We now write with an update regarding the CERS program. On November 23, 2020, the Government of Canada announced that the Minister of National Revenue, Canada Revenue Agency, the government body administering CERS, will be accepting applications for the program for the first claim period of September 27, to October 24. Applications for the second claim period of October 25 to November 21, 2020 will open on November 30, 2020.
Applicants for CERS are to apply via an online calculator and application form administered by the Canada Revenue Agency through a specified online portal.
The Canada Revenue Agency portal provides clarifying information regarding the businesses that are eligible to apply for CERS and what can be claimed through CERS:
- businesses eligible for CERS include individuals (but not trusts), corporations or trusts that are not exempt from income tax, partnerships where at least 50% of the interests of the partnership are held by eligible employers, registered charities, non-profit organizations (including non-profit corporations for scientific research and experimental development), agricultural organizations, boards of trade, chambers of commerce, labour organizations or societies, certain Indigenous government-owned corporations and partnerships, registered amateur athletic associations, registered journalism organizations, and private schools and colleges.
- public institutions including municipalities, local governments, Crown corporations, hospitals and public universities, colleges and schools are not eligible businesses.
- eligible businesses must:
- have had a Canada Revenue Agency business number on September 27, 2020;
- have had a payroll account on March 15, 2020 (or be able to identify another person or partnership that made payroll remittances on behalf of the business); or
- have purchased the business assets of another person or partnership who had a payroll account on March 15, 2020 (or who can identify another person or partnership that made payroll remittances on behalf of the business), or can meet the special acquisition rules established for the Canada Emergency Wage Subsidy;
- eligible businesses must also have experienced a drop in revenue calculated by comparing eligible revenue during the CERS period from a previous period. There is no minimum drop in revenue required, however the amount of the drop in revenue will be used to calculate the sum of subsidy received for the applicable period;
- qualifying property includes any real property (land) that an eligible business owns or rents or uses in the course of its ordinary business activities. This excludes residences, homes, cottages, or any other properties owned by an individual used to earn rental income;
- eligible expenses must be paid or payable to an arm's length party pursuant to a written agreement in place before October 9, 2020;
- if your business rents a qualifying property, you can claim the
following eligible expenses:
- rent, including rent based on a percentage of sales or profit;
- amounts required to be paid under a net lease, including base rent, operating expenses, property taxes, or other payments to the landlord for ancillary services
- if your business owns a qualifying property, you can claim the
following eligible expenses:
- property taxes, including school and municipal taxes that form part of your property tax assessment;
- property insurance;
- interest on commercial mortgages, so long as your mortgage does not exceed the lesser of the principal amount secured by one or more mortgages on the property at the time it was acquired or the cost of the property;
- eligible expenses do not include:
- sales tax (including GST, HST and provincial sales tax);
- interest or other penalties on unpaid amounts; or
- any other 'special amounts' under a lease or other agreement.
- eligible expenses that can be claimed are capped at a maximum
- $75,000 per business location; and
- $300,000 in total for all business locations (including all of a business' affiliates)
Applicants should note that the eligible expenses that can be claimed in their CERS application include amounts that are paid or payable during the claim period when the CERS application is being submitted. All amounts that are payable must be paid no later than sixty days after the subsidy is received.
Applicants for CERS should also be aware that their CERS application must be filed no later than 180 days after the end of a CERS claim period.
We will continue to provide you with updates as further information regarding CERS is available.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.