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  • Peter Wiesner

Canada Emergency Commercial Rent Relief

The Canada Mortgage and Housing Corporation (“CMHC”), the Crown Corporation responsible for administering the Canada Emergency Commercial Rent Assistance Program (“CECRA”) in partnership with the provincial and territorial governments, has released a publication that provides clarification on the details of CECRA. While CMHC has clarified certain aspects of CECRA, full details of the program (including how funds will be disbursed and how landlords can apply) are still being finalized.

Some of the main points of clarification include the following:

Rent Forgiveness

While previous government announcements have either been less than clear on the calculation of “Rent” or have expressly stated that landlords would not be entitled to include any profit component in the calculation of rent (meaning landlords would only be able to recover 75% of fixed costs as rent), the recent announcement from CMHC suggests that the calculation of rent for the purposes of CECRA means gross rent (being what is normally understood to include basic/minimum rent/net rent and additional rent). This change would not only simplify the calculation of rent for the purposes of CECRA, but will likely encourage many more landlords to opt into the program.

In addition, landlords who have collected any rent from their tenants in respect of the months of April, May or June 2020 in excess of the 25% of rent payable under CECRA would be required to refund the excess rent to the tenant, unless the landlord and tenant agree to apply the difference to the tenant’s rent account and credit such amounts to future rent owing as they come due.

The requirement that the landlord and tenant enter into a rent forgiveness agreement was confirmed by CMHC. However, CMHC has made clear that, in order to be eligible for CECRA, the landlord must not seek to recover the abated rent once the program is over.

While the details provided to date confirm that a rent forgiveness agreement must be signed and include certain provisions in order for the landlord to qualify for CECRA, it is unclear whether a template form of rent forgiveness agreement will be provided to landlords. A government-approved standard form of rent forgiveness agreement would streamline the approval process and not leave landlords guessing whether their form of rent forgiveness agreement complies with governmental requirements. If a standard form of agreement is not provided, landlords will need to take care in drafting their rent forgiveness agreements so as to ensure that all requirements are met, failing which they may inadvertently find themselves as being ineligible to have the loan granted under CECRA forgiven.


CMHC’s recent announcement has clarified certain of the eligibility requirements of CECRA. In particular, CMHC has confirmed that landlords must have a mortgage loan secured by a commercial property occupied by one or more small business tenants in order to be eligible for the loan. In addition, the landlord must have declared rental income on its tax return for tax years 2018 and/or 2019. This latter requirement could be interpreted to mean that landlords of properties that were acquired in 2020 may not be eligible for CECRA, though further clarification on this point is required. Nevertheless, CMHC has confirmed that alternative mechanisms will be implemented for those property owners without a mortgage on their property (though it is unclear whether owners of properties acquired in 2020 will also have alternative options available to them in the event that they are ineligible for the program).

Definition of “Impacted Small Business Tenant”

The definition of an “impacted small business tenant” has also been clarified. To qualify as an impacted small business tenant, the tenant must:

  1. pay no more than $50,000 in monthly gross rent per location;

  2. generate no more than $20 million in gross annual revenues, calculated on a consolidated basis (at the ultimate parent level); and

  3. have temporarily ceased operations or experienced at least a 70% decline in pre-COVID-19 revenues.

Clearly, CECRA is geared towards providing relief in relation to smaller businesses and not large retail tenants.

April 24, 2020

Update on government announcements:

Deadline for GST/HST returns:  In a new Q&A page on GST/HST, the CRA made the following statement on the deadlines for GST/HST returns: “The deadline for businesses to file their returns is unchanged. Those who are able to, should continue to file their GST/HST returns on time, reporting their net tax for the reporting period to help facilitate tax compliance and administration. However, recognizing the difficult circumstances faced by businesses, the CRA won’t impose penalties where a return is filed late provided that it is filed by June 30th.”

Businesses: WSIB Financiial Relief Package

The financial relief package allows businesses to defer premium reporting and payments until August 31, 2020. Businesses who report and pay monthly, quarterly or annually based on their insurable earnings are eligible for this deferral. Each customer reports and pays on the previous full month or quarter, for example March 31 reporting and payment obligation covers the period of February 1-29. The following payments are eligible for deferral:

  • Monthly: March 31, April 30, May 31, June 30, July 31, Aug 31

  • Quarterly: April 30, July 31

  • Annual: April 30

The relief package also applies to Schedule 2 organizations – publicly funded organizations (municipalities, hospitals, school boards), and other businesses who are involved in federally regulated industries. All payment obligations (weekly and monthly) for Schedule 2 businesses will be deferred until August, 31, 2020.

