Special Financial Assistance Program for Flooding April 5 to May 16, 2017, in Québec Municipalities. Presentation for businesses

Transcription

1 Special Financial Assistance Program for Flooding April 5 to May 16, 2017, in Québec Municipalities Presentation for businesses

2 Presentation Sequence General principles of the Program Who is eligible for the Program? Possible causes and eligibility of damage Flooding insurance Businesses Eligibility criteria - Principal means of subsistence - Low income cut-off Indemnities provided under the program Exclusions General program provisions Processing of claims 2

3 General Program Principles Last resort humanitarian assistance Ensure people are safe and can resume their normal lives 3

4 Who is eligible for the Program? Individuals Businesses Business corporations Partnerships Self-employed workers Owners of rental buildings Cooperatives Farming enterprises Municipalities Organizations that provided help and assistance 4

5 Eligible Causes of Damage Cause Definition Sewer backup Water enters through sanitary facilities (shower, floor drain, well). Water infiltration Water enters through openings, foundations, or the concrete floor. Flooding overflowing of a watercourse Water reaches the insured premises and leads to infiltration or sewer backup. 5

6 Eligibility of Damage (Businesses Only) Cause Insurability Eligibility Sewer backup Insurable Not eligible Water infiltration Not insurable Eligible Flooding overflowing of a watercourse Insurable but generally not underwritten Eligible 6

7 Flooding insurance Disaster victims do not have to reimburse financial assistance provided for any portion their insurance companies will not pay in the case of flooding since financial assistance provided by the program can cover that portion (deductible excluded) 7

8 Eligibility Criteria Eligibility criteria for businesses, except owners of rental buildings For one of both years preceding the year of the loss Principal means of subsistence of owners who hold at least 50% of the shares or Income taking the owner closer to the low income cut-off For both years preceding the year of the loss Net income under $500,000 and Total income under $2,000,000 Eligibility criteria for owners of rental buildings For both years preceding the year of the loss Net income under $500,000 and Total income under $2,000,000 8

9 Principal Means of Subsistence Self-employed workers Business owners must prove, for one of both years preceding the loss, that the income generated by their businesses is their principal means of subsistence or that this income allows them to reach or get closer to the low income cut-off. 9

10 Principal Means of Subsistence (cont.) Calculation method Employment income (other than business): $18,000 Income from the business: $25,000 Rental income: $3,000 Interest income: $2,000 TOTAL: $48,000 Income from the business: $25,000 52% Total income: $48,000 10

11 Principal Means of Subsistence (cont.) Business corporation The partner or partners entitled to at least 50% of the corporation s profits must prove, for one of both years preceding the year of the loss, that they rely on this income as their principal means of subsistence or that this incomes allows them to reach or get closer to the low income cut-off. 11

12 Principal Means of Subsistence (cont.) The business is eligible since Mr. B and Ms. C (entitled to 50% of profits) rely on it as their principal means of subsistence Partners % of profits Mr. A 50% Income source Employment income $20,000 Rental income $25,000 Income from business $17,000 $17,000 $62,000 Eligibility 27% Mr. B 30% Employment income $5,000 Income from business $9,000 $9,000 $14,000 64% Ms. C 20% Employment income $1,000 Interest income $12,000 Income from business $15,000 $15,000 $28,000 54% 12

13 Principal Means of Subsistence (cont.) Incorporated companies (business corporation) The shareholder or shareholders owning at least 50% of the corporation s voting stock must prove, for one of both years preceding the year of the loss, that they rely on this income as their principal means of subsistence or that this income allows them to reach or get closer to the low income cut-off. 13

14 Principal Means of Subsistence (cont.) The business is eligible because Mr. A (holds 50% of voting stock) relies on it as his principal means of subsistence Shareholders % voting stock Mr. A 70% Income source Employment ABX $20,000 Employment Z $25,000 Dividends ABX $7,000 $27,000 $52,000 Eligibility 52% Mr. B 20% Employment ABX $5,000 Interest $9,000 $5,000 $14,000 36% Ms. C 10% Dividends ABX $1,000 Rental $12,000 $1,000 $13,000 8% 14

15 Statistics Canada s Low Income Cut-off Example Statistics Canada s low income cut-off: $19,053 Business income: $10,000 Other income: $14,000 Total: $24,000 The business income is not the owner s main source of income ($10,000/$24,000 = 42%). However, the other income of $14,000 is under the low income cut-off. By adding both sources of income together, the low income cut-off is reached. The business is therefore eligible. 15

16 Indemnities provided under the Program For owners and tenants of buildings Temporary preventive measures Moving and storage costs Business property Equipment Merchandise Leasehold improvements For building owners only Essential buildings 16

17 Temporary Preventive Measures Actions taken to protect essential property (see Appendix A of the program), for example: Raising of equipment and merchandise Installation of temporary protection Invoices For purchasing material and renting equipment 100% of the costs of such measures up to a limit of $8,000 17

18 Moving or Storage Expenses For moving or storing of equipment or merchandise Due to the loss Due to recovery Invoices For vehicle rental or storage 100% of eligible expenses up to a maximum of $2,500 18

19 Amount of Financial Assistance For essential movable and immovable property Financial assistance amounting to 75% of eligible damage Maximum assistance of $265,000 plus emergency work and temporary work 19

20 Essential Property (Merchandise and Equipment) Amount of financial assistance Whichever is less: repairing the property or replacing the property with property of equal value without depreciation 20

