Every Friday, we publish a weekly update on COVID-19 and its effect on business.
Canada Emergency Commercial Rent Assistance (CECRA) is Extended
“Across Canada, small businesses are working hard to grapple with this crisis so they can serve their communities and provide jobs. Our government recognizes that while small businesses’ needs are evolving, many still require support to face the challenges of the COVID-19 pandemic. That is why we are extending the rent relief provided through CECRA by an additional month, to ensure that Canadian businesses hit hardest by COVID-19 get support when they need it most.”
– The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance
On September 8th, 2020, it was announced that the Canada Emergency Commercial Rent Assistance (CECRA) will be extended for an additional month. Per the Government of Canada’s website, updated facts about CECRA include:
- Those who qualified for CECRA based on existing program parameters will be able to apply soon for the additional one month based on having at least a 70 percent revenue decline for April, May and June, without reassessing whether they continue to have at least a 70 percent revenue decline in July, August or September. Participation in the one-month extension is voluntary. Both existing applicants to the CECRA and new applicants are able to opt for the September rent reduction.
- CECRA provides forgivable loans to qualifying commercial property owners, whether they have a mortgage on their property or not. The loans cover 50 percent of three to six months rent payments for eligible small business tenants during April, May, June, July, August, and September.
- The loans will be forgiven if the qualifying property owner agrees to reduce their 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.
- Existing applicants will need to reapply for the month of September. New applicants will have the choice of applying for the three-month initial period, four months, five months, or six months.
- Eligible 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 experienced at least a 70 percent drop in pre-COVID-19 revenues on average for the period of April, May, and June.
- Details on the September extension will be available on the CMHC website on Wednesday, September 9.
Five Upcoming Events in the Canadian Business World
Throughout the coming week, five notable events will have a significant impact on the future of Canadian business:
- Prime Minister Justin Trudeau and his cabinet will hold a two-day retreat starting on Monday. The federal government spent billions to help Canadians and businesses through the COVID-19 pandemic and keep the economy moving, but now those programs are set to start to wind down.
- Aimia Inc. is set to report its second-quarter financial results on Tuesday. The loyalty rewards company has been working to transform itself since it sold its flagship Aeroplan program back to Air Canada.
- Statistics Canada will release several economic data points that will help paint a picture of how the economy began the second half of the year. The agency’s monthly survey of manufacturing for July comes on Tuesday while retail and wholesale trade figures for the month come Friday.
- The Canadian Real Estate Association is expected to release its monthly home sales figures for August on Tuesday, September 15th. The Canadian real estate market has been on a tear, fuelled by pent up demand from the spring when the market froze due to the pandemic and super-low mortgage rates that have reduced the cost of borrowing.
- Statistics Canada will release its consumer price index for August on Wednesday, September 16th. The annual pace of inflation has slowed to a crawl during the pandemic.
While the coronavirus continues to spread quickly, it is important to remember that only a small percentage of patients need special treatment to recover. Trusted health experts continue to emphasize that the general population shouldn’t panic and should instead focus on practicing proper hygiene, such as hand-washing and refraining from touching the facial area.
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