Brick and mortar small businesses have been forced shut, or face almost no traffic. Wage relief is being delivered, with the government covering up to 75% of payroll costs at impacted businesses. Subsidized wages help, but another very large expensive still needs to be considered – rent.

Commercial rents have been soaring, and tenants, even closed ones, still have to pay them. This puts landlords in tricky situation – do they evict late payments, and risk losing a tenant? Or do they give rent relief, losing a few months of income, and still potentially losing the tenant down the road? The new government program is hoping to help them make the latter choice – the Canadian Emergency Commercial Rent Assistance Program (CECRAP).

Canadian Emergency Commercial Rent Assistance Program

The program is still in the works on how it will be delivered, but there’s some details. Landlords that provide rent incentives to small businesses, can apply for the CECRAP. The relief will come in the form of a loan, “including forgivable loans.” Further details won’t be released until it’s worked out with the provinces, since they have to deliver the relief.

More debt? Kind of. Non-forgivable ones would be similar to the relief homeowners are currently getting. Which helps them defer many of the costs for a few months. That gives them some breathing room, until hopefully, they’re better positioned. Then they can slowly repay the cash.

Which sounds tough, but also consider, that’s how taxes work too. If government relief was fully forgiven, future tax revenues would have to pay it off. The big difference here would be, repayment is confined to the user, instead of society as a whole.

The forgivable loans, or portion of the loans, would be similar to the Canada Emergency Business Account. In that program, the government will forgive up to $10,000 on a $40,000 loan. Not exactly a ton of money to turn things around, but enough of a bridge to get to the other side. That is of course, assuming the other side comes quickly through a v-shaped recovery.

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