The Canada Emergency Rent Subsidy (CERS) and Lockdown Support Overview

The Canada Emergency Rent Subsidy (CERS)

What is CERS

The Canada Emergency Rent Subsidy (CERS) provides financial assistance for eligible fixed property expenses, including rent and interest on commercial mortgages. CERS is paid directly to the retailer and is proportional to revenue reduction.

The federal government announced proposed changes to the CERS program in summer 2021. These included a program extension until October 23, 2021 and increased subsidy rates for what would otherwise have been the program’s last claim period, August 29 to September 25, 2021. Lockdown support was also extended until October 23, 2021. The details below include these proposed changes.

Subsidy Rates

The CERS program will be reducing the amount and availability of subsidies in the months leading up to the program’s final (pending another extension) claim period.

Until the claim period starting July 4, the CERS program continues its pre-Budget 2021 structure. The maximum “base rate” subsidy of 65% is reached at revenue reduction of 70% or more and is proportionately reduced to 40% assistance at 50% revenue reduction. Hence, each percentage point of revenue reduction between 50% and 70%, generates 1.25 assistance on eligible rental expenses.  The rate of assistance drops to 0.8 on each point of revenue reduction between 0% and 50%.

Revenue Reduction Applicable CERS assistance rate Maximum Assistance Rate
0% to 50% 0.8 40%
50% to 70% 1.25 65%

See Canada Emergency Rent Subsidy backgrounder for a more detailed table.

See Canada Emergency Rent Subsidy backgrounder for a more detailed table.

Over the last three claim periods leading up to the October 23, 2021 extension, the CERS subsidy will be phased out as per the table below. The main changes from the program’s previous version are the existence of the new October claims period, and a higher subsidy of 40% in the August 29 – September 25 claims period for a revenue decline of 70% and over, replacing what was initially a lower subsidy of 20%.

CERS Extension and Updated SubsidyPeriod 19 (August 1-28)Period 20 (August 29-September 25)Period 21 (September 26-October 23)
Revenue Decline
70% and over40%40%20%
50-69%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 – 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)

Eligible Expenses

Expenses eligible for the CERS subsidy include commercial rent, property taxes (including school taxes and municipal taxes), property insurance, and interest on commercial mortgages. The sales tax component on these expenses (most typically on the insurance portion) are not eligible expenses.  This would be true for lease agreements entered into before October 9, 2020 (and lease agreements that are continued thereafter).

Eligible expenses for any given location are $75,000 per qualifying period with maximum eligible expenses of $300,000 for affiliated entities per qualifying period (so no more than $300,000 in eligible expenses for a corporation).

CERS Reference Periods

The general approach to assessing the applicable rate of CERS, CEWS and CRHP (“hiring subsidy”) assistance is to compare an eligible entity’s monthly revenues, year-over-year, for the calendar reference month. For example, November 2020 compared to November 2019.  Alternatively, an entity can choose to calculate its revenue decline by comparing its current reference month revenues with the average of its January and February 2020 revenues.

Once you have chosen between these two options, you must use that method consistently and use the same method for both for CERS and CEWS (if you are also claiming CEWS).

Businesses using the general approach of comparing reference periods year over year to show revenue decline switched to 2019 calendar months in spring 2021. This change was made to ensure 2021 revenue was still being compared to pre-pandemic revenue.

However, some businesses may not have been in existence for these 2019 months. New flexibility has been introduced into the program to allow businesses in this situation to switch to using the alternative approach (comparing their 2021 reference period revenue to an average of January to February 2020 revenue) for Periods 14 to 17, March 14 to July 3, 2021. More information can be found in the summer 2021 federal wage and rent subsidy program announcement. View announcement

As with CEWS, you have the option in any qualifying period to use either the current month’s revenues or the previous month’s revenues as the basis for the CERS application. In essence this is a “better of” outcome for retailers and ensures at least two consecutive months of assistance at the same level.

How to apply

Retailers will need to apply for the rent subsidy after the month has passed. Retailers will need to apply through CRA via MyBusiness Account (MyBA) OR Represent a Client. Applications must be made no later than 180 days after the end of each relevant qualifying period. View more information.


Lockdown Support – Additional Rent Assistance

What is Lockdown Support? 

Lockdown Support is extra rent assistance offered to businesses who are subject to a lockdown under a public health order and is part of the Canada Emergency Rent Subsidy (CERS) program.

Overview

A top-up CERS subsidy of 25% will be available for retailers who are temporarily shut down or “significantly limited” by a mandatory public health order. The trigger for this subsidy will be a public health order issued by a federal, provincial or territorial government, or by a municipality or regional health authority.

The public health order must stipulate the cessation of some type or types of activity at the location (you cannot self-select in this regard) and the cessation must last for at least one week. Moreover, if a complete shutdown is not ordered, it must be a cessation that reduces revenues at that location by at least 25% relative to the relevant pre-pandemic period.

For example, a retail store that is ordered to close down its location in a mall, but that continues to provide online sales and curbside pick-up, could qualify so long as its in-store sales normally accounted for at least approximately 25% of its revenues.

Reductions in hours of operation or imposition of physical distancing rules would not qualify for the top-up.

Retailers who are ineligible for the CERS base subsidy will not qualify for the top-up. To be clear, retailers are not required to be eligible for the maximum base subsidy, just some portion of the base subsidy, in order to qualify for the top-up.

The top-up subsidy, referred to also as Lockdown Support, is retroactive to September 27, 2020 and will continue until October 23, 2021 at the same rate, 25%.

