Canada Emergency Rent Subsidy (CERS) Now Available

Beth Graddon

The Canada Emergency Rent Subsidy (CERS) Program,  initially presented in draft legislation back in October,  was just approved by the Senate late last Friday. With new lockdowns in place across Canada and rent due next week, many small business owners are stressed, without revenues, and grasping at this latest straw, which is also very complex. But there is some good news in the detail.

The Canada Emergency Rent Subsidy (CERS) replaces the CECRA program which ended on September 30. It provides up to 65% rent support for qualifying businesses struggling to stay afloat during the pandemic, and up to 90% for those that have been forced to lockdown their businesses due to public health protocols and can demonstrate revenue decline.

There is no minimum revenue loss required for businesses to be eligible, however the amount of subsidy available is based on a sliding scale.  Specifically, the CERS covers a maximum amount of 65% of eligible expenses up to $75,000 per location and $300,000 overall,

This program is being administered by the CRA, which differs from the CECRA which was administered by the Canada Mortgage and Housing Corporation (CMHC).

The CERS has one major benefit to businesses over the CECRA, in that the program does not require the participation and support of the landlord. It can also be applied to unpaid rent, provided businesses attest rent will be paid upon the receipt of the subsidy.

Eligible expenses to receive the CECRA subsidy include commercial rent, property insurance, property taxes, and in some cases, interest on debt obligations secured by a mortgage. As with the calculation changes introduced for the Canada Emergency Wage Subsidy (CEWS), calculating this subsidy is complex and is dependent upon where a business falls in terms of lost revenue percentage. The CRA has, however, released an online calculator to help.

There are two options for demonstrating revenue declines:

1. Compare to the corresponding month in 2019
2. January and February 2020 compared to the 2020 months inthe claim period

Calculating the Base Subsidy

Calculating the Lockdown Support Rate.  There is also an additional top-up of 25% available for businesses temporarily shut down by a mandatory public health order. However, the amount businesses are eligible for varies based on the number of days within each application period the business was shut down for, as shown below: 

25% Fixed Top-Up Rate X # days the location was shut down / 28 (# days in the CERS period)

This program works similarly to the CEWS, in that businesses must apply following each period. The first qualifying period of the CERS aligns with Period 8 of the CEWS: September 27 – October 24, and now that this program has launched, claims can be made for this first period retroactively.

It’s a good idea to get help from a professional with these calculations; the beneficiaries of the program are sure to face audit from CRA in the future.

Additional educational resources: Help business owners and corporate owner-managers stay audit-proof, even throughout the complexities associated with the emergency response benefit programs with credentials as an MFA™-Business Services Specialist.