Canada Emergency Rent Subsidy (CERS) applications are open now.
CERS provides much-needed support to Canadian businesses struggling with rent payments during the pandemic. If you have already applied for Canada Emergency Wage Subsidy (CEWS) you will find the process quite familiar.
In the below post, we are going to have a quick overview of CERS instead of going into more details. The Canada Revenue Agency (CRA) has published details of CERS here.
How much is Canada Emergency Rent Subsidy?
The Canada Emergency Rent Subsidy is based on a sliding scale of how much the revenue is dropped. That means it depends on your revenue drop. If a business has a drop of 70% or more in revenue, it is eligible for 65% of the eligible expenses. If the drop is between 50 & 69%, the subsidy is around 40%. It keeps on decreasing when the revenue drop is less than 50%.
Top-up Canada Emergency Rent Subsidy for shut down businesses
During the pandemic, a lot of businesses were shut down due to the lockdowns and shutdowns. These businesses are eligible for another top-up subsidy in addition to the 65% subsidy which is another 25%. Therefore, the maximum possible subsidy amount is 90% of the eligible expenses.
Who can apply for CERS?
The businesses which meet the below conditions can apply for the CERS.
Business Number is required
A business must have a Business Number (BN) with CRA on 09/27/2020, a payroll account on March 15, 2020, or meet the special acquisition rules same as that of CEWS. If you don’t have a BN, you can get one.
Must be an eligible business
A list of businesses eligible for CERS is here.
There must be a revenue drop
There must be a revenue drop! Though there is no minimum drop requirement.
Revenue drop is a comparison of current period revenue with the same period in 2019. Businesses can also compare the current month’s revenue with an average of January and February 2020. The comparisons are similar to Canada Emergency Wage Subsidy.
Must have a qualifying property:
An immovable property a business or organization uses for ordinary business activities. The property can be either a rented one or owned. However, you cannot use your home, cottage or other property where you, your family members, or non-arms length persons live/use.
Must have eligible expenses
The business must have eligible expenses for CERS.
- A maximum of 75,000 per location including both Base CERS and top-up CERS.
- The total Base subsidy of all the locations has a maximum of $300,000. Whereas top-up subsidy has no limit.
There are strict criteria for the expenses to be eligible for CERS:
- These expenses must be paid to non-arm’s-length persons. For example, If you pay one of your own business rent for using the space owned by it, that’s not eligible.
- The expenses should belong to the claim period you are applying for. For example, the first claim period of 09/27/2020 to 10/24/2020 cannot have the expenses outside this date range.
- The expenses must have been paid or payable. In the case of payable, you must attest to the payment of expenses.
CERS – Eligible Expenses for rented property
This includes the rent whether it’s a base rent, sales-based rent or profit-based rent. This also includes the amounts paid or payable under a net lease such as periodic payments of customary operating expenses or the use of ancillary amount, for example, TMI.
CERS – Eligible Expenses for owned property
If you own the property, eligible expenses for CERS include property taxes, property insurance and interest on commercial mortgages. If you use your house for business purposes, you cannot claim a subsidy in the first place.
Further, if you sublease or lease your property you must reduce the number of eligible expenses with the same.
What are the Claim periods for CERS?
As of now, below are the CERS claim periods each having four weeks starting 09/27/2020:
- 09/27/2020 – 10/24/2020
- 10/25/2020 – 11/21/2020
- 11/22/2020 – 12/19/2020
- 12/20/2020 – 01/17/2021
- 01/18/2021 – 02/15/2021
- 02/16/2021 – 03/15/2021
- 03/16/2021 – 04/12/2021
- 04/13/2021 – 05/10/2021
- 05/11/2021 – 06/07/2021
You can apply for the CERS within 180 days of the claim period.
How to apply for the CERS?
You can apply it either through your CRA my business account or ask for a professional accountant to do it for you.
How can we help?
Maroof HS CPA Professional Corporation is a professional accounting firm registered with CPA Ontario and Alberta. We help businesses with all their accounting, bookkeeping, income taxes and advisory services.
You can apply for CERS yourself if you have the information related to qualifying revenues and eligible expenses. However, if you are falling behind updating your books due to the pandemic or for some other reason, you can ask for our help. We can assist in completing the information needed for the Canada Emergency Rent Subsidy. If you have all the information ready and only need help with CERS application filing, we are here too.