No interest will accrue on outstanding premium payments for Schedule 1 businesses and no penalties will be charged during this six-month deferral period. Schedule 2 account balances will not accrue debit interest as part of the financial relief package.   

Also, we have determined that costs associated with COVID-19 related claims will not be allocated at an employer or class level. Instead, they will be allocated on a Schedule-wide basis and there will be no change in premium rates for 2020. 

April 24, 2020

Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. This program will lower rent by 75 per cent for small businesses that have been affected by COVID-19.

The government is also providing further details on the program:

  • The program will provide forgivable loans to qualifying commercial property owners to cover 50 per cent of three monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June. 

  • The loans will be forgiven if the mortgaged property owner agrees 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 include a term not to evict the tenant while the agreement is in place. The small business tenant would cover the remainder, up to 25 per cent of the rent.

  • Impacted small business tenants are businesses paying less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70 per cent drop in pre-COVID-19 revenues. This support will also be available to non-profit and charitable organizations.

Under a rent forgiveness agreement, which includes a moratorium on eviction, the mortgaged commercial property owner would reduce the small business tenant’s monthly rent by at least 75 per cent. The tenant would be responsible for covering 25 per cent, the property owner 25 per cent, while the federal government and provinces would share the remaining 50 per cent. The forgivable loans would be disbursed directly to the mortgage lender.

April 22, 2020

Student Covid19 Tax Measures

Canada Emergency Student Benefit

The benefit will see eligible postsecondary students receive $1,250 a month from May to August, and if you are taking care of someone else or have a disability, that amount increases to $1,750 monthly.

College and university students currently in school, planning to start in September, or who graduated in December 2019 are eligible. The federal government still needs to pass legislation in order to activate the CESB program.

Working students that are earning less than $1,000 per month are also able to apply for the benefit if their hours have been cut due to COVID-19.

These new measures come after some students had voiced concerns that they were not eligible for the $2,000 per month Canada Emergency Response Benefit (CERB), which requires applicants to have earned at least $5,000 in the past year, which isn’t the case for all completing postsecondary studies.

April 21, 2020

The federal government is setting up a $350 million Emergency Community Support Fund to help charities and non-profits keep up their work. Details to follow.

April 18, 2020 

What is the Canada Emergency Response Benefit

If you have stopped working because of COVID-19, the Canada Emergency Response Benefit (CERB) may provide you with temporary income support. The CERB provides $500 a week for up to 16 weeks.

Who is eligible from CRA

The Benefit is available to workers:

  • Residing in Canada, who are at least 15 years old;

  • Who have stopped working because of reasons related to COVID-19 or are eligible for Employment Insurance regular or sickness benefits or have exhausted their Employment Insurance regular benefits between December 29, 2019 and October 3, 2020;

  • Who had employment and/or self-employment income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and,

  • Who have not quit their job voluntarily.

When submitting your first claim, you cannot have earned more than $1,000 in employment and/or self-employment income for 14 or more consecutive days within the four-week benefit period of your claim.

When submitting subsequent claims, you cannot have earned more than $1,000 in employment and/or self-employment income for the entire four-week benefit period of your new claim.

The Ontario government has announced the following programs:

April 17, 2020

$40,000 Loan Amount -More Regulations on Use of Funds

The funds from this loan shall only be used by the Borrower to pay non-deferrable operating expenses of the Borrower including, without limitation, payroll, rent, utilities, insurance, property tax and regularly scheduled debt service, and may not be used to fund any payments or expenses such as prepayment/refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation.

Multiple Businesses

Application can be made for each Business that meets the CEBA Program qualification criteria once, through the business’ primary financial institution.

Who doesn’t qualify?​​

  • Businesses that were behind on their payments for an existing loan on March 1 of this year are not eligible for CEBA loans.​

  • Sole proprietors who use a personal chequing account while operating in the name of a business are not eligible.

  • ​Businesses owned by a government body or an elected official cannot receive a CEBA loan.​

Multiple Businesses

Application can be made for each Business that meets the CEBA Program qualification criteria once, through the business’ primary financial institution.

April 16, 2020

Loan Criteria Change for Salaries.

Now, companies who paid between $20,000 and $1,500,000 in total payroll in 2019 will be eligible to receive a loan.

Also, to help more Canadians benefit from the CERB, the government will be changing the eligibility rules to:

  • Allow people to earn up to $1,000 per month while collecting the CERB.

