On October 9, 2020, the Department of Finance announced the introduction of the Canada Emergency Rent Subsidy (CERS). This new subsidy will provide direct relief to businesses, non-profits and charities that continue to be economically impacted by the COVID-19 pandemic.
The CERS is a replacement of the Canada Emergency Commercial Rent Assistance (CECRA) program, which ended in September 2020. The CECRA program was generally viewed as unsuccessful since the application process was complex and it required the landlord to apply for unsecured forgivable loans that were based on tenants meeting stringent criteria (i.e., 70% decline in pre-COVID-19 revenues).
The CERS will provide benefits directly to qualifying renters and property owners, without requiring the participation of landlords. The CERS is available retroactive to September 27, 2020 until June 2021. The Federal government has only provided details for the first 12 weeks of the program, until December 19, 2020.
Eligible Entities
Eligibility criteria for the CERS generally aligns with the Canada Emergency Wage Subsidy (CEWS) program. Eligible entities include individuals, taxable corporations and trusts, non-profit organizations and registered charities. Eligible entities also include the following groups:
In addition, an eligible entity must meet one of the following criteria:
Eligible Expenses
Eligible expenses for a location for a qualifying period will include the following:
Please note that subleasing revenues would reduce eligible expenses. As well, any sales tax (e.g., GST/HST) component of these costs would not be considered an eligible expense.
Eligible Expense Limitations:
Calculating Revenue
Reference Periods for the Drop-in Revenues Test
Rent Subsidy for Entities Impacted by the Crisis
Lockdown Support Subsidy
General Comments
Please contact Segal LLP for any assistance required.
For more information on how our team can help you navigate your specific transfer pricing needs, contact our Transfer Pricing Leader, Avinash S. Tukrel.
Written by Stephen Lanni, CPA, CA from Segal LLP. This document was written for our quarterly bulletin, Canadian Overview, published by Canadian member-firms of Moore North America.
Written by Echo Lee, CPA, MTax, MTI, from Segal LLP. This document was written for our quarterly bulletin, Canadian Overview, published by Canadian member-firms of Moore North America.
Written by Brad Berry from Mowbrey Gil. This document was written for our quarterly bulletin, Canadian Overview, published by Canadian member-firms of Moore North America.
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