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Update: Economic Response Plan

There were some announcements by the federal government recently. Applications are now open for new relief measures designed to help businesses who have been impacted by this year’s craziness.

If eligible, businesses can now apply for the Canadian Emergency Rent Subsidy (CERS) and the extended loan (CEBA). The Wage subsidy (CEWS) period has also been extended. Below is a summary of the expanded or new programs available:

Canada Emergency Rent Support (CERS)

  • This is a new rent subsidy program which the business can apply for directly rather than the landlord.
  • It will subsidize up to 65% of ‘eligible expenses’, on a sliding scale, based on the business’s drop in revenues in 2020 compared to a baseline.
  • The business would need to show a drop in revenues in the 2020 period compared to the baseline revenue from previous periods.
  • Based on that drop in revenue the percentage of subsidy is calculated.
  • The company would have to have eligible rent or property expenses per an agreement. (such as rent and other costs per a lease agreement, if you own: mortgage interest, insurance and property taxes)
  • Any properties used to earn rental income from arm’s length parties do not qualify.
  • The program is similar and for similar periods as the CEWS.
  • There is an additional top-up of 25% for organizations that have been temporarily shut down by mandatory public health orders issued by a ‘qualifying public health authority’.
  • Applications are done through CRA ‘My Business Account’.
  • For more information:

Canada Emergency Business Account (CEBA)

  • Applications are now available at most financial institutions for the increase in the CEBA.
  • The CEBA loans for eligible businesses will increase from $40,000 to $60,000. An additional $20,000 interest free loan.   $10,000 of which will be forgivable if it is repaid by December 31, 2022;
  • Although not listed specifically in the CRA program overview, a requirement per the agreement with the banks states that:  “you will agree to use the funds from this loan to pay for Eligible Non-Deferrable Expenses”. Non Deferrable expenses are expenses required under a contract/agreement that cannot be deferred such as:
      • Wages to INDEPENDENT (ARM’S LENGTH) third parties (not the owners or related to the owners), rent/lease, insurance, property taxes, telephone and utilities, debt service, contracts/agreements with independent contractors.
  • Business owners will also have to certify that the business is facing ongoing financial hardship; including, for example, a continued decline in revenue or cash reserves, or an increase in operating costs as a result of the COVID-19 (This was not previously required under the original $40,000 loan).
  • The application deadline for CEBA is further extended until March 31, 2021.
  • For more information:

Canada Emergency Wage Subsidy (CEWS)

  • The CEWS program will be extended until June 2021;
  • The CEWS is a subsidy for payroll paid by businesses who have seen a drop in revenue.  If your business has seen a reduction in revenues in a month in 2020 compared to that same month in 2019 (or compared to the average revenues of January and February 2020) your business may qualify for the subsidy.
  • For more information: