On October 9, 2020, the Department of Finance announced the intention to introduce new, targeted support measures to help businesses and other organizations who continue to experience a decline in revenue as a result of the COVID-19 pandemic.
On November 2, 2020, the Department of Finance announced proposed legislation to implement these measures. This legislation has received royal assent as of November 19, 2020.

The November 2, 2020 legislation introduced a top-up Canada Emergency Rent Subsidy (CERS) subsidy or “Lockdown Support” equal to 25% of expenses eligible for CERS for entities that must shutdown a location or significantly limit their activities because of a “public health restriction”.

A public health restriction would include a public health order issued under federal, provincial or territorial law (including orders made by a municipality or regional health authority under one of those laws) issued in response to the COVID-19 pandemic.

For an entity to qualify for the Lockdown Support for a qualifying property, the following conditions must apply:

• The entity must qualify for the CERS; and

• A public health order requires that the entity

  • Completely shut down the location; or

  • Cease some or all of the activities at the location and it is reasonable to conclude that the ceased activities, in the relevant prior reference period, generated at least approximately 25% of the revenues of the entity at that location.

In addition, the public health order must be in effect for a period of at least one week.

If the entity is subject to a public health restriction and has to cease activities for only part of a qualifying period, the Lockdown Support will be pro-rated for the number of days in the period during which the location was affected.

Note that an entity that is required to close down because it was in violation of a public health order will not be eligible for the Lockdown Support.

The eligible expenses for the Lockdown Support will be determined in the same manner as for the CERS. However, although eligible expenses will still be limited to $75,000 per qualifying period per qualifying property, the overall threshold of $300,000 per qualifying period for all closed locations will not apply to the Lockdown Support calculation.

For more information, including examples, which illustrate some common circumstances where an entity may or may not qualify for the Lockdown Support, please refer to the November 5, 2020 Department of Finance Lockdown Support Backgrounder.

Please contact your Shimmerman Penn advisor for further guidance and to discuss your particular situation.