Commercial Rent Relief Revamp Announced by Canadian Government

Mario Toneguzzi
Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He now works on his own as a freelance writer and consultant in communications and media relations/training.

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By Mario Toneguzzi

The federal government announced Friday some major new changes to support businesses in Canada that have been hit hard, and on the verge of collapse, due to the COVID-19 crisis.

Those changes include:

  • The new Canada Emergency Rent Subsidy, which would provide simple and easy-to-access rent and mortgage support until June 2021 for qualifying organizations affected by COVID-19. The rent subsidy would be provided directly to tenants, while also providing support to property owners. The new rent subsidy would support businesses, charities, and non-profits that have suffered a revenue drop, by subsidizing a percentage of their expenses, on a sliding scale, up to a maximum of 65 per cent of eligible expenses until December 19.  Organizations would be able to make claims retroactively for the period that began September 27 and ends October 24;
  • A top-up Canada Emergency Rent Subsidy of 25 per cent for organizations temporarily shut down by a mandatory public health order issued by a qualifying public health authority, in addition to the 65 per cent subsidy;
  • The extension of the Canada Emergency Wage Subsidy until June 2021, which would continue to protect jobs by helping businesses keep employees on the payroll and encouraging employers to re-hire their workers. The subsidy would remain at the current subsidy rate of up to a maximum of 65 per cent of eligible wages until December 19;
  • An expanded Canada Emergency Business Account (CEBA), which would enable businesses, and not-for-profits eligible for CEBA loans—and that continue to be seriously impacted by the pandemic—to access an interest-free loan of up to $20,000, in addition to the original CEBA loan of $40,000. Half of this additional financing would be forgivable if repaid by December 31, 2022. Additionally, the application deadline for CEBA is being extended to December 31. Further details, including the launch date and application process will be announced in the coming days. An attestation of the impact of COVID-19 on the business will be required to access the additional financing.

“Canadian businesses and workers have shown tremendous resilience in adapting to the challenges posed by the global pandemic. With the country now in the second wave of this virus, our government knows businesses and workers need continued support. We were there to help businesses when the COVID-19 pandemic began, and we will continue to give them the support they need. As we get through this difficult situation, we will keep taking action to support our businesses, protect jobs, and keep Canadians safe and healthy,” saidChrystia Freeland, Deputy Prime Minister and Minister of Finance.

The Canadian Federation of Independent Business (CFIB) said it welcomes the announcement of a new rent relief program as well as extensions and expansions of the CEBA loan program and the wage subsidy (CEWS) for small businesses impacted by COVID-19.

“We are particularly pleased the government has delivered on CFIB’s three major recommendations for rent support, ensuring the program is independent of landlord participation, continues for the months ahead and provides support to businesses with revenue losses on a sliding scale,” said Laura Jones, CFIB’s executive vice-president. “The additional 25 per cent coverage for businesses facing closures due to public health orders is also good news.” 


It said rent relief is critical to the future of many Canadian small businesses. The government’s original Canada Emergency Commercial Rent Assistance (CECRA) program was deeply flawed and left too many businesses without the help they badly needed. When it ended at the end of September, 47 per cent of small business tenants needed rent relief but were not able to access it. With only 30 per cent of firms back to normal revenues, it is more important than ever that small businesses have support to cover their fixed costs such as rent, said the CFIB, but it added it is disappointed that the government has not created a retroactive pathway to access funds for businesses that met the 70 per cent CECRA revenue loss criteria from April to September, but whose landlord chose not to apply.

“Many businesses have taken on tens of thousands of dollars in new debt to stay afloat during the last six months and they should not be left to deal with it with no help,” said Jones.

Dan Kelly, President of the CFIB, said it is pleased the government has agreed to expand the CEBA loan program by $20,000 with an additional $10,000 forgivable in the days ahead.

