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Commercial Rent Relief Update: Additional Guidance for Landlords, Tenants During COVID-19

June 3, 2020

The federal government recently announced the introduction of the Canada Emergency Commercial Rent Assistance (CECRA) program, which provides rent relief for small and medium-sized businesses that have been impacted by the COVID-19 crisis. On May 25, 2020, The CECRA application portal opened, and further program details emerged. This bulletin reviews the CECRA program, taking into account the new details and updates released after the program’s initial announcement in April 2020. For further information about the program, please see our April 2020 Blakes Bulletin: Canada Emergency Commercial Rent Assistance Program.


The Canada Mortgage and Housing Corporation (CMHC) has been selected to administer the program on behalf of the federal and provincial governments.

The CECRA program will provide forgivable loans to eligible commercial property owners. The loans cover 50 per cent of the gross rent a landlord is owed for April, May and June 2020, if the landlord agrees to reduce an eligible tenant’s gross rent by at least 75 per cent. The eligible tenant will be responsible for no more than 25 per cent of the gross rent. This effectively means the property owner will not recover (and, in fact, is not permitted to recover) the last remaining 25 percent of the monthly gross rent (of course, a property owner may agree to reduce the tenant’s obligation to below 25 percent in which case the property owner will be out of pocket more than 25 per cent).

The definition of gross rent is generally consistent with what one would expect. However, it is important to note that in calculating gross rent, a tenant must report and exclude any rent insurance proceeds and other government rent relief proceeds it may have received (not any government program but, rather, those targeted at rent relief). It is up to a tenant to disclose these to the property owner. The loan will be calculated after these proceeds are deducted. The CECRA loan amount will be further reduced by any rent insurance proceeds and other government rent relief proceeds received by the property owner itself.

Assuming compliance with the program, landlords can expect that the CECRA loan will be forgiven on December 31, 2020. Funds will be transferred directly to the property owner’s bank account.

It is important to highlight that even if all eligibility criteria are satisfied, CECRA is not a mandatory program. In other words, both landlords and tenants need to cooperate with each other and jointly elect to shelter under the program in respect of the relevant premises. Needless to say, prior to opting in, both landlords and tenants will need to carefully consider whether the CECRA program adequately meets their needs or if alternative arrangements (outside of the program) would be preferable. This analysis should be conducted on a lease-by-lease basis, as the answer may differ from one tenant to another and from property to property.


Eligible tenants are entities or individuals who: (1) typically pay no more than C$50,000 per month in gross rent for the relevant property; (2) generate no more than C$20-million in consolidated gross annual revenues at the parent level; and (3) experience a decline in gross monthly revenues of at least 70 per cent from pre-COVID 19 pandemic revenues (determined by comparing gross monthly revenues in April, May and June 2020 to the corresponding months in 2019, or average revenues for January and February 2020 if the tenant is a new business and was not in operation in 2019).

Subtenants that meet the requirements established for tenants are also eligible for rent relief under the program.


Eligible property owners are owners of commercial properties with at least one tenant eligible to receive benefits under the CECRA program. However, in order to be eligible: (1) property owners cannot be owned, in whole or in part, by the federal, provincial or a municipal government (but, irrespective of government links, pension funds, post-secondary institutions and hospitals are eligible); and (2) property owners must be in a position to confirm as part of the application documents that the property owner, among other things, has not been convicted of financial fraud, is not subject to sanctions and would not otherwise put the reputation of CHMC at risk.


  • The program conditions stipulate that loan proceeds may only be used to: (1) reimburse tenants who have already paid rent over the 25 per cent threshold for April, May and June; and (2) pay property related expenses including any debt service (principal and interest) payments, operation, maintenance and repair obligations (such as costs of common area maintenance, property taxes, insurance and utilities).
  • It is important that a property owner confirms that participation in the CECRA program does not violate any agreements to which it is party to and that consents have been obtained from any applicable third parties, including any lenders.
  • Only one application is permitted for each property, so it is important that an owner ensure that its application includes all eligible tenants, as they cannot be included later.
  • In order to apply for the program, the property owner will need to submit a property owner’s attestation and a tenant/subtenant attestation. These forms are included in the application portal. A rent relief agreement is also required evidencing that the lease has been amended to reduce the rent payable. The use of CHMC’s sample form of rent relief agreement is not mandatory but is recommended in order to avoid delay or other issues associated with the processing of applications. CHMC has indicated that the other program documents should not be amended or otherwise altered.
  • In addition to the tenant/subtenant attestation and rent relief agreement, there is other information that property owners will need to obtain from their tenants in order to complete the application, such as the tenant’s business number, employee count and consolidated gross revenue figure for the tenant’s last fiscal year-end. Property owners also need to supply their most recent bank account statement and property tax bill.
  • CECRA applications will be accepted until August 31, 2020.


It is unclear whether a separate program will be established for tenants who are too large to be eligible under the CECRA program. There had been some discussion suggesting that could be the case, but no details have been provided.

For further information, please contact a member of our Commercial Real Estate group.

Please visit our COVID-19 Resource Centre to learn more about how COVID-19 may impact your business.