The Government of Canada is launching a new federal rent relief program for businesses amid the ongoing COVID-19 pandemic.
Prime Minister Justin Trudeau and Deputy Prime Minister Chrystia Freeland announced the new program on Friday. The program, which Trudeau called the Canada Emergency Rent Subsidy, is the replacement to the Canada Emergency Commercial Rent Assistance (CECRA) and is set to allow businesses to apply directly for rent relief through the Canada Revenue Agency (CRA).
The announcement of the new program comes as the federal government allowed CECRA to lapse at the end of September. The new program is set to be available until June 2021, is aimed towards small-and-medium-sized businesses (SMBs) and will offer a sliding scale of support.
The original rent relief program was faced with criticism and low uptake as it required commercial property owners to apply for the loans rather than businesses themselves.
The previous rent relief program required federal and provincial governments to collectively pay for 50 percent of the monthly rent through the Canada Mortgage and Housing Corporation, with property owners absorbing the remaining 25 percent. Businesses with rent payments of $50,000 or less per month were eligible for the program.
Government data puts the number of businesses supported through CECRA, as of Sunday, at 128,000. This falls much short of the 400,000 to 500,000 businesses the Canadian Federation of Independent Businesses (CFIB) estimated should qualify for the program.
Trudeau stated that the new rent subsidy will be available for businesses that have seen a revenue drop due to COVID-19. It will provide up to 65 percent support for expenses, with up to 90 percent available for businesses that have been especially hard hit by having to shut down due to mandatory government shutdown orders.
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As the second wave of COVID-19 has hit many parts of Canada, the federal government has been back in spending mode. During the Liberal government’s September 23 Throne Speech, promises were made to extend and expand numerous COVID-19 relief efforts for businesses, including extending the Canada Emergency Wage Subsidy (CEWS) to summer 2021. Last week, an additional $600 million was committed to the Regional Relief and Recovery Fund (RRRF).
The rush to provide continued support to businesses comes as regions like Québec have moved back to stage two shutdown protocols. Ontario Premier Doug Ford is also reportedly considering moving back to phase two shutdowns, which would affect small businesses, including restaurants and fitness centres. The premier is expected to make an announcement about his decision later today.
Image source Justin Trudeau Flickr account