The Federal Government announced last Friday that they will offer 75% rent relief for small businesses that have been affected by COVID-19 by subsidizing half their rent for April, May and June, and asking landlords to cover an additional quarter of the costs.
The government said they reached an agreement in principle with all provinces and territories to implement the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. The funds will flow through Canada Mortgage and Housing Corporation (CMHC) to landlords of tenants who have had revenues drop at least 70% since the novel-coronavirus pandemic began.
The loans will be forgiven if the mortgaged property owner agrees to reduce the small business tenants’ rent by at least 75% under a rent forgiveness agreement, which will include a term not to evict the tenant while the agreement is in place. The small business tenant would cover the remainder, up to 25% of the rent.
Impacted small business tenants are businesses paying less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70% drop in pre-COVID revenues. This support will also be available to non-profit and charitable organizations.
It is expected that CECRA will be operational by mid-May, and further details will be announced soon.