Prime Minister Justin Trudeau is announcing significant rent relief for businesses that can’t afford to pay their landlords at a time when their operations are shut down due to the COVID-19 pandemic.
The federal help, expected to lower rent by 75% for affected small businesses, will be provided in partnership with the provinces and territories, which have jurisdiction over rents.
The Canada Emergency Commercial Rent Assistance for small businesses will provide forgivable loans to qualifying commercial property owners to cover 50% of three monthly rent payments payable by eligible small business tenants experiencing financial hardship during April, May and June.
The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible small business tenants’ rent by at least 75% for the three corresponding months under a rent forgiveness agreement, which will include a pledge not to evict the tenant while the agreement is in place.
The small business tenant would cover the remainder, up to 25% of the rent.
Affected small business tenants are those paying less than $50,000 per month in rent and who have temporarily ceased operations, or have experienced at least a 70-per-cent drop in pre-COVID-19 revenues.
The federal Canada Mortgage and Housing Corp. will administer and deliver the program.
Provinces and territories have agreed to cost share total costs and ensure implementation of the program. They will cover up to 25% of costs, subject to terms of agreements with Ottawa.
It is expected the new program will be operational by mid-May, with commercial property owners lowering the rents of their small business tenant’s payable for the months of April and May, retroactively, and for June.