January 11, 2022, update

Businesses subject to a closure order starting from December 20, 2021, to protect the health of the population in the context of the COVID-19 pandemic can again submit a financial assistance application under the Assistance for Businesses in Regions on Maximum Alert (AERAM) section of the Emergency Assistance Program for Small and Medium-Sized Businesses (PAUPME).

Additionally, restaurants that benefit from a financial contribution under the Assistance for Businesses in Regions on Maximum Alert (AERAM) section, reopened since December 20, 2021, are eligible for additional loan forgiveness to cover the cost of unused perishable items. 

Applications for financial assistance under the AERAM section must be received not later than four weeks after the resumption of the operations of the businesses subject to a closure order.

Moreover, the moratorium on the repayment of principal and interest related to the financial assistance granted under the PAUPME can be extended until March 31, 2022.

The Emergency Assistance Program for Small and Medium-Sized Businesses (PAUPME) seeks to support, for a period no greater than six months, the working capital of SMEs to enable them to maintain, consolidate or revive their activities.

The financial assistance addresses the need for the working capital required to maintain the operations of the business and is determined based on justified and reasonable expenses, as well as on a recovery plan showing good prospects of profitability in the medium term. The funding must offset cash-flow problems stemming from:

  • the inability or significantly reduced capacity to deliver products (goods and services) or merchandise;
  • problems in obtaining raw materials or products (goods or services);
  • slower resumption of the operations of the business due to the COVID-19 pandemic.

The assistance granted will take the form of a loan or loan guarantee of up to a maximum of $50,000, based on the following terms:

  • 3% interest rate;
  • a three-month moratorium on the repayment of principal and interest, which may be extended until March 31, 2022;
  • the possibility of an additional 12-month moratorium on principal repayment;
  • 36-month loan amortization following the moratorium;
  • the possibility of amortizing the loan repayment up to 60 months after the moratorium.

As part of the recovery of operations of a business, additional assistance of up to a maximum of $50,000 may be added to funding already granted under the program.

The total value of the financial assistance granted to a business may not, however, exceed $150,000 at any time within a 12-month period.

Applications for financial assistance under the PAUPME must be submitted not later than four weeks after the lifting the health emergency.

For applications of $50 000 or more, please consult the website of the Concerted Temporary Action Program for Business This hyperlink will open in a new window. administered by Investissement Québec.

What is more, the federal government has implemented support measures pertaining to rent, property, wages through the following programs:

Eligible clientele

The following enterprises are eligible for the program:

  • enterprises in all areas of activity;
  • social economy enterprises, including cooperatives and non-profit organizations that engage in business activities.

Applicants that are under the protection of the Companies’ Creditors Arrangement Act (R.S.C. [1985], c. C-36) or the Bankruptcy and Insolvency Act (R.S.C. [1985], c. B-3).

All areas of activity are eligible except the following:

  • the production or distribution of weapons;
  • gambling, combat sports, racing, or other similar activities;
  • the production, sale and services related to the consumption of tobacco or drugs, except projects that cover pharmaceutical-grade products approved by Health Canada with a Drug Identification Number (DIN), or their ingredients, and research and development projects covered by a Health Canada permit;
  • any activity whose main purpose is protected by the Canadian Charter of Rights and Freedoms (religion, politics, advocacy, and so on);
  • any other activity that might undermine moral standards. Some examples are establishments whose activities are of a sexual nature such as erotic bars, escort agencies, brothels, erotic massage studios, or swingers’ clubs.

To be eligible, the enterprise must:

  • have operated in Québec for at least six months;
  • be closed temporarily, liable to close or display early warning signs of closing (for applications submitted under the Assistance for Businesses in Regions on Maximum Alert section and the Assistance for Some Businesses in the Tourism Sector section only);
  • be in the process of maintaining, consolidating or reviving its activities;
  • have demonstrated a causal link between its financial or operational problems and the COVID-19 pandemic.

Assistance for Businesses in Regions on Maximum Alert (AERAM) section

To support establishments subject to a closure order, the Assistance for Businesses in Regions on Maximum Alert (AERAM) section allows for loan forgiveness (non-repayable financial assistance) according to the following conditions:

  • it applies to loans granted under the PAUPME after December 20, 2021;
  • it covers the portion of eligible fixed expenses unclaimed under another government programs and disbursed for the closed period in question:
    • municipal and school taxes,
    • rent;
    • interest paid on mortgage loans;
    • expenses related to public services such as electricity and gas;
    • insurance;
    • telecommunications expenses;
    • licensing and association fees.

Salaries, fringe benefits, employer and social contributions, taxes, and other fixed expenses are excluded from expenditures that give rise to loan forgiveness.

Loan forgiveness could reach 100% of the eligible fixed expenses, up to $15 000 per month of closing. Loan forgiveness cannot exceed 80% of the loan granted under the PAUPME.

