Tourism Interest Relief Program

The Tourism Interest Relief Program announced by the Province of Prince Edward Island will provide assistance to Island tourism operators through a joint partnership of Finance PEI and Tourism PEI. Subject to the terms noted below, assistance provided will equal the amount of interest expense incurred or paid on term debt, for each month from April 1, 2020 to September 30, 2021 in which the tourism operator demonstrates either:

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

Once an application has received initial approval for relief under the program, claims will be submitted and processed monthly, as received. Subsequent monthly relief payments will require applicants to apply, using the separate link provided for subsequent relief. The program will not exceed eighteen months, and no claims will be processed for months subsequent to September 2021.

Note: The subsequent relief applications are now available.

General Eligibility Criteria

The maximum cumulative interest to be issued under this program to a business or group of businesses under common control, as defined by the Canadian Income Tax Act, has been increased to $400,000 up from the original $250,000. Please note, all eligible companies can still receive up to 100% of their interest from their term debt up to the original $250,000, however once a company hits the $250,000 threshold, only 50% of the company's outstanding term debt interest will be eligible until they reach $400,000.

Eligible applicants must be operating within one of the following sectors:

  • Licensed tourism accommodations used primarily for business activity (e.g. hotel, motel, bed and breakfast, inn, resort, cottage operations, campgrounds);
  • 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.

Business requirements
For-profit corporations, partnerships and sole proprietorships operating within one of the above-noted sectors are eligible for the program, provided that the physical tourism operation and head office are both located on Prince Edward Island. Ineligible entities include the following:

  • Operations that are currently, or have been in the past, in the process of receivership as per Canada’s Bankruptcy and Insolvency Act;
  • Businesses and/or shareholders/partners listed on the Provincial Central Default Registry;
  • Non-Canadian or publicly traded companies or company owned by the same; and
  • Corporate operations of a franchise network with establishments located outside of PEI.

Eligible Debt

Only non-revolving, term debt incurred on or before April 1, 2020 with a financial institution is eligible for interest relief under this program. Revolving credit, debt held within the company, but not related to tourism activities and/or debt with private lenders is not eligible for interest relief. If your business requires financing for operating expenses or new capital projects, you can make application to the Tourism Assistance Loan Program or the Emergency Working Capital Loan Program, both of which are administered by Finance PEI.

Maximum Interest Relief Provided Under the Program

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 maximum cumulative interest relief to be provided to any one business is limited to the lower of:

  • Total revenue reported by the business for income tax purposes in the previous year; or
  • $400,000.

Seasonal Operations: Eligibility for Months when the Operation is Not Active

Finance PEI and Tourism PEI recognize that many of our Tourism businesses earn the majority of their annual revenues from May to September. The amount earned during the short peak tourist season is sufficient to cover expenses of the operation year round. As such, operations continue to be eligible for interest relief for those months where revenues are zero, even if there was no revenue recorded for that month in the previous year, provided the company has not already reached the maximum interest relief for which they are eligible, as described above.

Real estate holding companies

A real estate holding company may be eligible for interest relief under this program if the following criteria have been met:

  • The company that holds the capital assets and associated debt rents space to a related company operating a tourism-related enterprise; and 
  • Both companies are controlled by the same ownership or “immediate family members” (for the purpose of this program, immediate family members include parents, spouse, or children).

If the above-noted criteria and all other program criteria have been met, ONE of the two companies, as elected by the companies, will be eligible for interest relief under the program. For the purpose of monthly reporting to determine eligibility for a particular month, revenues of the operating company will be considered.

Further Eligibility Criteria for Accommodations

Licensing requirements

This program applies to Tourism Accommodations (Establishments) as defined under the Tourism Industry Act and therefore applies only to establishments that are rented for periods of less than one month at a time in accordance with S. 1.(i) of the Act. In order to be eligible, Tourism Accommodations must hold a valid license under the Tourism Industry Act, acquired prior to April 1, 2020. 

Private residences

There are a number of situations whereby a tourism accommodation establishment may also be the operator’s private residence for all or part of the year. Some examples include the following:

  • Bed and Breakfast/Tourist Home operations where bedrooms are assigned for the exclusive use of a guest or party of guests and hospitality is provided by the tourism operator; or
  • Cottage operations where the cottages are located on the same parcel of land as the business operator’s home. 

In these situations, the owner occupies a portion of the residence during the period the establishment is rented for tourism purposes. As such, a determination must be made as to what percentage of interest will be deemed eligible and may be calculated based on the portion of the residence in use and/or the number of months the residence is utilized for short term rentals. The intent of the program is to provide interest relief on tourism operations, exclusive of private residences.

Properties used for both long term and short term rentals

Long term rental activities are not eligible for interest relief under this program. In situations where a property is used to earn income from both long term and short term rentals, and is not the private residence of the owner, the operator is only eligible to receive interest relief for those months that the establishment was used for tourism (short term rental) purposes. 

What is the process to apply?

Processing of Applications for this program will commence on May 1, 2020 and must make application before December 31, 2020 to be considered eligible. 
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

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 provision of interest relief.

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.

What is the process to request subsequent relief? 

After your initial application and approval, for each subsequent month you request relief you must complete the online application for "Request Subsequent Relief Payments" (below). In order to complete this online form, you will need:

  • Your initial Interest Relief Confirmation Number (ie 3264-123456)
  • Subsequent financial documentation for the month applying:
    •  Comparative Income Statement for the month you are applying (ie May 2019 and May 2020) 
    •   Loan statement for the month you are applying (ie May 2020)

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.

What is the payment process?

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

Contact information

For information about interest relief for tourism operators, contact

Finance PEI

General Inquiries

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