Organizations can apply for an emergency federal rent subsidy starting Monday

0
31


Businesses, nonprofits and charities financially affected by the pandemic will be able to apply for the federal government’s new rent subsidy program starting Monday.The Canada Emergency Rent Subsidy, CERS, which replaces the federal government’s Emergency Commercial Rent Assistance Program (CECRA), will provide up to 90 percent rent support for eligible businesses.

The federal government’s CECRA program, launched in April, initially saw low participation from businesses because the program required landlords to apply for the benefit on behalf of tenants. The new CERS program allows tenants to apply directly to the federal government.

Under the new program, organizations that have seen their revenues decline by 70% or more due to the pandemic are eligible for a 65% rent subsidy.

The grant rate gradually decreases for organizations that have experienced decreases of less than 70 percent.

The federal government uses formulas to calculate the drop in the subsidy rate. An organization that would lose 50%. For example, 100% of his income would get a 40% subsidy. While an organization that would see its revenues drop by 25%. 100 would receive a 20% subsidy.

When the ESRB was first announced, it was criticized for requiring cash-strapped organizations to first pay their rent before recovering it through the grant. The Liberal government tried to fix this problem with a legislative amendment, but it failed because of a procedural error.

To ensure that organizations can apply for the grant immediately, even if they have not paid rent, the Department of Finance has notified the Canada Revenue Agency that it intends to pursue a legislative change to that the “rent due” be considered an eligible expense at the time of the request. – provided that the organization agrees to use the grant to actually pay the rent due.

The CRA, which administers the program, will treat the rent owed as if it had already been passed by Parliament, said a finance official speaking in the background.

Locking bracket

Although the program is called a “rent subsidy,” it allows organizations to claim assistance for eligible expenses that go beyond rent, such as property taxes, school taxes, municipal taxes, property insurance. and commercial mortgage interest.

An additional 25 percent grant called “foreclosure aid” will be available to organizations that are temporarily forced to shut down or restrict their businesses due to a public health directive.

Unlike the CERS program, the locking support is not calculated on a sliding scale. To be eligible, an organization must have seen its revenues decrease by at least 25% from pre-pandemic levels due to a public health order.

One restaurant said it could no longer serve diners inside, for example, would qualify for lockdown assistance, but a takeout restaurant with a few tables inside would not.

Grant rates may change on December 19

Combined with foreclosure assistance, the new CERS benefit could offer some organizations a rent subsidy of 90 percent of eligible expenses.

The new program runs until June 2021, but the federal government only guarantees the subsidy rate until December 19, 2020. An official said the federal government wanted the flexibility to change the subsidy rate if there was a problem. situation improves or worsens.

Each organization can claim up to $ 75,000 in eligible expenses per location, with an overall limit of $ 300,000 for each eligible period. Right now we are in period 9, which runs from October 25 to November 21. Period 10 runs from November 22 to December 19.

Shortly before the end of period 10, the federal government will announce any change in the subsidy rate for periods 11 and above.

The ESRB grant is backdated to the start of period 8, which started on September 27 and continued until October 24.

LEAVE A REPLY

Please enter your comment!
Please enter your name here