Canada’s emergency assistance for commercial rent

To qualify for the AUCLC for small businesses, as a building owner you must meet the following requirements:

• You are a building owner generating rental income from commercial real estate located in Canada.
• You are the owner of the commercial building housing the affected small business tenants.
• You have a mortgage secured by a commercial rental property where at least one of the tenants is a small business*.
• You have or will enter into a rent reduction agreement that will reduce the rent for the affected small business tenant by at least 75% for the period April (retroactive), May and June 2020.
• The rent reduction agreement with the affected tenants includes an eviction moratorium for the period April, May and June 2020.
• You have reported rental income on your tax return (individual or corporate) for the 2018 or 2019 tax year or both.

*We are working on another mechanism for building owners who do not have a mortgage. Subscribe to notifications to receive details as they become available.

What does it mean to be an affected small business tenant?

Affected small business tenants are businesses, including nonprofits and charities:

• who pay no more than $50,000 in gross monthly rent per location (as defined in a valid and enforceable lease agreement);
• generate no more than $20 million in gross annual revenues, calculated at the level of consolidated entities (at the level of the ultimate parent entity); and
• have temporarily ceased operations (i.e. are no longer generating revenues), or whose revenues have decreased by at least 70% compared to pre-pandemic revenues from COVID-19**.

** To determine lost revenues, small businesses can compare revenues for April, May and June 2020 with revenues for the same months in 2019. They can also use the average revenues for January and February 2020.

CMHC administers the program on behalf of the Government of Canada and our provincial and territorial partners.

The program offers support for the months of April, May and June 2020.

• It can be applied retroactively.
• Building owners will still be able to apply for assistance after the 3-month period, provided they can demonstrate that they were eligible during those months.
• Building owners must reimburse amounts paid by small business tenants during this period*.

*If, at the time of approval, rent has already been collected, a credit can be granted for a later month (e.g. July instead of April) if the building owner and tenant agree. The 3-month period can be flexible.

The application deadline is August 31, 2020.

CMHC will provide forgivable loans to eligible commercial building owners.

• The forgivable loan will cover 50% of the gross monthly rents payable by affected small business tenants for the period April, May and June 2020.
• The building owner will be responsible for at least half of the remaining 50% of gross monthly rental payments (and will pay at least 25% of the total).
• The small business tenant will be responsible for no more than half of the remaining 50% of gross monthly rental payments (and will pay no more than 25% of the total).

Note: If you are a tenant and have difficulty paying your share of the rent,other assistance programs are available to you.

AUCLC small business loans will be forgiven if the building owner complies with the terms and conditions of the program, which include not seeking to recover the rent reduction amounts once the program has ended.