Canada Recovery Hiring Program

Subsidy programs like the CEWS and CERS are ongoing, but a new program also recently began to help hire new staff as businesses start to recover from the pandemic shutdowns. 

Program Overview

The Canada Emergency Wage Subsidy (CEWS) was recently extended, and its end date is now set for October 23, 2021. Though there is a potential for further extension, the Canada Recovery Hiring Program (CRHP) may replace it come October.  

The CRHP and CEWS are currently both active and running on the same period schedule, but you may only receive subsidy from one program at a time. CRA has built CRHP calculations into the most recent CEWS calculator in order to identify the most beneficial program to claim for the period. 

Eligibility

Most of the eligibility criteria for the CRHP and CEWS are the same, including payroll account requirements and revenue drop thresholds. There are some rules that differ slightly for for-profit corporations and partnerships. Full eligibility criteria can be found here. 

Eligibility is based on revenue drop, using the same calculations as CEWS and CERS. For Period 17 (June 6 to July 3, 2021, the first period the CRHP is available), your revenue drop must be greater than 0%. For the following Periods 18-22 (July 4 - November 20), your revenue drop must be greater than 10% to qualify for the CRHP. 

Subsidy rates are fixed for all periods and are not dependent on % revenue drop. The subsidy rates are as follows:

Claim Period	Min. Revenue Drop Required	Subsidy Rate
17 (June 6 to July 3, 2021)	0%	50%
18 (July 4 to July 31, 2021)	10%	50%
19 (August 1 to August 28, 2021)	10%	50%
20 (August 29 to September 25, 2021)	10%	40%
21 (September 26 to October 23, 2021)	10%	30%
22 (October 24 to November 20, 2021)	10%	20%

Calculations

The CRHP is calculated using how much your overall pay (eligible remuneration) to your employees has increased from the time of the base period of March 14 to April 10, 2021, to the time of the claim period. Eligible remuneration amounts are determined using the same criteria as CEWS, and the base period dates are the same as CEWS claim Period 14.

Amounts for employees who were on leave with pay are not included in the CRHP calculation.

We strongly recommend using the CRA’s calculator to determine your subsidy amount. To use the calculator, you’ll need to know the amount you paid to active eligible employees for the claim period and how much you paid active eligible employees in the base period (March 14 to April 10, 2021). The calculator will use the increase in pay from the base period to the claim period to determine your subsidy amount. 

Disclaimer: The above explanation is based on information available as of July 30, 2021. The program is likely to change as the situation develops

---

This info sheet was created by the Young Associates team based on the best information available to us as of the date of posting. We are happy to receive your comments at info@youngassociates.ca.

Although every effort has been made to provide complete and accurate information, Young Associates makes no warranties, express or implied, or representations as to the accuracy of content in this tip sheet. Young Associates assumes no liability or responsibility for any error or omissions in the information contained in the tip sheet. 

Founded in 1993, Young Associates provides bookkeeping and financial management services in the charitable sector, with a focus on arts and culture. Young Associates also provides consulting services in the areas of data management, business planning and strategic planning. Heather Young published Finance for the Arts in Canada (2005, 2020), a textbook and self-study guide on accounting and financial management for not-for-profit arts organizations.

Planning Amidst Uncertainty, Federal Budget Updates & More

We hope most of you have been able to book vaccinations now that the booking system has opened up to all Ontarians over 18! These are exciting times, and we hope we will see things start to improve soon thanks to increased vaccinations.

Though exciting, there is also plenty of uncertainty around the future of the sector. We would like to offer a few thoughts about the issues you are facing.

We Have Your Back

We’ve been starting to receive calls from the CRA following up on CEWS and CERS claims, and have been providing documentation on clients’ behalf. We’re braced for audits, but we’re confident we’ve done our due diligence and will be ready to assist if CRA comes calling.

 We continue to stay alert to CEWS, CERS, and other subsidies. Please get in touch with your bookkeeper if you have any specific questions or concerns. 

Planning Amidst Uncertainty

Impacts are Uneven Across the Sector

Some organizations are seeing large surpluses — others, large deficits — others, lesser impacts from COVID. Our observation is that some common characteristics drive the financial outcomes organizations are likely to see.

