Ontario-Canada Emergency Commercial Rent Assistance Program
NOTE: This information is no longer current. Please visit Ontario.ca/RentAssistance.
The Ontario Government is committing $241 million to partner with the federal government and deliver more than $900 million in urgent relief to small businesses and their landlords through a new program, the Ontario-Canada Emergency Commercial Rent Assistance Program (OCECRA).
How does the program work?
The program has been developed to share the cost between small business tenants and landlords. Small business tenants and landlords would each be asked to pay 25 per cent of the tenant's total rent (i.e., gross monthly rent payable under a lease agreement) and the provincial and federal government would cost share the remaining 50 per cent.
For example, a monthly rent for a small business is $10,000. In this example, the landlord forgoes $2,500 (25 per cent of rent). The small business would be responsible for paying $2,500 (25 per cent of rent). The program would cover the remaining $5,000.
The loan would be contingent on the signing of a rent forgiveness agreement between impacted tenants and landlords, which reduces the rental costs of small business tenants for April to June 2020 by at least 75 per cent. This would also include a moratorium on evictions for three months.
How long would a commercial property owner have to apply for OCECRA?
The OCECRA would be administered by the Canada Mortgage and Housing Corporation (CMHC) and would be available until August 31, 2020. Support would be retroactive to April 1, covering April, May and June 2020.
The federal government designed the program and program details are being finalized by the federal government. To receive more information, visit CMHC's website and sign-up to receive additional details including when the application process opens.
Are there any eligibility requirements for commercial property owners?
The OCECRA would apply to commercial properties with small business tenants.
To qualify for the program, the property owner must meet the following requirements:
- Own property that generates rental revenue from commercial real property located in Canada.
- Be the property owner of the commercial real property where the impacted small business tenants are located.
- Have a mortgage loan secured by the commercial real property, occupied by one or more small business tenants.
- Have entered or will enter into a rent reduction agreement for the period of April, May, and June 2020, that will reduce impacted small business tenant's rent by at least 75%.
- The rent reduction agreement with impacted tenants includes a moratorium on eviction for the period of April, May and June 2020.
- Declared rental income on their tax return (personal or corporate) for tax years 2018 and/or 2019.
For those property owners who do not have a mortgage, an alternative mechanism will be implemented. Further information will be outlined by CMHC in the near future.
What are the eligibility requirements for small businesses?
OCECRA for small businesses is applicable to commercial property owners with:
- Eligible small business tenants.
- Eligible small business subtenants.
- Residential components and multi-unit residential properties with commercial tenants (i.e. mixed usage).
Impacted small business tenants are businesses, including non-profit and charitable organizations who:
- Pay monthly rent not exceeding $50,000 in gross rent per location (as defined by a valid and enforceable lease agreement);
- Generate no more than $20 million in gross annual revenues, calculated on a consolidated basis (at the ultimate parent level); and
- Have temporarily ceased operations (i.e., generating no revenues), or who are experiencing a 70 per cent drop in pre-COVID-19 revenues (determined by comparing revenues in April, May or June of 2020 to the same month of 2019 or alternatively compared to average revenues earned in January and February 2020).
Are any small businesses excluded from the OCECRA program?
The following exclusions would apply:
- Entities owned by individuals holding political office;
- Entities that promote violence, incite hatred or discriminate on the basis of race, national or ethnic origin, color, religion, sex, age or mental or physical disability; and,
- An entity in the Lenders special accounts or Restructuring Group prior to March 1, 2020.
- Canada Emergency Commercial Rent Assistance for Small Businesses
- See how your organization can help fight COVID-19.
- Information and advice to help your business navigate the economy during COVID-19.
- Learn more about Ontario’s Action Plan: Responding to COVID-19.
- Visit Ontario’s website to learn more about how the province continues to protect Ontarians from COVID-19.