Recently, the Government of Canada announced the Canada Emergency Commercial Rent Assistance (CECRA) in collaboration with the Canada Mortgage and Housing Corporation (CMHC). This program aims to provide support to eligible businesses to reduce their rent payments for the period of April, May and June 2020. This assistance is in the form of forgivable loans to eligible commercial property owners and subject to certain essential conditions , including the willingness of the property owners to participate in the program. If you are not eligible for the CECRA for small businesses, the Government of Canada offers other support measures for businesses and individuals as part of Canada's COVID-19 Economic Response Plan . If you are not a commercial property owner, the Mortgage Payment Deferral may be what you need.

The CECRA application portal for small businesses opened on May 25, 2020 at 8:00 a.m. ET.

As a tenant subject to the closure notice, am I released from my obligation to pay rent during this period?

A priori, Article 1854 of the Civil Code of Québec sets out the principal obligation of the lessor, namely to provide his tenant with peaceful enjoyment of the leased premises for the entire term of the lease. In return for this obligation, the tenant is required to pay the agreed rent (Article 1855 CcQ).

However, when the debtor of an obligation cannot perform it due to force majeure , he is released from his obligation (article 1693 CcQ).

We can reasonably understand that a lessor, following the latest government measures, is no longer able to ensure the enjoyment of the premises rented to his tenant.

However, Article 1694 of the Civil Code of Quebec, as well as the case law to this effect, specifies that if the debtor (the lessor) is released from the execution of his obligation due to force majeure, he cannot demand in return that his creditor (the lessee) pay the rent.

Does my lease have a force majeure clause?

Before determining whether you can invoke the release of your correlative obligation, you will need to check whether you have deviated, in your lease, from the general principles of civil law (articles 1854 and 1855 CcQ set out above).

Indeed, you may have stipulated in your lease that no case of force majeure can release you from your obligation to pay rent. In such a case, this clause would prevail over civil law unless, depending on the circumstances, it is invalid, if you had not freely negotiated the clauses of your lease, for example.

Also, your lease may contain other clauses relevant to your current situation (a rent renegotiation clause, a release from certain obligations clause, a lease termination clause, among other examples), which will have a direct impact on your current obligations towards the lessor, in particular paying the rent for the period in question.

The AUCLC program is a solution offered to commercial property owners and tenants to ease their financial burden, while minimizing the risk that the tenant will become insolvent or even bankrupt and request termination of their lease due to force majeure. Refer to the CMHC website for eligibility requirements and answers to frequently asked questions.

Can I request termination of my lease?

Yes, the tenant could obtain the termination of a commercial lease if he cannot use the leased premises for the intended purpose. However, such termination can only be judicial, that is to say, it must be pronounced by a court, following a formal request by the tenant, and upon proof of serious harm. For example, the prohibition measures put in place by the government, not authorizing a tenant to open his business to the general public, during the confinement period, could be considered as a serious reason.

However, considering that this type of request is not being processed urgently at the moment, the tenant seeking to terminate his lease may not be able to submit his request until after the current situation and once the Quebec courts have resumed their regular activities.

Finally, it is crucial to review your commercial lease before taking any action.

9185-4000 Quebec inc. c. Innovation shopping center inc. (2016 QCCA 538)

Henry c. 9131-5267 Québec inc., (2017 QCCS 716)

Place Fleur de Lys v. Tag's Kiosque Inc. [1995] RJQ1659 (CA)