The biggest arts organizations, who generate proportionally more earned revenue and who receive proportionately less government funding seem more likely to be hurting. These organizations are also more likely to own land and buildings, and to have significant fixed costs — and therefore less agility.

Mid sized and smaller organizations, whose earned revenues make up a smaller proportion of their operating budget appear to have seen different financial outcomes (so far!): the continuation of operating grants and the addition of emergency grants and subsidies have the potential to create substantial short-term operating surpluses even in the midst of the current emergency.

The smallest arts organizations may have been left out in the cold. With no payrolled employees they cannot receive CEWS; with no rented space they cannot receive CERS; these same features make them ineligible for CEBA; and they may not have qualified for Canada Council emergency funding.

These disparities raise interesting questions about what interventions may be needed to support recovery, and about what shape the arts community may take in the “new normal.”

Benchmarks & Expectations

It’s difficult at the moment to feel any sense of control over financial plans. Managers are unsure how to plan programs, board members are feeling anxious about upholding their fiduciary/financial responsibilities, and everyone is trying to meet funder and donor expectations — expectations which aren’t necessarily clear. 

Previously, an accepted sustainability benchmark was to hold unrestricted net assets equal to about 3 months of revenues. At 2020 and 2021 year-ends, some companies are seeing surpluses that have pushed their net assets above that 25% mark — and of course there is concern about possible reaction from funders and other supporters.

Considering the longer-term effects of the pandemic, we expect that this generally accepted 3 months of savings benchmark may change — or at least be relaxed while the world recovers from the crisis. We expect that over the next few years, nonprofits and charities will absolutely need any larger surpluses they may have accumulated to sustain themselves as the sector rebuilds. 

What Can You Do?

• Save your surplus: If you’re worried about what a major surplus will look like on your financial statements, explore options that don’t involve rushing to spend it. 

• Plan (and communicate) for the long haul: Given the present uncertainties, it seems reasonable to ask stakeholders to support you in crafting a measured response. As of this writing, it’s unclear how the latest Federal Budget measures will be implemented — let alone what subsidies might be available past 2021. It is wise to assume that any short-term plans should be contextualized within a multi-year game plan, and that your game plan needs to remain flexible.

• Consider creating an internally restricted fund: Your board of directors can move to segregate a portion of your net assets for a defined purpose. This might be as general as “operating reserve,” or more specific such as “new creation fund” or “scholarship fund.” The objective is to define an intention for your net assets. This conveys to the readers of your financial statements that you are thoughtfully considering your future options (not just hoarding cash).

• Consider incorporating a foundation: This would be a significantly more complex response, requiring careful thought and planning. Larger organizations, or those with proportionally larger net assets, may find it beneficial to create a separate foundation to support operations. This has the effect of investing the main portion of your resources in a separate — though related — organization. Your operating entity therefore reports smaller net assets. Of course, you now have a second corporation to manage — so the pluses and minuses need to be carefully evaluated.

• Consult with an expert: Before changing the structure of your net assets, discuss the matter with your board, your auditor and other financial and legal advisors.

Revenue Uncertainty

Planning for the future is difficult when so much is still up in the air: When will venues be allowed to reopen? How soon will audiences come back? How long will subsidy programs like CEWS be around? What are the details of the new recovery programs?

With so many unanswered questions (and many more), the most we can do for now is speculate, and speculation doesn’t make for useful budget scenarios! 

What Can You Do?

• Narrow down your options: Don’t spend time agonizing over hundreds of scenarios. To the extent that you can, try to identify “bookends”: the best and worst case scenarios will give you a better idea of your limits.

• Focus on what you can control, leave what you can't: Revenues are tough to predict; expenses are usually more within your control. 

• Read your balance sheet: This will allow you to track your cash, which will help with immediate cash flow estimates. You’ll also want to pay close attention to obligations against your cash. For example, you may have deferred revenue from various sources — which entails commitments to upcoming activities. Be sure you understand how much flexibility you actually do have. 

