OUT OF THE CROSSFIRE
New Rent Relief Program to Channel Funds Directly to Tenants By Barbara Carss
CANADA EMERGENCY Commercial Rent Assistance (CECRA) has now given way to a new, somewhat inaccurately named version of the federal-provincial/ territorial relief program to help businesses and not-for-profit organizations with strained financial resources due to COVID-19. As Finance Minister Chrystia Freeland announced earlier this month, the new Canada Emergency Rent Subsidy will provide support for fixed property expenses that could include commercial mortgage payments for qualified recipients who own their premises. The threshold for qualifying has also been adjusted. CECRA recipients had to prove a 70% drop in revenue from prepandemic levels, while the new program will apply a sliding scale to prorate the subsidy to recipients’ losses and needs. Perhaps most pertinently for both CECRA’s critics and commercial landlords somewhat caught in the 6 October 2020 | Canadian Property Management
crossfire, the new program will channel funds directly to tenants or mortgagees. As Freeland outlined, they can attain subsidies for up to 65% of their fixed property expenses. Businesses faced wit h compulsory shutdowns for COVID-19related public health reasons will be eligible for a further 25% top-up, taking the subsidy to as much as 95%. “A tenant-side rent bank or rent subsidy is what REALPAC has been asking for from the outset. We are also encouraged that mortgage support is also available in this version of the program,” says Michael Brooks, Chief Executive Officer of REALPAC, which counts many of Canada’s most prominent commercial landlords among its membership. “We will look closely at details, such as how the rent subsidy part actually finds its way to the landlord, but, all in all, it’s very encouraging,” The Canadian Federation of Independent Business (CFIB) likewise commends the
new program, although it continues to advocate for qualifying candidates who did not receive CECRA support because their landlords chose not to participate in the program. In such cases, CFIB argues overlooked tenants should be allowed to retroactively claim the funding they theoretically could have received during the six months CECRA was available. The new program will be retroactive for October in recognition of the gap from CECRA’s final expiry date on September 30. Looking forward, current funding parameters are promised until December 19, 2020, with extensions “to be adapted and targeted as needed” available until June 2021. “We are particularly pleased the government has delivered on CFIB’s three major recommendations for rent support: ensuring the program is independent of landlord participation; continues for the months ahead; and
