Federal Government Announces Commercial Rent Assistance
On April 24, 2020, Justin Trudeau announced the Canada Emergency Commercial Rent Assistance Program. This program aims to assist small businesses, charities, and nonprofits who have seen at least a 70% decrease in revenue by providing forgivable loans to commercial property owners. Under the program, qualifying tenants will have their rent lowered by 75% from April to June while the property owner will receive a loan of 50% of the tenant’s rent. Trudeau hinted that the government would evaluate whether an extension of the program would be required after June.
In order to qualify the tenant must pay less than $50,000
0 per month in rent. Of the 75% reduction, the landlord will absorb 25% of the rent, while the federal government and provinces will absorb the remaining 50%. For the government’s portion of the rent reduction, 75% will be allocated to the federal government and 25% to the provincial or territorial government. The commercial property owner’s loan will be forgiven provided that the eligible tenant’s rent is reduced by 75% and they agree to not evict the tenant during the course of the rental assistance. In addition, the program will be available to landlords who have already stepped up or would like to retroactively do so. It is expected that the program will be available in mid-May.
It is hoped that by providing this program, the economy will have a better chance of rebounding once restrictions are eased. Despite this, critics of the program argue that the government’s actions are too little too late for some and that other businesses in need of assistance will fall through the cracks as they do not qualify for the program. Trudeau stated that there will be news for larger corporations to come, however the extent of the assistance for these larger corporations remains unclear.
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Have questions regarding this topic? This post was authored by Deanna Froese. Please don’t hesitate to contact her at email@example.com or anyone else listed on the authors page.