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9 months ago

Relief Measures for Small Business Owners & Essential Workers

Dear Valued Clients,

New information was released this past weekend regarding the Canada Emergency Commercial Rent Assistance (CECRA) program which was recently introduced by our government. Temporary financial support for low-income essential workers was also addressed.

CERCA Eligibility and Execution Details

Businesses that are paying less than $50,000 per month in rent can take advantage of this new program. Qualifying businesses will have either ceased their operations or have had their revenues reduced by at least 70% in comparison to their pre-COVID revenues. Non-profit and charitable organizations may also be eligible for the CERCA program.

CECRA is aimed to provide forgivable loans to qualifying commercial property owners to cover 50% of monthly rent payments that are typically payable by eligible small business tenants for April, May and June 2020. The tenants will still be responsible for paying 25% of their monthly rent costs for these months, and the property owners will be required to absorb the remaining 25% of the monthly rent charges.These loans will be forgiven if the mortgaged property owners agree to reduce the eligible small business tenants’ rent by at least 75% for the months of April, May and June 2020.

Furthermore, the property owners must agree to suspend evictions. As the CECRA program will not be fully operational until mid-May, property owners can start by retroactively reducing their rent for April and May, and respectively for the month of June.

The Canada Mortgage and Housing Corporation (CMHC) is administering this program. Funds will be disbursed directly to the mortgage lenders. We expect to hear further announcements regarding CECRA for larger business owners and those with commercial properties which have no mortgages.

This program is not mandatory. It is an alternative measure which is being rolled out for those landlords who wish to participate. Proper financial disclosure will be required to implement this type of assistance. If landlords and tenants have already worked out their own negotiated rent deferral agreements, taking into consideration CERCA will not interfere with such agreements. It is completely up to the commercial property owners and tenants to decide what the best option is for all parties involved.

Salary Top-Up for Low income Essential Workers

The federal government will be working with the provinces to create a new transfer to cost-share a temporary top-up for salaries of low-income workers who continue to be deemed as essential workers amidst the COVID-19 pandemic. This will be applicable to those essential workers who earn less than $2,500 per month on a full-time basis.

The goal is to provide financial relief to those heroes on the front-lines in hospitals, those caring for seniors in long-term care facilities, and those who are working hard to ensure that our grocery stores and markets are continuously stocked and ready to deliver every day products for all community members across the country.

As soon as we hear of more government updates, we will be sure to share them with you.

This newsletter and the details provided are solely shared for informational purposes and does not constitute legal, tax, or financial advice or opinions. Please do not hesitate to reach out to your manager if you need assistance.


Pramen Prasad CPA, CA, CMA

Managing Partner

Prasad & Company LLP

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