Canada Emergency Commercial Rent Assistance (CECRA) Program

Dear Clients and Colleagues,

The COVID-19 pandemic has impacted our lives like nothing ever before…. Its implications on the healthcare system, financial markets, and economy are far-reaching… including commercial real estate…

Over the past few weeks, I have been on the phone and video conference calls with many clients, investors, occupiers, service providers, design-builders, and experts of many facets of commercial real estate, including calls with Cushman & Wakefield’s GTA and Global leadership, SIOR, etc…

I wanted to provide you with a brief update on what I have learned so far about the impact of COVID-19 pandemic, but please keep in mind that the situation is changing on a daily basis…

So let’s take a look at where we stand as of today… May 1st, 2020.


The Canada Emergency Commercial Rent Assistance (CECRA) Program

This week, the federal government announced the Canada Emergency Commercial Rent Assistance (CECRA) Program for small businesses. This program was designed to provide forgivable loans to qualifying commercial property owners to cover 50% of the rents of tenants experiencing financial hardship during the months of April, May, and June 2020. The loans will be forgiven if the property owner agrees to reduce the tenants’ rent by at least 75% whereby tenants would cover the remainder.

Some of the main points were:

  • The Program will provide forgivable loans to qualifying commercial property owners to cover 50 percent of three monthly rent payments that are payable by eligible small business tenants who are 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 percent for the three corresponding months under a rent forgiveness 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 percent of the rent;
  • Impacted small business tenants are non-essential small businesses paying less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70 percent drop in pre-COVID-19 revenues. This support will also be available to non-profit and charitable organizations;
  • There is a requirement that the property has a mortgage or utility account;
  • There is a requirement that the property owner agrees to forgo “profit” for a three-month period;
  • The commercial property owner and eligible small business tenant must enter into a “Rent Forgiveness Agreement” which shall include a moratorium on eviction for the three-month period of the loan;
  • The CECRA Program will be administered by the Canada Mortgage and Housing Corporation (CMHC) and will be available until September 30, 2020. Support would be retroactive to April 1, covering April, May, and June 2020.

To read the Ontario CECRA program policy please follow this link: 

There has been a lot of controversy surrounding this program since its announcement by the Federal Government, especially with the following:

  • While everyone understands the saying “We are all in this together” it seems that it is expected of Landlords to participate in this program and forgo rental income and “profits” while they have already experienced a loss of income by not collecting full rent on April 1st. Some fared better and some fared worse, depending on the asset class, type, and size of tenancy. Retail landlords, small office, and small-industrial-bay Landlords were hit harder than anyone else. We shall see what happens in May and June.  
  • Nobody knows what “not making a profit” really means. Does it mean that a landlord cannot earn a return on equity? Or is this term designed to eliminate any additional or extra fees or charges?
  • There is an explicit obligation for the property owner to reduce the tenant’s monthly rent to not more than 25% of rent that relates to fixed costs for three months. 
  • There is a requirement for Landlords to have a mortgage or utility account in order to allow the CMHC to have jurisdiction over the program. 
  • Many landlords have already made arrangements with their tenants for April’s rent. For this program to work, it has to be for a rolling three-month period. I don’t see why a Landlord would be willing to refund rent for April in order to participate in the program for the remaining two months.
  • It is obvious that this is NOT a mandatory program for Landlords. They may elect to opt-in or not. Some have already pre-emptively offered tenants different rent deferral programs, and in some cases, rent abatement programs. It appears that it would be a lot easier for Landlords to continue to work directly with their tenants on suitable arrangements. 

The Federal Government announced the CECRA with a lack of clarity, and some tenants may have assumed that the program is automatically and universally applicable. Clearly that is not the case so far.

Furthermore, wouldn’t Landlords most likely prefer deferral arrangements with their tenants? In a situation where they will at some point be made whole, instead of opting in to the CECRA arrangement that would require them to forgo rent?

It remains to be seen over the next few weeks how successful Landlords were with rent collection on May 1st… and how willingly Landlords will be participating in CECRA.

To read the Canada Mortgage and Housing Corporation (CMHC) announcement please follow this link:


This is a continuously evolving situation…

Whether you are an Investor or Occupier or Lender we understand that the impact of the COVID-19 pandemic on your business may be significant. All parties involved have keen issues they are focused on and potentially different priorities at this moment. Proper and transparent communication is what will sustain and strengthen the relationships that will get us to the other side… Just remember…

We are all in this together…

DISCLAIMER: All information herein is for informational purposes only. This is not intended as professional legal, tax or accounting advice. We are not liable for any damages, real or perceived, as a result of you receiving or consuming this information. Please consult your attorney, accountant, or other counsel prior to making any decisions… 

As we navigate through these uncertain times, rest assured that our team is working diligently to meet the needs of our clients and colleagues. The manner in which we do business is changing constantly, but our commitment to providing the best information and advice remains the same.

Cushman & Wakefield’s leadership team and research resources are committed to providing information on the overall economic and, specifically, the commercial real estate impact due to this pandemic. Please continue to check for the latest information regarding COVID-19 and the commercial real estate industry.

We’re all in this together, so please reach out with any needs you may have during this time.

Please stay healthy and safe.

Best Regards,

Goran Brelih, SIOR

Senior Vice President, Broker
Cushman & Wakefield ULC, Brokerage.
Immediate Past President, SIOR – Central Canada Chapter

Office: 416-756-5456
Mobile: 416-458-4264


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