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Canada Emergency Rent Subsidy (CERS)

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What is the CERS?

The Canada Emergency Rent Subsidy (CERS) provides rent and mortgage support to small businesses affected by COVID-19. The subsidy is administered by the Canada Revenue Agency (CRA) and provides support directly to tenants.

Most recent update: On March 3, 2021, government announced that the CERS base rate will remain at 65% and the top-up support will remain at 25% between March 14 and June 5, 2021 (period 7-period 9). Additionally, businesses will be able to use 2019 revenue numbers in their 2021 revenue drop calculations. On February 24, 2021, government proposed draft legislation to allow holding companies to qualify for the lockdown support if their operating company is eligible. This change must pass through legislation before coming into effect. See our timeline for all updates on rent relief

Program Overview                  FAQ                 
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CERS Program Overview

How the program is administered: CERS is administered by the CRA on a period-by-period basis. Each CERS Claim Period is four weeks, and businesses can generally submit a claim the day after the period has ended. Here is a current schedule of CERS Claim Periods:

Note: Only periods 1-4 are confirmed. Periods 5-9 still need to be adopted by the Parliament.

CERS Claim Periods
Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9
Sep 27 to Oct 24, 2020 Oct 25 to Nov 21, 2020 Nov 22 to Dec 19, 2020 Dec 20 to Jan 17, 2021 Jan 18 to Feb 13, 2021 Feb 14 to Mar 13, 2021 Mar 14 to Apr 10, 2021 Apr 11 to May 8, 2021 May 9 to Jun 5, 2021

Amount businesses can receive: The subsidy is available on a sliding scale (with a maximum amount of 65%) for businesses that can demonstrate a revenue loss from September 27 to January 17, 2020 (the other periods still need to be adopted by the Parliament). An additional top-up of 25% (maximum possible subsidy of 90%) is available for businesses that temporarily shut down due to a mandatory public health order issued by a qualifying public health authority.

Program duration: September 27, 2020 to June 2021

How to apply: After using the CERS calculator, you must apply through one of the following CRA portals:

When to apply: Businesses need to apply for the rent subsidy after the month has passed. This means, for example, that applications for November support will not be available until December.

Application deadline: 180 days after the end of each claim period.

Eligibility criteria: See the FAQ below for details.

How to calculate: See the FAQ below for details. 

Stay informed! If you’re not a CFIB member and would like to receive CERS updates by email, please subscribe to our email list.

Frequently Asked Questions

Is my business eligible for the CERS?

CERS is available for both renters and property owners. To determine if your business is eligible, you need to:

  1. Own or rent a property that is:
    • Real or immovable (not for domestic purposes); and
    • Located in Canada and used by your business for its ordinary activities
  2. Have eligible rent expenses totalling no more than $75,000 per location per period and $300,000 per entity per period
  3. Be an eligible entity, including a/an:
    • Individual
    • Taxable corporation or trust
    • Registered charity
    • Partnership of eligible employers
    • Non-profit organization
  4. Have experienced a revenue loss during a CERS claim period
  5. Have a payroll account as of March 15, 2020 (or have been using a payroll service provider) or have a business number (BN) as of September 27, 2020.

Non-eligible businesses include those who:

  • Do not have revenues before March 1, 2020
  • Have residential properties such as your home or cottage used by you, your family or other non-arm’s-length persons
  • Have properties you own that are primarily used to earn rental income from arm’s-length parties

Note: If your landlord received funding through CECRA, it does not impact your eligibility for the CERS.

What is a net lease?

A net lease is a written rental agreement between the landlord and a tenant that states the tenant will pay or owes one or more expenses (e.g., rent, property taxes) to the landlord, landlord’s agent, or property management company.

What expenses are eligible to be covered by the CERS?
  Eligible Ineligible
Renter if included under a net lease
  • Base rent
  • Regular payments for customary operating expenses, such as:
  • Property insurance
  • Utilities: Hydro, gas, water
  • Common area maintenance
  • Storage fees
  • Snow removal
  • Property and similar taxes, including school and municipal taxes
  • Ancillary fees such as:
    • Key/clicker replacements
    • Cleaning charges
  • Sales taxes (such as GST/HST and provincial sales taxes)
  • Property damages
  • Interest or penalties on unpaid amounts
  • Leasehold improvements
  • Tenant insurance such as:
    • Content insurance
    • Liability insurance
Owner
  • Property and similar taxes including:
    • School taxes, and
    • Municipal taxes, if these are part of your property tax assessment
  • Property insurance
  • Interest on commercial mortgages for the purpose of purchasing real property
  • Storage rent to arm’s length parties
  • Content insurance
  • Liability insurance
  • Payments between non-arm’s length and related entities*

Condo and strata fees:

  • For owners: this is not considered an eligible expense. These fees can be claimed as an eligible Working from home expense
  • For renters: CRA is still making a determination on this

*Speak to your accountant or CRA if this is your situation.

