December 2, 2020
The Canada Emergency Rent Subsidy (CERS) was announced by the federal government on October 9, 2020, as an additional support for businesses, and applications for the CERS opened up November 30, 2020.
A Brief Overview
· The base subsidy is meant to provide a rent and mortgage subsidy of up to 65% of eligible expenses to qualifying business, charities and not-for-profits.
· There is an additional lockdown support of up to 25% of eligible expenses per location where an organization had to close and cease activities under a public health order for one week or longer.
· Effective period for this benefit is September 27, 2020 until June 2021.
· The subsidy provides payments directly to renters and property owners, thereby eliminating the need to involve landlords.
· The base subsidy applies to a maximum of $75,000 in eligible expenses per location, with an overall $300,000 maximum for an organization and any affiliated entities per claim period (see below regarding affiliated entities).
Eligibility
Base Subsidy
The following 4 eligibility criteria must be met:
1. One of the following 4 applies:
a. The organization had a CRA business number on September 27, 2020, or
b. The organization had a payroll account on March 15, 2020, or another person or partnership made payroll remittances on behalf of the organization, or
c. The organization purchased business assets of another person or partnership that meets (b) above, and have made an election under the special asset acquisition rules, or
d. The organization meets other prescribed conditions not yet introduced.
2. The organization is considered an eligible business, charity or non-profit. Click here to download a list of what this would include.
Note that if the organization is related to another eligible entity, it may be considered an “affiliated entity” which may have an impact on the subsidy, in that affiliated organizations that are each applying for the CERS benefit will need to agree on how they will split the potential $300,000 limit for eligible expenses.
3. The organization experienced a drop in revenue. There is no minimum revenue decrease required to qualify, but the benefit amount is based on the amount of revenue decrease. Revenue that is considered here includes selling of goods, rendering of services, and others’ use of an organization’s resources.
4. The organization has a qualifying property and eligible expenses. Click here for additional information on what is considered qualifying property and eligible expenses.
Lockdown Support
The following eligibility criteria must be met:
1. The organization has a base subsidy rate of more than 0% for the claim period.
2. One or more locations were temporarily closed or have activities that were significantly restricted for a week or longer due to a COVID-19 related public health order that was issued by a federal, provincial or municipal government, or a local health authority.
Significantly restricted activities mean activities that account for at least 25% of the total revenues of the location during the prior reference period. Note that if a public health order resulted in reduced activities for the organization, but did not require the organization to close or stop certain activities, such as decreased business due to travel restrictions, that would not qualify for lockdown support.
Calculating The Benefit
Click here to access the online calculator to determine your benefit amount.
The base subsidy is calculated as follows:
The lockdown subsidy is calculated as follows:
Note that if an organization has a 0% base subsidy rate, they cannot claim a top up for any location.
How To Apply
The periods that are open now for application are:
Period 1: September 27 – October 24, 2020
Period 2: October 25 – November 21, 2020
Claim period 3 for November 22 – December 19, 2020 will be opening at a later date.
Click here for more information or to apply for the CERS benefit.
If you have any questions specific to your situation, or if you would like assistance in mapping out your business operations over the upcoming year, in light of COVID-19 and continued restrictions, please contact us.
The information contained in this communication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.
Comments