Following the requests of organizations such as the Ontario Chamber of Commerce, the Canadian Federation of Independent Business and the Retail Council of Canada and in light of recent action taken by provinces including British Columbia, Québec and Nova Scotia, Premier Doug Ford announced on June 8, 2020 that the Ontario government “intends to take action to protect commercial tenants from being locked out or having their assets seized by their landlords due to the negative impacts of COVID-19”.
A few preliminary details are provided below, with more information to come in the following weeks:
1. The proposed legislative changes to the Commercial Tenancies Act, if passed, would result in a temporary moratorium on evictions on business that are eligible for provincial and/or federal rent assistance;
2. The proposed legislation would reverse evictions that occurred on or after June 3, 2020 and would make it illegal to evict a commercial tenant until August 31, 2020; and
3. It is the intention of the provincial government to move this legislative change through parliament as quickly as possible.
The announcement is in direct response to the low participation by landlords in accessing programs such as the Canada Emergency Commercial Rent Assistance (CECRA) program — a joint partnership with the federal government in which Ontario is committing $241 million in support of small businesses. According to the Premier, only 7,000 landlords had accessed the program as of Monday. The CECRA program guarantees up to 75% of the rent for impacted tenants during the months of April, May and June 2020, with the tenant responsible for up to 25% of the remaining rent obligations. For more information on the CECRA program, please see our earlier bulletin “CECRA: Applications for Canada Emergency Commercial Rent Assistance Program to Open at 8:00 a.m. EST on May 25, 2020”.
Please contact our national Real Estate team for any questions you may have regarding the new proposed legislation or in preparing applications for the CECRA program as noted in this bulletin.