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Canada Emergency Commercial Rent Assistance Program (“CECRA”) Update

Updated September 30, 2020 to address September CECRA extension

October 01, 2020

The federal government recently announced that is has partnered with the provinces and territories to deliver the Canada Emergency Commercial Rent Assistance program (“CECRA”) to help small businesses with commercial rent payments for the months of April through September. The program, as it relates to the Province of Ontario, is called the Ontario-Canada Emergency Commercial Rent Assistance Program (“OCECRA”).

How Will OCECRA Work?

  • Landlords are responsible for applying under OCECRA. Participation in the program by landlords is NOT mandatory. As a consequence, tenants are well-advised to speak with their landlords and should be expected to provide the supporting information and evidence required by the program to demonstrate that the tenant (or subtenant) will be an eligible small business tenant.
  • If a small business tenant (or subtenant) is eligible under OCECRA and its qualifying commercial landlord agrees to participate in the program, then responsibility for rent for the months of April, May, June, July, August and September 2020 is apportioned as follows:

Entity Responsible for Rent

Share of Rent


Eligible small business tenant


Small business tenant will be responsible for no more than 25% of the total

Qualified property owner


Property owner will be responsible for no less than 25% of the total

Federal government


Forgivable loans will cover 50% of gross rent paid

Provincial government



  • The program will provide forgivable loans to qualifying commercial property owners to cover 50 per cent of monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, June, July, August and September
  • The forgivable loans would be disbursed directly to the qualifying commercial property owner. In order of priority, the proceeds of the loan can be used for:
  1. reimbursing impacted tenants for any rent paid above 25% during the eligible period unless the tenant chooses to apply the previously paid rent against future rent;
  2. any costs and expenses relating directly to the property, including general business purposes (except distribution to shareholders/payment of dividends) after reimbursing tenants and applying to property costs.
  • To ensure loan forgiveness, the property owner must comply with the Rent Reduction Agreement, and ensure that the attestations and application materials are accurate and truthful. Following this, the loans will be automatically forgiven on December 31, 2020 if the property owner complies with all applicable program terms and conditions including to not seek to recover rent abatement amounts after the program is over, not filing for bankruptcy, restructuring, reorganizing or dissolving its business and ensuring that the attestation and application, including the supporting documentation, does not contain false or misleading information, failing any of which the loan has to be repaid by the property owner.
  • No formal notification of forgiveness will be given.

The September Extension

  • On September 8th, 2020, it was announced that CECRA would be extending the rent relief for small businesses one last time to include the month of September.
  • Property owners and small business tenants will be able to receive funding for the month of September 2020.
  • If applicants have already applied for CECRA for the period of April-June, they can log back into the Portal and opt-in for the September extension. There are no additional documents required.
  • The only additional step to the opt-in is the written notice requirement, which must be sent to each selected impacted tenant and sub-tenant.
  • Only tenants approved in the April, May and June application are eligible for the extension. Landlords can choose which of the previous impacted tenants you wish to include in the September extension and are not obligated to seek the September extension for all tenants included in the original application.
  • Applicants will be eligible for the September extension if the business had an average of 70% decline or more for April, May and June. Those who were previously eligible will not have to reassess whether they continued to have a 70% revenue decline. Rather, they will be automatically eligible for the additional 1, 2, or 3-month extension.
  • Existing and new applicants will be eligible to apply for the September rent reduction. However, applicants must request the July and August extensions before opting-in for the September extension. The existing applications will have to opt-in for the month of September and must do so before October 30, 2020.
  • The new applicants can choose whether they wish to apply for the initial three-month period (April, May and June) and the four, five, or six-month period that includes September. Nonetheless, whichever is chosen, the new applicants must have their application submitted before September 30, 2020.
  • CECRA is removing the claw-back insurance proceeds requirement and provincial rent supports from the forgivable loan amount for both existing and new applicants. Existing applicants will receive notice and will have previously clawed-back amounts restored to their forgivable loan.

What is a “qualifying commercial property owner”?

To qualify for OCECRA, a property owner must:

  • own property that generates rental revenue from commercial real property located in Canada;
  • own commercial real property where the eligible small business tenants are located. Commercial properties with a residential component, and residential mixed-use properties with a 30 per cent commercial component, would be equally eligible for support with respect to their commercial tenants only;
  • property owners with or without a mortgage are eligible for the program. Loan funds will be deposited directly into the property owner’s bank account for the following months: April, May, June, July, August and September of 2020. The property owner then has an obligation to apply the funds as follows:
    1. reimbursing impacted tenants for any rent paid above 25% during the eligible period unless the tenant chooses to apply the previously paid rent against future rent;
    2. any cost and expenses relating directly to the property, including general business purposes (except distribution to shareholders/payment of dividends) after reimbursing tenants and applying to property costs.
  • have entered or will enter into a “rent reduction agreement” for the period of April, May, June 2020, that will reduce impacted small business tenant’s rent by at least 75%, and the rent reduction agreement includes a moratorium on eviction for aforementioned months;
  • have declared rental income on its tax return (personal or corporate) for tax years 2018 and/or 2019. If you do not have rental income from 2018 and/or 2019 because the property is new you still may be eligible if all other requirements set out be CECRA have been met; and
  • short-term, month-to-month leases can qualify if there was a legally binding lease in place prior to April 2020 and all other program requirements are met.

