Federal Budget -> COVID-19 Financial Relief -> CERS / CECRA
Bill C-9, An Act to amend the Income Tax Act (Canada Emergency Rent Subsidy and Canada Emergency Wage Subsidy) was tabled on November 2, 2020 and received Royal Assent November 19, 2020, providing the legislation for CERS, and changes to CEWS.
CERS applications can now be done through the application portal. Apply to create your CERS account number through My Business Account or Represent a Client, where you'll also file your application, after calculating your subsidy through the CERS Portal.
See Video Tax News information:
CERS will be available until June 2021.
- information on base subsidy calculation and lockdown support top-up
An October 9, 2020 news release announced the Canada Emergency Rent Subsidy.
- to provide easy-to-access rent/mortgage support until June 2021 for qualifying organizations affected by COVID-19.
- to be provided directly to tenants, while also providing support to property owners.
- for businesses, charities, and non-profits that have suffered a revenue drop.
- to subsidize a % of expenses, on a sliding scale, up to 65% of eligible expenses until December 19, 2020.
- retroactive claims can be made for Sep 27th to Oct 24th, 2020.
- lockdown support: top-up CERS of 25% for organizations temporarily shut down by a mandatory public health order issued by a qualifying public health authority, in addition to the 65% subsidy.
Periods 7 to 9 March 14 to June 5
A March 3, 2021 news release announced that the current structure of the subsidy (max 65%) and lockdown support (25%) would continue until June 5, 2021. Pre-pandemic 2019 reference months can still be used for these periods.
Owners with Non-Arm's Length Tenants
New: The lockdown support portion of the CERS may be available to eligible property owners with non-arm's length tenants.
CRA information on lockdown support change - scroll down to Lockdown support.
CERS Claim Reviews by CRA
Canada Revenue Agency will be reviewing claims for the Canada Emergency Rent Subsidy.
Video Tax News information on reviews, list of supporting documents needed.
Tax Tip: Keep records of all documents supporting your claims!
The rent subsidy is included in income immediately before the end of the qualifying period to which it relates, as is the Canada Emergency Wage Subsidy (CEWS), as per s. 125.7(3) of the Income Tax Act. For example, the subsidy for the 4 weeks ending October 24, 2020 is included in income on October 24, 2020, not when it is received.
For businesses who file their tax return without inclusion of the CERS as required, a subsequent amendment will be required.
The deadline for rent subsidy applications is 180 days from the end of the period. This is also the deadline to change or increase the amount of your claim. If you need to cancel or reduce a claim, you must call CRA's business enquiries phone number. See:
Video Tax News Changing or Cancelling a CEWS or CERS Claim - lots of detail provided
The subsidy is included in income immediately before the end of the period to which it relates - it does not matter when the subsidy is received.
The CECRA forgivable loan is taxable when received - see Tax Treatment and Accounting Treatment of Forgivable Loans such as CEBA and CECRA.
The CECRA is administered by the Canada Mortgage and Housing Corporation (CMHC).
The CECRA lowers rent by 75% for small businesses affected by COVID-19, by providing forgivable loans to qualifying commercial property owners to cover 50% of 3 monthly rent payments, for April, May and June. The landlord absorbs (forgives) 25% of the monthly rent. This has subsequently been revised to include rent for July and August. Only tenants who were eligible for April to June are eligible for July and August, and no further documentation needs to be provided - previously eligible tenants are automatically eligible. However, it is not mandatory to include all tenants in the extension for July or August.
Eligibility for the 70% revenue reduction factor is determined on the average of April, May and a forecast of June revenues, comparing to April, May and June 2019, or to the average of January and February 2020.
The landlord must apply for all 3 months at the same time. Multiple applications can be submitted, provided that each application is for a different property. The property owner can only apply for the program once per property, so attestations for each impacted tenant at that property must be included with one application. There is no indication of what happens if the forecast for June is off by enough to make the revenue decline less than 70%.
New applicants can now apply for up to 6 months of rent assistance (from April through September) all at once. If a business had an average revenue decline of 70% or more in April, May and June, they are deemed eligible for all months of rent relief.
As with the July and August extensions (see below), tenants who were eligible for the April to June rent relief will automatically be eligible for the September rent relief.
The deadline for new applications was extended to September 30, 2020.
The deadline to opt-in for the CECRA September extension is October 30, 2020.
Eligible small business tenants
- paying less than $50,000 per month in rent,
- generating no more than $20 million in gross annual revenues, calculated on a consolidated basis (at the ultimate parent level), and
- have experienced at least a 70% drop in pre-COVID-19 revenues from the April to June 2019 revenues, or from the average of January and February 2020 revenues.
The loans will be forgiven on December 31, 2020, if the property owner agrees to reduce the eligible small business tenants' rent by at least 75% for the 3 months, and agrees to not evict the tenant while the agreement is in place.
The portal opened May 25, 2020.
If you have a problem entering the landlord address, because it pops up with 2 choices and you have to confirm one, if the correct address is showing as the "suggested" address, choose that one and confirm. Choosing the address you entered, even if both are the same, may result in an error message.
The registration requires a mobile telephone number to be provided. What they neglect to tell you is that they will text you your password once the registration is complete. The login name is sent in an email. Hopefully you're not in an area with limited cell service!
If you have problems you can call 1-800-668-2642 or 1-833-610-0515. The morning of the portal opening it was not possible to speak to anyone because these lines were too busy.
CECRA was extended through the end of July 2020, and subsequently to the end of August. Only the tenants approved for the April to June CECRA are eligible for the July support, and they are automatically eligible. This is based on their April and May revenue and their forecast for June revenue. Clawback provisions were removed retroactively. See the CECRA application portal for more information and changes to their Program Details.
Existing applicants will be notified, and CMHC will let them know when the extension application process can be done. Not all tenants need to be included in the July or August applications. A landlord may feel it is not necessary to include a tenant who has their business back up and running and revenues back on track.
Video Tax News CECRA - July extension, 70% test, FAQ update and more - good summary of changes made in July.
CFIB Templates for Businesses re COVID-19 - includes tenant and landlord templates re CECRA.
BDO Canada CECRA to Bring Rent Relief to Small Business Tenants - includes information on provincial announcements re the CECRA.
Baker Tilly Support for Businesses - includes CECRA general eligibility test decision tree.
Revised: March 03, 2021
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