UPDATE as of May 25, 2020
As of today, applications will be accepted through the Canada Mortgage and Housing Corporation (CMHC) website.
The CMHC expects a large number of applications. To manage this volume, the intake of applications will be staggered based on the size and location of the commercial property. Property owners can submit their applications according to the following timetable:
- Monday, May 25: Property owners who are located in Atlantic Canada, British Columbia, Alberta, and Quebec, with up to 10 tenants who are eligible for the program.
- Tuesday, May 26: Property owners who are located in Manitoba, Saskatchewan, Ontario, and the Territories, with up to 10 tenants who are eligible for the program.
- Wednesday, May 27: All other property owners in Manitoba, Saskatchewan, Ontario, and the Territories.
- Thursday, May 28: All other property owners in Atlantic Canada, British Columbia, Alberta, and Quebec.
- Friday, May 29: All property owners across Canada.
This program is for small business tenants that are paying less than $50,000 per month in gross rent, with annual consolidated revenues of less than $2 million, and that have experienced at least a 70 per cent drop in pre-COVID-19 revenues. It will also be available to non-profit and charitable organizations.
May 6, 2020
On April 16, 2020, Prime Minister Trudeau announced a new rent assistance program aimed at those with commercial properties. This program will lower rent by 75% for eligible small businesses that have been impacted by COVID-19.
Forgivable loans will be provided to commercial property owners to cover 50% of rent payments due to be made by eligible small business tenants who are experiencing financial hardship in April, May and June.
Loans are forgivable if the property owner holding the mortgage agrees to all the terms and conditions.
A rent forgiveness agreement must be established, including a term that the tenant cannot be evicted while the agreement is in place.
The Government will cover 50%, the property owner will cover 25%
The small business must pay the remaining 25% of the rent.
Small business tenants who:
- Pay less than $50,000 per month in rent; and
- Have temporarily ceased operation due to COVD-19; or
- Have experienced at least a 70% drop in pre-COVID-19 revenues
- Non-profit and charitable organizations are also eligible.
- Details for this program are not yet available regarding application processes and enforcement procedures/penalties. We will share the information as soon as it becomes available.
Who can apply?
- A property owner who is an individual or corporation or other business entity that generates rental revenue from commercial real property located in Canada.
- The property owner must be the registered owner and landlord of the commercial real property.
What are the eligibility criteria?
The property owner has:
- A commercial property in Canada that generates revenue
- Tenants who have been impacted by COVID-19
- A mortgage secured by a commercial rental property, occupied by one or more small business tenants
- Entered, or will enter, a rent forgiveness agreement for April, May and June 2020, that will reduce the tenants’ rent by at least 75%
- Included, or will include in the agreement a moratorium on eviction for April, May and June 2020 Declared rent income on its tax return (personal or corporate) for tax years 2018 and/or 2019.
There are no provincial differences in the key eligibility criteria.
What is an impacted tenant?
An impacted tenant is a non-essential business that temporarily ceased operations; or those experiencing at least a 70% decline in pre-COVID-19 revenues. The impacted tenant must generate no more than $20million in gross annual revenues, calculated on a consolidated basis. Impacted tenants must pay no more than $50,000 in monthly gross rent per location.
What is pre-COVID revenue?
Pre-COVID revenue is to be determined by comparing revenues in April, May, or June to the same month in 2019; or alternatively compared to average revenues for January and February 2020.
What are the application requirements?
- Property address and any information pertaining to the program criteria, such as information on the Borrower/Landlord, number of tenants, rent rolls, etc.
- Signed tenant attestations.
- Agreeing to comply with the program’s terms and conditions.
Canada Mortgage and housing Corporation (CMHC) reserves the right to request any additional reporting it deems reasonably necessary.
You can sign up with CMHC to be notified of when the application process opens.
Does CECRA cover basic rent or include additional rent, TMI (taxes, maintenance and insurance)?
The CECRA will cover all fixed costs including mortgage and principal interest, property tax, utilities, and insurance.