Benefits of the CERS

What is the Canada Emergency Rent Subsidy (CERS) and how does it help your business?

The Canada Emergency Rent Subsidy is replacing the original model for rent subsidies that was announced at the beginning of the pandemic.

Deputy Prime Minister Chrystia Freeland announced on Monday (November 23, 2020) that the federal government’s new rent subsidy program has started accepting applications.

The subsidy structure is tiered based on a scale of how much your revenue has dropped because of the coronavirus pandemic.

A revenue drop of 70% or more will let a business, registered charity or non-profit qualify for a subsidy of 65% on its eligible expenses*. A revenue drop of between 50-69% would yield a subsidy of 40%, while any eligible entity with revenue drops of below 50% would get gradually decreasing levels of subsidy. Each organization can claim up to $75,000 of eligible expenses per location.

In effect, those who see very little revenue drop will qualify for very little rent assistance, while those hit hardest will qualify for the most.

The new program runs until June 2021, but the federal government is only guaranteeing the subsidy rate until Dec. 19, 2020.

Eligibility

To be eligible to receive the rent subsidy, you must meet all four of the following criteria:

1. Meet at least one of these conditions:
   1. 1. You had a CRA business number on September 27, 2020 or
      2. You had a payroll account on March 15, 2020, or another person or partnership made payroll remittances on your behalf or
      3. You purchased the business assets of another person or partnership who meets condition 2 above, and have made an election under the special asset acquisition rules These special asset acquisition rules are the same for the Canada Emergency Wage Subsidy (CEWS) or
      4. You meet other prescribed conditions that might be introduced
         Note: there are no prescribed conditions at this time

2. Are an eligible business, charity, or non-profit (eligible entity)
   Organizations must be individuals, taxable corporations and trusts, non-profit organizations or registered charities.

3.    Experienced a drop in revenue
There is no minimum revenue drop required to qualify for the subsidy. The rate your revenue has dropped is only used to calculate how much subsidy you receive for these periods. To calculate your revenue drop, use either:

• Corresponding month of 2019 method: the months of 2019 and 2020 that relate to the claim period you’re applying for
• Alternative method: January and February 2020 compared to the months of 2020 that relate to the claim period

* 4.    Have eligible expenses
Eligible expenses include commercial rent, property taxes (including school taxes and municipal taxes), property insurance, and interest on commercial mortgages (subject to limits) for a qualifying property, less any subleasing revenues. Any sales tax (e.g., GST/HST) component of these costs is not be an eligible expense.

Applying for the CERS

Applicants can visit CRA login services to create a My Business Account and apply for the CERS.

The CRA has launched CERS web pages, to assist qualifying organizations in preparing their applications. The CERS web pages include detailed information about eligibility requirements, how payment periods are structured, and how the subsidy is calculated.

The CRA has also launched a CERS online calculator. The calculator guides applicants through a step-by-step process that allows them to determine the subsidy amount they can claim, based on the information they enter.

The CRA will collect applications over the coming days and on November 30 start processing applications received to date. Qualifying organizations whose claims successfully clear the CRA’s automated verification system and that are registered for direct deposit should expect to begin receiving payments as early as December 4th.

References

https://www.canada.ca/en/revenue-agency/services/subsidy/emergency-rent-subsidy/cers-who-apply.html

https://globalnews.ca/news/7478962/canada-emergency-rent-subsidy-small-business-application/