Real Estate and Construction
Canada Emergency Rent Subsidy: An Assistance Program for Businesses and Organizations
Since November 23rd, 2020, it is possible, under certain conditions, to apply for a grant from the federal government, more specifically through the Canada Revenue Agency (hereinafter "CRA"), for certain real estate expenses.
The program is the Canada Emergency Rent Subsidy (hereinafter the "EERS") and will be in force until June 2021, and this retroactive to September 27th, 2020.
This program aimed at businesses, charities and non-profit organizations that experienced a drop in revenue during the pandemic. There is no minimum revenue drop, but the greater the drop, the greater the grant. Tenants and landlords are both eligible. To make the process easier, tenants will be able to complete an application themselves and receive the money directly, in contrast to the latest government programs where the landlord had to apply for the subsidy for their tenant.
The tenant or landlord must also have an "eligible property" to receive the subsidy. An eligible property is defined as any real or immovable property in Canada that a business or organization owns or leases, in addition to using it in its usual business activities. Only certain expenses are also considered eligible for the grant. For a tenant, both basic and additional rent are eligible expenses, including property taxes and operating costs in the case of a net lease. For landlords, property taxes, property insurance and interest on mortgages are eligible expenses.
For each application period of approximately one month each, a business or organization will be entitled to a maximum of $75,000 per business location and a maximum of $300,000 in total, for itself and its affiliated entities. The greater the drop in revenue during the pandemic, the greater the amount that can be awarded. It is already possible to obtain the grant for the period of September 27th to October 24th, 2020 on the CRA website. It is important to note that an application must be made no later than 180 days after the end of such period. The application must be made on the CRA's website where an online calculator is located to determine the amount to which each business or organization is entitled.
In a nutshell, to be eligible, a business or organization must have eligible property and expenses and must have suffered a drop in revenue during the pandemic. Our real estate law team is equipped and ready to answer any questions related to the CERS. We can also assist you in your efforts to obtain the subsidy.