OTTAWA — Prime Minister Justin Trudeau has announced rent-relief measures to support small businesses struggling to pay their bills as a result of COVID-19 shut-downs.

During a press briefing held Friday, Trudeau announced the federal government has reached an agreement in principle with all provinces and territories to implement the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. This program will lower rent by 75 per cent for small businesses that have been affected by COVID-19.

“Small businesses across the country are the backbone of our communities and they are now facing significant challenges,” he said in a statement. “That is why the Government of Canada and provincial and territorial partners are taking strong, immediate and effective action to protect Canadians and businesses from the impacts of the COVID-19 pandemic. We’re introducing significant measures to support them and ensure they have the resources to make it through these difficult times.”

CECRA will provide forgivable loans to qualifying commercial-property owners to cover 50 per cent of three monthly rent payments that are payable by eligible small-business tenants experiencing financial hardship during April, May and June. 

The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible small business tenants’ rent by at least 75 per cent for the three corresponding months 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 per cent of the rent.

To qualify for CERCA, impacted small-business tenants must be paying less than $50,000 per month in rent and have temporarily ceased operations or have experienced at least a 70 per cent drop in pre-COVID-19 revenues. This support will also be available to non-profit and charitable organizations.

“Small businesses are an integral part of our economy and are vital for families and communities across the country,” said Bill Morneau, Minister of Finance. “Many businesses are facing economic hardship and uncertainty during the COVID-19 pandemic. We thank and commend the many property owners who have already acted to help their tenants during this crisis. [CERCA] will provide forgivable loans to commercial property owners who in turn will lower the rent of tenants to keep them prepared to bounce back when this crisis subsides.”

The program will be administered and delivered by Canada Mortgage and Housing Corporation, a collaboration between the federal government and provincial and territorial governments, which are responsible for property owner-tenant relationships. 

Provinces and territories have agreed to cost-share total costs and facilitate implementation of the program and will cost share up to 25 per cent of costs, subject to terms of agreements with the federal government.

CECRA is expected to be operational by mid-May. Further details on the program will be shared once final terms and conditions are available. The federal government and provincial and territorial governments are urging property owners to “provide flexibility to tenants facing hardship in this uncertain time.”

Shortly after Trudeau’s briefing Friday, Ontario Premier Doug Ford made his own announcement, saying the Ontario government is partnering with the federal government and providing $241 million to businesses in Ontario through the Ontario-Canada Emergency Commercial Rent Assistance Program (OCECRA). 

In total, more than $900 million in provincial-federal relief will be provided to help businesses. 

“The vast majority of Ontario’s small businesses and landlords are struggling during this extraordinary public-health emergency,” said Ford in a statement. “That’s why we are doing everything we can to support them through these tough economic times, so they can hit the ground running when we are in a position to open up the provincial economy.”

However, the Canadian Federation of Independent Businesses (CFIB) said, while it appreciates the enormous challenge in designing support programs and getting them out quickly, there are some concerns about the program — including that the program may be too complicated and too reliant on landlords to administer.

“In particular, as landlords don’t have to participate and will be expected to accept some losses under the program, they may choose to ignore it, even if their tenants badly need it,” read a CFIB statement on Twitter. “Another concern is that the all-or-nothing threshold of a 70-per-cent revenue reduction will leave many hard-hit businesses without the relief they need.”

Restaurants Canada also released a statement in response to the CERCA announcement, saying “While we’re still waiting to learn the full details of the program, we’re encouraged by what the federal and provincial governments have brought to the table and look forward to building on any areas where there might still be gaps.”


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