The federal government is ready to open applications for its long-promised rent relief program for small business on May 25, Prime Minister Justin Trudeau announced Wednesday.
Speaking at his daily press conference in Ottawa, Trudeau said the Canada Emergency Commercial Rent Assistance (CECRA) program will provide forgivable loans to eligible commercial landlords, so that they can reduce by 75 per cent the rent for small business tenants that have lost the majority of their revenue because of COVID-19.
The rent reduction program will be retroactive for April and May, and will offer support for the month of June.
Trudeau urged landlords to be “part of the solution” and buy into the program.
“We need them to understand that they do have a deep vested interest in keeping their renters in those spaces, that if more businesses go under because of COVID-19, we’re all going to be worse off,” Trudeau said.
“We implore and expect landlords and building owners to understand that we all are in this together, we need to be there for each other and this program is there to help them and to help small businesses.”
Applications will be accepted through the Canada Mortgage and Housing Corporation website beginning on May 25, and application documents can be accessed as of Wednesday.
The federal government, along with the provinces and territories, will cover 50 per cent of the rent, Trudeau said.
The loans will be forgiven if the qualifying landlord agrees to reduce the small business tenants’ rent by at least 75 per cent under a rent reduction 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 per cent of the rent.
To qualify for the program the small business must be paying less than $50,000 per month in rent, have annual revenues of less than $20 million and must have experienced at least a 70 per cent drop in pre-COVID-19 revenues.
According to a recent survey by the Canadian Federation of Independent Business (CFIB), half of small businesses are not able to pay their June rent without further help from the government.
Laura Jones, CFIB’s executive vice-president, said small business owners have been asking for rent relief since March.
“Even when CECRA applications become available we know that program will leave businesses without the help they desperately need,” Jones said in a news release. “The closer we get to June 1, the more stressful things are getting and the more business failures we will see. We’re begging governments to move quickly to create additional help outside of CECRA.”
Expanding the Canada Emergency Business Account (CEBA) to cover many more businesses is a great start and it’s urgent this be implemented in time for June 1, Jones added.
Small business owners would also like to see governments increase the forgivable portion of CEBA which would go a long way to cover the rent relief program shortfall, she said.