75% rent relief for small businesses – Today at Rideau Cottage, Prime Minister Justin Trudeau announced the details of the Canada Emergency Rent Assistance program that was hinted at on Thursday, April 16. The new program will provide small businesses that pay less than $50,000 month or less in rent with a 75% rent reduction.
75% rent relief for small businesses
Under the CERA program, Commercial property owners will receive forgiveable loans covering 50% of the rent in exchange for a rent reduction of 75% for the months of April (retroactive), May, and June.
What this means for small businesses, charities and non-profits is that they are only required to pay 25% of their rent during the COVID-19 crisis. The federal government will cover 50% of the rent, and the property owners will cover 25% of the rent.
To qualify, the businesses must be paying less than $50,000 per month in rent and to have temporarily ceased operations, or have experienced at least a 70-per-cent drop in pre-COVID-19 revenues.
To receive the loan, the mortgaged property owner must be on board by agreeing to reduce the eligible small business tenants’ rent by at least 75 per cent for the three corresponding months under a rent forgiveness agreement, which will also include a pledge not to evict the tenant while the agreement is in place.
To launch this program the federal government needed the provinces and territories on board, and they have agreed to share total costs and ensure implementation of the program. They will cover up to 25 per cent of costs, subject to terms of agreements with Ottawa.
The CERA will be administered by the federal Canada Mortgage and Housing Corp.
The new program to help small businesses will be fully operational by mid-May, said Canada’s PM, which means commercial property owners will be lowering the rents of their small business tenant’s payable retroactively for the months of April and May, and then active for the month of June.
story by Terry Lankstead – totimes.ca