The Canada Emergency Rent Subsidy (CERS) will now be available until at least September 25, but at gradually declining levels after July 3. The newly released 2021 federal budget earmarks approximately $1.9 billion for an additional 16 weeks of CERS coverage and also opens the potential for a further extension to November 20.
Under current rules, to qualify for the maximum subsidy covering up to 65 per cent of fixed property expenses — capped at a maximum of $75,000 per single location or $300,000 for entities with more than one location — tenants and businesses in owned premises must have suffered at least a 70 per cent drop in revenue compared to the pre-pandemic period. From there, all businesses and organizations registering a decline in revenue are eligible for subsidies on a sliding percentage scale. In addition, eligible CERS recipients forced to curtail business operations for COVID-19-related public health reasons qualify for lockdown support, which covers an extra 25 per cent of fixed property costs, including rent, mortgage interest and insurance.
“To date, these measures have provided $2.6 billion in support to Canadian businesses,” the budget document states. “To bridge Canadians through the rest of this crisis to recovery, continued support is needed.”
As outlined, CERS will be offered at the current level for the first four weeks of the extension, from June 6 to July 3. It will dip to a maximum of 60 per cent for the July 4-31 period then drop more precipitously to a maximum of 40 per cent for August 1-28 and a maximum of 20 per cent in the four-week term ending September 25. After July 3, the program will only be open to applicants that have experienced at least a 10 per cent revenue decline relative to the pre-pandemic period.
Lockdown support will hold steady at 25 per cent of fixed property costs until September 25. The budget document also announces the government’s intension to enact regulations to extend CERS for an additional eight weeks, to November 25, “should the economic and public health situation require further support”.
Meanwhile, the Canada Emergency Wage Subsidy will also be extended until September 25 with a similar incremental curbing of maximum disbursement in the periods after July 3. That also comes with some new stipulations for publicly listed companies, which will call for partial to full repayment of allocated subsidies if a corporation’s aggregate executive compensation in 2021 exceeds the aggregate in 2019.