Montreal merchants hit by construction eligible for up to $30K a year

Montreal merchants hit by construction eligible for up to $30K a year
Montreal unveils details of plan to help businesses suffering from construction woes
The City of Montreal says its new compensation program for businesses that have incurred losses because of construction projects is the first of its kind in Canada.

In fact, the city is launching two programs: one $25-million program to compensate for losses due to sewer repairs and other underground work, as well as STM construction, and a second $16.8-million program to support business development organizations during construction periods.

The compensation will be retroactive to Jan. 1, 2016 for municipal infrastructure projects and Sept. 21, 2017 for STM-related projects.

Businesses affected by city projects that include underground work, such as sewer repairs, that last at least six months are eligible. STM projects or surface work that affects traffic must last at least 36 months for affected businesses to be eligible.

Losses due to provincial construction projects or for the REM light-rail transit project will not be eligible.

Businesses will be eligible for a maximum of $30,000 per year in compensation. The amount each will receive is based on the loss in gross profits during the construction period, minus the first 15 per cent in losses.

In other words, a business must be able to show it lost at least 15 per cent of its business in order to qualify for any compensation.

Businesses will have to prove their losses with financial statements and must have been established before the construction began. As well, they must still be in operation for at least another 40 days after submitting their claim. Any businesses that have already gone bankrupt or moved are not eligible.

Only businesses that provide direct services or sales to the public are eligible, and some types of businesses, such as massage parlours, banks, insurance companies and real estate firms, are excluded from the program. All professional services, such as law firms or engineering firms, are excluded as well, except for photographers and interior design companies.

The city will announce in January which specific projects will be eligible, but it said the recent STM construction project on Bishop, Ste-Catherine and St-Denis streets would meet the criteria. The city has calculated that there are roughly 15 construction sites that are already completed or ongoing for which businesses will be eligible. Another 60 projects could qualify over the next four years.

It is a priority for CBC to create a website that is accessible to all Canadians including people with visual, hearing, motor and cognitive challenges.

The program will be the first of its kind in Canada, the city says, and it hopes to start sending out cheques in February or March.

Some merchants on Bishop St. have been forced out of business because of construction on the street. John Mahoney / Montreal Gazette

The City of Montreal unveiled the details on Wednesday of its long-awaited plan to compensate merchants affected by major construction work.

Under the plan, businesses that have seen their revenue drop by more than 15 per cent because of major projects will be eligible for up to $30,000 a year in compensation.

Its a historic day for local commerce in Montreal, said Robert Beaudry, the member of the citys executive committee responsible for economic development.

The city says it expects a municipal bylaw to be passed in December and it will be able to start accepting applications for the program in January. It hopes to start sending out cheques in February or March.

The program will apply across the Island of Montreal and cover work conducted by de-merged suburbs and the STM as well as by Montreal boroughs and the central city.

The plan will be retroactive to Jan. 1, 2016, for work done by the city of Montreal, or another on-island city that involved underground work and lasted — or is scheduled to last — for more than six months.

It will be retroactive to Sept. 21, 2017, for businesses affected by work conducted by the city or the STM that blocked traffic and lasted, or is scheduled to last, for more than 36 months.

That would include Bishop St., where an STM construction project — scheduled to last almost four years —started in October 2016.

The 75-year-old restaurateur said, for him, the damage has already been done. He doesnt think hell be able to sell his business, something he had counted on to fund his retirement.

Beaudry said the city had to make sure it had the capacity to pay and he didnt think giving money to companies that no longer exist was a good use of taxpayer money.

While the municipal administration has been criticized for moving too slowly on the plan, Beaudry said the administration, which took office a year ago, has moved as fast as it could.

As much as wed like it to go faster, we have to look at reality, said Mike Parente, the head of the Société de développement commercial de la Plaza St-Hubert. I think our members will be ok to wait until spring.

Merchants on Plaza St-Hubert, where several blocks have been dug up, could be among the first to benefit from the program.

Its a step in the right direction, were happy, the amount for some will be sufficient, the amount for others will not, Parente said.

More important than the specific amount, he said, is the fact it comes alongside several other municipal measures, including a reduction in property taxes on the first $500,000 of a non-residential buildings evaluation, aimed at supporting local businesses.

Irving Tajfel, the president and founder of Neon Clothing has seen the impact of construction on his St-Denis location. Now, hes seeing it on his St-Hubert store.

Im very happy getting $30,000, but thats a one-time fix. On St-Denis, when they started, 10 or 15 stores closed up. A year or two later, theres still eight or 10, he said. Theyre not helping to promote activity on the retail streets. I need competition.

The city plans to spend $5 million on compensation in 2019, retroactive compensation is expected to cost $8 million. In total, the city plans to spend $25 million between now and 2021.

The plain is aimed specifically at retailers and restaurants — professional services businesses, banks and massage parlours wont be eligible.

Businesses will have two years after a project is finished to apply and will be able to demonstrate their losses by submitting their corporate tax return to the city. That move was praised by the Canadian Federation of Independent Business, which said programs of this nature often make the application process difficult.

The city also said its rebranding and adding new elements to an existing program that supports neighbourhood business associations, known as sociétés de développement commercial, in areas where major projects are taking place. Those new elements include a program that will provide $100,000 in funding for post-construction support and additional funding for SDCs in affected areas.