April 30 update on OCECRA
Yesterday, the Canada Mortgage and Housing Corporation (“CMHC”) provided updated details with respect to the Ontario-Canada Emergency Commercial Rent Assistance Program (OCECRA).
Updated information was provided with respect to who is eligible to apply for the OCECRA and how it will function. The updated information is provided below, for OCECRA details please review our previous update as well as information via CMHC’s website https://www.cmhc-schl.gc.ca/.
- CMHC confirmed that unleveraged commercial property owners who would otherwise not qualify for the Program will be scoped into the program via the availability of an alternative mechanism for non-mortgaged commercial properties. No details of the alternative mechanism were provided, further information is expected in the near future.
- CMHC introduced the requirement that rental income must have been declared on owners’ 2018 and/or 2019 personal or corporate income tax returns.
- CMHC provided further details as to the definition of small business tenants (“SBT”) for the purpose of the Program. The updated SBT definition now includes the updated requirement that SBTs pay no more than $50,000 in monthly gross rent per location pursuant to a valid and enforceable lease agreement and that SBTs have no more than $20,000,000 of annual gross revenues at a consolidated level (i.e. at the parent company level).
- CMHC clarified that the program relates to gross rent. This clarification was required to align the OCECRA with the communication of the Federal government and to allay industry concerns with respect to a Provincial miscommunication.
- CMHC clarified that property owners must either refund rental amounts paid during April, May, and June by SBTs in excess of the 25% OCECRA requirement or, if mutually acceptable, provide SBTs with a credit against future rent.
No further details have been provided with respect to how to apply or when funds will be available. CMHC recommends signing up for CMHC e-blasts to ensure immediate access to further CMHC announcements.