KPMG in Canada has launched a new automated tool to help commercial landlords apply to the Canada Emergency Commercial Rent Assistance (CECRA) program, making it easier for them to offer rent relief to their impacted tenants.
The tool collects and coordinates tenant and property information in a centralized database, determines tenant eligibility for the program, and provides end-to-end application processing and submission to the Canada Mortgage and Housing Corporation (CMHC).
“While many of our commercial landlord clients want to provide rent relief to their tenants, the preparation and application process for the CECRA can be lengthy and present a significant administrative burden on landlords,” said Ali Baniasadi, partner, Business Law, KPMG Law LLP. “We wanted to provide an automated tool that would make the process much easier and less time-consuming, particularly for landlords with multiple tenants, and for smaller landlords who may lack the infrastructure and human capital to participate.”
Initially announced on April 24, 2020, the CECRA enables landlords of eligible small businesses to apply for forgivable loans to cover up to 50 per cent of the monthly rent owed by their tenants for the months of April, May and June 2020.
In Quebec, this amount will be increased by a further 12.5 per cent. Under the program, the landlord is required to forgive not less than 75 per cent of the rent, while the tenant is responsible for paying up to 25 per cent.
On June 29, the federal government announced an extension of the federal-provincial program until the end of July. Despite a moratorium on evictions in numerous provinces, uptake of the program (which is not mandatory) by landlords has been slower than anticipated. Most provincial governments have introduced eviction bans that prevent landlords from evicting commercial tenants if they are eligible under the CECRA program, but the landlord has decided not to participate in the CECRA program.
“The level of interest we are seeing from the launch of our CECRA automation tool is encouraging, and includes both our landlord and tenant clients,” said Gino Piazza, national leader, Tax Transformation & Technology at KPMG. “We worked on behalf of our clients to develop an online App to fully automate the entire application process and help minimize the need for manual intervention.”
Applications for the CECRA must be submitted by August 31, 2020.