Conclusion

Although in the “before times” you might have been tempted to spend down a large surplus, we believe it is reasonable to assume we'll have some years of repercussions of the pandemic to contend with — and that you are likely to find a future, mission-driven, strategic use for those funds. The government cannot continue its current level of subsidy indefinitely; at some point they will need to replenish their reserves. 

It will also be a while before audiences come back the way they used to. Though the timelines are unclear, the common wisdom is that the arts sector will be among the last to rebound. 

Ultimately, we don't know what the effects will be in the long term, so it is best to hold onto cash reserves, structure them thoughtfully, and be conservative about spending.

Important Dates and News

• June 2: QuickBooks Connect Conference

  • The YA team will be attending to make sure we stay on top of product updates, and get the most out of the software to best serve your organizations

• The CEWS and CERS programs have officially been extended to September 25, with rates starting to decrease in July. Details have yet to be officially published. The federal budget also proposed a potential extension to Nov. 20, 2021, if required.

• Deadline schedules for CEWS and CERS below

  • Periods 1-8 of CEWS have closed, Period 9 to close on May 20. 

  • Period 1 of CERS has closed, Period 2 to close on May 20.

---

This tip sheet was created by the Young Associates team based on the best information available to us as of the date of posting.

Although every effort has been made to provide complete and accurate information, Young Associates makes no warranties, express or implied, or representations as to the accuracy of content in this tip sheet. Young Associates assumes no liability or responsibility for any error or omissions in the information contained in the tip sheet. 

Founded in 1993, Young Associates provides bookkeeping and financial management services in the charitable sector, with a focus on arts and culture. Young Associates also provides consulting services in the areas of data management, business planning and strategic planning. Heather Young published Finance for the Arts in Canada (2005, 2020), a textbook and self-study guide on accounting and financial management for not-for-profit arts organizations.

March 2021 CERS & CEWS Update

As we approach a full year of the pandemic, there has been some uncertainty about the continuing government subsidy programs that so many of our clients rely on. Today, our questions were answered! See below for an explanation of yesterday’s press release regarding CEWS and CERS. 

Federal Minister Chrystia Freeland announced the eligibility guidelines for the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS) for March 14 to June 5, 2021. Previously, details had only been released up to CEWS Period 13 and CERS Period 6, which end March 13. 

Please note that this is proposed legislation, so there is potential for changes to be made in the coming weeks. 

According to the press release, the current rate structures for the CEWS and the CERS will be maintained through to June 5:

• The maximum base CEWS rate for active employees will remain at 40%, and the maximum top-up rate will remain at 35%. 

• The maximum CERS rate would remain at 65%, and the maximum Lockdown Support component of CERS will remain at 25%

To ensure that the general approach continues to compare a pre-pandemic month to a current month, the months of the calendar year 2019 will continue to be used as reference for revenue drop calculations. 

The proposed reference months for CEWS Periods 14-16 and CERS Periods 7-9 are as follows:

Period	General Method	Alternative Method
CEWS Period 14 CERS Period 7 March 14 – April 10	Mar 2021 over Mar 2019 or Feb 2021 over Feb 2020	Mar 2021 or Feb 2021 over average of Jan and Feb 2020
CEWS Period 15 CERS Period 8 April 11 – May 8	Apr 2021 over Apr 2019 or Mar 2021 over Mar 2019	Apr 2021 or Mar 2021 over average of Jan and Feb 2020
CEWS Period 16 CERS Period 9 May 9 – June 5	May 2021 over May 2019 or Apr 2021 over Apr 2019	May 2021 or Apr 2021 over average of Jan and Feb 2020

You can find the press release here. A full backgrounder with additional details for the release can be found here. 

Charities Working with Intermediaries

Registered charities are held to high standards of behaviour. Through the T3010 and its compliance program (read: audits) the CRA’s Charities Directorate monitors how charities receive and spend money. As a charity manager, you need to be careful about how you work with non-charities. Of course charities work with nonprofits and other organizations all the time! It is your responsibility to ensure that your working arrangements are compliant.

