On November 2nd, 2020, the federal government tabled legislation establishing a series of new financial supports to help businesses survive the pandemic — including a redrafted commercial rent subsidy program to replace the federal government’s much-criticized rent assistance benefit.
The measures include the introduction of the Canada Emergency Rent Subsidy (CERS) which replaces the Canada Emergency Commercial Rent Assistance (CECRA) program. It also includes a new “lockdown support” to aid businesses ordered to close by a public health order. The legislation also extends the Canada Emergency Wage Subsidy until June 2021.
Tenants participating in the new program still had to pay 25% of their pre-pandemic rent, while their landlords had to accept a 25% loss on the total rent paid. The new CERS allows businesses to apply directly for the benefit without having to go through landlords.
Here are some of the key points outlined in the legislation:
The change to the top-up subsidy revenue decline calculation, and the freezing of period 8 CEWS calculations through to period 10, were included. The legislation generally matches the October 9, 2020 release.
As indicated in the October 9, 2020 release, the first applicable period is Period 8 (Sept 27 – Oct 24).
Up to $75,000 per period in rent, mortgage interest, insurance and property taxes paid by commercial property owners can be partially subsidized. Several additional rules were included to further limit the claim.
CERS legislation is included as a part of CEWS legislation (Section 125.7). The subsidy percentage is computed in the same manner as CEWS (using the same revenue reduction percentages), with the same 65% maximum for all periods ending on or before December 19, 2020.
An additional rent top-up percentage will provide a further subsidy of 25% for the portion of the period throughout which the property is subject to a public health restriction.
CERS and CEWS:
Applications are due by the later of January 31, 2021, and 180 days after the end of the qualifying period.
Several revenue recognition elections previously available only until Period 4 has been made available for all periods.
The ability to revoke or amend elections has been added.
Thank you to our friends at Video Tax News for the summary.