Tourism Interest Relief Program

The new ‘term debt’ interest relief program announced by the Province of PEI will provide assistance to PEI tourism operators through a joint partnership of Finance PEI and Tourism PEI. This new interest relief program will provide relief for qualified applicants that meet the eligibility noted below, and demonstrate either:

a) a minimum 30% decrease in tourism related revenues compared to the same month in the prior year; or
b) no tourism revenue for the month. 

The total obligation of the Government of Prince Edward Island under the Tourism Interest Relief program will not exceed ten million dollars ($10,000,000). The Government of Prince Edward Island reserves the right to pro-rate payments at any point during the program should the total interest rebate/claims from the cumulative operators exceed ten million dollars ($10,000,000).

The Tourism Interest Relief program has a maximum eligibility (or "cap") stating that no one tourism operation (or group of associated companies as defined by Revenue Canada Agency) receive more than $250,000 (2.5%) of the ten million dollar fund. Should this program not be fully utilized/committed by the end of the 18 months; the residual amount in the fund would be proportionately allocated to companies capped at $250,000. 

After an applicant has received approval for relief under the Tourism Interest Relief Program, Finance PEI and Tourism PEI will process claims on a monthly basis, as received.

Maximum interest relief for tourist operators under this program will not exceed total revenues reported for the previous year. 

Eligibility

Businesses that are in the process of receivership as per the Canada’s Bankruptcy and Insolvency Act, or have been so in the past, are not eligible for this program.

The physical tourism operation and head office must both be located on PEI. Further, all non-Canadian or publicly traded companies or company owned by the same are excluded from this program. Additionally, corporate operations of a franchise network with establishments located outside of PEI are excluded from this program.Only Licensed tourism accommodations that held licenses before April 1, 2020 will be eligible for the interest relief program. 

Eligible applicants must be a ‘for profit entity’ operating within one of the following sectors:

  • Licensed tourism accommodations (e.g. hotel, motel, bed and breakfast, inn, resort, cottage operations, campgrounds);
  • Licensed tourism accommodations must be used for business activity and not, whole or in part, for primary residential purposes;
  • Food and beverage service (e.g. restaurant, bar, brewery);
  • Local artisans and artists (e.g. pottery, artwork);
  • Locally-owned retail and gift shops that cater primarily to Tourism;
  • Attractions (e.g. museum);
  • Tourism service/experience providers;
  • Event companies;
  • Adventure (e.g. kayaking, amusement park, golf); and/or
  • Tour operators.

What are the program details?

The Tourism Interest Relief Program being offered though Finance PEI and Tourism PEI will reimburse interest expense related to term debt for every month the tourism operator demonstrates either:

a) a minimum 30% decrease in tourism related revenues from PEI operations compared to the same month in the prior year; or
b) demonstrating that the operation had no tourism revenue for that month.

  • Interest relief is only eligible for ‘term debt’ directly related to tourism activities, and held with a financial institution (i.e. chartered banks, Credit Unions, BDC and FPEI/PEI Century Fund). For greater clarity, the program excludes revolving credit (i.e. lines of credit and related party debt).
  • The program will provide interest relief on term debt incurred on or before April 1, 2020, with interest relief claims being processed for the period of April 1, 2020 through September 2021. (The program will not exceed eighteen months).
  • The maximum interest relief benefit will not exceed the total revenues reported by the business in the prior year.

What is the process to apply?

Business administrators/operators who provide false or misleading information to obtain access to this program will be subject to full repayment with interest, plus other penalties as deemed appropriate by the agency and authorities.

Processing of Applications for this program will commence on May 1, 2020. 

Eligible tourism operators on PEI will be required to submit an online application and the required supporting documentation demonstrating either:

a) a minimum 30% decrease in tourism related revenues compared to the same month in the prior year; or
b) that the operation had no tourism revenue for that month.

Information to be provided:

  • Completed online application for “Tourism Interest Relief” from Finance PEI and Tourism PEI;
    • Monthly financial statements demonstrating a negative impact in PEI-generated tourism revenues each month via either:
      • a) a minimum 30% decrease in tourism related revenues from PEI operations compared to the same month in the prior year; or
      • b) no tourism revenue for the month.
    • Financial reporting (under this program) must be consistent with the applicant’s tax reporting practices (i.e. cash vs. cash or accrual vs. accrual).
    • Term debt agreements with financial institutions (including, but not limited to, mortgage documents) confirming interest rate. Documents must confirm that debt is with an arm’s length entity (i.e. related party debt is not eligible for interest relief);
    • Documentation to confirm that debt was incurred for the purpose of earning income on PEI for tourism activities;
    • Completed Tourism Interest Relief Program Pre-Authorization for Credit Transactions Form

In order to be eligible for interest relief for a particular month, Tourism operators are required to reapply each month and demonstrate either: a minimum 30% decrease in tourism related revenues for PEI operations compared to the same month in the prior year, or b) that the operation had no tourism revenue for that month.

Finance PEI reserves the right to review and request additional information to validate a decrease in revenues including, but not limited to: financial statements; HST returns; tax returns; and/or any other documents that validate a reported decrease in tourism revenues.

Tourism PEI will validate that an applicant operates within an eligible sector for the program prior to reimbursement of interest expense.

What is the payment process?

Upon approval of an application under the Tourism Interest Relief Program, Finance PEI and Tourism PEI will process payment of interest relief on approved monthly claims.

Other Information: The program will be administered through a joint effort by both Finance PEI and Tourism PEI.

Contact information

For information about interest relief for tourism operators, contact tourismrelief@gov.pe.ca

Finance PEI

General Inquiries

Development Lending and Property Management
2nd Floor, 94 Euston Street
Charlottetown, PE   C1A 7M8

financepei@gov.pe.ca