Canada Emergency Rent Subsidy & Wage Subsidy Rates Announced

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November 9, 2020

Canada Emergency Rent Subsidy

The government is providing the proposed details for the first 12 weeks of the Canada Emergency Rent Subsidy, until December 19, 2020. The proposed program would, in many ways, mirror the successful Canada Emergency Wage Subsidy, providing a simple, easy-to-understand program for affected qualifying organizations. Pending the passage of legislation, the new rent subsidy would provide benefits directly to qualifying renters and property owners, without requiring the participation of landlords.

A quick synopsis is as follows (see the full backgrounder for complete information):

Revenue Decline Base Subsidy Rate
70% and over 65%
50% to 69% 40% + (revenue drop – 50%) x 1.25
(e.g., 40% + (60% revenue drop – 50%) x 1.25 = 52.5% subsidy rate)
1% to 49% Revenue drop x 0.8
(e.g., 25% revenue drop x 0.8 = 20% subsidy rate)

Eligible expenses for a location for a qualifying period would include commercial rent, property taxes (including school taxes and municipal taxes), property insurance, and interest on commercial mortgages (subject to limits) for a qualifying property, less any subleasing revenues. Any sales tax (e.g., GST/HST) component of these costs would not be an eligible expense.

Expenses for each qualifying period would be capped at $75,000 per location and be subject to an overall cap of $300,000 that would be shared among affiliated entities.

Eligibility criteria for the new rent subsidy would generally align with the Canada Emergency Wage Subsidy program. Eligible entities include individuals, taxable corporations and trusts, non-profit organizations and registered charities. Public institutions are generally not eligible for the subsidy.

In addition, an eligible entity must meet one of the following criteria:

  • have a payroll account as of March 15, 2020 or have been using a payroll service provider;
  • have a business number as of September 27, 2020 (and satisfy the Canada Revenue Agency that it is a bona fide rent subsidy claim); or
  • meet other conditions that may be prescribed in the future.

Eligibility would generally be determined by the change in an eligible entity’s monthly revenues, year-over-year, for the applicable calendar month.  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 an entity has chosen to use either the general or alternative approach, they must use that approach for each of the three periods. The approach chosen would apply to both the base Canada Emergency Wage Subsidy and the Canada Emergency Rent Subsidy.

An eligible entity would use the greater of its percentage revenue decline for the current qualifying period and that for the previous qualifying period in order to determine its subsidy rate. This would provide certainty to businesses regarding their expected minimum subsidy rate and aligns with the practice under the Canada Emergency Wage Subsidy.

If your organization has been subject to a public health order issued under the laws of Canada, a province or territory (including orders made by a municipality or regional health authority under one of those laws), you may be eligible for additional resources under the new Lockdown Support.

Canada Emergency Wage Subsidy

The wage subsidy supports businesses to keep and re-hire employees and avoid layoffs.  Pending the passage of legislation. The wage subsidy would remain at the current subsidy rate of up to a maximum of 65 per cent of eligible wages until December 19, 2020, and would be extended until June 2021.

Timing Period 8:
September 27 – October 24
Period 9:
October 25 – November 21
Period 10:
November 22 – December 19
Maximum weekly benefit per employee Up to $452 Up to $452 Up to $452
Revenue drop      
50% and over 40% 40% 40%
0% to 49% 0.8 x revenue drop
(e.g., 0.8 x 20% revenue drop = 16% base subsidy rate)
0.8 x revenue drop
(e.g., 0.8 x 20% revenue drop = 16% base subsidy rate)
0.8 x revenue drop
(e.g., 0.8 x 20% revenue drop = 16% base subsidy rate)

A top-up wage subsidy of up to 25 per cent is available to employers most adversely impacted by the pandemic. Currently, an eligible employer’s top-up wage subsidy is generally determined based on the revenue drop over the preceding three months compared to the same months in the prior year. Under the alternative approach to the calculation of baseline revenues, the top-up wage subsidy is determined based on the revenue drop experienced when comparing average monthly revenue in the preceding three months to the average monthly revenue in January and February 2020.

More information and apply for the Canada Emergency Wage Subsidy

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