Safe Harbour Rule: To ensure this change does not result in a lower wage subsidy for eligible employers than you would have received using the previous revenue decline test, a safe harbour rule will apply from 27 September to 19 December 2020 (i.e., from Periods 8 to 10). Under this rule, an eligible employer will be entitled to a top-up subsidy rate that is no less than the rate that would have applied under the three-month revenue-decline test, which you would have used in Period 7.
Amendment of eligible employee definition: Now, eligible employee means someone who was employed primarily in Canada throughout the qualifying period. This amendment clears up some vagueness that was previously in the definition.
A summary of Bill C-9 can be found on this Government of Canada webpage.
More info found at ey.com.
Canada Emergency Rent Subsidy (CERS)
In addition to updating the CEWS, Bill C-9 also introduces the Canada Emergency Rent Subsidy (CERS).
As opposed to CECRA (Canada Emergency Commercial Rent Assistance), this subsidy provides relief directly to business tenants, and uses a sliding scale to determine eligibility. It is also aligned with the CEWS, using the same period start and end dates as well as the same initial revenue drop calculation. Similar to CEWS, it has been announced for September 27-December 19, but is expected to continue through June of 2021.
What can the subsidy be used for?
Eligible Expenses
Commercial rent
Property taxes (including school and municipal taxes paid by owners)
Property insurance (paid by owners)
Interest on commercial mortgages, less any subleasing revenues
Must be based on agreements entered into before October 9, 2020, and continuations of those agreements
Must apply to real properties located in Canada
Ineligible Expenses
Sales tax on any eligible expenses
Expenses relating to residential property used by the taxpayer (eg: their house or cottage)
Payments made between non-arm’s-length entities
Mortgage interest expenses in respect of a property primarily used to earn, directly or indirectly, rental income from arm's-length entities
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.
Who can get the subsidy?
Eligibility criteria for the CERS is generally aligned with the CEWS. Eligible entities include individuals, taxable corporations and trusts, non-profit organizations and registered charities. Public institutions are generally not eligible for the subsidy. For a complete list of eligible entities, please visit https://www.canada.ca.
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)
Meet other conditions that may be prescribed in the future
Calculations
There is both a base subsidy and a top-up subsidy available through the CERS. The revenue drop calculation method is the same as the CEWS and can be found in the table above.
The Base Subsidy rate for the CERS is calculated on a sliding scale as follows:
