On April 24th, the Government of Canada announced a new program, called Canada Emergency Commercial Rent Assistance (CERA). The program, to be implemented and funded jointly with the provinces and territories, will lower rent by 75 per cent for small businesses that have been affected by COVID-19. This could be of great benefit to restaurants, stores, and other businesses that have been started by newcomers.
- The assistance is being given directly to commercial property owners (and not for example, residential property owners). They, in turn, will be reducing the rent for small businesses.
- The assistance will be given to the commercial landlords in the form of forgivable loans, in order to cover 50% of three monthly rent payments (for April, May, and June, 2020) by “eligible small businesses who are experiencing financial hardship.”
- Eligible small businesses are those that pay less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70 per cent drop in pre-COVID-19 revenues.
- The loans will be forgiven if the eligible tenant’s rent is reduced by at least 75% for those months, under a formal agreement between the landlord and the tenant, as part of which, the tenant cannot be evicted, so long as the agreement is in place.
- The small business tenant is still responsible for paying the remaining 25% or less of the rent that was not reduced by the landlord.
The assistance program is expected to launch around the middle of May and will be retroactive to April.