A Rose By Any Other Name: Federal Government Announces New Targeted COVID-19 Rent Support Measures

• Published date: 11 November 2021
• Subject Matter: Government, Public Sector, Real Estate and Construction, Coronavirus (COVID-19), Government Contracts, Procurement & PPP, Landlord & Tenant - Leases, Operational Impacts and Strategy
• Law Firm: WeirFoulds LLP
• Author: Mr Robert Eisenberg and Emma Brown, Student-at-Law

As the Canada Emergency Rent Subsidy ("CERS") program ends, the Canadian federal government (the "Government") recently announced new targeted COVID-19 support measures to support commercial tenants: the Tourism and Hospitality Recovery Program (the "Tourism Program") and the Hardest-Hit Business Recovery Program (the "Hardest-Hit Program"). As, many COVID-19 restrictions continue to be lifted, these new programs are aimed at providing support to those businesses that have been most deeply affect by the pandemic. The details of these programs are not finalized; however, on October 21, 2021, the Government released a broad overview of the support that will be available under the proposed measures.

The Government proposes to use its existing authority to put these two programs in place by regulation from October 24, 2021 until November 20, 2021 and proposes to introduce legislation in Parliament as soon as possible to extend these programs until May 7, 2022, with authority for further amendments by regulation until July 2, 2022.

The Tourism Program

The Tourism Program is intended to provide support to eligible organizations in the tourism and hospitality industry, such as hotels, restaurants, bars, festivals, travel agencies, tour operators, convention centres, and convention and trade show organizers. While details on what constitutes a "qualifying business" for purposes of this program are not yet available, organizations would need to demonstrate the following in order to qualify:

• an average monthly revenue reduction of at least 40% over the first 13 qualifying periods of the Canada Emergency Wage Subsidy ("CEWS") (i.e., a 12-month revenue decline); and
• a current-month revenue loss of at least 40%.

The calculation of the 12-month revenue decline would take the average of all revenue decline percentages for eligible organizations from Periods 1 through 13 (i.e., March 2020 to February 2021), excluding Period 10 or 11. Periods in which an organization was not carrying on its ordinary operations for reasons other than a public health restriction (e.g., a seasonal shutdown) would be excluded from the calculation as well. The 12-month revenue decline would be calculated using the CEWS rules.

The rent subsidy rates are to be calculated by comparing current-month revenue losses to those of a prior reference period. The starting subsidy rate is 40% which increases on a sliding scale as revenue further declines. For example, if an organization's revenue decline...