The moratorium on the repayment of principal and interest related to financial assistance granted under the AERAM section of the PAUPME has been extended until March 31, 2022.

To be eligible, the establishments must:

Applications for financial assistance under the AERAM section must be received not later than four weeks after the resumption of the operations of the businesses subject to a closure order.

Additional support to cover food losses in restaurants

Restaurants that benefit from financial assistance under the Assistance for Businesses in Regions on Maximum Alert (AERAM) section are eligible for additional loan forgiveness (a non-repayable contribution) up to maximum of $10 000 per establishment to cover the cost of unused perishable items. The additional assistance does not apply to alcoholic products. The eligible expenses must have been incurred between December 15 and 30, 2021.

Enhancement for the resumption of operations

The additional support is equivalent to one, two, or three months of additional loan forgiveness (non-repayable financial assistance) in addition to for the preceding months, which can be claimed when the business targeted reopens.

For businesses closed for 90 days or less

A maximum additional amount payable is $15 000 per establishment. The additional support must cover the fixed expenses disbursed in the month following the reopening of the businesses targeted.

For businesses closed for between 91 and 180 days

The maximum additional amount payable corresponds to $30 000 per establishment, i.e., $15 000 per month. The additional support must cover the fixed expenses disbursed in the two months following the reopening of the businesses targeted.

For businesses closed for more than 180 days

The maxiumum additional amount that can be paid corresponds to $45 000 per establishment, or $15 000 per month. The additional support must cover the fixed expenses disbursed in the three month following the reopening of the businesses targeted.

The enhancement is added to the loan forgiveness for the preceding months, up to a maximum of 100% of the financing granted.

It is worth noting that the period for submitting applications for financial assistance under the Assistance for Businesses in Regions on Maximum Alert (AERAM) section for the period from October 2020 to June 2021 has ended, since the applications had to be received not later than four weeks after resumption of operations by the businesses covered by a closure order.

Assistance for Some Businesses in the Tourism Sector section

Under the Assistance for Some Businesses in the Tourism Sector section of the PAUPME, tourist lodges with four or more rooms (for the commercial portion) and travel agencies will benefit from the following conditions:

  • Possibility of converting to loan forgiveness 40% of the amount reimbursed (principal and interest) during the first 24 months following the start of repayment up to a maximum of $20,000 per establishment;
  • A 12-month moratorium on the repayment of principal and interest. The moratorium can be extended until March 31, 2022;
  • Possibility of amortizing loan reimbursement up to 60 months following the moratorium.

To be eligible, tourist accommodation businesses with four or more rooms (in the commercial section of the building) must be registered on the Bonjour Québec website. 

To be eligible, travel agencies must hold one of the following licences issued by Office de la protection du consommateur du Québec:

  • General travel agent’s licence
  • Restricted travel agent’s licence (adventure travel organizer)
  • Restricted travel agent’s licence (outfitter)

Travel agencies are not required to be registered on the Bonjour Québec website. 

Lastly, it is worth noting that businesses in the tourism sector can submit their applications in the context of this section until four weeks after the latest of the following dates:

  • the lifting of the health emergency;
  • the full opening of the Canada-US border, which has already occurred.

To apply for support

1- Prepare yourself

Because this is a loan application, the following documents may be required when the application is submitted:

  • the most recent financial statements;
  • the most up-to-date interim financial statements;
  • the cash flow budget or cash flow predictions;
  • recovery plan of the business;
  • for businesses eligible for the AERAM section, supporting documents for monthly fixed expenses (lease, notice of assessment, tax notice [municipal and school taxes], mortgage contract, insurance contract, public services, telecommunications services, licences, invoices for services, and so on).

2- Contact the RCM, the office of the municipality, or the organization that manages the local investment fund (FLI) in your territory.

An advisor will answer your questions and guide you in the submission of your application.

3- Complete the application documents

The advisor responsible for your file at the RCM will provide the other documents, including the application form, to be completed when you submit your application. Please allow for the time required to analyze the application.

4- Obtain financial support

Your application and the documents submitted will be analyzed to determine the enterprise’s eligibility for the PAUPME program and, where appropriate, the AERAM section (loan forgiveness) or the Assistance to Some Businesses in the Tourism Sector section.

If the application is accepted, a loan will be granted under the terms of the PAUPME program and, where appropriate, of the AERAM section (loan forgiveness) or Assistance for Some Businesses in the Tourism Sector section.

If the enterprise is eligible for the AERAM section under the PAUPME loan, the loan forgiveness will apply at the conclusion of the repayment moratorium upon receipt of the requisite supporting documents.

Applications for financial assistance under the AERAM section must be received not later than four weeks after the resumption of the operations of the businesses subject to a closure order.