COVID-19: Support for Businesses II
April 30th, 2020

Canada Emergency Commercial Rent Assistance (CECRA)

On April 24, 2020, Prime Minister Trudeau announced the Canada Emergency Commercial Rent Assistance (“CECRA”) program – a government initiative to provide rent relief to help Canadian small and mid-size businesses through the current challenges presented by the COVID-19 crisis.

Essentially, the CECRA program will provide 50% of the rent for qualifying businesses, the commercial landlord must reduce rent by at least 25%, and the qualifying business must pay the remaining rent to the landlord – 25% or less.

The implementation of the program appears to be complex and will require coordination between the business owner, the landlord and the government of Canada.  In our view, the program appears to put significant risk on the commercial property owners as the government’s contribution to rent payments is being provided in the form of a forgivable loan to the landlord and not the tenant.  If a business does not qualify, the loan will be payable by the landlord and not the tenant.

We expect the details of this program to evolve over the coming days and weeks.

Program description

While details are still sparse, the following are the key points from the announcement:

  • Forgivable loans will be provided to qualifying commercial property owners (“landlords”) for 50% of rent payable for April to June 2020 by eligible tenants experiencing COVID-19 related hardships.
  • The loans will be forgiven if the landlord agrees to reduce the rent of eligible tenants by 75% or more, under a rent forgiveness agreement for April to June 2020.
  • The rent forgiveness agreement must include a pledge by the landlord to not evict the tenant for the term of the agreement.
  • The program is expected to be operational by mid-May. Landlords could lower eligible tenants’ rent payable retroactively for April and May 2020 if they haven’t already done so and for June 2020 to qualify.


To qualify for the program, a business must:

  • Be a business, charity or other not-for-profit entity;
  • Pay less than $50,000 per month in rent; and
    • Have temporarily ceased operations; or
    • Have experienced a reduction in pre-COVID-19 revenues of 70% or more.

How to Apply

The Federal Canada Mortgage and Housing Corp. will administer this relief program.  Details on how to obtain the rent relief will be forthcoming.


Posted in COVID-19

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