Canada Emergency Rent Subsidy (CERS)

CERS

UPDATE:  Starting November 23, 2020, businesses can start applying for the CERS.  For more information, please go to the official CERS page, https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-rent-subsidy.html 

The Federal Government has announced the details of the Canada Emergency Rent Subsidy that will apply to its first 12 weeks of implementation (until December 19, 2020). Note that this new rent subsidy is available retroactive to September 27, 2020 until June 2021.

The Canada Emergency Rent Subsidy (CERS) is a new program that would provide benefits directly to qualifying renters and property owners without the participation of landlords. Eligible organizations that have suffered a revenue drop would be eligible for a subsidy on eligible expenses.

Base Subsidy Rate:
The maximum base rate subsidy is 65% for eligible organizations with a revenue drop of 70% or more. For eligible organizations with a revenue drop of 50%, the base rate is 40%. The base rate will gradually reduce for those not experiencing a decline in revenues.

Revenue Decline of 70% or more: 65% base subsidy rate
Revenue Decline of 50% to 69%: 40% + (revenue drop – 50%) x 1.25
Revenue Decline of 1% to 49%: Revenue drop x 0.8

Eligible Expenses:
The criteria to be eligible for CERS generally align with those of the Canada Emergency Wage Subsidy (CEWS). Eligible entities include the following:
• Individuals
• Taxable corporations and trusts
• Non-profit organizations
• Registered charities
• Partnerships that are up to 50% owned by non-eligible members
• Indigenous government-owned corporations that are carrying on a business as well as partnerships where the partners are Indigenous governments and eligible entities
• Registered Canadian Amateur Athletic Associations
• Registers Journalism Organizations
• Non-public colleges and schools, including institutions that offer specialized services such as arts schools, driving schools, language schools or flight schools

An eligible entity must also meet one of the following:
• Have a payroll as of March 15,2020 or have been using a payroll service provider
• Have a business number as of September 27, 2020 (and satisfy the CRA that it is a bona fide subsidy claim) or
• Meet other conditions that may be prescribed in the future

Note that public institutions are generally not eligible for this rent subsidy.

Calculating Revenues:
Calculating revenues for the CERS is the same as calculating revenues for the Canada Emergency Wage Subsidy (CEWS).

Reference periods for the drop-in-revenues test:
Eligibility can be determined using 2 approaches. First is the general approach which uses the change in monthly revenues, year-over-year, for the applicable month. An alternative approach can also be used by comparing its current reference month revenues with the average of its January and February 2020 revenues.

Reference periods* are as follows:
• September 27 to October 24, 2020
• October 25 to November 21, 2020
• November 22 to December 19, 2020

*The period numbers align with those used for the Canada Emergency Wage Subsidy (CEWS). The first period of the CERS (September 27 to October 24, 2020) is period 8 of the CEWS.

IMPORTANT NOTE: Applications must be made on or before 180 days after the end of the qualifying period.

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