Corporate & Commercial
Canada emergency rent subsidy and lockdown support for businesses, non-profits and charities.
Applications are now open for the new Canada Emergency Rent Subsidy (“CERS”) and Lockdown Support. If your business, non-profit or charity rents or owns property that is used in the course of its ordinary activities and if your business or organization has experienced a decrease in revenue as a result of the on-going COVID-19 pandemic or been forced to temporarily close or restrict its activities as a result of a public health order, then you may be able to apply for additional financial support from the federal government.
Your business, non-profit or charity may qualify to receive a subsidy of up to 65 percent of eligible expenses (consisting primarily of certain property-related expenses, such as rent, property taxes, property insurance and operating costs paid to arms’ length third parties by renters and mortgage interest on commercial mortgages incurred for the purpose of purchasing qualifying real property, property taxes and property insurance paid to arms’ length third parties by property owners). If your business, non-profit or charity is experiencing revenue losses of 70 percent or more, you may be eligible for the maximum subsidy rate. For revenue losses below 70 percent, the subsidy rate will proportionately be lower.
Your business or organization and any affiliated businesses, charities and non-profit organizations (“affiliated entities”) are together only eligible for the CERS base subsidy amount on a combined maximum of $300,000 in eligible expenses and each location is eligible to claim up to $75,000 in eligible expenses. If your business or organization has more than one location, the CERS amount you can apply for is a percentage of your eligible expenses for all your business locations.
The CERS replaces the Canada Emergency Commercial Rent Assistance (“CECRA”) program and a key feature of the new program is that it allows tenants to apply directly to the federal government for financial assistance, instead of requiring landlords to apply for their tenants and the subsidy payments are made directly to the qualifying tenant. In addition, an applicant is no longer required to first make payment of the eligible property-related expenses before applying for the subsidy. Under the new program, if your business or organization has not already paid the eligible expenses then under the CERS, your business or organization will now have up to 60 days from the date it receives the subsidy to pay the property-related expenses for which the subsidy was provided.
In addition to the CERS base subsidy, if your business or organization has suffered financially from significant public health restrictions, it may be eligible for some additional lockdown support available under the CERS program.
The Lockdown Support is a “top-up” available under the CERS in addition to the CERS base subsidy for businesses, non-profits and charities. Similar to the CERS base subsidy, your business, non-profit or charity may qualify to receive a subsidy of up to 25 percent of eligible expenses. To qualify for the Lockdown Support, your business or organization must have a base rent subsidy rate under the CERS for the claim period and one or more of its qualifying locations must have been temporarily closed, or had its activities significantly restricted for a week or more as a result of a COVID-19-related public health order. If your business, non-profit or charity has more than one location, the Lockdown Support is calculated on a location by location basis.
To find more information about whether your business, non-profit or charity is eligible and to apply for available subsidies under the CERS program, please contact your accountant and/or visit the Canada Revenue Agency’s (“CRA”) website for the CERS and the Lockdown Support.
If you have questions or need legal assistance with the CERS and the Lockdown Support, please contact one of the lawyers in our business law department.