Note:

  • For renters and property owners: Only amounts paid or payable to an arm’s-length party are considered eligible expenses.
  • For property owners: If you earned any revenue from sub-leasing space to arm’s-length parties, you must subtract that revenue from your eligible expenses.
  • Expenses must fall within the claim period you are applying for. Note: the CERS calculator prorates eligible expenses to 28 days.
  • Eligible rent expenses are limited to those under agreements entered into before October 9, 2020 and must be in writing.
What rent expenses are not covered by the CERS?

 

  • Sales tax (e.g., GST/HST)
  • Regular business operating payments paid to a third-party provider (e.g., phone or internet)
  • Amounts paid as, on account of, in lieu of payment of or in satisfaction of damages
  • Amounts paid under a guarantee, security, or similar indemnity of covenant
  • Payments arising due to default under the agreement by the eligible entity
  • Interest and penalties on unpaid amounts
  • Fees payable for infrequent items or special services
  • Reconciliation adjustment payments

 

Does my rent need to be paid to qualify for CERS?

No. CERS is based on the amount payable (owed) in each claim period, NOT on the amount paid. However, you must attest to pay your rent bill within 60 days of receiving your CERS.

How do I calculate my CERS?

To calculate CERS, businesses need to determine their revenue loss and then use one of the formulas below to calculate the amount of rent subsidy that they will receive. The calculation is as follows:

Those with up to 50% revenue loss will get 0.8 times their current revenue loss as a subsidy.

  • For example, if your revenue loss is 50%, you will multiply this by 0.8 to receive a 40% rent subsidy.

Those with a revenue loss between 50% and 70% will get 40% plus 1.25 times the incremental amount of loss above 50%.

  • For example, if your revenue loss is 60% you will get a CERS of 40% + (1.25x10%) = 52.5% rent subsidy.

Those with 70% or more revenue loss will receive a 65% rent subsidy.

Revenue Loss Rent Subsidy Calculation
Up to 50% CERS = Revenue loss % x 0.8
Between 50% and 70% CERS = 40% + [1.25 x(Revenue loss - 50%)]
70% and greater CERS = 65%

Note: businesses required to shut down due to a public health order are eligible for a maximum 90% subsidy.

Use the CRA calculator to determine your CERS amount.

The following table is a summary of the CERS calculation:

Revenue Loss (%) Base Subsidy Total Subsidy % = A + B
Top-Up Subsidy: Shut down due to public health orders?
A. Base Subsidy: For revenue loss 0%-50%:
Multiply by 0.8
B. For revenue loss >50%:
Multiple incremental amount over 50% by 1.25%
No Yes
10% 8% - 8% 33%
20% 16% - 16% 41%
30% 24% - 24% 49%
40% 32% - 32% 57%
50% 40% - 40% 65%
60% 40% 10% x 1.25 = 12.5% 52.5% 77.5%
70% 40% 20% x 1.25 = 25% 65% 90%
80% 40% 25% (maximum reached) 65% 90%

*The percentages shown in the table are for a business that is shut down for the full 28 days of the period. Businesses shut down for fewer days will be entitled to a smaller top-up.

Is my business eligible for the top-up?

You will be eligible for an additional 25% top up if your business is forced to temporarily close or significantly restrict operations for one week or longer due to a COVID-19 related public health order.

The public health order must require you stop or restrict business activities. Restricted activities must account for at least 25% of total revenues at the relevant location during the prior reference period.

Example 1: A restaurant is required to close its dine-in service due to a public health order but is allowed to remain open for take-out service. The restaurant’s dine-in revenues must have accounted for at least 25% of revenues during period 1 to be eligible for the top-up in period 2.