The CRA recently issued a new guidance document concerning charities working with non-charities in Canada, and we wanted to draw your attention to this new version of the plain-language guide to help you clarify your internal policies. Specifically, the issue is charities accepting money for the purpose of passing it on to another organization. In these cases, charities are accepting money on behalf of non-charities — often in situations where the non-charity solicits the funds — and are transferring the funds to the non-charity to use in various projects. 

Sometimes people refer to this as a “charitable trusteeship” (not language that CRA uses), and an avenue whereby a charity can help a non-charity to attract donations. Be careful! If this is how you’re thinking about it, quite likely you are not complying with the regulations.

According to the CRA, the Income Tax Act allows a charity to operate in only two ways:

1. carrying on its own charitable activities

2. making gifts to qualified donees

Qualified donees include registered charities and other organizations that have been granted status by CRA.

The worst-case scenario is an arrangement whereby the charity acts as a conduit by simply passing on the funds with no meaningful oversight.  CRA states, “a conduit is a charity that funnels its resources to a non-qualified donee without direction or control. Acting as a conduit contravenes the Income Tax Act, and could jeopardize a charity's registration.”

The key to remaining compliant is a written agreement — an “intermediary agreement” — drafted specifically with reference to CRA’s guidelines. 

The intermediary arrangement brings the relationship under point 1, above, making clear that it’s part of the charity’s own activities, and that the activity falls within the charity’s mandate. The agreement must specify how the charity will exercise direction and control over the project. This includes monitoring and supervising the activity throughout the duration of the project.

In order to comply with the Income Tax Act, you need to state, first, that your organization is a registered charity, set out how the proposed activities further your organization’s charitable objects, and then how you will monitor and supervise the project as it unfolds.

When these criteria are met, it is possible to remain compliant when entering into the agreement. Failure to comply with the CRA guidelines can result in temporary or permanent revocation of your charitable status, and we want to make sure that that doesn’t happen. 

Part of our service to you is to be conversant with applicable CRA rules, and alert to possible non-compliance risks. If you have any further questions, we are happy to assist in your research and share resources that may help in your decision-making. 

How Young Associates can assist

A consultation with us may make all the difference to your comfort level and confidence that your accounting system is up to the challenge of the pandemic. 

We’d also be happy to give you a quote for full-service bookkeeping. 

We work on the basis of fixed price agreements, so you’ll know going in how much our work will cost — and we always offer a money-back guarantee: if you’re not completely delighted with our service, we will, at your option, either refund the price, or accept a portion of said price that reflects your level of satisfaction. 

---

This tip sheet was created by the Young Associates team based on the best information available to us as of the date of posting.

Although every effort has been made to provide complete and accurate information, Young Associates makes no warranties, express or implied, or representations as to the accuracy of content in this tip sheet. Young Associates assumes no liability or responsibility for any error or omissions in the information contained in the tip sheet. 

Founded in 1993, Young Associates provides bookkeeping and financial management services in the charitable sector, with a focus on arts and culture. Young Associates also provides consulting services in the areas of data management, business planning and strategic planning. Heather Young published Finance for the Arts in Canada (2005, 2020), a textbook and self-study guide on accounting and financial management for not-for-profit arts organizations.

Budgeting with CEWS

One thing that is top of mind for our customers during the pandemic is budgeting and cash flow. Considering that earned revenues have largely been reduced and the Canada Emergency Wage Subsidy (CEWS) has been a major stabilizing factor during unstable times, projecting CEWS has become a priority for many. 

However, due to the ever-changing nature of the subsidy, as well as the estimation involved in the calculation and forecasting process, attempting to project CEWS is a much more difficult task than most would assume.

Here is some further detail to help you understand how challenging it is to forecast CEWS, and what your alternatives are when trying to project budget and cash flow.

Estimating Future Revenues

There are 2 steps to calculating CEWS. The first is to compare the current period’s revenues to a previous period to measure the revenue drop. This is where the first element of uncertainty lies. It is very difficult to forecast revenues with confidence. We don’t know what public health challenges lie ahead, so many organizations are struggling around programming decisions, what to charge for vs. offer for free, and what fundraising avenues to pursue.

