Here is information from the Ontario government on the Ontario-Canada Emergency Commercial Rent Assistance Program including a press release and also a background document.  Please note that although it often mentions “small businesses” that “Not-for-profit organizations and charitable entities would also be considered for the program.”

PRESS RELEASE

Ontario

News Release

Ontario Provides Urgent Relief for Small Businesses and Landlords

Rent Assistance in Addition to Billions in Measures to Support Business During the COVID-19 Outbreak

April 24, 2020 12:30 P.M.

Office of the Premier

TORONTO — The Ontario government is partnering with the federal government to provide urgent relief for small businesses and landlords affected by the COVID-19 outbreak. The province is committing $241 million through the new Ontario-Canada Emergency Commercial Rent Assistance Program (OCECRA). The total amount of provincial-federal relief that would be provided is more than $900 million, helping to ensure small businesses are ready to reopen their doors when the emergency measures are lifted.

Details of the new program were announced today by Premier Doug Ford, Rod Phillips, Minister of Finance, Christine Elliott, Deputy Premier and Minister of Health, and Dr. Merrilee Fullerton, Minister of Long-Term Care.

“The vast majority of Ontario’s small businesses and landlords are struggling during this extraordinary public health emergency,” said Premier Ford. “That’s why we are doing everything we can to support them through these tough economic times, so they can hit the ground running when we are in a position to open up the provincial economy. I want to thank the federal government for partnering with us to help our small businesses and commercial landlords. I look forward to working together to also provide much-needed support to residential renters ahead of May 1.”

The OCECRA will provide forgivable loans to eligible commercial property owners experiencing potential rent shortfalls because their small business tenants have been heavily impacted by the COVID-19 crisis. 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 moratorium on evictions for three months.

Partnering with the federal government on the OCECRA builds on the provincial government’s approach to supporting business during COVID-19. As part of Ontario’s Action Plan: Responding to COVID-19, the government has implemented a series of cash flow supports amounting to $10 billion to help support jobs and the economy, including:

  • Doubling the Employer Health Tax exemption for 2020, cutting taxes by $355 million, benefiting roughly 57,000 employers;
  • Eliminating penalties and interest to businesses who miss filing or remittance deadlines for various provincially administered taxes for five months starting April 1, 2020, providing up to $6 billion in cashflow for about 100,000 Ontario businesses;
  • Postponing the planned property tax reassessment for 2021, providing stability for Ontario’s property taxpayers;
  • Deferring the upcoming quarterly (June 30) remittance of education property tax to school boards by 90 days, providing municipalities with the flexibility to, in turn, provide property tax deferrals of over $1.8 billion to local residents and businesses;
  • Implementing the new Regional Opportunities Investment Tax Credit for businesses that make eligible capital investments in designated regions of the province where employment growth has significantly lagged behind below the provincial average.

Ontario has also suspended time-of-use electricity rates for eligible small businesses, as well as residential and farm time-of-use customers, holding electricity prices to the off-peak rate of 10.1 cents-per-kilowatt-hour, for 24 hours per day, seven days a week for 45 days, for all time-of-use customers, who make up the majority of electricity consumers in the province. By switching to a fixed off-peak rate, time-of-use customers will see rate reductions of over 50 per cent compared to on-peak rates.

“To help stop the spread of COVID-19, businesses have closed their doors and employees have stayed home and that has been working, but it has also created significant financial hardship,” said Rod Phillips, Minister of Finance. “By subsidizing rent payments, reducing taxes, extending deadlines, and eliminating penalties and interest, we’re helping to ensure businesses can start up quickly when the time is right.”

The Ontario government has also worked with the federal government to develop the Small and Medium-sized Enterprise Loan that will enable up to $40 billion in lending, supported through Export Development Canada and the Business Development Bank. This program will help businesses meet cash flow requirements through guaranteed loans.

“Ontario’s small and medium-sized businesses are vital to our economy and include some of the hardest-working people in the world who have rolled up their sleeves to support our frontline healthcare workers, and beat this virus,” said Vic Fedeli, Minister of Economic Development, Job Creation and Trade. “This package of supports will help them get through these difficult days and resume normal operations as soon as possible.”

“In the months ahead, small businesses will be critical to Ontario’s economic recovery. Together with our federal partners, we are ensuring we support our small businesses today, so that they can continue to create opportunities for hardworking Ontario families tomorrow,” said Prabmeet Sarkaria, Associate Minister of Small Business and Red Tape Reduction. “With rents coming due, it’s extremely important that the federal government move quickly to implement this program and get small businesses and property owners the support they urgently need.”

