Some Industries Enjoy Government Support, While Others Left In The Cold During COVID-19’s Second Wave
November 27, 2020
With a second wave of COVID-19 spreading across much of the world, Canada has not been spared from a growing number of cases related to the virus. While the Canadian government was quick to issue various forms of financial support to businesses, employers and individuals during the initial wave of COVID-19, things have slowed down after Canada enjoyed a relatively quiet summer and fall. With the rise in cases, the government has announced some new or extended forms of support that people or businesses may wish to take advantage of.
Canada Emergency Rent Subsidy (CERS)
Canada had introduced a reformed commercial rent subsidy program (CERS) during the spring and summer. One of the common complaints about the program was that it required landlords to apply for CERS rather than having businesses apply themselves.
The updated form of CERS will allow businesses to apply directly for CERS through their business accounts. Representatives can also claim it through the “represent a client” portal. The changes come in response to businesses who complained that their landlords could not be relied upon to apply for the subsidy themselves.
Qualifying organizations can claim up to 65% of eligible expenses. In addition, organizations that have had to shut down or “significantly limit” their activities will also have access to a top-up subsidy called Lockdown Support which includes a 25% top-up. This brings the total potential subsidy available to those organizations to 90%.
Who is eligible for CERS and what is covered?
The CERS program is available to businesses, charities, and non-profits that can demonstrate they have suffered a revenue drop during COVID-19. Eligible expenses include commercial rent, property taxes (including school taxes and municipal taxes), property insurance, and interest on commercial mortgages (though there are limits to this), less any revenue obtained through subleasing the premises. Any sales tax components of these expenses are not eligible.
Airline Industry Calls for More Aid
While rent subsidies will help many businesses, Canada’s airlines are calling on the government to provide additional support to their industry, which has become crippled due to the drastic drop in air travel.
A story published this week on CTV News reports that the Canadian Airports Council, representing more than 100 of the country’s airports, has asked the federal government to help implement COVID-19 testing at airports, with the goal of reducing mandatory quarantine orders. This process is currently undergoing a pilot program at two Alberta airports, enabling participating travellers to potentially reduce their quarantine time from 14 to 2 days. Though there is additional follow up required, the idea is that the reduction in quarantine would induce more people to travel to Canada and boost revenue for the industry.
This in addition to calls for additional financial relief, which the government has indicated it may be ready to move on, but has not offered any specifics as of this time. The CTV article quotes James Bogusz, President and CEO of the Regina Airport Authority as estimating that the airport will run out of cash by the end of the year despite having laid off over half of its staff.
The United States has announced measures to support the American airline industry through the CARES Act, which was passed in the spring and made $50 billion in loans and grants available to airlines and cargo carriers. Canada’s airline industry employs nearly 200,000 people in Canada, and with air travel not expected to return to pre-pandemic levels until 2024, financial help is greatly needed.
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