Nonetheless, your bookkeeper needs your revenue estimates by month before they can make any further calculations. 

If you are accustomed to budgeting annually, you will need to pivot to a monthly budgeting process in order to generate estimates for CEWS.

Your bookkeeper will have evaluated the benefits of using the cash or the accrual method of reporting. If your company is filing using the cash method, your bookkeeper may need an up to date monthly cash flow forecast.

The Sliding Scale Factor

The second step is to calculate the subsidy rate. This tip sheet contains details on the base and top-up rates for Periods 8 to 10. 

Since the base subsidy rate is calculated on a sliding scale, any errors from step 1 will be multiplied by a factor of 0.8 for Periods 8 to 10. 

Additionally, if you have a greater than 50% revenue drop, a faulty revenue forecast will result in an inaccurate top-up subsidy estimate.

Estimating Future Payroll Costs

The second step to calculating your CEWS subsidy is to apply the rates to your payroll cost. Your bookkeeper will need your staffing costs by employee, by month in order to make the calculations. Employee detail is required because there is a maximum per employee.

Remember to allow for any anticipated changes — and any contingencies that should be discussed. For example, if you are considering a layoff under certain circumstances, your payroll will be reduced and your CEWS forecast needs to be reduced accordingly.

Government Policy

The government reserves the right to amend CEWS. We have seen a number of important changes to the program since it was first announced. We have also seen the rules confirmed very close to the implementation date. For instance, CEWS Period 8 arrangements were confirmed a few weeks after the Period start date.

The government has announced that CEWS will continue until June of 2021, but at this point we know the terms and conditions only until Period 10, which ends on December 19.

Risks

As you can see, there is a significant risk of inaccuracy in forecasting CEWS. The numbers involved are large. For many organizations, payroll is the single largest expense — and de facto CEWS has become one of the largest revenue sources.

Understandably, managers want to build CEWS into their budgets. For many organizations, CEWS has proven to be the single most stabilizing factor during the pandemic.

But, as you can see, a budget forecast for CEWS involves estimates on top of estimates — plus the “unknown” of future public policy changes.

Possible Approaches

The more conservative your estimates, the less likelihood you will wind up in trouble.

One important challenge with budgeting — in any situation — is that once the plan is on paper, people tend to feel “authorized” to proceed. This can mean that staff members forge ahead with planned expenses (which are in your control) while revenues (which are generally not in your control) remain uncertain.

One idea is to omit CEWS altogether. Define what revenues you’re able to count on, and what expenses you expect before even taking CEWS into account. This will give you a better idea of the state of your organization and your internal cash flow. 

Or, omit the top-up subsidy and prepare your budget forecast only on the base rate. 

If you are dependent on CEWS and therefore need to see it in the budget, prepare the best possible documentation for your revenue forecasts. Keep good notes! Review often. As each month elapses, re-evaluate your estimates for upcoming months. 

Lowball revenue forecasts, which will lowball the CEWS rate that you may claim. Highball expense forecasts, including salaries — but hold back as much as possible on actual spending.

How Young Associates can assist

A consultation with us may make all the difference to your comfort level and confidence that your accounting system is up to the challenge of the pandemic. 

We’d also be happy to give you a quote for full-service bookkeeping. 

We work on the basis of fixed price agreements, so you’ll know going in how much our work will cost — and we always offer a money-back guarantee: if you’re not completely delighted with our service, we will, at your option, either refund the price, or accept a portion of said price that reflects your level of satisfaction. 

Contact us: info@youngassociates.ca

---

This tip sheet was created by the Young Associates team based on the best information available to us as of the date of posting.

Although every effort has been made to provide complete and accurate information, Young Associates makes no warranties, express or implied, or representations as to the accuracy of content in this tip sheet. Young Associates assumes no liability or responsibility for any error or omissions in the information contained in the tip sheet. 

Founded in 1993, Young Associates provides bookkeeping and financial management services in the charitable sector, with a focus on arts and culture. Young Associates also provides consulting services in the areas of data management, business planning and strategic planning. Heather Young published Finance for the Arts in Canada (2005, 2020), a textbook and self-study guide on accounting and financial management for not-for-profit arts organizations.

