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Deputy Prime Minister Chrystia Freeland, right, speaks as Mary Ng, Minister of International Trade, Small Business and Export Promotion looks on during a press conference in Toronto, Monday, Aug. 31, 2020. The Liberals will be extending a rent-relief program through September, according to sources.

Cole Burston/The Canadian Press

The federal government will extend its widely criticized pandemic rent-relief program for small businesses through September, sources familiar with policy discussions say, as the governing Liberals consider options to overhaul it.

The Globe and Mail is not identifying its sources because they were not authorized to discuss the matter. The federal-provincial Canada Emergency Commercial Rent Assistance Program currently offers forgivable loans to landlords of entrepreneurs worth half the tenant’s rent from April through August. Tenants then pay a quarter and the landlord absorbs the remaining quarter.

But the program requires landlords to apply, which has prompted low uptake and left many tenants powerless to get relief as their landlords decline to make applications. A Parliamentary Budget Office report last week forecast that Ottawa would spend less than 40 per cent of the $2.4-billion it earmarked for the program.

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Although the program initially offered support for April, May and June, the government announced two one-month extensions at the end of both June and July, carrying CECRA through the end of August.

On Aug. 31, Finance Minister Chrystia Freeland and Small Business Minister Mary Ng declined to say CECRA would be extended into September, but Ms. Freeland said that “we’re going to have more to say about [rent relief] very soon.” Small-business lobby groups took that as a signal that Ottawa was considering an overhaul of the underused program, possibly with more favourable terms for small businesses.

Over the weekend, sources said that Ottawa was still working through options to overhaul its rent-relief policy, with an extension of the existing CECRA program through September as an interim measure. A spokesperson for Ms. Freeland declined to confirm the details late Sunday afternoon.

Ontario Premier Doug Ford’s press secretary, Ivana Yelich, said in an e-mail that the province was working with the federal government to move such an extension forward.

Landlords can apply for CECRA through Canada Mortgage and Housing Corp. if their small-business tenants pay less than $50,000 a month in rent, bring in less than $20-million in gross annual revenue and have seen revenue drop by at least 70 per cent because of the pandemic.

The federal government said that more than 100,000 small businesses had received CECRA support by the start of September, with $1.26-billion of combined federal and provincial funding. Polling from the Canadian Federation of Independent Business has found that about 40 per cent of Canada’s slightly more than 1 million small businesses should be eligible for CECRA – meaning only about a quarter have been able to access the funding.

Ottawa has been hesitant to alter CECRA, even though entrepreneurs have criticized the program structure since the day it was announced in late April. Even some provincial governments, who co-administer the program and provide some of its funding because rent is their jurisdiction, have come out against CECRA’s structure.

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Both Saskatchewan and Manitoba have asked the federal government to revamp CECRA to put power in tenants’ hands. Provinces including British Columbia, Alberta, Quebec, Ontario, New Brunswick and Nova Scotia put temporary eviction bans into place for small businesses who are eligible for CECRA but whose landlords decline to apply – though some of those bans have since lapsed.

Ms. Yelich said in an e-mail that Ontario would soon introduce legislation to extend its small-business eviction ban through September, which the CBC first reported on Saturday.

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