CERS replaces earlier versions of commercial rent subsidies and will provide eligible Canadian businesses, non-profit organizations, and charities with up to 65% of rent or commercial mortgage payments until June 2021.
While previous versions required the landlord to partake in the application process, CERS will provide the funds to the renters and property owners directly. To qualify, applicants need to meet all four conditions below:
1. Applicants need to fulfill at least one of the following:
they must have had a CRA business number on September 27, 2020,
they must have had a payroll account on March 15, 2020, or
they must have purchased a business that meets the above criteria, and made an election under the special asset acquisition rules.
If an applicant meets the second or third criteria, but not the first, they may still be able to apply once they obtain a CRA business number.
2. Only certain types of businesses, non-profits, and charities qualify:
corporations not exempt from income tax
individuals other than trusts
partnerships consisting of eligible employers
certain prescribed organizations, such as private schools and indigenous government-owned corporations
the following entities that are exempt from income tax:
boards of trade
chambers of commerce
non-profit corporations for scientific research and development
labour organizations or societies
benevolent or fraternal benefit societies
3. Applicants need to show a decrease in revenue.
While there is no minimum revenue decrease required to be eligible, CRA compares the revenue of the referencing period with the revenue of another period. This online calculator helps to determine if and how much an applicant may receive in subsidy.
4. CERS only covers qualifying properties for eligible expenses up to a certain maximum.
Qualifying properties include real or immovable property in Canada owned or rented and used during ordinary business. Expenses must meet the following conditions to be eligible:
amounts were paid or are payable to arm’s-length parties,
expenses paid or payable are pursuant to an agreement signed before October 9, 2020,
expenses are in respect of the claim period, and
for tenants: the expenses are rent or amounts payable under a net lease, such as property taxes; or for landlords: the expenses are property and similar taxes, property insurance and interest on mortgages.
Once applicants have determined that they qualify for CERS, the application can be filed online through CRA. On November 30, 2020, CRA will process applications received to date and begin distributing payments on December 4, 2020.