Relief for small businesses and landlords affected by the COVID-19 outbreak has been announced.
The province is committing $241 million through the new Ontario-Canada Emergency Commercial Rent Assistance Program, as part of a $900 million provincial-federal relief package, to help ensure small businesses are ready to reopen their doors when the emergency measures are lifted.
The commercial rental assistance program will provide forgivable loans to eligible commercial property owners experiencing potential rent shortfalls. To receive the loan, property owners will be required to reduce the rental costs of small business tenants for April to June 2020 by at least 75 per cent and commit to a hold on evictions for three months.
An eligible small business tenant is one that:
- Pays monthly rent not exceeding $50,000 in gross rent payments; and is,
- A non-essential small business that has temporarily closed, or who is experiencing a 70 per cent drop in pre-COVID-19 revenues (determined by comparing revenues in April, May or June to the same month in 2019 or alternatively compared to average revenues for January and February 2020).
The rent support would be administered by the Canada Mortgage and Housing Corporation and support would be retroactive to April 1st, covering April, May and June 2020.
The program has been developed to share the cost between small business tenants and landlords. Small business tenants and landlords would each be asked to pay 25 per cent of the before profit costs and the provincial and federal government would cost share the remaining 50 per cent.
For example, a monthly rent for a small business is $10,000. In this example, assume the landlord doesn’t make a profit. The landlord forgoes $2,500 (25% of rent). The small business would be responsible for paying $2,500 (25% of rent). The government would cover the remaining $5,000, with $3,750 from the federal government (37.5% of rent) and $1,250 (12.5% of rent) from the provincial government.
Get more details about the Ontario-Canada Emergency Commercial Rent Assistance Program online here.
