October 10, 2020 | Danny J. McMullen
As discussed in our previous post , the federal government has been working on a new program to replace the Canada Emergency Commercial Rent Assistance (the “CECRA”) program. On the afternoon of October 9th we got the first glimpse of what the replacement program will look like (see the announcement here). We don’t have all of the details yet, but below is a brief outline of the program based on what we do know:
What is the program?: The new program is called the Canada Emergency Rent Subsidy (“CERS”) program and it has been modeled on the existing successful federal support program for businesses affected by COVID-19, the Canada Emergency Wage Subsidy (the “CEWS”) program . The program provides assistance directly to small business owners, charities and non-profits who have suffered a revenue drop due to the COVID-19 pandemic. The program provides relief on a sliding scale based on the extent of the revenue drop suffered by the affected businesses, charities and non-profits. The program will subsidize a percentage of eligible expenses (which would include commercial rental payments) up to a maximum of 65% until December 19, 2020. Tenant’s will be able to retroactively apply to the program for the time period from September 27 to October 24th – this is presumably to cover the span of time between when the CECRA program ended and when the CERS program is fully operational.
There will be also be a CERS top-up available to those businesses who are required to temporarily shut down as part of any public health response so that the 65% amount can be bumped up by 25% to cover 90% of eligible expenses. This part of the program will be essential for those businesses which have been forced to completely shut down in the regions of Peel, Toronto and Ottawa based on the Government of Ontario’s announcement yesterday (see here for more details).
The parameters of the program described above will apply until December 19, 2020, going into 2021 the federal government intends to update and adapt the parameters of the program to be more targeted on an as needed basis.
Who qualifies?: Small businesses, charities and not-for profit companies will all be able to qualify for the CERS program and the amount of the rent subsidy that they receive will be on a sliding scale based on the actual amount of revenue lost due to the COVID-19 pandemic up to the maximum amounts described above.
How do you apply?: The federal government in designing the CERS program has purposely made the application process simpler and more streamlined. Applications for the CERS program will be done directly by the affected tenants through the Canada Revenue Agency. This will be a very similar process to the existing CEWS program. This is a welcome change from the existing CECRA program which only permitted landlord’s to apply for the program. The application process was also long, complicated, and ultimately required that Landlord’s take a 25% loss of their monthly rent to qualify for the program. The application process and parameters were frustrating for all parties and in particular for tenant’s who had no control over whether landlord’s would apply for CECRA assistance. The specifics of the application process are not yet available, once they are – this post will be updated to describe that process in as much detail as possible.
When do applications open?: It does not appear that a date has been provided for when applications will be open – once this information is available, this post will be updated accordingly.
As more information becomes available, we’ll update this post accordingly, stay tuned.
