Trudeau Announces 75% Rent Relief for Small and Medium-Sized Businesses
Prime Minister Justin Trudeau unveiled the details of the federal government’s long-awaited rent relief that will help Canadian businesses that can’t afford to pay their landlords at a time when their operations are shut down due to the COVID-19 pandemic.
Trudeau said the government has reached an agreement with all provinces and territories to implement the Canada Emergency Commercial Rent Assistance (CECRA) to lower rents by 75% for small and medium-sized businesses that have been impacted by COVID-19.
This will cover April, May, and June rents.
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“More help is on the way for our small businesses across the country. They are the backbone of our families, our communities, and our economy,” said Prime Minister Trudeau. “That is why we will continue working closely with provinces and territories to make sure that Canadian businesses have the support they need during these difficult times.”
The government will cover 50% of the commercial rent reduction in the form of a “forgivable” loan, and the property owner will be responsible for the rest.
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 term 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.
According to the federal government, impacted business tenants are businesses paying less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70% drop in pre-COVID-19 revenues. This support will also be available to non-profit and charitable organizations.
Since rent falls under a province’s jurisdiction, Premier Doug Ford said the Ontario government will commit $241 million to businesses as part of the new $900 million Ontario-Canada Emergency Commercial Rent Assistance Program.
“Businesses are paying a heavy price during COVID-19,” said Ford during his briefing on Friday, adding that this funding will help to ensure small businesses are ready to reopen their doors when the emergency measures are lifted.
“I want to thank the federal government for partnering with us to help our small businesses and commercial landlords. I look forward to working together to also provide much-needed support to residential renters ahead of May 1,” said Ford.
For larger businesses that need rent support, Trudeau said he will be announcing further information soon.
The prime minister also added he will be meeting with provincial leaders regarding the gradual reopening of the economy on Friday afternoon.