On October 9, 2020, the federal government announced a new Canada Emergency Rent Subsidy (CERS) to assist businesses, charities and non-profits that are experiencing a drop in revenue as a result of the COVID-19 pandemic.
Introduced as part of a series of targeted supports to assist businesses and organizations through the expected second wave of the virus, CERS will provide financial assistance to both commercial tenants and property owners.
The CERS replaces the Canada Emergency Commercial Rent Assistance (CECRA) program, which provided commercial rent assistance for the months of April to September 2020.
1. Applicable Period:
The new CERS will apply retroactively to provide rent and mortgage support from September 27, 2020 to June 2021 to qualifying organizations affected by COVID-19.
2. Qualifying Organizations:
Unlike CECRA, where funds were made available to the property owner, the CERS benefit will be paid directly to qualifying tenants or property owners. Qualifying businesses charities, and non-profit organizations that have experienced a revenue drop (to be specified) will receive a subsidy for rent or mortgage interest payments, as applicable. For companies that experience less than the maximum prescribed revenue drop, financial assistance will be provided on a gradually decreasing scale that corresponds with the amount of revenue loss.
3. Subsidy Amount
CERS will subsidize up to 65% of rent or mortgage interest payments, with an additional 25% subsidy provided to businesses or organizations that have been ordered to shut down temporarily by a qualifying public health authority until December 19, 2020. In total, a qualifying business or organization could potentially have up to 90% of their rent or mortgage interest payment subsidized.
Since the program runs until June 2021, it is expected that the federal government will provide further details at a later date as to whether the subsidy amount will remain the same, or decrease after December 19, 2020.