Critics Say Newly Announced Commercial Rent Relief Program with Forgivable Loans for Landlords is Too Little and Too Late

Retail industry news delivered directly to you. Subscribe to Retail-Insider.

The federal government announced Wednesday that applications for much-needed rent relief will open May 25 to help Canadian businesses survive the devastating economic downturn caused by the COVID-19 pandemic.

The Canada Emergency Commercial Rent Assistance program will provide forgivable loans to qualifying commercial property owners, whether they have a mortgage on their property or not. The loans will cover 50 percent of three monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June.

But critics say the program is still a mess, leaves out many hurting businesses, comes only a few days before June rent is due, and still relies on landlords agreeing to participate in it.

The government said the loans will be forgiven if the qualifying property owner agrees to reduce the small business tenants’ rent by at least 75 percent under a rent reduction 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 percent of the rent.

It said impacted small business tenants are businesses that are paying less than $50,000 per month in gross rent in a given location, with annual revenues of less than $20 million (at the ultimate parent level), and who have experienced at least a 70 percent drop in pre-COVID-19 revenues.

Downtown Toronto city Skyline at twilight in Ontario, Canada

“Canadians want to know that their jobs are protected and their families are safe and healthy. That’s why we’re stepping up to provide support that will keep workers on the payroll, protect middle class jobs, and help Canadians recover quickly once we make it through these difficult times,” said Prime Minister Justin Trudeau.

“The COVID-19 pandemic continues to have a profound impact on Canadians. We thank and commend the many property owners who have already taken action to help their tenants during this crisis. With CECRA, the Government of Canada is stepping up to support Canada’s small businesses. The forgivable loans will significantly lower the rent for small business tenants and keep them prepared to bounce back when this crisis subsides,” added Minister of Finance, Bill Morneau.

Karl Littler, Senior Vice President, Public Affairs at the Retail Council of Canada, said many questions remain about CECRA.

“They’re going to have to provide a little more detail been now and May 25. This week I guess is the kind of crystallization week for this program . . . We think there are some design issues that could be improved upon and then there’s the broader issue of landlord take up,” he said.

“On the design side, one of the issues is with respect to using gross rent as the sole metric. So it’s a bit of a double-edged sword because obviously gross rent if it’s covered is the optimal situation for the tenant. The trouble is that in some cases the base rent is well below $50,000 but with all of the add-ons including insurance and municipal taxes it’s above $50,000.”

Crescent Street boutiques in Montreal

Laura Jones, executive vice-president of the Canadian Federation of Independent Business, said the fact that applications for CECRA will be open is a bit of good news but they’re going to be open only six days out from when rent is due. 

“And it doesn’t answer the biggest question out there right now for tenants which is what do I do if I desperately need rent relief and I can’t get it because my landlord is not going to use CECRA or I don’t meet the 70 percent revenue reduction threshold. It doesn’t answer that question,” said Jones.  “In our surveys what we see is about half of small businesses have seen a revenue reduction of 70 percent or more. There’s a big chunk of businesses that have lost 30 percent or more and 30 percent is the wage subsidy cutoff of course. Even a 20 percent revenue loss . . . is a pretty big hit. Seventy percent is a high bar. In theory it can help many but of course you have to qualify first and then your landlord has to want to use it because they’re the ones that have the power in this equation. In this unfortunate equation.

“CECRA needs a safety net. It needs a safety net for businesses that don’t qualify or whose landlords won’t use it. I think the simplest safety net right now would be to increase the forgivable portion of the CEBA (Canada Emergency Business Account) loan. The interest free $40,000 loan with $10,000 forgivable . . . That would give a lot of tenants the help they need.

“The challenge is that with applications only available next week, you’re skating very close to June 1. It’s a mess. This is a make or break issue for a lot of business owners. Over half are saying this could be the difference between their survival and not. And that’s as high as 80 percent when you look at arts and recreation businesses. So gyms and dance studios are hooped without this kind of help.” 

In a recent letter to Morneau, RCC said it has mounting concerns as information on CECRA rolls out from policymakers, notably the Department of Finance and the Canada Mortgage and Housing Corporation. 

