Canada Emergency Rent Subsidy (CERS): What You Need to Know
The COVID-19 pandemic has been difficult for everybody for various reasons, from personal health to the ability to work. Financially, businesses have been struggling during this time because of restrictions and lockdown policies or just from the lack of customers shopping.
Luckily, the government has provided the Canada Emergency Rent Subsidy (CERS) to help with these financial burdens.
What exactly is the CERS, and who can apply for this subsidy? CHI Real Estate has the answers to what you want to know.
What is the Canada Emergency Rent Subsidy
The government has decided to provide subsidies to Canadian businesses, non-profit organizations, and other charities that the COVID-19 pandemic has financially impacted. This subsidy covers part of their commercial rent or other property expenses and currently covers September 27, 2020, to June 2021.
For those that qualify, the subsidy will be paid directly to the renter and property owner. Landlords do not need to be involved in receiving the subsidy.
Who Can Apply for CERS?
This can get somewhat complex, but to apply for CERS, you must meet all four established requirements. If you don’t have a CRA business number but meet conditions b or c (of requirement 1), you will have to set one up before applying for CERS.
1. You meet one of the following conditions:
- A) On September 27, 2020, you had a CRA business number or
- B) On March 15, 2020, you had a payroll account, or someone else made payroll remittances for you or
- C) You acquired the business assets of someone who meets condition b or
- D) Your business meets other conditions that have been introduced at a later time (currently, no new conditions have been introduced).
2. You are a business, charity, or non-profit that is eligible
- Non-profit and Agricultural Organizations
- Boards of Trade and Chambers of Commerce
- Labour Organizations
- Registered Charities
- Certain Organizations
- Private Schools and Colleges
Keep in mind; public institutions cannot apply for CERS.
3. You had a drop in revenue
There is no minimum revenue drop required to apply for the subsidy. This rate only is used to calculate the amount of the subsidy.
This calculation is comparing your revenue during a particular period with the baseline revenue from a previous period. Use this online calculator to figure out your revenue drop and the amount you may receive as a subsidy.
4. You have eligible expenses
This subsidy will cover a portion of expenses deemed eligible for a particular period for each qualifying property, calculated on a property by property basis. “Qualifying property” means any buildings or land that you own or rent and use in the normal activities of your organization. This does not include your home or any properties primarily used to generate rental income.
Eligible expenses must have happened within the claim period and were under a written agreement that was in effect before October 9, 2020. There is a maximum for these expenses: $75,000 per location, $300,000 in total for all of your locations (including any affiliated entities).
How to Apply
The application for CERS is through My Business Account on the Canadian Revenue Agency’s website. You can register for or log in to your My Business Account here.
Once registered and logged in, make sure that all mailing and other contact information is up to date. Then you will need to have a CERS number, which is created in your My Business Account. The final first step is to make sure your direct deposit is set up unless you want to receive the subsidy by cheque.
You will need to verify that the claim period you are applying for is open. Next, gather the required information for calculating the subsidy:
- The amount you owe/have paid for on all eligible expenses.
- Property Address
- Landlord Name and contact information if you rent or mortgage holder if you currently have a mortgage on the property.
Finally, you are now ready to apply for the CERS within your My Business Account. Remember, you will need to submit a separate application for each claim period. Also, the application must be filed within 180 days of the end of the period you are claiming.
Considering buying a restaurant? Restaurant buyers are eligible for CERS Subsidies. Ask the business if they have applied or are qualified for CERS. The purchaser will need to reapply for the program as the benefit cannot be transferred. The purchaser can use the sales reporting from the selling restaurant in their application for the program, so be sure to obtain documentation from the Seller on their CERS application and amount of subsidy. You can contact Revenue Canada with your questions and to confirm eligibility at +1 (800) 959-5525
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