On April 16, 2020, the Federal government announced the Canada Emergency Commercial Rent Assistance (CECRA) program to assist small businesses with their rent payments during the COVID-19 crisis.
The CECRA program will provide loans and/or forgiveable loans to commercial property owners who will be expected to pass on the benefit to small businesses by lowering or forgoing rent for April (retroactively), May and June 2020. Further details of the program are expected to be released soon and the program will be administered by the provincial and territorial governments.
Although the Ontario Superior Court of Justice had issued an Order on March 19, 2020 suspending the eviction of residents from their homes (unless ordered otherwise under an urgent motion), there was no similar protection against evictions for commercial tenants which included many small business owners.
Commercial rent payments are typically the second largest operating expense for most small businesses after payroll expenses. Very few provincial and territorial governments have implemented programs to provide commercial rent relief to small businesses. On March 27, 2020, Nova Scotia announced its Commercial Rent Deferral Support Program to provide government-backed guarantees on Rent Deferral Agreements for the months of April, May and June 2020. On April 9, 2020, Saskatchewan announced its Small Business Emergency Payment Program to provide grants to small businesses of 15% of monthly sales revenue, up to a maximum of $5,000, to pay operating expenses such as rent. Ontario has yet to announce or implement any programs to assist small businesses in respect to payment or deferral of rent.
The CECRA program could not have come at a better time for Ontario small businesses because tomorrow is the first day that some commercial landlords in Ontario can evict and lock out tenants for non-payment of rent due on April 1, 2020. Under section 18(1) of the Commercial Tenancies Act, R.S.O. 1990, c. L7, the landlord may re-enter and take possession of the leased premises, without notice, if the rent remains unpaid for a period of 15 days (provided the lease agreement does not address this issue).
The Federal government also announced that it was expanding the eligibility for the Canada Emergency Business Account (CEBA) program which provides small businesses with interest free loans of up to $40,000 to pay operating expenses during the COVID-19 pandemic. The eligibility requirements changed from a total 2019 payroll between $50,000 and $1 million to a total 2019 payroll between $20,000 and $1.5 million.
Our lawyers have expertise and experience in commercial lease matters and can assist you in resolving your legal issues in a timely and cost-effective manner. Please contact us for an initial consultation through our Request Consultation Form, email to info@gilbertsondavis.com or by telephone (416) 979-2020.
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