  • Extend the CERB to seasonal workers who have exhausted their EI regular benefits and are unable to undertake their usual seasonal work as a result of the COVID-19 outbreak.

  • Extend the CERB to workers who recently exhausted their EI regular benefits and are unable to find a job or return to work because of COVID-19.

Application Deadline: You must apply as no worker is permitted to file an application after December 2, 2020. 

April 15, 2020

More Canadians are now eligible for emergency benefit, PM Trudeau says

Part-time and seasonal workers are now eligible to claim the $2,000 a month Canada Emergency Response Benefit, and new money is coming for front-line workers, Prime Minister Justin Trudeau has announced.

April 11, 2020

The CEWS provides eligible employers with a wage subsidy of up to 75% of weekly wages paid to an eligible employer, to a maximum of $847 per week, for the period from March 15 to June 6, 2020.

Any taxable business in operation in Canada may qualify for the CEWS, including public corporations and foreign-controlled corporations. To qualify, the business must have realized a year-over-year revenue decline of 15% for the month of March 2020 or 30% for the month of April or May 2020. Businesses may, instead, elect to use their average revenues for January and February 2020 as the baseline (businesses that did not operate a year ago, such as a startup or new business, need not elect). The CEWS is broken up into three four-week periods beginning March 15. A business that meets the requirements for a particular four-week period is automatically deemed to meet the requirements for the next four-week period.

Revenue is generally determined on an accrual basis for each period measured, but the legislation contemplates that the cash method may be used if that would help a business qualify. Corporate groups can choose whether to apply the combined group's results for each affiliate within the group, or alternatively each member of the group can determine its revenue results on a standalone basis. While revenue is generally measured using normal accounting practices, extraordinary items for each reference period are to be backed out. Notably, revenue for purposes of the CEWS excludes revenue from non-arm's length sources in the first instance, but the legislation contemplates how to attribute any revenue reduction realized by the non-arm's length payer to the recipient of the revenue, which should be welcome news for corporate groups that house the majority of their employees within an internal services company.

Wages paid to any employee, whether a pre-existing employee or a new hire, may qualify for the CEWS with the exception of employees who do not deal at arm's length with the employer. Non-arm's length employees must have been employed prior to March 15, 2020.

The amount of the CEWS depends on whether the employee was employed before March 15, 2020 or is a new hire. The CEWS for a pre-existing employee is the lesser of 75% of the average weekly remuneration paid from January 1 to March 15, 2020 and $847 per week. The CEWS for a new hire is 75% of remuneration paid, up to a maximum of $847 per week.

25% penalty plus a requirement to repay any CEWS received applies where a business takes artificial steps to qualify for the CEWS (or fails to take steps to mitigate) if it is reasonable to conclude that one of the main purposes for doing so was to cause qualification.

Businesses apply for the CEWS via CRA's My Business Account portal or a web-based application (both in progress) and the CEWS will be delivered by cheque or direct deposit. The submission process starts Monday April 27th, 2020.

April 8, 2020

The Ministry of Education is providing financial support to parents to assist with the costs of educational resources during school and child care closures as a result of Ontario’s declared emergency to stop the spread of COVID-19. Parents are eligible for a one-time per child payment of:

  • $200 for children aged 0-12, or

  • $250 for children with special needs aged 0-21.

Parents/guardians must submit one application per child. Only one parent / guardian may apply for each child. The parent / guardian who applies should have custody of the child. If you have already successfully applied to the Support for Parents program and received payment through direct deposit, you are automatically eligible for the Support for Families program. You will receive email confirmation with a reference number and the Support for Families funding through direct deposit within the next two weeks. Before beginning this application, please have your banking information ready. This payment will be provided through direct deposit. If you are unable to provide banking information and require a cheque, you may submit a special request for one. Please note that processing of cheques may take up to several months from the date of application. Note that you may be contacted to verify the information you are providing through this application. For more information please visit

April 8th, 2020

CRA’s My Account began accepting applications for the Canada Emergency Response Benefit (CERB).

The CERB provides a payment of $2,000 for a 4-week period for up to 16 weeks.  Payments will be processed in 3 business days if registered for direct deposit.

When can I apply? CRA is asking that only people born in certain months apply on certain days.

As an alternative to My Account, individuals can call 1-800-959-2019 or 1-800-959-2041.  They will need to provide their SIN, their postal code, the period that they are applying for, and attest that they qualify.

Eligibility Periods Eligibility periods are fixed in 4-week periods.  Individuals may receive benefits for up to 4 of the 7 periods.

