Extension of the Canada Emergency Rent Subsidy

Brian Sanders, Brian Steeves, Garrett Louie, Lawrence Tam
Insights
| 6/8/2021

With both the Canada Emergency Rent Subsidy (CERS) and Lockdown Support program set to expire in June, the 2021 Federal Budget has extended the programs to allow for a gradual phase-out, while still supporting businesses.

Both programs will run for an additional five periods, beginning on June 6, 2021, and ending on October 23, 2021.

Extending the CERS

The CERS will continue to provide a base subsidy based on revenue decline for eligible renters, with the Lockdown Support providing an additional 25% top-up subsidy if the renter is forced to close or reduce operations due to public health restrictions.

Similar to the extension of the Canada Emergency Wage Subsidy, the last four periods will require the renter to have a revenue decline of over 10% in order to be eligible. If this requirement is not met, the business will not be eligible for the CERS or Lockdown Support.

*Expenses for each qualifying period are capped at $75,000 per location and are subject to an overall cap of $300,000 that is shared among affiliated entities.

CERS Calculations for Periods 17 to 21

Relevant Periods for Calculating Revenues

  • Period 17 - June 6 to July 3
  • Period 18 - July 4 to July 31
  • Period 19 - August 1 to August 28
  • Period 20 - August 29 to September 25
  • Period 21 - September 26 to October 23

 

Period 17

Period 18

Period 19

Period 20

Period 21 
Revenue decline:          

70% and over

65%  60%  40%  40% 20% 
50-69% 40% + (revenue decline - 50%) x 1.25 (e.g., 40% + (60% revenue decline - 50%) x 1.25 = 52.5% subsidy rate) 35% + (revenue decline - 50%) x 1.25 (e.g., 35% + (60% revenue decline - 50%) x 1.25 = 47.5% subsidy rate) 25% + (revenue decline - 50%) x 0.75 (e.g., 25% + (60% revenue decline - 50%) x 0.75 = 32.5% subsidy rate)
25% + (revenue decline - 50%) x 0.75 (e.g., 25% + (60% revenue decline - 50%) x 0.75 = 32.5% subsidy rate) 10% + (revenue decline - 50%) x 0.5 (e.g., 10% + (60% revenue decline - 50%) x 0.5 = 15% subsidy rate)  
 >10-50%  Revenue decline x 0.8 (e.g., 30% revenue decline x 0.8 = 24% subsidy rate) (Revenue decline - 10%) x 0.875 (e.g., (30% revenue decline - 10) x 0.875 = 17.5% subsidy rate)
(Revenue decline - 10%) x 0.625 (e.g., (30% revenue decline - 10) x 0.625 = 12.5% subsidy rate)
(Revenue decline - 10%) x 0.625 (e.g., (30% revenue decline - 10) x 0.625 = 12.5% subsidy rate)
(Revenue decline - 10%) x 0.25 (e.g., (30% revenue decline - 10) x 0.25 = 5% subsidy rate)
 0-10% 

Revenue decline x 0.8

(e.g., 5% revenue decline x 0.8 = 4% subsidy rate) 

 0% 0%  0%  0% 

 

This article has been published for general information. You should always contact your trusted advisor for specific guidance pertaining to your individual tax needs. This publication is not a substitute for obtaining personalized advice.

Brian Sanders
Brian Sanders
Partner, Incorporated
Brian Steeves
Brian Steeves
Partner
Garrett Louie Tax Expert
Garrett Louie
Partner, Incorporated
Lawrence Tam
Lawrence Tam
Senior Manager, Tax