On Friday, Prime Minster Justin Trudeau announced details of the federal rent assistance program for small businesses that was first unveiled last week.

In a statement, the federal government said it has reached an agreement in principle with all provinces and territories to implement the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses impacted by COVID-19. The program will lower rent by 75 per cent for affected small businesses.

The government said:

The program will provide forgivable loans to qualifying commercial property owners to cover 50 per cent of three, monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June. 

The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible small business tenants’ rent by at least 75 percent for the three corresponding months under a rent forgiveness agreement, which will include a term not to evict the tenant while the agreement is in place. The small business tenant would cover the remainder, up to 25 percent of the rent.

Impacted small business tenants are businesses paying less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70 per cent drop in pre-COVID-19 revenues. This support will also be available to non-profit and charitable organizations.

The Canada Mortgage and Housing Corporation will administer and deliver the CECRA. Provinces and territories have agreed to share total costs and facilitate implementation of the program. They will cost share up to 25 percent of costs, subject to terms of agreements with the federal government.

It’s expected that CECRA will be operational by mid-May, with commercial property owners lowering the rents of their small business tenants payable for the months of April and May, retroactively, and for June.

Further details on CECRA will be shared in the near future once final terms and conditions are available. The federal government and provincial and territorial governments urge property owners to provide flexibility to tenants facing hardship.