The 4-week periods are:

Certification Applicants must certify:

  • I reside in Canada.

  • I am 15 years of age or older at the time of application.

  • For my first CERB application: I have stopped or will stop working due to reasons related to COVID-19 and, for at least 14 consecutive days of the four week period for which I am applying, I will not be receiving:

    • employment income;

    • self-employment income; or

    • provincial or federal benefits related to maternity or paternity leave.

  • For my subsequent CERB applications: I continue to not be working due to reasons related to COVID-19 and, for  the four week period for which I am applying, I will not be receiving:

    • employment income up tp $1,000; and/or

    • self-employment income up to $1,000; or

    • provincial or federal benefits related to maternity or paternity leave.

  • I have not quit my job voluntarily.

  • I have not applied for, nor am I receiving, the Canada Emergency Response Benefit (CERB) or Employment Insurance (EI) benefits from Service Canada for the same eligibility period.

  • I have earned a minimum of $5,000 income within the last 12 months or in 2019 from one or more of the following sources:

    • employment income;

    • self-employment income; or

    • provincial or federal benefits related to maternity or paternity leave.

Special note: Individuals in receipt of non-eligible dividends (generally, those paid out of corporate income taxed at the small business rate) are eligible for CERB. An individual could count this income towards the $5,000 income requirement to be eligible for CERB.

April 7th,2020

On March 27, the federal government announced the Canada Emergency Business Account.

What is it?

  • The Canada Emergency Business Account provides an interest-free, government-guaranteed loan of $40,000 to help you pay for operating costs that you’re not able to defer as a result of COVID-19.

  • $10,000, which is 25%, of the $40,000 loan is eligible for complete forgiveness if $30,000 is fully repaid on or before December 31, 2022.

  • If the loan can’t be repaid by December 31, 2022, it can be converted into a 3-year term loan charging an interest rate of 5%.

Who is eligible for the loan? Businesses or not-for-profits will be eligible to apply for this loan if they have:

  • an operating company registered in Canada;

  • an annual payroll of between $50,000 and $1 million, based on their 2019 T4SUM Summary of Remuneration Paid; and

  • Primary bank means that the business uses an account opened on or before March 1, 2020, for day-to-day payments and cash management activities.

  • Primary bank, apply through the financial institution that holds your primary business operating account.

When is the loan available? The loan will be available during the week of April 6. April 6th, 2020

Trudeau said that Canadians who still have jobs but are working reduced hours, as well as those who are working but earning less money due to the pandemic, like gig economy or contract workers, will soon be able to qualify for federal assistance.

The prime minister also said that the government is currently drafting its second piece of emergency legislation, and will be looking to recall Parliament as quickly as possible, this time to pass a multi-billion-dollar expansion to COVID-19 financial assistance measures. Please note that the 75% wage Subsidy is still not law as announced April 1, 2020.

Trudeau indicated that with the New Canadian Emergency Response Benefit applications opening on Monday, more direct help would be coming soon for students who don’t qualify. 

April 1st, 2020

Canada Emergency Wage Subsidy

The subsidy will apply to the first $58,700 of each employee’s salary and provide up to $847 a week per employee for up to three months, with a possible extension if the crisis continues for companies with at least  a 30% decline in revenues can receive a 75% wage subsidy for 12 weeks (March 15 to June 6). The money is available to companies of all sizes, as well as charities and non-profits. “Funds will be available in approximately six weeks,” the finance minister said. 

Businesses will be able to apply through a Canada Revenue Agency portal “soon,” Morneau said, and money is supposed to begin flowing in six weeks.

For businesses that cannot show revenue from the previous year, the previous month’s revenue may be an option. Companies that are signed up for CRA direct deposit will receive funds faster.

Companies will be required to “show what the pre-crisis income was of an employee and show that they’re paying that employee an amount up to $847 and then they will get that money returned to them from the Canada Revenue Agency.”

Editor Commentary: This means companies have to front the wages with little sales and that is not going to happen for many small businesses. Also, the test of 30% decline is very ambiguous and adds risk that the CRA disputes the claim after the fact, and then further time wasting results in going over payroll by employee for the claims of existing employees only. This is simply a fail in the short term for companies with cash flow issues, and companies should just lay off the staff and do a recall once needed! Then make the claim for 75% for the last weeks of the program as the case may be. 

Organizations that do not qualify for the new Canada Emergency Wage Subsidy of 75% wage subsidy continue to be eligible for the existing 10% wage subsidy on remuneration paid from March 18 to June 19, up to a maximum of $1,375 per employee and $25,000 per employer.

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