 “CEBA has been a critical lifeline to many small firms and offers the benefits of flexibility to be used for several purposes,” said Kelly. “But far too many very small firms have slipped through cracks in the program. Firms with business bank accounts still do not have access to the program despite repeated promises from government. And those without payroll still struggle to have access to the program due to the restrictive conditions and giant administrative delays. This needs to change.”

He said it is good news that the government will maintain the wage subsidy at a maximum of 65 per cent until December 19.

 “This will help small firms know how much help this critical program will deliver in the months ahead to allow them to determine how many staff they can afford to hire, retain or call back,” added Kelly.

“With fears of a second wave leading to further business closures, it is absolutely critical that the federal and provincial governments find ways to provide full economic supports for affected firms. These new federal measures need to be followed by extended commercial eviction protection and additional provincial supports as the Quebec government has announced in recent days. No firm should be forced into bankruptcy due to an order to close their doors from government.”


Karl Littler, Senior Vice President, Public Affairs at the Retail Council of Canada, said the new CERS program shares features with the CEWS wage subsidy program – in that they both provide for a sliding scale of support, calibrated based on revenue loss and, as with CEWS, will be continued until June 2021. 

The following elements were not mentioned in Friday’s announcement and have instead emerged in discussions between RCC and senior officials, he said:

  • “Notably, the CERS program looks like it will extend to a greater range of rental settings and to companies of greater size levels than was the case with the previous CECRA program. We understand that the former limitation to enterprises with under $20 million of annual revenue will be dropped and that a cap of $300,000 in total assistance on a go-forward basis will be imposed instead.”;
  • “RCC also understands that the subsidy will apply to locations with up to $75,000 of gross monthly rent, up from $50,000 of gross monthly rent under the CECRA program. Further, we understand (but do not have formal confirmation) that locations with gross monthly rent of over $75,000 may still be eligible for support on that first $75,000.  This is obviously a critically important issue and we will be seeking further clarification.”

David Lefebvre, Restaurants Canada Vice President, Federal and Quebec, said the organization commends the government for “committing to act on one of our top recommendations to make rent assistance accessible directly to commercial tenants.”

“We appreciate the continued efforts of Minister (Mary) Ng (Minister of Small Business, Export Promotion and International Trade)to champion the needs of small and medium sized businesses like restaurants, who are a critical load-bearing pillar of communities across the country,” said Lefebvre.

Michael Smith, co-founder of Save Small Business, said Friday’s unveiling of the Canada Emergency Rent Subsidy (CERS) will be welcome news for main street businesses owners across Canada. The federal government has finally acted on what Save Small Business and other organizations have been saying for months: small business tenants need a better, more inclusive rent relief program that they could apply to directly. An estimated three-quarters of landlords, mainly small and mid-sized players, simply didn’t apply to CECRA because of poor design even though their tenants were eligible for the program, he added.

“It’s also important that there’s now a sliding scale of support based on revenue decline given the previous eligibility threshold of 70 per cent was too high. CERS will also provide support to property owners on their mortgage payments which will be helpful to many landlords,” said Smith.

“We’re encouraged by the longer-term signalling of the rent subsidy through June 2020 and the commitment to provide additional targeted support for those businesses ordered to close. This is very important because it will help small business owners have greater confidence they’ll be able to cover their major fixed costs and get through the pandemic, even if operating at reduced capacity, with lower than usual sales, or if required to close to protect public health. 

“Unfortunately CERS doesn’t address some outstanding issues caused by CECRA: an estimated 300,000 small business owners were eligible for CECRA and another 200,000 that would have benefited from some rent support during the April to September period. These small businesses will receive no retroactive financial support under CERS. This is an equity issue given tenants whose landlords applied to CECRA would have had 75 per cent of rent subsidized for up to six months. The expansion of CEBA and the $10,000 forgivable loan increase doesn’t come close to addressing the fact that main street businesses have been forced to take on an average of $135,000 in new debt since the start of the pandemic.”

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