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Canada Emergency Commercial Rent Assistance


Original Post Date: May 22, 2020

IMPORTANT UPDATES

Canada Emergency Commercial Rent Assistance (CECRA)

Information regarding the CECRA program for commercial property owners has now been released with applications opening on May 25, 2020.

The information contained in this email is current to the date and time sent and includes our interpretations of publicly-available information that is subject to change during this rapidly-evolving pandemic.  As more information becomes available, we will continue to provide you updates. 

Please visit the following link for full details on the CECRA program: CLICK HERE TO READ FULL DETAILS

Items of note:

EligibilityThe commercial property owner must:
1.) Own or be the landlord of the commercial real property occupied by an impacted small business tenant
2.) Enter into a rent reduction agreement for the period of April, May and June 2020, reducing and impacted small business tenant’s rent by at least 75%
3.) Have declared rental income on their tax return for tax years 2018 and/or 2019

An impacted small business tenant includes:
1.) a business, non-profit, or charitable organization that:
a.) pays no more than $50,000 in monthly gross rent per location
b.) generates no more than $20 million in gross annual revenues (calculated on a consolidated basis at the parent level); and
c.) has experienced at least a 70% decline in revenues (comparison of revenues in April, May and June 2020 to the same period to 2019, or use an average of revenue earned in January and February 2020)
Program BenefitsCHMC will provide forgivable loans to eligible commercial property owners provided all program terms and conditions of program are met.

Loans will cover 50% of the monthly gross rent owed by impacted small business tenants during April, May and June 2020.

Of the remaining 50% of gross rent owed:
>the property owner will be responsible for paying no less than half (no less than 25% of the total); and,
>the small business tenant will be responsible for no more than half (no more than 25% of the total).
ApplicationsOnline applications will be available on the CMHC website starting May 25, 2020 with staggered registration dates – see above linked website to determine which days your company will be eligible to apply.

The deadline to apply is August 31, 2020.
Filing RequirementsProperty owners will need to provide proof of:
>an existing rent reduction agreement or a moratorium on eviction,
>an attestation that their small business tenant experienced at least a 70% decline in revenue; and,
>additional basic information about their property and tenant

Sample attestations and rent reduction agreements are available at the website linked above under the “what you need to apply” section.

Ford Keast LLP will continue to monitor government releases and will share information that impacts your personal and business income tax matters.  We encourage clients to continue submitting documents to us ELECTRONICALLY, where possible.  Our staff remain working on files and we will process your documents as timely as possible.

Please contact your Ford Keast representative to discuss this article or address any other concerns you may have at this time.

Sources the information above are:

https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business