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Note: An updated article on the Canada Emergency Commercial Rent Assistance program can be found here.

During Prime Minister Trudeau’s daily address on Thursday, April 16, 2020 he announced a new assistance program to help small businesses affected by the COVID-19 pandemic. According to the Prime Minster, the Canada Emergency Commercial Rent Assistance (“CECRA”) program will assist small businesses with rent for April, May and June.

What is that Canada Emergency Commercial Rent Assistance program?

Few details about this new program were immediately available; however, comments from the Minister of Finance and a news releases from the Prime Minister’s office indicate that “the program will seek to provide loans, including forgivable loans, to commercial property owners who in turn will lower or forgo the rent of small businesses for April (retroactive), May, and June.” Being that rent is primarily a provincial/territorial responsibility, the details released Thursday confirm that the program will require partnership between the federal and provincial governments.

Answers to the following questions were not clear from Thursday’s announcements and will likely be the subject or the additional details that the Prime Minster promised to share soon:

  • What will qualify as a small business for the purposes of the CECRA?
  • What will the size of the loans be, and will there be any caps?
  • What will the terms of the loans be? 
  • What portion of the loans will be forgivable and under what circumstances will forgiveness be available?
  • How will the CECRA will be administered?
  • How will a property owner have to prove that they lowered or waived the rent of their tenants?
  • What happens if a property owner receives a loan but doesn’t lower or forgo rent?

What does the CECRA mean for your business?

After salaries and related expenses, commercial rent is the largest monthly expense for many small and medium size businesses. Landlords and tenants should monitor the details of the CECRA as they are announced and prepare to take advantage of this program where the tenant is a qualifying small business. Landlords and tenants presently engaged in negotiations over past or future rent for the months of April, May and June should factor the possibility of assistance from the CECRA intro their negotiations. Where appropriate, firm decisions could be deferred until more details about the CECRA are known.

What other supports are available for small businesses?

In addition to announcing the new CECRA program on Thursday, the federal government also announced an expansion to the previously announced Canada Emergency Business Account (“CEBA”) program. The initial qualifying payroll range of $50,000 to $1 million will be replaced by a new range of $20,000 to $1.5 million in total payroll in 2019.[1]  The CEBA provides interest-free loans of up to $40,000 to small businesses and not-for profits, to help cover their operating costs while experiencing reduced revenues due to the economic impact of COVID-19.[2]

Other supports for businesses from the federal government include:

  • Programs designed to avoid layoffs and encourage the rehiring of employees.
  • Deferred income tax payments, sales tax remittances and customs duty payments.
  • Programs (including the CEBA and the CECRA) designed to provide access to credit.
  • Programs supporting financial stability
  • Support for self-employed individuals.
  • Support for specific industries, including programs and supports for agriculture, fisheries and other businesses in the food supply chain.[3]

At the provincial level, Ontario is providing economic assistance in the form of interest and penalty relief for provincially administered taxes, education and property tax, WSIB payment deferrals, affordable electricity bills and employer health tax relief.[4] Other relief programs may be available in other provinces/territories and or at the municipal level.

Relief and support programs are changing rapidly. Businesses should closely monitor these changes and take advantage of any programs they are eligible for.

Do you have questions about government support programs for your business?

Siskinds LLP has developed a comprehensive operational plan that aims to protect our employees, clients, colleagues and the greater community while continuing to deliver uninterrupted legal services. Our website now has a COVID-19 Legal Updates page, which contains additional COVID-19 legal resources. If you have questions or require legal assistance with a commercial lease during COVID-19, or with business support generally, please contact one of our business lawyers today.


[1] See: https://pm.gc.ca/en/news/news-releases/2020/04/16/prime-minister-announces-additional-support-small-businesses

[2] For more information about the CEBA, visit the website established by the federal government: https://ceba-cuec.ca/

[3] A summary of Canada’s COVID-19 Economic Response Plan is available at: https://www.canada.ca/en/department-finance/economic-response-plan.html

[4] More information on Ontario’s COVID-19 support for businesses is available at: https://www.ontario.ca/page/covid-19-support-businesses

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