The Canada Emergency Rent Subsidy (CERS) was recently announced and will replace the Canada Emergency Commercial Rent Assistance (CECRA) program. The CERS will be similar to the CECRA in the sense that it’ll provide rent relief for small business owners, but the updated version is much better since it allows you to bypass landlords for direct relief. This new benefit will be retroactive to September 27, 2020.
The CERS will cover up to 65 per cent of rent or mortgage interest payments if a business has seen a decline in revenue by at least 70 per cent. Even if your business revenue has declined by less than 70 per cent, you may still qualify for a decreased version of the CERS.
If your business is forced to temporarily shutdown due to mandatory orders, then you could get funding up to 90 per cent of your rent or mortgage interest payments. It’s pretty clear that the CERS can be beneficial, so make sure you know how to apply for CERS and how much CERS pays.
To qualify for the Canada Emergency Rent Subsidy, you need to meet the following conditions.
- You had a CRA business number on September 27, 2020
- or You had a payroll account on March 15, 2020, or another person or partnership made payroll remittances on your behalf
- or You purchased the business assets of another person or partnership who meets the above conditions
- You are an eligible business, charity, or non-profit
- You experienced a drop in revenue
- You have eligible expenses
CERS claim periods which you can apply
Similar to other COVID-19 government benefits, the CERS operates under specific time periods which you can apply. The following periods have been announced:
- September 27 to October 24, 2020 (can apply now)
- October 25 to November 21, 2020 (can apply as of Nov. 30)
- November 22 to December 19, 2020 (can apply as of Dec. 23)
Note that a separate application is required for each period.
Expenses you can claim
The CERS only covers a portion of eligible expenses during the claim periods. There are set maximums in place so you’ll never be 100% covered. The following are expenses you can claim.
You can essentially claim any property that’s related to your business. E.g. office or store. However, you can’t claim your primary residence under the CERS even if you operate your business out of it. Rental properties also wouldn’t apply.
The maximum amount you can claim per period is $75,000 per business location or $300,000 total for all locations.
How much does CERS pay?
The payout from the CERS depends on your rent or mortgage interest payments and how much business revenue you’ve lost. If your business was shut down due to a public health order, you would be eligible for an additional 25 per cent top-up.
The formal CERS pay calculation is as follows:
|Revenue decline||CERS Benefit|
|50% - 69%||40% + (revenue drop - 50%) x 1.25|
|Up to 49%||Revenue drop x 0.8|
If you don’t want to do the math, there’s a calculator on the official website.
How to apply for CERS?
To apply for the CERS, you need to go through your My Business Account via the CRA or you can register for Represent a Client. Once logged in, you’ll need to review your business information. Create a CERS number via your My Business Account and set up your direct deposit information if you haven’t already.
Your formal CERS application is done through your My Business Account.
Assuming you have direct deposit set up, you’ll get your funds between 3 to 8 days after filing. Any money that you’re not eligible for needs to be returned.
Don’t forget about the CEBA
The CERS is just one program that is aimed to help small business owners. You could also potentially take advantage of the Canada Emergency Business Account (CEBA). This program has been very popular since it allowed businesses to borrow up to $40,000 to keep things going. As long as they met certain conditions, 25% of the loan was forgiven. Under the new CEBA rules, up to $20,000 is forgivable as long as you meet certain conditions.
Business credit cards
Another option to help you manage your expenses is to apply for one of the best business credit cards in Canada. To be clear, credit cards should only be used if you’re able to pay off the full balance every month. When used responsibly, you can take advantage of the points you’ll earn and the additional benefits that it comes with such as longer periods where you don’t need to pay interest.