Example 2: A clothing retailer is required to completely close and therefore has no revenues for a given period. The retailer will receive the 65% subsidy, plus the 25% top-up for each day closed or restricted for a possible total of 90% rent subsidy for the period(s) they are completely shut down.

Restrictions that do not qualify your business for the top up:

  • Requiring masks for staff and/or customers
  • Restricted or reduced hours of operation (i.e., bars and pubs required to close before midnight)
  • Seating capacity limits or physical distancing requirements
How do I calculate my revenue loss for a CERS claim period?

Revenues for the CERS are calculated in the same way they are for the CEWS. To calculate your revenue drop, you can choose one of the following baseline revenue options:

  • General approach: Compare your business eligible revenue for the claim period month in 2020/2021 you are applying for with your eligible business revenue for the same month in the previous year; OR
  • Alternative approach: Compare your business eligible revenue for the claim period month in 2020/2021 you are applying for with your average eligible business revenue for the months of January and February 2020

Periods 4-6

Period 4
December 20, 2020 to January 16, 2021

GENERAL APPROACH
December 2020 over December 2019
or
November 2020 over November 2019

ALTERNATIVE APPROACH
December 2020 or November 2020
over average of January and February 2020

Period 5
January 17, 2021 to February 13, 2021

GENERAL APPROACH
January 2021 over January 2020
or
December 2020 over December 2019

ALTERNATIVE APPROACH
January 2021 or December 2020
over average of January and February 2020

Period 6
February 14, 2021 to March 13, 2021

GENERAL APPROACH
February 2021 over February 2020
or
January 2021 over January 2020

ALTERNATIVE APPROACH
February 2021 or January 2021
over an average of January and February 2020

When calculating your revenue loss, use your revenues from the calendar month and not the claim period. You can use the higher revenue reduction of the two calendar months that fall within the claim period to maximise your subsidy.

What are the 125.7 CERS Elections?

These elections are CRA’s way of confirming if you are calculating your CERS revenues differently from the revenues that you regularly submit to CRA.

If in your CERS application, you chose to change your revenues in one (or more) of the below ways be sure to check the corresponding election box correctly. This must be consistent with your CEWS elections. If you have not made any changes to your revenue, then please indicate that you have not made any of the elections in your Attestation form (RC 665-20e).

How are you calculating your CERS revenues differently from the revenues that you regularly submit to CRA? Simplified: if yes to any of these questions check the corresponding election box.
A joint election, along with each other member of the group of eligible employers that prepares consolidated financial statements, under paragraph 125.7(4)(a) of the Income Tax Act (revenue determined on a non-consolidated basis for members of the employer's group). Did you combine/separate your financial statements with other entities?
A joint election, along with each other member of the affiliated group, under paragraph 125.7(4)(b) of the Income Tax Act (revenue determined on a consolidated basis for the employer's group). Do you have other affiliated groups that you are consolidating your revenues with?
An election under paragraph 125.7(4)(c) of the Income Tax Act (joint venture election). Is the entity a joint venture (by 2+ parties) and does it have its own revenues that are used separately from the other parties?
A joint election, along with each person or partnership with which the employer does not deal at arm's length and from whom the employer earns all or substantially all of its qualifying revenue under paragraph 125.7(4)(d) of the Income Tax Act (non-arm's length revenue). Accountant recommended. Is the revenue received in majority (CRA says 90%+), from a non-arm’s length source?
An election under paragraph 125.7(4)(e) of the Income Tax Act (cash method or accrual method). Did you switch your accounting method?
  1. Cash method (recording income as it is received and expenses as they are paid)
  2. Accrual method (recording income and expenses when they are billed)
A joint election between eligible entity and the seller of an asset an election under paragraph 125.7 (4.1) (e) of the Income Tax Act (Asset sales). Accountant recommended. Did you acquire a business or part of a business during the qualifying period (or before that) and it was:
  • used by the seller in the course of a business in Canada,
    and
  • Was not bought to increase your CERS?
  • You could use the seller’s revenue attributable to the purchased assets – depending whether it was acquired from an arm’s length seller or not – in calculating your CERS revenue drop.
An election under clause (b)(ii)(B) of the definition "prior reference period" in subsection 125.7(1) of the Income Tax Act. Did you use the alternative approach (average of Jan/Feb)?
An election under subparagraph (a)(ii) or (b)(ii) of the definition "qualifying revenue" in subsection 125.7(1) of the Income Tax Act (election by registered charity or not-for-profit (including a prescribed organization that is a registered charity or a not-for-profit organization that is a public institution), to exclude government funding). Are you a registered charity or non-for profit who decided to exclude government funding?
What do “arm’s-length and “non-arm’s length” mean?

