The definition of “qualifying rent expense” for Canada emergency rent subsidy (“CERS”) purposes includes a requirement that the rent be paid “under a written agreement entered into before October 9, 2020” (subject to some accommodation of subsequent renewals or lease assignments). CRA indicated that the requirement for a pre- October 9, 2020 written agreement was met where a letter agreement to lease was entered into before that date, even though the “formal” lease was not executed until subsequently, provided that the letter agreement satisfied requirements that it “show a clear intention to create a binding and enforceable contractual relation, outline all the essential terms and conditions of the agreement, and demonstrate an acceptance in writing by both parties of the terms and conditions.”
That left the requirement that the rents be paid “under” the letter agreement rather than only under the later lease. CRA stated that this was “possible … assuming that the Lease includes the same enforceable and binding rights and obligations, and terms and conditions, as the [letter agreement].”