CERS & CEWS Updates

2020-12-04 UPDATE: The 2020 Fall Economic Update on November 30 announced that the maximum CEWS rate will be raised to 75% (40% base subsidy, 35% top-up) for the period beginning December 20, 2020 and extending this rate until March 13, 2021. The current rate of the Canada Emergency Rent Subsidy and Lockdown Support will also remain in place until March 13, 2021. Official details about this have yet to be announced. 

Canada Emergency Wage Subsidy Updates (CEWS)

With the introduction of Bill C-9, the Federal Government provided more insight into the Canada Emergency Wage Subsidy (CEWS) and the newly announced Canada Emergency Rent Subsidy (CERS). This is the first major announcement since we were first informed of the extension that would allow the CEWS to continue through June of 2021. The new bill gives us information about Period 10 (Nov 22 - Dec 19), and comes with a few other adjustments. 

The maximum base subsidy rate of 40% for Period 8 will remain in place for Periods 9 and 10:

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

Harmonization of revenue-decline test for both base and top-up subsidies: The top-up subsidy used to be calculated on the basis of a 3-month revenue decline. In order to align this calculation with the base subsidy calculation, the same revenue decline calculation will now be used for both the base and top-up subsidies. 

Under both the base and top-up subsidies, revenue decline will be determined using the general or alternative method as outlined in the table below.

Period	Revenue Drop Calculation Method (for Base Subsidy & Top-up Subsidy)
Period 8	General	October 2020 over October 2019 or September 2020 over September 2019
	Alternative	October 2020 or September 2020 over average of January and February 2020
Period 9	General	November 2020 over November 2019 or October 2020 over October 2019
	Alternative	November 2020 or October 2020 over average of January and February 2020
Period 10	General	December 2020 over December 2019 or November 2020 over November 2019
	Alternative	December 2020 or November 2020 over average of January and February 2020

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:

Revenue reduction %	Base Subsidy Rate
> 70%	65%
50-70%	40% + ([revenue reduction %] − 50%) × 1.‍25
< 50%	0.‍8 × [revenue reduction %]

The top-up amount is only available for properties that have been temporarily shut down or had their activities significantly limited by a mandatory public health order for at least one week. The maximum top-up subsidy rate is 25%, and is calculated using the following formula:

0.25 × [# days in period for which the property is subject to a public health restriction]
[# days total in qualifying period]

Deadline

An application for the CERS must be filed no later than 180 days after the end of the qualifying period.

Various other rules that are relevant to the CEWS, such as the deemed government assistance rule, anti-avoidance rules, penalty provision, and notice of determination rules, also apply for purposes of the CERS.

CERS claims will be accepted retroactively for the period from 27 September to 24 October 2020. Similar to the CEWS, the new CERS program will be administered by the Canada Revenue Agency (CRA) as opposed to the Canada Mortgage and Housing Corporation, which administered the CECRA.

More information available from the Government of Canada Website.

How Young Associates can assist

A consultation with us may make all the difference to your comfort level and confidence that your accounting system is up to the challenge of the pandemic. 

We’d also be happy to give you a quote for full-service bookkeeping. 

We work on the basis of fixed price agreements, so you’ll know going in how much our work will cost — and we always offer a money-back guarantee: if you’re not completely delighted with our service, we will, at your option, either refund the price, or accept a portion of said price that reflects your level of satisfaction. 

Contact us: info@youngassociates.ca

---

This tip sheet was created by the Young Associates team based on the best information available to us as of the date of posting.

Although every effort has been made to provide complete and accurate information, Young Associates makes no warranties, express or implied, or representations as to the accuracy of content in this tip sheet. Young Associates assumes no liability or responsibility for any error or omissions in the information contained in the tip sheet. 

Founded in 1993, Young Associates provides bookkeeping and financial management services in the charitable sector, with a focus on arts and culture. Young Associates also provides consulting services in the areas of data management, business planning and strategic planning. Heather Young published Finance for the Arts in Canada (2005, 2020), a textbook and self-study guide on accounting and financial management for not-for-profit arts organizations.