The Emergency Assistance Program for Small and Medium-Sized Businesses (PAUPME) seeks to support through loans of less than $50 000 the working capital of SMEs to enable them to maintain, consolidate or revive their activities. The financing must offset cash-flow problems stemming from:

  • halted or significantly reduced capacity to deliver goods or services;
  • problems in obtaining raw materials or products (goods or services).

The assistance granted will take the form of a loan of up to a maximum of $50 000:

  • 3% interest rate;
  • a moratorium until September 1, 2021 on the principal and interest repayment;
  • 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.

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.

Moreover, the federal government has established the Canada Emergency Rent Subsidy (CERS) This hyperlink will open in a new window., intended for commercial tenants and the owners of commercial buildings. It covers part of their commercial rent or building expenses for the period from September 27, 2020 to June 2021. The Canada Emergency Wage Subsidy (CEWS) modified This hyperlink will open in a new window. on November 19, 2020, remains in force and enables employers to cover part of their employees’ wages.

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 a least six months;
  • be closed temporarily, liable to close or display early warning signs of closing;
  • 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 businesses that must fully or partially halt their activities, a new section has been added to the PAUPME. The Assistance for Businesses in Regions on Maximum Alert (AERAM) section takes the form of loan forgiveness (non-repayable financial assistance) subject to the following conditions:

  • it applies to loans granted under the PAUPME starting October 1, 2020;
  • 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. To be eligible, the establishments must:

  • be subject to a closure order to protect the health of the population during the COVID-19 pandemic;
  • have halted, in whole or in part, their activities in accordance with an Order-in-Council or a Ministerial Order for a period of at least:
    • of at least 10 days in a given month in October, November or December 2020, or from January 2021;
    • of at least seven days in a given month, starting from February 2021.

Starting February 10, 2021, businesses that submit an application under the AERAM section will be eligible for the loan forgiveness to cover fixed expenses incurred starting in January 2021. Applications submitted starting from that date must indicate the businesses’ working capital needs starting from January 1, 2021 and for a period of at least six months.

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 in the economic sector. Businesses that have already resumed their operations must submit their application not later than April 30, 2021.

Enhancement for the resumption of operations

To facilitate recovery, businesses that are eligible for the AERAM may obtain additional support under the PAUPME. A business can take advantage of new additional financial assistance of up to a maximum of $50 000 to cover its cash requirements, for total assistance of $150 000.

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.

A company that has reopened but has had to halt its operations before fully taking advantage of the enhanced support (reopening enhancement) may have acccess to it when it next reopens.

Compensation for closure expenses

Moreover, additional support may apply to the restaurants and training rooms that have resumed their operations but which must close again because of a closure order in order to protect the health of the population during the COVID-19 pandemic.

This additional support corresponds to loan forgiveness of a maximum of $10 000 per establishment to cover the expenses incurred and deemed necessary for the enterprise’s reopening:

  • the cost of unused perishable items;
  • cleaning of the commercial enterprise;
  • costs incurred to recruit and train new staff.

Assistance for Some Businesses in the Tourism Sector section

Under the PAUPME program, tourist accommodation businesses with four or more rooms (in the commercial section of the building) and travel agencies qualify for the following benefits:

  • 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 reimbursement of principal and interest;
  • 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. 

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;
  • 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.

SMEs that are already benefiting from this program and that take advantage of the AERAM section may submit a new financial assistance application totalling $50 000.

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 in the economic sector. Businesses that have already resumed their operations must submit their application not later than April 30, 2021.

An example of financial assistance granted under the AERAM section

ABC had to close on October 1, 2020. Bearing in mind the entire array of its cash requirements to weather this period, the enterprise applied for a loan of $50 000. It therefore assembled the information requested and prepared the documents necessary for its application, then submitted its application to the RCM in its territory on November 1, 2020.

Once the RCM had answered all the enterprise’s questions and received all the relevant documents, it analyzed the application for financial assistance under the PAUPME and issued a favourable opinion. The enterprise thus obtained a loan as follows:

  • a loan of $50 000;
  • 3% interest rate;
  • a moratorium until September 1, 2021 on the repayment of the principal and interest;
  • a 36-month repayment period after the repayment moratorium.

Since the closure order has been extended, the AERAM section may apply to the months of October, November and December 2020, and to the months of January, February, March, and April 2021. When the business resumes its operations, the enhancement will apply for three months because it was closed for more than 180 days.

Following the repayment moratorium and receipt of the supporting documents for the eligible monthly fixed expenses, the amount of the loan forgiveness is set at $5 000 per month.

Number of months that the AERAM section applies
(seven months)

Enhancement for the resumption of operations
(three months)
Total amount of the loan forgiveness
7 x $5 000 = $35 0003 x $5 000 = $15 000$50 000

In this example, the total loan forgiveness reaches 100% of the loan granted to the business.