are expected to be accepted starting mid-May 2020, with retroactive rent reductions for eligible small business tenants for April and May, along with prospective rent reduction for June.
      • This loan will be administered by the Canada Mortgage and Housing Corporation.
      • Commercial landlords and tenants may be eligible for mixed commercial/residential properties where the commercial component is 30% or more, though only the commercial component may be eligible.


For larger businesses that would not qualify as small business tenants, future commercial rent relief was also promised, but with details to follow.


More details are anticipated in coming days, including some of the specific aspects that still may be required:

  • How the $50,000 gross rent per month rent will be calculated
    • Overall entity or location-by-location basis
    • Inclusion or exclusion of TMI and CAM
  • Other potential tenant eligibility requirements, including how “small business” will be determined or possible exclusion of some non-profit or charitable entities
  • Impact on Harmonized Sales Tax (HST) collection and remittance for commercial rent
  • Determination of this profit component, such as:
    • How the mortgage principal and/or interest payments would be considered
    • Whether property amortization or depreciation would included in determining profit
    • If loan forgiveness will be excluded for calculating any profit component
  • Application process details
    • Responsibilities of the landlord and tenant in the process
    • How the landlord will be able to rely upon the tenant’s eligibility claim


Further details can be found in publications from the Federal and Ontario governments:

Federal: https://pm.gc.ca/en/news/news-releases/2020/04/24/prime-minister-announces-partnerships-provinces-and-territories

Ontario: https://news.ontario.ca/opo/en/2020/04/ontario-canada-emergency-commercial-rent-assistance-program.html


We will continue to monitor announcements and further details relating to the CECRA and provide updates as new information is available.