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Ontario-Canada Emergency Commercial Rent Assistance Program for Small Businesses

May 13, 2020

Updated May 12, 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, May, and June 2020. 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 appropriate supporting information and evidence 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 and June 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 three “pre-profit” monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June. Government funding, and remaining monthly tenant rent payment obligations (i.e. 25 per cent), would not cover the property owner's profits derived from rental income. In applying for this program, a qualifying commercial property owner agrees to forego profit for a three-month period. 
  • The forgivable loans would be disbursed directly to the mortgage lender of a qualifying commercial property owner. If a property owner does not have a mortgage secured by commercial rental property, the property owner should contact the Canada Mortgage and Housing Corporation (which will be tasked with administering the program) to discuss program options, which may include applying funds against other forms of debt facilities or fixed cost payment obligations (e.g. utilities).
  • The loans will be forgiven 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.

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;
  • have a mortgage loan secured by the commercial real property, occupied by one or more small business tenants. As noted above, for those property owners who do not have a mortgage, an alternative mechanism will be implemented. Further information will be outlined in the near future by CMHC;
  • have entered or will enter into a “rent forgiveness agreement” for the period of April, May, and 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; and
  • have declared rental income on its tax return (personal or corporate) for tax years 2018 and/or 2019.

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 or 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.

What is a rent forgiveness agreement?

  • Commercial landlords and tenants must agree to enter into “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 April, May and June; and
  2. landlord agrees not to evict the tenant during those three months.

How will OCECRA be administered?

  • It can 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. Landlords may wish to enter into rent forgiveness 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 deadline to apply is August 31, 2020.

When will the application form be made available?

According to CMHC, program details including how funds will be disbursed and how to apply are being finalized and will be available soon. We will update this blog as new information about the application process becomes available from CMHC.

What other government programs are available to tenants struggling to pay their share?

Alternate funding programs are available. You can canvass these programs at the following link:

How can we help?

  • We will prepare rent forgiveness 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 at least July, and only once the tenant has provided satisfactory evidence they meet the eligibility criteria (including revenue statements at the tenant’s parent level, if applicable).
  • Landlords should consider whether the rent forgiveness 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 at the following links:

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