The Canada Emergency Rent Subsidy (CERS) Program

Date: Nov 25, 2020
By: Ken Goodridge, MBA, CPA, CMA

The federal government rolled out a new assistance program, the Canada Emergency Rent Subsidy, or CERS.  The purpose of the program is to provide rent assistance to businesses, non-profits, and charities that have had a revenue reduction. 

The program will run from September 27 to June 2021.  It provides payments directly to qualifying renters and property owners. The amount that can be applied for is a percentage of eligible expenses for all of the applicant’s business locations.  There is no minimum percentage drop requirement.

The amount that may be claimed is based on the revenue drop experienced between corresponding months in 2019 and 2020 that relate to the claim period being applied for, or the average of January and February 2020 compared to the months of 2020 that relate to the claim period. The revenue drop is scaled to calculate the subsidy.

If you rent the qualifying property, eligible expenses include rent, property taxes, and certain regular payments for operating expenses.  If you own the qualifying property, your eligible expenses are property and similar taxes, property insurance, and interest on commercial mortgages.

The maximum subsidy per claim period will be $75,000 (base and top-up) per location, and $300,000 in total per claim period for all locations per affiliated group (base subsidy only, no maximum for top-up).

Qualifying property is land and buildings owned or rented, and used in the course of ordinary business activities.  Qualifying property does not include properties that are primarily used to earn rental income from arm’s length parties.

Only amounts paid or payable to an arm’s length party are eligible.  The expense must be paid or payable under a written agreement in place before October 9, 2020, or a renewal under substantially similar terms. 

Eligible expenses must be reduced by the amount of any revenue earned from sub-leasing space to arm’s length parties.

The CERS website provides all the information necessary to calculate the subsidy and make a claim.

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