New information on the Canada Emergency Commercial Rent Assistance (CECRA) program has been released.
To qualify for CECRA for small businesses, the property owner must meet the following requirements:
- Own property that generates rental revenue from commercial real property located in Canada;
- Be the property owner of the commercial real property where the impacted small business tenants are located;
- Have a mortgage loan secured by the commercial real property, occupied by one or more small business tenants*;
- Have entered or will enter into a rent reduction agreement for the period of April, May, and June 2020, that will reduce impacted small business tenant’s rent by at least 75%;
- Provide a rent reduction agreement with impacted tenants including a moratorium on eviction for the period of April, May and June 2020; and
- Declared rental income on your tax return (personal or corporate) for tax years 2018 and/or 2019.
* For those property owners who do not have a mortgage, an alternative mechanism will be implemented. Further information will be outlined in the near future.
What is an impacted small business tenant?
Impacted small business tenants are businesses who:
- Pay no more than $50,000 in monthly gross rent per location (as defined by a valid and enforceable lease agreement);
- Generate no more than $20 million in gross annual revenues, calculated on a consolidated basis (at the ultimate parent level); and
- Have temporarily ceased operations (i.e. generating no revenues), or has experienced at least a 70% decline in pre-COVID-19 revenues.**
** To measure revenue loss, small businesses can compare revenues in April, May and June of 2020 to that of the same month of 2019. They can also use an average of their revenues earned in January and February of 2020.
Click here for the release from the Canada Mortgage and Housing Corporation (CMHC).
Should you have any questions or feedback, please reach out to myself or the team. As always, we are here to help and support you.