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Canada Emergency Rent Subsidy (“CERS”)

20-Oct-20

By Matthew Ryan, Student-at-law

On October 9, 2020, the Federal Government announced plans to introduce the new Canada Emergency Rent Subsidy (“CERS”), which replaces the Canada Emergency Commercial Rent Assistance Program (“CECRA”) announced in May. Notably, CERS would provide support directly to tenants. This addresses a criticism of CECRA which placed the onus on landlords to apply for the subsidy.

CERS will provide rent and mortgage support until June 2021 for qualifying organizations affected by COVID-19. CERS will be available to businesses, charities, and non-profits that have suffered a drop in revenue, as long as they have eligible costs, such as rent and mortgage interest payments.

In addition, CERS is available to businesses with more than $20 million in annual revenue, and with more than $50,000 in monthly rent. Businesses with revenue or rent obligations beyond these amounts were previously not eligible for support under CECRA.

How does it work?

CERS will subsidize a percentage of expenses, on a sliding scale, to a maximum of 65% of eligible expenses until December 19, 2020. A business will qualify for a 65% subsidy if revenues drop by at least 70%; a lesser drop in revenues will result in a smaller subsidy. A business can claim a maximum of $75,000 of eligible expenses per location, but this amount is capped at $300,000 across all of a business’ locations.

CECRA expired on September 30, which has left many commercial tenants without support. To this end, organizations will be able to make claims for CERS retroactively for the period beginning September 27 and ending October 24, 2020.

Extra support is promised for businesses forced to close due to lockdowns. An additional subsidy of 25% of eligible expenses will be available for organizations temporarily shut down by a mandatory public health order issued by a qualifying public health authority.

The Federal government also announced that CERS will provide support to property owners, although details about this have not been announced yet.

We will continue to provide updates as more details about CERS become available.

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