Emergency Commercial Rent Assistance for small businesses Expanded May 19
Canada Emergency Business Account (CEBA) loans program will be expanded for those:
who are sole owner-operators;
that depend on contractors; and
that are family businesses that pay employees by dividends rather than payroll.
As well, CEBA will be modified to become available to new businesses (those which have never filed a tax return) and businesses which do not have “business accounts” at the bank, but operate through personal accounts.
To qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 would need:
a business operating account at a participating financial institution;
a Canada Revenue Agency business number, and to have filed a 2018 or 2019 tax return; and
eligible non-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance.
April 24, 2020
Ottawa, Ontario
Small businesses across the country are the backbone of our communities, and they are now facing significant challenges. That is why the Government of Canada and provincial and territorial partners are taking strong, immediate, and effective action to protect Canadians and businesses from the impacts of the COVID-19 pandemic. We are introducing significant measures to support them and ensure they have the resources to make it through these difficult times.
The Prime Minister, Justin Trudeau, today announced that the federal government has reached an agreement in principle with all provinces and territories to implement the 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.
Today’s announcement is part of the Government of Canada’s COVID-19 Economic Response Plan, which is addressing the challenges facing Canadians and their employers during this time of global uncertainty. The government continues to assess and respond to the impacts of COVID-19, and stands ready to take additional actions as needed to stabilize the economy and mitigate the impacts of the pandemic.