Who is eligible to apply for the CECRA?
To qualify for CECRA for small businesses, the commercial property owner must:
- own commercial real property* which is occupied by one or more impacted small business tenants
- enter (or have already entered) into a legally binding rent reduction agreement for the period of April, May and June 2020, reducing an impacted small business tenant’s rent by at least 75%
- ensure the rent reduction agreement with each impacted tenant includes:
- a moratorium on eviction for the period during which the property owner agrees to apply the loan proceeds, and
- a declaration of rental revenue included in the attestation
The commercial property owner is not and is not controlled by an individual holding federal or provincial political office.
CECRA will not apply to any federal-, provincial-, or municipal-owned properties, where the government is the landlord of the small business tenant.
- Where there is a long-term lease to a First Nation, or Indigenous organization or government, the First Nation or Indigenous organization or government is eligible for CECRA for small businesses as a property owner.
- Where there are long-term commercial leases with third parties to operate the property (for example, airports), the third party is eligible as the property owner.
- Also eligible are post-secondary institutions, hospitals, and pension funds, as well as crown corporations with limited appropriations designated as eligible under CECRA for small businesses.
NOTE: Small businesses that opened on or after March 1, 2020 are not eligible.
* We define commercial real property as a commercial property with small business tenants. Commercial properties with a residential component and multi-unit residential mixed-use properties would equally be eligible with respect to their small business tenants.
NOTE: Properties with or without a mortgage are eligible under CECRA for small businesses.
What is an impacted small business tenant?
Impacted small business tenants are businesses — including non-profit and charitable organizations — that:
- 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)
- have experienced at least a 70% decline in pre-COVID-19 revenues **
NOTE: Eligible small business tenants who are in sub-tenancy arrangements are also eligible, if these lease structures meet program criteria.
** Small businesses can compare gross revenues in April, May and June of 2020 to that of the same period in 2019 to measure revenue losses. If the small business was not open during April – June 2019, they can compare their average gross revenues for April, May and June to the average of their gross revenues earned in January and February of 2020.
How does CECRA work?
CMHC administers CECRA for small businesses on behalf of the Government of Canadaand our provincial and territorial partners.
The program offers assistance for the months of April, May and June 2020.
- Property owners can apply later and the program will be applied retroactively.
- Property owners may still apply for assistance once the 3-month period has ended if they can prove eligibility during those months. The end date for applications is August 31, 2020.
- Property owners must use the funds from CECRA for small businesses to refund amounts in excess of 25% paid by the small business tenant for the period or at the option of the impacted tenant apply rent paid in excess of 25% to future rent owing by the impacted tenant. ***
*** If rent has been collected at the time of approval, a credit to the tenant for a future month’s rent (i.e. July for April) is acceptable — if the tenant chooses this option. This can be a flexible 3-month period.
The deadline to apply is August 31, 2020.
CMHC will provide forgivable loans to eligible commercial property owners. Funds will be transferred to the property owner’s financial institution.
- The loans will cover 50% of the monthly gross rent owed by impacted small business tenants during the 3-month period of April, May and June 2020.
- The property owner will be responsible for no less than half of the remaining 50% of the monthly gross rent payments (paying no less than 25% of the total).
- The small business tenant will be responsible for no more than half of the remaining 50% of the monthly gross rent payments (paying no more than 25% of the total).
Note: If you are a tenant and struggling to pay the remaining portion of your rent, alternate programs are available to assist you.
CECRA for small businesses loans will be forgiven if the property owner complies with all applicable program terms and conditions — including to not recover forgiven rent amounts when the program is over.