Applications for the Canada Emergency Commercial Rent Assistance (CECRA) haven't opened yet, but it's good to prepared ahead of time — so here's what you need to know.

What is it?

CECRA provides relief to small businesses in Canada that are experiencing financial hardship due to COVID-19.

The program offers forgivable loans to eligible commercial property owners (i.e. landlords) to cover 50 per cent of three monthly rent payments that are payable by eligible small business tenants during April, May and June 2020.

The loans will be forgiven if the property owner agrees to reduce the small business tenants' rent by at least 75 per cent under a rent forgiveness agreement.

The CECRA will be delivered jointly by the Federal Government with each of the Provinces and Territories, and the forgivable loans will be administered by Canada Mortgage and Housing Corporation (CMHC).

#Smallbusinesses who have had to close or have lost significant revenue due to #COVID19 are getting #RentRelief soon. More help is on the way in the form a forgivable loan to eligible commercial property owners.
More info: https://t.co/dFHEUt9LRr pic.twitter.com/Iw0TOrDTzu

— CMHC (@CMHC_ca) May 1, 2020

Am I eligible?

To qualify for the program, property owners must:

• own property in Canada that generates rental revenue from commercial real property
• own commercial real property with impacted small business tenants (see below)
• have entered or will enter into a rent reduction agreement for the period of April, May and June 2020 that will reduce impacted small business tenants' rent by at least 75 per cent
  • your rent reduction agreement with impacted tenants must include a moratorium on eviction for the period of April, May and June 2020
• have declared rental income on your tax return (personal or corporate) for tax years 2018 and/or 2019
• have a mortgage loan secured by the commercial real property, occupied by one or more small business tenants*

*if you don't have a mortgage, an alternative mechanism will be implemented in the coming weeks

What is an impacted small business tenant?

Impacted small business tenants are businesses, including non-profit and charitable organizations, who:

• pay a maximum of $50,000 in monthly gross rent per location (as defined by a valid and enforceable lease agreement)
• generate a maximum of $20 million in gross annual revenues, calculated on a consolidated basis (at the ultimate parent level)
• have temporarily ceased operations (i.e. generating no revenues), or have experienced at least a 70 per cent decline in pre-COVID-19 revenues**

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

How do I apply?

According to the CMHC, program details are still being finalized — so you can't apply for the program yet.

Property owners can also still apply retroactively for assistance once the three-month period has ended if they can prove eligibility during April, May and/or June.

The deadline for the application will be August 31, 2020.

I'm a small business but my landlord isn't applying for CECRA — what do I do?

An early survey found that only one in five small businesses expect their landlord to sign on to the CECRA program, so it's likely that quite a few Canadians will have this question.

Unfortunately, there's not much you can do; landlords are 100 per cent responsible for deciding whether your business will be able to participate in the program.

However, you may still qualify for the Canada Emergency Business Account (CEBA), which provides small businesses with up to $40,000 in government-backed loans.