The CMHC has posted updated information on the CECRA Program on their web-site. For full details (including FAQ’s for both landlords and tenants), click here.

Please speak to your DMCL advisor about your circumstances and to understand the tax impact on you or your organization.

Of particular note:

• Properties with or without a mortgage are eligible under CECRA for small businesses. Previously, the property had to be mortgaged to qualify for the program.
• The application portal is opening on May 25, 2020.
• The deadline to apply is August 31, 2020.
• Landlords must apply for all 3 months at the same time and all impacted tenants must be included on a single application.
• Landlords who declared no rental income in 2018 or 2019 may be eligible for the program. Generally, the landlord has to have declared rental income in 2018 and 2019 to qualify, however where the property is newly constructed or recently purchased, the landlord may be still eligible for CECRA for small business, provided the other program requirements are met. This includes having entered into a lease with the eligible tenant on or before April 1, 2020.
• Landlords who do not deal at arm’s length with their tenants may be eligible for the program. There must be a valid and enforceable lease agreement in place and the rent under the lease is at market rates.

Who is Eligible for the CECRA Program?

To qualify for CECRA for small businesses, the commercial property owner must:

• Own commercial real property* which is occupied by one or more impacted small business tenants
• Enter (or have already entered) into a legally binding rent reduction agreement for the period of April, May and June 2020, reducing an impacted small business tenant’s rent by at least 75%
• Ensure the rent reduction agreement with each impacted tenant includes:

1. A moratorium on eviction for the period during which the property owner agrees to apply the loan proceeds, and
2. A declaration of rental revenue included in the attestation

The commercial property owner is not and is not controlled by an individual holding federal or provincial political office. CECRA for small businesses doesn’t apply to any properties owned, in whole or in part, by the federal, provincial, or municipal governments. These are the exceptions:

• If the property owner is a First Nation or an Indigenous organization or government which is the lessee of the property pursuant to a ground lease or similar long-term lease from such government to administer the Property
• If the property owner is the lessee of the property pursuant to a ground lease or similar long-term lease from such government to operate the property (such as a lease to an airport)
• If the property owner is a crown corporation with limited appropriations designated as eligible for the CECRA Program by CMHC
• If, for greater certainty, the property owner is a post-secondary institution, hospital, or pension fund

NOTE: Small businesses that opened on or after March 1, 2020 are not eligible.

* We define commercial Real Property as a commercial property with small business tenants. Commercial properties with a residential component and multi-unit residential mixed-use properties would equally be eligible with respect to their small business tenants.

NOTE: Properties with or without a mortgage are eligible under CECRA for small businesses.

What is an impacted small business tenant?

Impacted small business tenants are businesses — including non-profit and charitable organizations — that:

• Pay no more than $50,000 in monthly 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)
• Have experienced at least a 70% decline in pre-COVID-19 revenues **

NOTE: Eligible small business tenants who are in sub-tenancy arrangements are also eligible, if these lease structures meet program criteria.

** Small businesses can compare revenues in April, May and June of 2020 to that of the same period in 2019 to measure revenue losses. They can also use an average of their revenues earned in January and February of 2020.

Applying for the CECRA

The application portal is opening on May 25, 2020.
We encourage all eligible commercial property owners to participate in this program. As part of your application, you must provide rent reduction agreement(s) and landlord and tenant attestations. To help you prepare, we’ve outlined what information will be required and sample documents in the ‘what you need to apply’ section.

Taking a staggered approach

We expect a large volume of applications. To manage this volume and allow us to serve you better, we will be asking property owners to register on the following days once the application process has opened.
NOTE: Once registered, the portal will be available 24/7 for applicants to input data and upload documents.

Who should register?

Monday:
Property owners who are located in Atlantic Canada, BC, Alberta and Quebec, with up to 10 tenants who are eligible for the program
Tuesday:
Property owners who are located in Manitoba, Saskatchewan, Ontario and the Territories, with up to 10 tenants who are eligible for the program
Wednesday: 
All other property owners in Manitoba, Saskatchewan, Ontario and the Territories
Thursday:
All other property owners in Atlantic Canada, BC, Alberta and Quebec
Friday: All

CMHC has engaged MCAP and First Canadian Title (FCT) to deliver CECRA for small businesses. You may be contacted by either MCAP or FCT throughout the applicant validation and funding processes.

What you Need to Apply

Property owners will need to provide information in support of their application, sign an attestation and agree to the terms and conditions of the loan agreement in order to be eligible for the program.

Attestations
• Tenant or Sub-tenant’s Attestation (sample PDF):
Property owners must have each of their eligible commercial small business tenants and/or subtenants sign an attestation. The Tenants are responsible for attesting to their eligibility with the program requirements.

• Property Owner’s Attestation (sample PDF):
Property owners must sign an attestation confirming the information relating to the property owner and the property provided in the application is correct and attest to their eligibility with the program requirements.

Agreements
• Rent Reduction Agreement (sample PDF):
Property owners must enter into a legally binding rent reduction agreement with each impacted tenant to confirm the rent reduction in accordance with the program terms and conditions. This agreement is conditional upon final approval of the application for CECRA for small businesses.

• Forgivable Loan Agreement (sample PDF):
Property owners must agree to the terms and conditions in the application and outlined in the forgivable loan agreement.

You’ll also need to provide the following information:

Property owner information
• Property information includes: property address, property type, property tax statement, latest rent roll for each property and the number of commercial units.

• Applicant information includes: banking information (including bank statement), property owner contact information, co-ownership information and contact details for co-owners.

Tenant information
• Tenant information includes: tenant contact information, registered business name, lease area and the monthly gross rent for the period of April, May and June 2020.