What is an “eligible small business tenant”?

“Eligible small business tenants” must meet the following criteria:

  1. pay less than $50,000 per month in gross rent (as defined in a valid and enforceable lease agreement);
  2. generate no more than $20 million in gross annual revenues, calculated on a consolidated basis (at the ultimate parent level); and
  3. be a non-essential business that has temporarily closed or that has experienced at least a 70 per cent drop in pre-COVID-19 revenues (determined by comparing revenues in April, May, and June to the same month in 2019 or alternatively compared to average revenues for January and February 2020).

Not-for-profit organizations and charitable entities would also be considered for the program. Both the CMHC and Ontario government websites indicate that subtenants will be eligible if they meet the same criteria. While final details of the program are not available as of the date of writing, this suggests that franchises are likely to qualify – provided they meet the criteria for eligible small business tenants – regardless of whether they lease directly from a qualifying commercial property owner, or sublease from their franchisor (or franchisor's affiliate). The inclusion of subtenants is critical as many franchised business have a non-qualifying franchisor (or franchisor's affiliate) on the head lease with the landlord and are then subleased to a franchisee, who is likely to meet the eligibility criteria.

Are any small businesses excluded OCECRA?

The following exclusions apply:

  • Entities owned by individuals holding political office;
  • Entities that promote violence, incite hatred or discriminate on the basis of race, national or ethnic origin, colour, religion, sex, age or mental or physical disability; and
  • An entity in the “Lenders special accounts or Restructuring Group” prior to March 1, 2020.
  • Tenants that opened for business on or after March 1, 2020.
  • Subject to a few exceptions, tenants of any federal, provincial, or municipal-owned properties, where the government is the landlord of the small business tenant.

What is a rent reduction agreement?

  • Commercial landlords and tenants must agree to enter into “rent reduction agreements”, previously called “rent forgiveness agreements” in order to participate in the program. The agreements must include the following terms:
  1. landlord agrees to reduce the tenant’s rent by at least 75 per cent for the period during which you agree to apply the loan proceeds; and
  2. landlord agrees not to evict the tenant during those months; and
  3. a declaration of rental revenue included in the property owner and tenant attestation forms discussed below.

How will OCECRA be administered?

  • CMHC has been tasked with administering the program.
  • The program can be applied retroactively and the deadline to apply is September 30, 2020.
  • Property owners may still apply for assistance once the initial 3-month period has ended if they can prove eligibility during those months. Landlords may wish to enter into rent reduction agreements only after tenants have provided satisfactory evidence to support their eligibility. Otherwise, the landlord risks that the loan will not be forgiven.
  • Property owners must refund amounts paid by the eligible small business tenant for the period (i.e. 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 agreed upon by both the property owner and the tenant. This can be a flexible 3-month period).

The Application Process

  • There are three stages associated with the application:
  1. Registration. The property owner acknowledges that it and its impacted tenants are eligible and accepts the terms and conditions of the loan agreement. The property owner completes a form with its corporate information and confirms its account upon receipt of a text message. The property owner must complete security questions and create a password.
  1. Application. The property owner must upload a completed property owner attestation form, tenant or sub-tenant attestation form(s) and a rent reduction agreement (also referred to as a rent forgiveness agreement) for each impacted tenant. The property owner must gather a rent roll (only if a property has more than five impacted tenants), a property tax statement, total number of full and part time employees of the tenant, recent back account statement for the subject-property and the business number for impacted tenants.
  1. Approval. CMHC has retained MCAP and FCT to assist in the approval process. It will take up to 2 weeks to obtain approval.

How can we help?

  • We will prepare rent reduction agreements that satisfy the requirements of the OCECRA program.
  • We can provide a guide that landlords can share with their tenants outlining the information/evidence that must be provided to support the application.

What should tenants and landlords do now?

  • Tenants should gather the information needed to establish eligibility and share with their landlords. Landlords should refrain from applying until the tenant has provided satisfactory evidence they meet the eligibility criteria.
  • Landlords should consider whether the rent reduction agreement will stipulate that the tenant indemnifies the landlord if the loan is not forgiven as a result of the representations and warranties made by the tenant being untrue.

Where can I find more information about OCECRA?

Further information about OCECRA can be found on the CMHC website at the following link: