Legislation Adjustment to CEWS and CERS

On February 24, 2021, the Department of Finance released draft legislation that would affect CEWS and CERS. The proposals include two parts:

  • The immediately preceding qualifying period in respect of CEWS and CERS claims for the December 20, 2020 to January 16 period is deemed to be November. (This addresses the technical issue that Video Tax News mentioned on January 6, 2021.)

  • The definition of “public health restriction” in respect of CERS lockdown supports has been modified. Previously, where the business rented from a non-arm’s length landlord, the CERS claim was made by the landlord.  As a result, where the tenant – the actual business – was required to close its doors due to a public health order, lockdown support was not available as the public health order did not require the landlord to stop renting the property.  The proposal broadens the definition of a public health order to include one which requires a “specified tenant” – basically, that non-arm’s length tenant – to close its doors.  This will allow the non-arm’s length property owner to claim the same CERS that could have been claimed if the business and the real estate were owned by the same legal entity.