COVID-19 Financial Relief – Part 5: The CECRA


AF Accounting is helping individuals and small businesses learn more about the COVID-19 benefit programs available from the Federal Government. Part 1 looked at the Canada Emergency Response Benefit (CERB). Part 2 detailed the Canada Emergency Business Account (CEBA). Part 3 provided an overview of the extended tax deadlines. Part 4 showed why the CERB is taxable and how to calculate what you may owe. This installment takes a look at the Canada Emergency Commercial Rent Assistance (CECRA) benefit.

What is the CECRA?

The CECRA benefit is designed around commercial rent relief. It lowers rent by 75 per cent for businesses whose operations have been affected by the pandemic. The program provides forgivable loans to landlords to cover 50 per cent of the rent for April, May and June. Non-profit organizations and charities are included in this program.

It gets complicated

In order for a small business to receive rent relief, the landlord must first quality for the program and reduce the small business’ rent by 75 per cent or more and not evict the tenant as part of the overall agreement.

The small business qualifies if:

  • The landlord meets the criteria and agrees to the terms.
  • The small business was paying $50,000/month or less in rent and has either closed temporarily due to the pandemic or saw a 70 per cent or more drop in revenue due to the pandemic.
  • The tenant agrees to pay up to 25 per cent of the rent.

As you can see, the small business cannot simply apply for this program. The CECRA is highly dependent on the landlord’s actions.

Who administers the CECRA?

The CECRA is administered by the Canada Mortgage and Housing Corporation on behalf of the Government of Canada. While it covers April-June 2020, it is a benefit that can be applied for retroactively. If the landlord has applied for assistance and collected rent while the application was being processed, the landlord must return the rent or provide a credit to the tenant if the application is approved.

Is this a grant or a loan?

This is a loan. However, it is a forgivable loan. That means it does not have to be paid back if the landlord is completely compliant with all aspects the program. As the program details actions that the landlord must continue to take after the benefit period ends, it is important that the landlord has a very clear understanding of their obligations to avoid having to pay back the loan.

What is the CECRA deadline?

The deadline to apply for the CECRA is August 31, 2020.

How AF Accounting Helps

The CECRA is one of the more complicated benefits and it highly dependent on already having a good landlord/tenant relationship in place. AF Accounting can help explain the many nuances of this program and show both landlords and tenants other COVID-19 benefit programs they are eligible for if the CECRA is not a viable option. Call or email us to learn more this, and about the accounting and bookkeeping services we offer.

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