Quick Facts

  • The Province’s $241 million investment in OCECRA is part of the $17 billion Ontario’s Action Plan: Responding to COVID-19.
  • The government has retroactively, to January 1, 2020, raised the Employer Health Tax (EHT) exemption to $1 million from $490,000 for 2020, providing additional EHT relief of up to $9,945 per eligible employer.
  • Starting January 1, 2020, Ontario reduced the small business Corporate Income Tax rate from 3.5 per cent to 3.2 per cent.

Media Contacts

Ivana Yelich

Premier’s Office

Ivana.Yelich@ontario.ca

Emily Hogeveen

Minister Phillips’s Office

Emily.Hogeveen@ontario.ca

647 294-6166

Scott Blodgett

Communications Branch

Scott.Blodgett@ontario.ca

416 728-9791

 

 

 

 

 

BACKGROUNDER

 

Ontario

Backgrounder

Ontario-Canada Emergency Commercial Rent Assistance Program

April 24, 2020 12:30 P.M.

Office of the Premier

The Ontario Government is committing $241 million to partner with the federal government and deliver more than $900 million in urgent relief to small businesses and their landlords through a new program, the Ontario-Canada Emergency Commercial Rent Assistance Program (OCECRA).

The OCECRA will provide forgivable loans to eligible commercial property owners experiencing potential rent shortfalls because their small business tenants have been heavily impacted by the COVID-19 crisis.

How does the program work?

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 per cent of rent). The small business would be responsible for paying $2,500 (25 per cent of rent). The government would cover the remaining $5,000, with $3,750 from the federal government (37.5 per cent of rent) and $1,250 (12.5 per cent of rent) from the provincial government.

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. The loan would also be contingent on the signing of a rent forgiveness agreement between impacted tenants and landlords. This would also include a moratorium on evictions for three months.

How long would a commercial property owner have to apply for OCECRA?

The OCECRA would be administered by the Canada Mortgage and Housing Corporation (CMHC) and would be available until September 30, 2020. Support would be retroactive to April 1, covering April, May and June 2020.

Are there any eligibility requirements for commercial property owners?

The OCECRA would apply to commercial properties with small business tenants.

Commercial properties with a residential component, and residential mixed-use properties with a 30 per cent commercial component, would be equally eligible for support with respect to their commercial tenants.

The property owner must be the registered owner and landlord of the residential or commercial real estate property.

If a property owner does not have a mortgage secured by a commercial rental property, the property owner should  contact CMHC to discuss program options, which may include applying funds against other forms of debt facilities or fixed cost payment obligations (e.g. utilities).

What are the eligibility requirements for small businesses?

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).

Not-for-profit organizations and charitable entities would also be considered for the program.

Are commercial properties that also have apartments eligible as well?

Commercial properties with a residential component, and residential mixed-use properties that have a 30 per cent commercial component, would be equally eligible for support with respect to their commercial tenants only.

Does the OCECRA program factor in profits for the commercial property owner through the loan period?

The forgivable loan would be conditional on the property owner and tenant entering into a rent forgiveness agreement (including a moratorium on eviction for three-months) pursuant to which the property owner would reduce the tenant’s monthly rent to 25 per cent of rent that relates to fixed costs for three months. The property owner would be responsible for the remaining 25 per cent. For certainty, government funding, and remaining monthly tenant rent payment obligations (i.e. 25 per cent), would not cover the property owner’s profits derived from rental income – that is, in applying for this program, the property owner agrees to forego profit for a three-month period.

Are any small businesses excluded from the OCECRA program?

The following exclusions would apply:

  1. Entities owned by individuals holding political office;
  2. Entities that promote violence, incite hatred or discriminate on the basis of race, national or ethnic origin, color, religion, sex, age or mental or physical disability; and,
  3. An entity in the Lenders special accounts or Restructuring Group prior to March 1, 2020.

Media Contacts

Ivana Yelich

Premier’s Office

Ivana.Yelich@ontario.ca

Emily Hogeveen

Minister Phillips’s Office

Emily.Hogeveen@ontario.ca

647 294-6166

Scott Blodgett

Communications Branch

Scott.Blodgett@ontario.ca

416 728-9791