Ottawa unveils new commercial rent relief program - YAHOO FINANCE
OCTOBER 10, 2020
The federal government unveiled its new commercial rent relief program on Friday, one that will bypass landlords and provide direct support for small businesses.
The Canada Emergency Rent Subsidy, announced by Prime Minister Justin Trudeau on Friday, will be available for small businesses until June 2021.
Trudeau said the government’s goal with the new program is “to support Canadian employers and help businesses bridge to better times.”
“That’s why we are updating support for commercial rent and mortgage payments, with the new Canada Emergency Rent Subsidy,” he said. “This will provide support to businesses directly, not through landlords, for businesses who have seen a revenue drop.”
The program will fund up to 65 per cent of rent or mortgage interest payments for businesses that have seen revenue decline by at least 70 per cent. Companies that have had revenue fall by less than 70 per cent will receive “a gradually decreasing level of support” in line with revenue, Deputy Prime Minister Chrystia Freeland said Friday. Businesses that are forced to temporarily shutdown by mandatory orders will be able to qualify for funding that covers up to 90 per cent of rent or mortgage interest payments.
Freeland said one of the goals of the program is to make obtaining support “as straightforward and simple as possible.”
The government’s previous program, called the Canada Emergency Commercial Rent Assistance (CECRA), expired at the end of September. The program was widely criticized by small businesses for its strict requirements, as well as its reliance on landlord participation.
Trudeau acknowledged on Friday that some tenants were frustrated with the program and had landlords who opted not to participate in the program.
The Canadian Federation of Independent Business (CFIB), one of the most outspoken critics of the government’s original rent relief program, said the new initiative was welcome news for small businesses.
“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 provides support to businesses with revenue losses on a sliding scale,” CFIB executive vice president Laura Jones said in a statement.
“The additional 25 per cent coverage for businesses facing closures due to public health orders is also good news.”
The government also announced it will expand the Canada Emergency Business Account (CEBA), a popular program that provides $40,000 loans for companies struggling due to the coronavirus pandemic, doubling the amount that is forgivable, to $20,000, if certain conditions are met. It will also continue covering 65 per cent of wages through its subsidy program until Dec. 19.
Ontario announced it will impose new restrictions in Toronto, Peel Region and Ottawa in an attempt to slow the spread of COVID-19. Premier Doug Ford said the government will provide $300 million in funding to help support businesses that are forced to shutdown." data-reactid="28" style="margin-bottom: 1em; color: rgb(0, 0, 0); font-family: "Yahoo Sans Finance", "Helvetica Neue", Arial, sans-serif; font-size: 16px; background-color: rgb(255, 255, 255);">The new announcements comes in the midst of a second wave of the coronavirus pandemic that has prompted provincial governments in Quebec and Ontario to impose targeted lockdowns in specific regions. On Friday, Ontario announced it will impose new restrictions in Toronto, Peel Region and Ottawa in an attempt to slow the spread of COVID-19. Premier Doug Ford said the government will provide $300 million in funding to help support businesses that are forced to shutdown.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj." data-reactid="29" style="margin-bottom: 1em; color: rgb(0, 0, 0); font-family: "Yahoo Sans Finance", "Helvetica Neue", Arial, sans-serif; font-size: 16px; background-color: rgb(255, 255, 255);">Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.