Articles

PUBLIC WORKS AND GOVERNMENT SERVICES CANADA - Guidelines for Payments on an Ex gratia Basis

1. Purpose

   These guidelines address situations where the Government of Canada could consider making payments to commercial businesses, non-profit organizations and individuals to mitigate adverse financial consequences as a result of extraordinary security measures implemented for the G8 Summit. The Government of Canada does not have a legal obligation to provide payment for losses as a result of meetings held in Canada.

2. Definitions

   • Claimant
     A commercial business, a non-profit organization or an individual filing a claim for payment related to extraordinary security measures for the G8 Summit.
     
     
   • Commercial Business
     A person or an organization with activities consisting of the exchange of goods and/or services for the purpose of profit. Such activities must be permanent in character without necessarily being the main nor even the sole activity of the operator. The activities must be carried out on a routine basis rather than a casual basis.
     
     
   • Payment
     A payment made by the Government of Canada on an ex gratia basis pursuant to an eligible claim.
     
     
   • External Affected Area
     An area outside the security perimeter that is subject to extraordinary security measures as part of contingency plans. External affected areas shall be determined by Public Works and Government Services Canada (PWGSC) in consultation with G8 Summit Security on the basis of extraordinary security measures undertaken.
     
     
   • Extraordinary Security Measures
     Measures implemented by G8 Summit Security, such as a security perimeter, and other exceptional actions, to protect the security of Internationally Protected Persons and delegates and ensure the proper functioning of the G8 Summit, and to respond as part of contingency plans.
     
     
   • Loss of Net Revenues
     Estimated lost revenues less expenditure savings due to avoidable costs (i.e. revenues less variable costs), of a non-profit organization.
     
     
   • Loss of Net Profits
     Estimated lost sales less expenditure savings due to avoidable costs (i.e. sales less costs of goods for sale and other related variable expenses), of a commercial business.
     
     
   • Non-profit Organizations
     Organizations that are considered as such under the Income Tax Act.
     
     
   • Satellite Event Locations
     Locations outside the security perimeter where specific events, that are part of the official program of the G8 Summit, take place.
     
     

3. Authority

   The payments will be administered in accordance with Treasury Board policies and the Financial Administration Act.
   
   

4. Scope

   These guidelines apply to areas within the security perimeter. Payments could be considered for external affected areas and satellite event locations for the G8 Summit if extraordinary security measures are undertaken by G8 Summit Security in an external affected area as part of contingency plans or at satellite event locations.
   
   Payment could cover up to 100% of the loss of net profits or loss of net revenues or extraordinary costs that are eligible subject to approval of funds available for this purpose.
   
   

5. Exclusion

   These guidelines do not apply to additional costs incurred by Governments, including government agencies and Crown corporations at the federal, provincial and municipal level, or to any additional costs incurred by law enforcement agencies.
   
   

6. Accountability

   The Minister of Foreign Affairs will be accountable for the funds allocated for payments under these guidelines and to ensure the equitable and consistent application of these guidelines as compared to previous applications, in conjunction with PWGSC. The Solicitor General will be accountable for the security measures. PWGSC will administer the claims for payment.
   
   

7. Eligibility and Claims

   1. Eligible beneficiaries

      1. Commercial businesses and non-profit organizations located inside the security perimeter, in the external affected areas, and at satellite event locations, which suffered loss of net profits or loss of net revenues due to extraordinary security measures, could be eligible for payment.
         
         
      2. Individuals residing inside the security perimeter, in the external affected areas, and at satellite event locations, who incur extraordinary costs due to extraordinary security measures could be eligible for payment.
         
         
      3. Commercial businesses and non-profit organizations located outside the security perimeter, the external affected areas and satellite event locations, but who have significant operations on a routine basis within the security perimeter, external affected areas or satellite event locations, could be eligible for payment in relation to their operations in those areas.
         
         

   2. Ineligible costs

      The following costs shall not be considered eligible for payment:
      
      
      1. damages caused by third parties, including vandalism;
         
         
      2. damages for personal injury (bodily harm);
         
         
      3. damages for emotional distress; and
         
         
      4. private protection measures.
         
         

   3. General provisions

      1. The claimants have an obligation of keeping the losses incurred in their operations to a minimum. Where operations are primarily conducted through appointments and where there is normally the flexibility to reschedule business appointments and affairs, there is an obligation to minimize disruption during the G8 Summit. Claims will be refused if due diligence is not demonstrated.
         