“While we strongly support the stated principle of providing relief for small businesses experiencing financial hardship due to COVID-19, we are concerned that design-elements of the CECRA program will make that achievement far less likely than should be the case,” said the letter.

“RCC is aware that CECRA’s appeal for landlords, or lack thereof, will be based in part upon the alternatives available to them, including the capacity to evict tenants during this crisis. Despite the CECRA’s assurance of 75 percent coverage of rent, there will inevitably be landlords who believe that they can extract full payment of rent from their tenants, either by pursuing evictions and legal actions or by threatening to do so. This even though the very thing that they contract for with tenants, i.e., space in which to conduct business, has either been ordered closed or had its operations severely impaired by order of public authorities.

Toronto Retail Shops

“We understand that the authority to impose a moratorium on commercial evictions rest squarely within provincial jurisdiction. To that end, RCC, along with groups like Save Small Business, has called upon each of the provinces to enact such a moratorium.”

Jon Shell, Managing Director & Partner of Social Capital Partners in Toronto, and co-founder of Save Small Business, said the advocacy group continues to believe that CECRA will help very few people without action by the provinces. 

“Every survey indicated landlord interest in participating is very low. An evictions moratorium is needed to bring landlords to the table and consider this deal. We would love to be wrong, but we can’t ignore every single survey that said the same thing. Provinces need to act now,” said Shell.

Save Small Business is a grassroots coalition of about 40,000 small businesses across Canada.

While the CECRA program might provide some restaurants with relief, rent obligations continue to be a challenge for many and as the program depends on landlords choosing to participate, many restaurant operators are not going to be able to benefit from this relief, through no fault of their own, said David Lefebvre, Restaurants Canada Vice President, Federal and Quebec.


“Restaurants Canada continues to be at the table, working closely with all levels of government to build on this program and address gaps that still need to be filled,” he said. “We are calling for a broader rent relief program to capture businesses that have experienced a significant decline in sales but do not meet the current qualifying threshold.

“Commercial tenant protections also continue to be needed for those not benefiting from this program to relieve pressure while all stakeholders come to the table to develop immediate and long-term solutions. Some provinces, like New Brunswick and Nova Scotia, have already taken action on this front. Continued leadership is needed from the federal government to encourage other jurisdictions to adopt non-eviction policies.”

According to the findings of Restaurant Canada’s latest survey conducted between May 1 and May 5:

  • Nearly 70 percent of independent operators are dealing with landlords who might not be willing to participate in the CECRA program or any other rent relief arrangement. Just over 20 percent said their landlords are not willing to participate in the CECRA program or any other arrangement and 48 percent said they are not sure if their landlord is willing to participate in any kind of arrangement;

  • More than 60 percent of multi-unit restaurant operators are dealing with landlords who might not be willing to participate in the CECRA program or any other rent relief arrangement. One-third (34 percent) said they are dealing with landlords who are not willing to provide rent relief and more than a quarter (28 percent) said they are not sure if any of their landlords are willing to provide rent relief; and

  • More than half of independent restaurants have not paid their rent in April and May, with about a quarter of those who have not paid rent for those months not having permission from their landlord to postpone those payments.

Article Author

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 is the Senior News Editor with Retail Insider in addition to working as a freelance writer and consultant in communications and media relations/training. Mario was named as a RETHINK Retail Top Retail Expert in 2024.

More From The Author

Miele Expanding Canadian Footprint with Retail Space at CF Sherway Gardens...

It will be the second mall location for the premium German appliance brand, and will showcase products in an immersive environment with product demonstrations led by expert associates.

Despite Economic Challenges, Edmonton Retail Leasing Market Experiences Growth and Expansion:...

Edmonton is seeing increased demand for retail space as new retailers inter the market in the athletic, fashion and luxury sectors.



  1. For CECRA the "forgivable loan agreement" section 1. (c) (ii) essentially says that other COVID-19 relief has to be excluded. Does that mean the CEBA $10000 has to be excluded? So, if your small business is getting CEBA it is not worth applying for CECRA unless you can get more than $10000 ?


Please enter your comment!
Please enter your name here

- Advertisement -

Latest Stories

No posts to display

Follow us


all-time Popular