On Wednesday, September 9, 2020, the federal government announced an extension of the Canada Emergency Commercial Rent Assistance ("CECRA") program through September 2020.
CECRA reduces monthly rent by 75% for eligible small and medium-sized businesses that have been significantly affected by COVID-19. CECRA relief was originally only available for the months of April, May and June of 2020. The program was subsequently extended through July and August of 2020, and, most recently, through September. All tenants who were approved in their April, May and June application are automatically eligible for the July, August and September extensions. New applicants need only meet the CECRA criteria for April, May and June of 2020 in order to qualify for the entire CECRA period (April-September of 2020).
A commercial tenant is eligible for CECRA if it:
- pays no more than $50,000 in monthly gross rent per location;
- generates no more than $20 million in gross annual revenues (calculated at the parent-company level); and
- has experienced a reduction in gross revenues of at least 70% during April-June of 2020.
- In addition, for CECRA to apply, the landlord and tenant must enter into an agreement whereby the landlord agrees:
- to reduce the tenant's monthly rent by at least 75% during the applicable CECRA period;
- to not evict the tenant during the applicable CECRA period; and
- to acknowledge that rent forgiven during the CECRA period is never recoverable.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.