On November 23, 2020, the government of Canada opened the CERS application process for the first period (September 27, 2020 to October 24, 2020). The application portal looks very similar to that of the CEWS program. Eligibility details are discussed and an online calculator is provided. Also note that particular care has been made to question whether an affiliated party is also making a claim. In such cases, a declaration as to which party is making which part of the $300,000 in total claims available is required. Further, many parties may have affiliates and never realized it because it did not make much of a difference for tax purposes in most scenarios. As such, description and examples have been provided.
Some of the key points are:
Maximum eligible expenses per period
$75,000 per business location (base and top-up)
$300,000 in total for all locations (including any amounts claimed by affiliated businesses)
applies to the base subsidy only
there is no maximum for the top-up subsidy
Eligibility criteria
There are a few criteria that expenses need to meet:
Only amounts paid or payable to an arm’s-length party can be included
The expense must be in respect of the claim period
The expense must be paid or payable under a written agreement in place before October 9, 2020 (or a renewal on substantially similar terms or assignment of such an agreement)
Eligible Rent Expenses
Rent (including rent based on a percentage of sales, profit or similar criteria)
Amounts required to be paid or payable by you under a net lease (either to the lessor or a third party). Includes:
base rent
regular payments for customary operating expenses
property and similar taxes
regular payments to the lessor for customary ancillary services
Eligible expenses if you own the qualifying property:
Property and similar taxes
Includes school taxes and municipal taxes, if these are part of your property tax assessment
Property insurance
Interest on commercial mortgages for the purpose of purchasing real property
Your mortgage amount cannot exceed the lesser of:
the lowest principal amount secured by one or more mortgages on the property at any time it was acquired
or
the cost amount of the property