During the last three claim periods of the CERS, retailers with a less-than-10% enterprise-wide revenue decline will no longer qualify for the CERS base subsidy. Since qualifying for the base subsidy will remain an eligibility criterion for Lockdown Support, the latter will also become unavailable to these retailers at that point. 

How to apply for Lockdown Support?

Retailers can apply for Lockdown Support the same way they apply for the base rent subsidy: through the CRA via MyBusiness Account (MyBA) OR Represent a Client.

 View more information.

More Information


Q & As

  • What kind of restrictions from a COVID-19-related public health order are eligible for Lockdown Support?

    An order must require you to stop some or all of your regular activities. An order that restricts or reduces activities but doesn’t specifically require you to close or stop certain activities does not qualify for lockdown support.

    For example, the following orders would not qualify for lockdown support:

    • travel restrictions that reduce the number of customers
    • restricted or reduced service hours or hours of operation
    • reduced seating capacity or other physical distancing strategies

  • How is Lockdown Support calculated?

    Retailers who already qualify for the base Canada Emergency Rent Subsidy (CERS) amount for a claim period, and who had locations subject to a public health lockdown order during that period for at least a week, may receive a Lockdown Support top-up for eligible expenses at each location.

    To receive Lockdown Support, your location needs to have been subject to a lockdown order for a minimum of 7 days that required stopping some or all regular activities. That location needs to have suffered a revenue decline of approximately 25% or more.  Reductions in operating hours and foot traffic capacity would not count for the Lockdown Support top-up, but mandated brick-and-mortar closures likely would, even if your location(s) continued to do curbside pickup.

    For example, if one of your stores was on lockdown for 7 days of the 28 day period, you would be eligible to receive Lockdown Support at the rate below:

    • 25% base top-up rate multiplied by
    • 7 days out of 28
    • for a 6.25% top-up rate.

    At whatever your rate turns out to be, you can claim a maximum of $75,000 in eligible expenses per location for Lockdown Support, for as many locations as you need. This is in contrast to the $300,000 maximum cap in eligible expenses you can claim across your organisation per claim period, a cap that only applies to the base CERS subsidy.

    The CERS program has been extended until October, 2021. Although the base subsidy will see phased reductions starting in July, the lockdown support rate will remain as it is now at 25%, until October 2021. However, retailers should be aware that if they no longer qualify for the base CERS subsidy, they will also not be eligible to apply for lockdown support.

    RCC’s overview contains more information and the government website has a calculator to help you plan based on your specific circumstances.  View RCC Overview. View calculator.

  • How long will Lockdown Support be available, and at what level?

    Lockdown support will remain available at the current 25% rate until October, 2021.  

    Retailers should be aware that from July 2021 on, they will need to show revenue decline over 10% to qualify for the base CERS subsidy. If they do not qualify, they will also not be eligible for lockdown support.

  • What are the Lockdown Support eligibility requirements?

    To qualify for lockdown support, you must have:

    • a base rent subsidy rate of more than 0% for the claim period (ie. you need to qualify as an organization for the base rent subsidy)
    • one or more locations temporarily closed, or have activities significantly restricted for a week or longer due to a COVID-19-related public health order

    An order must require you to stop some or all of your regular activities. An order that restricts or reduces activities but doesn’t specifically require you to close or stop certain activities does not qualify for lockdown support.

    For example, restrictions due to the following orders would not qualify for lockdown support:

    • travel restrictions that reduce the number of customers
    • restricted or reduced service hours or hours of operation
    • reduced seating capacity or other physical distancing strategies

  • What is the “lockdown top-up” or “lockdown support”?

    Lockdown top-up refers to extra support available through the federal CERS rent relief program for retailers subject to COVID-19-related public health orders.

    If you must close or cease certain activities at one or more of your locations under a public health order for one week or longer, you may be eligible for lockdown support of up to 25% of eligible expenses per affected location based on the days the order was in place.

    The CERS program has been extended until October, 2021. Although the base subsidy will see phased reductions starting in July, the lockdown subsidy rate will remain as it is now, at 25%, until October 2021. Retailers should be aware that if they no longer qualify for the base CERS subsidy, they will also not be eligible to apply for lockdown support.

    RCC’s overview contains more information. 

  • How do I apply for the Canada Emergency Rent Subsidy (CERS) and Lockdown Support?

    The CERS program, including Lockdown Support, is administered by the Canada Revenue Agency (CRA) on a period-by-period basis, with each period spanning 4 weeks.

    Applications are to be made online after the relevant subsidy claim periods have passed. Retailers will need to apply through the CRA via MyBusiness Account (MyBA) OR Represent a Client.

  • What is the Canada Emergency Rent Subsidy (CERS) and how will it help retailers?

    The CERS is a federal rent and property expense support program to help businesses affected by COVID-19.  If eligible, retailers will receive direct support from the federal government. CERS replaces the previous federal Canada Emergency Commercial Rent Assistance program (CECRA).

    Retailers can apply based on a maximum of $75,000 in eligible expenses for each location, with an overall eligible expenses maximum of $300,000 across affiliated entities for the base subsidy.

    The amount of subsidy money a retailer can receive to help with those eligible expenses varies by criteria linked to the decline in revenue that the retailer has experienced during a monthly claim period. The CERS program also includes a Lockdown Support top-up for locations affected by lockdown orders.

    Although the CERS program has been extended until October 2021, base subsidies from the CERS program will decrease and will only be available to retailers experiencing revenue declines over 10% starting July 2021. CERS Lockdown Support will remain available until the end of the program at its current 25% rate. Retailers should be aware that if they no longer qualify for the base CERS subsidy, they will also not qualify for lockdown support.

    RCC’s overview goes into more detail and the government website has a calculator that helps retailers calculate what they can receive based on the specifics of their situation.

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