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Home , September 27

Canada Emergency Rent Subsidy (CERS) 2020

* based on government announcements to 12.01.20 1 CERS - Overview

► Canadian businesses, non-profit organizations, or charities who have seen a drop in revenue due to the COVID-19 pandemic be eligible for a subsidy to cover part of their commercial rent or property expenses, starting on 27, 2020, until 2021.

► The subsidy will provide payments directly to qualifying renters and property owners, without requiring the participation of landlords

This material is for informational purposes only and should not be construed as professional advice or opinion.

2 CERS - Eligibility

Organization must meet all the following criteria:

► have a CRA business number or a payroll account

► be an eligible business, charity, or non-profit

► experienced a drop in revenue

• there is no minimum revenue drop required to qualify for the subsidy

► incurred eligible expenses

This material is for informational purposes only and should not be construed as professional advice or opinion.

3 CERS – Claim Periods Rent subsidy periods – 28 day periods:

► September 27 – 24, 2020

► – 21, 2020

► – , 2020

► , 2020 – 16, 2021

► , 2021 – 13, 2021

► , 2021 – 13, 2021 ➢Remaining periods to June 2021 are yet to be announced **Can apply up to 180 days after the end of the subsidy period

This material is for informational purposes only and should not be construed as professional advice or opinion.

4 CERS – Eligible Expenses

Qualifying property

► Expenses for real property (buildings and land) in Canada that is rented/owned by a business or organization

A subsidy claim can be made for each qualifying property for each claim period

Eligible expenses for each period can be claimed to a maximum of:

► $75,000 per business location

► $300,000 in total for all locations (including amounts claimed by affiliated entities)

This material is for informational purposes only and should not be construed as professional advice or opinion.

5 CERS – Eligible Expenses Criteria expenses need to meet:

► amounts are paid or payable to an arm’s-length party

► expenses are in respect of the claim period

► expenses must be paid or payable pursuant to a written agreement in place before , 2020

** If the eligible expense has not yet been paid at time of filing for the subsidy, the organization must attest that it will be paid within 60 days of receiving the rent subsidy payment

This material is for informational purposes only and should not be construed as professional advice or opinion.

6 CERS – Expenses if you rent a qualifying property Eligible Expenses

► rent ► amounts required to be paid under a net lease • base rent • operating expenses (property insurance, utilities, common area maintenance) • property taxes NON-eligible Amounts

► HST ► tenant insurance ► leasehold improvements ► interest or penalties on unpaid amounts

This material is for informational purposes only and should not be construed as professional advice or opinion.

7 CERS – Expenses if you own a qualifying property

Eligible Expenses

► property taxes ► property insurance ► interest on commercial mortgages for the purpose of purchasing real property

NON-eligible Amounts

► HST ► other costs incurred with respect to owning and maintaining the property

This material is for informational purposes only and should not be construed as professional advice or opinion.

8 CERS – Base Subsidy Rate

Revenue Decline Base Subsidy Rate

70% or over 65%

50% to 69% 40% + (revenue drop - 50%) X 1.25

1% to 49% Revenue drop X 0.8

Example:

► Revenue decline of 65%: 40% + (65% - 50%) X 1.25 = 58.75% subsidy rate

► Revenue decline of 30%: 30% X 0.8 = 24% subsidy rate

This material is for informational purposes only and should not be construed as professional advice or opinion.

9 CERS – Determining Revenue Decline

Subsidy Period General Approach Alternate Approach September 27 – , October 2020 over October October 2020 or September 2020 2019 2020 over average of January or and February 2020 September 2020 over September 2019 October 25 to , November 2020 over November 2020 or October 2020 November 2019 2020 over average of January or and February 2020 October 2020 over October 2019

• all other periods follow the same format • the periods and approach are consistent with the Canada Emergency Wage Subsidy (CEWS)

This material is for informational purposes only and should not be construed as professional advice or opinion.

10 CERS – Lockdown Support

There is a 25% top up of the rent subsidy if a business is forced to temporarily close or significantly restrict operations for one week or longer due to a COVID19 related public health order. Restricted activities must account for at least 25% of total revenues at the relevant location • calculated on a location-by-location basis • public health order must be issued by one of the levels of government or the local public health authority

Example: A restaurant is required to close its dine-in service due to a public health order but is allowed to remain open for take-out service. The restaurant’s dine-in service must have accounted for at least 25% of revenues during period 1 to be eligible for the top-up in period 2

This material is for informational purposes only and should not be construed as professional advice or opinion.

11 CERS – Applying for Subsidy Canada.ca site will walk you through the steps and calculations!

Click here to begin your application process (external link)

This material is for informational purposes only and should not be construed as professional advice or opinion.

12 CERS – Sample Application

This material is for informational purposes only and should not be construed as professional advice or opinion.

13 CERS – Sample Application

This material is for informational purposes only and should not be construed as professional advice or opinion.

14 CERS – Sample Application

This material is for informational purposes only and should not be construed as professional advice or opinion.

15 CERS – Sample Application

NOTE: If you earn rental income from the property, it will be deducted from the total expenses

This material is for informational purposes only and should not be construed as professional advice or opinion.

16 CERS – Sample Application

NOTE: It appears that other amounts paid under a net lease will need to be included with the rent on this input screen

This material is for informational purposes only and should not be construed as professional advice or opinion.

17 CERS – Sample Application

NOTE: All expense will be prorated to the equivalent amount for a 28 day period.

This material is for informational purposes only and should not be construed as professional advice or opinion.

18 CERS – Sample Application

The calculated CERS will then need to be entered on the Canada Revenue Agency website using the entity’s My Business Account site

This material is for informational purposes only and should not be construed as professional advice or opinion.

19 CERS – Sample Application

This material is for informational purposes only and should not be construed as professional advice or opinion.

20 CERS – Sample Application

This material is for informational purposes only and should not be construed as professional advice or opinion.

21 Questions?

This presentation provides general information and is not intended to address the circumstances of a particular organization or individual. Appropriate professional advice should be obtained by an organization from its trusted advisors regarding CERS.

This material is for informational purposes only and should not be construed as professional advice or opinion.

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