21 Essential Immovable Property Eligible damage Emergency work and temporary work Essential access roads Damage to essential buildings Limit for damage to a building or facility: cannot exceed its replacement cost Limit for damage to land: cannot exceed the municipal standardized property assessment 21

22 Emergency Work and Temporary Work Emergency work Water pumping, cleaning, demolition, waste disposal, etc. Temporary work To allow the business to reopen prior to permanent work Example: boarding up openings Invoices Cleaning company, equipment rental, purchase of materials, contractor Labor 100% of eligible expenses minus $1,000 Importance of demolition 22

23 Essential Access Roads Cost of work required to allow minimal and safe access to the business s essential buildings Financial assistance equal to 75% of eligible damage Provide photos of damage 23

24 Repair of Damage to the Building Eligible components Foundation, footings, loadbearing walls, exterior cladding, framing, exterior doors, windows, interior stairways, roofing Floors Insulation, electricity, plumbing Drinking water supply system, and hot water tank Interior walls, including plastering and painting Cabinets 24

25 Damage Appraisal Inspection by a damage appraiser Damage appraisal report Claimant rate vs. contractor rate Valid license from Régie du bâtiment du Québec (RBQ) 25

26 Use of Financial Assistance to Eliminate or Reduce Risk of Loss Immunization Moving the business s buildings Departure allowance Financial assistance equal to 100% of the value of eligible damage for essential buildings and access roads, without exceeding the replacement cost of the buildings Maximum of $265,000 If the business assigns the property where the essential buildings are located for the nominal sum of $1, the owner will receive in exchange financial assistance equal to the value of the property s standardized municipal assessment, without exceeding $60,000 (on top of the maximum amount of $265,000) 26

27 Immunization Protection measures to avoid possible damage due to flooding Additional assistance for engineering costs Scenario 1 Scenario 2 Eligible damage $50,000 $50,000 Immunization cost $40,000 $75,000 Amount due from the owner $0 $25,000 27

28 Moving the Essential Buildings Moving the buildings to a different location on the same property Moving the buildings to another property Additional allowance for foundation demolition and waste disposal 100% of the cost of work (on presentation of two quotes) 28

29 Departure Allowance The owner must have the business s buildings demolished The business must relocate and pursue its operations Additional allowance for building demolition and debris disposal 100% of the cost of work (on presentation of two quotes) 29

30 Businesses Financial Assistance (Summary) Amount of financial assistance Temporary preventive measures Maximum $8,000 Moving or storage costs Maximum $2,500 Emergency work and temporary work Deductible: $1,000 Eligible amount: 100% Property damage Eligible amount: 75% Maximum of $265,000 or the replacement cost of the buildings 30

31 Exclusions Damage appraisal costs Damage and recovery measures covered by other programs, except any portions not reimbursed by an insurance company because damage was caused by flooding Loss of property value Loss of income Losses suffered as a result of damage to land or landscaping Automobiles and recreational vehicles 31

32 General Program Provisions Assistance from another source Claimants do not need to reimburse financial assistance provided for any portion their insurance companies will not pay in the case of flooding since financial assistance provided by the program can cover that portion (deductible excluded) Precarious Financial Position (please ask analyst about it) Claimants must provide all required documentation and give access to their property for damage appraisal 32

33 General Program Provisions (cont.) Destroyed property must be repaired or disposed of according to the laws in effect Eligibility for financial assistance is unassignable (may not be transferred) Financial assistance is exempt from seizure Claimants must have the work completed within 12 months of receiving a notice of eligible damage Claimants undertake to use the financial assistance exclusively for its intended purpose 33

34 General Program Provisions (cont.) Right of review Two-month window after notice of decision Claimants undertake to subrogate the Government of Québec with respect to all rights and remedies against third parties for any injury for which they have received financial assistance, up to the value of the assistance 34

35 Processing of Claims Individual meeting with an analyst or in a small group or mailing of the claim form Processing of the claim form Decision regarding eligibility - Summary analysis of the damage Application for a full appraisal of the damage (if necessary) In the following days Inspection by a damage appraiser Upon reception of the appraisal report Payment of an advance (if possible) Final payment upon work completion and reception of invoices 35

36 Deadline for Submitting a Claim Within 3 months of the program implementation date, or by August 16 th 2017, failing which it will be disqualified 36

37 Steps for Submitting a Claim Provide the required documentation (valid at the time of the disaster) Copy of the owner s or owners provincial income tax return(s) and notice(s) of assessment from Revenu Québec for both years preceding the year of the loss The business s provincial income tax return and the notice of assessment for both years preceding the year of the loss Copy of the lease or municipal appraisal notice 37

38 Steps for Submitting a Claim (cont.) Provide the required documentation (cont.) (valid at the time of the disaster) FAIRE TRADUIRE LA LISTE DU DÉPLIANT Copy of the insurance policy Letter indicating the insurer s denial Photos and videos of damaged property Startups should consult an analyst. 38

39 Key Steps Claim submission Within 3 months of the program implementation date Acknowledgement of reception and confirmation that a file has been opened 3 days following reception of the claim Contact by Ministère de la Sécurité publique 15 days following reception of the claim Notice of eligibility or an advance 90 days following reception of the claim Deadline for completing work 12 months following reception of the notice of eligible damage 39

40 Additional Information Get in touch: Québec City area Rest of the province , rue du Marais, Québec(QC) G1M 3A2 40