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The Canada Emergency Rent Subsidy (CERS) provides a federal subsidization of expenses associated with both commercial rental payments and property ownership.  The program commenced on September 27, 2020 and is scheduled to continue until June 2021.

The CERS program parallels the Canada Emergency Wage Subsidy (CEWS) program in that it is largely based on the same revenue decline calculations and related elections.

Also, the periods covered by each CERS application are four-weeks in length, and have the same beginning and ending dates as CEWS.

The CERS program has two components: the base CERS and the lockdown support (LS).


Broadly, the base CERS subsidizes eligible expenses based on the applicant’s revenue decline as compared to pre-pandemic earnings. The base CERS provides a subsidy of up to 65% of applicable expenses, until March 13, 2021. Details on support beyond this date have not yet been provided.

Lockdown support (LS)

The LS provides an additional 25% subsidy for qualifying entities that are subject to a lockdown and must shut their doors or significantly restrict their activities under a public health order (lasting at least one week) in response to COVID-19. The LS does not vary based on the revenue decline; however, the organization must be eligible for some base CERS, effectively requiring at least a small revenue decline.  It must also be reasonable to conclude that the ceased activities, in the appropriate pre-pandemic prior reference period, were responsible for at least approximately 25% of the revenues of the entity at that location.

For example, the government notes that the LS would generally be available where a restaurant, that previously earned at least 25% of its revenues from indoor dining, shifted to take-out operations due to their indoor dining being ordered to close.

An entity would not generally be eligible where, for example, it:

  • is required to reduce their business hours, such as restrictions requiring a bar to shut down by 10:00 pm;
  • must modify operations due to physical distancing rules, such as restaurants that must limit patrons to six persons per table; and
  • is suffering due to travel restrictions, such as a bed and breakfast that has a decrease in customers but can continue to operate.

If an entity had to cease activities for only part of a qualifying period, the LS is pro-rated for the number of days for which the relevant location was affected.

Eligible expenses

Eligible expenses must be paid under agreements in writing entered into before October 9, 2020 (and continuations of those agreements) and must relate to real property located in Canada.

Commercial rent

Arm’s-length commercial rent (e.g. rent paid to an unrelated corporation or individual), including amounts paid or payable under a net lease, are eligible. Non-arm’s-length commercial rent (e.g. rent paid to a controlling shareholder or parent) is not an eligible expense. Sales taxes, damages, and interest or penalties on unpaid amounts are not eligible either.

Tenants must reduce eligible expenses by any rent received or receivable from arm’s length tenants (such as in sub-lease arrangements).

Property ownership expenses

Some property owners may claim CERS in respect of certain expenses related to their properties. The expenses include mortgage interest (subject to limitations), property insurance, and property tax. However, where a property is primarily used to earn rental income, directly or indirectly, from one or more arm’s-length entities, no expenses related to that property are eligible.

Owners must reduce eligible expenses by any rent received or receivable from arm’s length tenants.


For the base CERS, expenses for each qualifying four-week period are capped at $75,000 per location.  A total overall limit of $300,000 in eligible expense claims must be shared between all affiliated entities. For the LS, expenses for each qualifying period are capped at $75,000 per location, but no overall cap applies.

While the definition of an affiliated person can be complex, the analysis generally starts by identifying entities in which a married or common-law couple, either together or individually, have a controlling interest. Persons can be affiliated with individuals, corporations, partnerships and trusts. For example, consider Mr. and Mrs. A who each own and control their own corporations, Aco and Bco respectively.  Aco and Bco would be affiliated even though Mr. A does not have any control or ownership of his spouse’s corporation, Bco.

Application and Administration

Prior to applying, all applicants must have a business number and will need to create a CERS account (ZA number) which can be done through CRA’s online portals. Business owners and/or senior employees must complete the RC665 Attestation prior to a representative filing the application for the subsidy.

The deadline for application is 180 days after the end of the qualifying period.  The rules authorize CRA to publish the name of any CERS applicant. This is reiterated and included on the RC665 Attestation form.

Finally, it is important to note that CERS is taxable and is deemed to be received on the last day of the claim period, the same as for CEWS.

ACTION ITEM: Prior to applying for CERS, it is important to determine monthly revenues, which revenue calculation elections are best, which parties you are affiliated with, and to whom the payments are being made.