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 programs cover all municipalities on the island of Montreal until 2021.

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.

Up to $30K per year

In the midst of construction in 2016 on St. Denis Street, restaurant Le Hachoir took this tongue-in-cheek picture of its predicament. (Restaurant Hachoir/Facebook)

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.

Some exclusions

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.