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New legislation provides CERS timing clarity & Child Benefit boost

New legislation provides CERS timing clarity

Bill C-14 will allow CERS claim prior to payment and introduces enhanced Canada Child Benefits

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The government has introduced new legislation to help eligible claimants access the Canada Emergency Rent Subsidy (CERS) prior to the payment of certain eligible expenses. The new legislation includes measures to allow eligible entities to claim the subsidy for certain eligible expenses when the amounts are due rather than when they are paid, when certain conditions are met. The bill also provides additional temporary support for families entitled to the Canada Child Benefit, as announced in the recent Fall Economic Update. These measures received first reading in the House of Commons on December 2, 2020 and are expected to become law soon.

Background

The CERS generally allows eligible businesses, charities and non-profits that have suffered a revenue drop to claim a subsidy of up to 65% of eligible expenses. Eligible expenses for a qualifying period may include (with exceptions) commercial rent, property taxes, property insurance and interest on commercial mortgages (subject to limits). Further, the government also instituted a Lockdown Support Subsidy of 25% of eligible expenses for organizations temporarily shut down due to a mandatory qualifying public health order. The CERS and Lockdown Support Subsidy were enacted as part of Bill C-9, effective beginning September 27, 2020. These rules required amounts to be paid in order to qualify as eligible expenses, however, Finance announced intentions to introduce additional legislation to allow eligible entities to claim the subsidy when they became due (instead of when they were paid) as long as certain conditions were met. The CRA also announced that it would process claims on this basis.

Finance delivered the 2020 Fall Economic Update on November 30, 2020. The Update includes new measures that affect corporate and personal taxpayers and extends several COVID-19 relief measures, including the CERS and Lockdown Support Subsidy to March 13, 2021. The Update also announced a temporary increase to the amount of the Canada Child Benefit for 2021.

Measures introduced in Bill C-14

Canada Emergency Rent Subsidy

Bill C-14 includes a new rule that deems an eligible entity to have paid the eligible expense on the date it first became due, as long as the eligible entity attests that it intends to (and does) pay the amount within 60 days of receiving the subsidy. The new deeming rule provides relief for claimants who would otherwise have had to pay an amount within a particular qualifying period for the amount to be considered an eligible expense on which they could claim the subsidy.

Canada Child Benefit payments

Bill C-14 also introduces additional Canada Child Benefit payments providing eligible families with four additional amounts (up to a total of $1,200) in 2021. Quarterly payments will be provided in January, April, July or October 2021 as follows:

  • A family with a net income of $120,000 or less may be eligible to receive $300 per child under the age of six
  • A family with a net income above $120,000 may be eligible to receive $150 per child under the age of six.
    For more information, contact your KPMG advisor.

Information is current to December 8, 2020. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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