- KD Wray
Canada Emergency Updates
CANADA EMERGENCY WAGE SUBSIDY (CEWS) May 16, 2020
• CEWS was to end on June 6, 2020
• The Prime Minister has announced that CEWS will be extended to the end of August, doubling the period eligibility for the wage subsidy from 3 four-week periods to 6 four-week periods
• The Prime Minister indicated in his press conference that the eligibility criteria may be adjusted to make the program applicable to more businesses, in particular, he mentioned the revenue test which currently requires a 30% decline in revenue may be revised
• https://www.canada.ca/en/department-finance/economic-response-plan.html has been updated to reflect this announcement
• Find more information about the CEWS at https://www.canada.ca/en/department-finance/news/2020/05/government-extends-the-canada-emergency-wage-subsidy.html
• Video courtesy of Global News is below on the announcement as a reference
• https://globalnews.ca/video/rd/f1b51718-96ce-11ea-a5ea-0242ac110005/
CANADA EMERGENCY COMMERCIAL RENT ASSISTANCE (CECRA)
May 16, 2020
• When the application process is launched the applicant will need to supply:
• Proof of an existing rent reduction agreement
• Proof of a moratorium on eviction
• Proof of small business tenant financial hardship
• The online application process will include both fillable forms fields and templates of the documents required
• The application process is expected to be launched in the second half of May 2020
• “Eligible Commercial Property Owners”
• Must own the property that generates rental revenue from commercial real property located in Canada
• The requirement for a mortgage to be secured on the property has been removed
• Enter into a rent reduction agreement for the period of April, May and June that reduces the rent by at least 75%
• The rent reduction agreement includes a moratorium on eviction for April,
May and June
• Property owner must have declared rental income on the personal or corporate return for the years 2018 and/or 2019
• “Impacted Small Business Tenant”
• A business that includes a non-profit and charitable organization
• Pays no more than $50,000 in monthly gross rent per location as defined by a valid and enforceable lease agreement
• Generates no more than 20 million in gross revenue (see additional rules)
• Have experienced at least a 70% decline in pre-COVID-19 revenues either by comparing:
• Year over year, example April 2020 vs April 2019 or
• Comparing to the average revenues in January 2020 and February 2020
• Deadline to apply is August 31, 2020
• There are some rules to govern situations were rent has already been paid
• The forgivable loan will cover 50% of the gross rent
• The property owner will be responsible for between 25% to 50% of the gross rent
• The small business tenant will be responsible for 25% or less of the gross rent depending upon the rent reduction agreement
• The loan is forgiven if the property owner complies with all applicable program terms and conditions including to not seek to recover rent abatement amounts after the program is over
• CMHC has created a site on the program and interested parties can subscribe to be updated at the website link below
• https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-
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