COVID-19: Rent Relief For Small Businesses

By Julie Alton, Associate


The federal government has announced a plan to help small businesses experiencing financial hardship due to COVID-19 with rent relief through the Canada Emergency Commercial Rent Assistance (CECRA) program.

What Type of Relief is Offered by the CECRA?

The CECRA program will reduce the commercial rent of eligible small businesses (including non-profits and charities) by at least 75% for April, May, and June of 2020. The tenant will be required to cover the balance of the monthly rent, up to a maximum of 25%.

The 75% reduction in rent for tenants is calculated as follows: the CECRA program will provide forgivable loans to commercial property owners to cover 50% of gross monthly rent, and the property owner will be responsible for 25% of gross monthly rent. So, for example if a tenant’s monthly gross rent is $1,000, then the property owner will receive:

  • $500 through the CECRA,
  • $250 from its tenant; and
  • The remaining $250 will be covered by the property owner.

The CECRA is administered by the federal Canada Mortgage and Housing Corporation (CMHC) in cooperation with each province and territory. The commercial property owner, not the tenant, is responsible for applying to the CECRA program for rent relief.

Who is Eligible for the Relief?

The CECRA program is administered to commercial property owners, rather than providing financial relief directly to commercial tenants. In order to be eligible for the program, the property owner must:

  • 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 (however, note that this requirement will soon change, see the “Issues” section below);
  • have entered into or will enter into a rent reduction agreement for the period of April, May, and June, 2020, that will: (i) reduce impacted small business tenants’ rent by at least 75%; and (ii) include a moratorium on eviction for the period of April, May, and June 2020;
  • have declared rental income on either their personal or corporate tax return for tax years 2018 and/or 2019.

There are also restrictions on the type of tenant that is eligible for the program. Eligible tenants are businesses (including non-profits and charities) 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 have experienced at least a 70% decline in pre-COVID-19 revenues.

Canada Mortgage & Housing Corporation: CECRA for small businesses


Both tenants and property owners have raised concerns about the design of the CECRA program.

Tenants are concerned that the process can only be initiated by the property owner, which leaves tenants with no recourse if the property owner decides the application process is too onerous or does not want to cover 25% of the gross monthly rent.

Property owners are concerned about the requirement that the commercial property be mortgaged (although the federal government has now said that an alternative mechanism for commercial properties without mortgages will be available soon) and have sought clarity on how the forgivable loan structure will work.

When Does the Program Start?

The CECRA was initially supposed to open for applications in Mid-May. However, because of the issues that have been raised by property owners and tenants (see above section), there have been some delays in its implementation. The CMHC website now states that program details, including how funds will be disbursed and how to apply, will be available soon.


Help is on the way for small businesses experiencing financial hardship due to COVID-19 through the CECRA program. Although there are still some issues that must be fixed with the design of the program, the CECRA will provide welcome financial relief to small business tenants struggling with their monthly rent payments. We will be monitoring the status of this program, and will amend this blog post as more information is available.

This post is meant to provide information only and is not intended to provide legal advice. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this post to be outdated.