You will have to determine whether the relationship between the property owner and tenant/subtenant is at arm’s length or non-arm's length because it will affect eligibility.

Non-arm’s length relationships can be more simply viewed as family, significant others, partnerships, or businesses where one partner has controlling interest/voting shares.

Arm’s-length relationships can be viewed as any other individuals or corporations that are treated without preference, and with no blood, trust or controlling relationship.

Unsure if your relationship is arm’s-length or non- arm’s length? Check CRA’s website.

What is an affiliated entity?

An affiliated entity is an organization that directly or indirectly controls another entity. An example of this would be a parent company or a subsidiary company.

If I have an operating company/holding company structure, am I eligible for CERS?

Possibly, but it's complicated. There are elections that allow for the holding company to apply for CERS. Under these elections, the Holdco & Opco revenues can be consolidated. Things to note:

  • Your CERS and CEWS revenue calculations should be consistent. Your elections must match up.
  • Rent is not eligible, but other arm’s-length eligible expenses for the holding company may be eligible (e.g., property taxes, mortgage and property insurance)
  • If your holding company was not impacted by a mandated closure, it will not be eligible for the top-up subsidy

If your business is in this situation:

  • Check the list of elections from the Income Tax Act
  • Speak to your accountant
  • Call CRA business enquiries at 1-800-959-5525
Does CERS cover my missed rent from May to September?

The missed rent from May to September is not included in this program. CFIB continues to advocate to make this available to those who have fallen through the cracks of support.

What kind of documentation do I need to prepare for my application?

To prepare, ensure that you have access to your MyBA or Represent a Client portals and that the people who deal with this information (those applying on your business’ behalf) have the proper authorities. Before you start your application, you should have your:

  • Monthly qualifying revenue amounts from 2019 and 2020
  • The eligible expenses broken down by business location
  • The property address
  • The name and contact information for your
    • mortgage holder (for property owners)
    • landlord (for renters)
  • Affiliated entities also require the following:
    • Number of affiliated entities in the agreement
    • Percentage assigned to you under the agreement with your affiliated entities
    • Business number of each affiliated entity
    • Percentage assigned to each affiliated entity under the agreement

The only way to apply for the CERS is through MyBA or Represent a client. There is no paper version or any other non-electronic method to apply for the CERS.

How long will it take to receive my CERS?
  • Direct deposit: 3-8 days after filing your claim.
  • Cheque by mail: 7-17 days after filing your claim (mail service dependent). Ensure your address on your MyBA is up to date as this is where CRA will send your cheque.

If you have not heard anything 8 days after filing your claim, you can call the CRA Business enquiries line (1-800-959-5525) for a status update. Please prepare for long wait times.

I made a mistake in my application. Where can I fix or amend it?

You can cancel or amend a previous application via either My Business Account or Represent a Client. The deadline is 180 days after the end of the period to change or increase the amount of your claim.

If you need to cancel or reduce the amount of your claim after the deadline you can do so by calling the CRA’s business enquiries line at 1-800-959-5525.

More information on changing or cancelling a claim can be found on the CRA website.

What happened to the CECRA?

CERS will replace the CECRA, which ended on September 30, 2020 for new applications and October 30, 2020 for extensions. If you received CECRA funding this will not impact your CERS. For more information on the CECRA program, view our CECRA FAQ. Please note that the program is no longer available, and we are not updating our FAQ.

Other CERS resources

How is CFIB advocating for small businesses on rent?

What we have achieved:

  • We pushed for the CECRA to be replaced by a program that would be simple and delivered directly to the tenants.
  • We are working with CRA to ensure they are aware of the issues that existed with the previous CECRA program.

What we're pushing for:

  • Pay 50% of rents retroactively for those who qualified for CECRA from April to September but did not get the support due to the landlord’s lack of participation. 
  • Ensure new rent support (CERS) is simple. 

Read more about our recommendations to address the gaps in the CERS here.

What you can do to help:

  • We’ve pushed the government to make some progress, but we're still fighting for better relief measures. Add your voice today.

SIGN THE PETITION

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