         
      2. Payment will not be provided for losses and damages that are insurable under normal insurance coverage. Only losses and damages arising from extraordinary security measures above and beyond the amounts covered by insurance policies could be eligible for payment.
         
         
      3. Payment could be considered for the following:
         
         
         • For commercial businesses - loss of net profits
           
           
         • For non-profit organizations - loss of net revenues
           
           
         • For individuals - extraordinary costs
           
           
      4. In arriving at the amount of loss of net profits or loss of net revenues or extraordinary costs, the following could be considered:
         
         
         • The insurance company's deductible (up to a maximum of $500). This deductible must be linked to damages arising from extraordinary security measures. Deductibles for ineligible expenses under 7b) above will not be considered;
           
           
         • Specific, justified and reasonable incremental expenses incurred as a result of the extraordinary security measures (e.g. relocation expenses, transportation expenses, accommodation and living expenses);
           
           
         • Justified, appropriate and reasonable cleaning expenses attributable to removal of any chemical or other materiel used by G8 Summit Security, where it is not covered by insurance, provided such expense is incurred within 30 days of the G8 Summit.
           
           
      5. For commercial businesses and non-profit organizations, the claims must include the following information, with each item claimed supported by appropriate substantiating documentation:
         
         
         • Actual revenues based on monthly sales or other receipts and actual expenditures for the immediate past three consecutive financial years, or from the date of inception if later;
           
           
         • Actual revenues from end of last completed fiscal year, or the date of inception if it is a new commercial business or non-profit organization, to the commencement of the extraordinary security measures of the G8 Summit;
           
           
         • Actual expenses from end of last completed fiscal year, or the date of inception if it is a new commercial business or non-profit organization, to the commencement of the extraordinary security measures of the G8 Summit; and
           
           
         • Estimate of loss of net profits or the loss of net revenues for period for which the extraordinary security measures were in effect.
           
           
      6. All amounts claimed for payment must be proven, justified, appropriate and reasonable, and only those amounts that cannot be paid out by means of other financial instruments are eligible.
         
         
      7. Claimants must demonstrate that they qualify as eligible beneficiaries.
         
         
      8. Claimants that have experienced a significant increase in revenues as a result of economic activity immediately before and/or immediately after the duration of the extraordinary security measures for the G8 Summit will be required to set-off the increased revenues against the loss of net profits or loss of net revenues suffered during the period that the extraordinary security measures were in effect.
         
         
      9. Claims must be submitted within 90 days of the date of conclusion of the extraordinary security measures for the G8 Summit unless otherwise authorized by PWGSC.
         
         

   4. Inside the security perimeter - specific provisions

      1. Commercial businesses and non-profit organizations located within the area delimited by the security perimeter could claim the loss of net profits or loss of net revenues stemming from the possible decline of customer traffic to their locations.
         
         
      2. This applies to operations inside the security perimeter where they carry out their business.
         
         
      3. Places of business must remain open during the G8 Summit to be eligible to make a claim for loss of net profits or loss of net revenues unless their closure is dictated by G8 Summit Security.
         
         
      4. Claims can only be presented for the period during which G8 Summit Security prohibits public access inside the perimeter. However, if eligible beneficiaries can demonstrate that they have suffered losses immediately before or shortly after the duration of the extraordinary security measures for the G8 Summit due to reduced traffic as a result of these measures, they may submit such losses in their claim for consideration.
         
         

   5. External Affected Area - specific provisions

      Where contingency provisions result in extraordinary security measures in an external affected area, if any payment is to be considered, the claims will be handled in the same manner as those inside the perimeter subject to the overriding consideration of the impact of the extraordinary security measures.

   6. Satellite Event Locations - specific provisions

      Where there are satellite event locations for the G8 Summit, payment to commercial businesses, non-profit organizations located at the satellite event locations and individuals resident at these satellite event locations could be considered if these sites are subject to extraordinary security measures during the G8 Summit. The claims will be handled in the same manner as those inside the perimeter.

   7. Claims procedure and substantiation

      1. All claims for payment must be made on the official claim form that will be provided by PWGSC. The onus is on the claimant to substantiate the reasonableness of the claim.
         
         
      2. It is incumbent on the Government of Canada to process any claims received as quickly as possible. The claims for payment should be forwarded directly to PWGSC.
         
         
      3. PWGSC will provide the format of the claim and guidance on what type of supporting documentation should be provided.
         
         
      4. Individuals will be required to provide invoices and receipts to support the costs that are claimed.
         
         
      5. Claim applications and supporting documentation may be subject to review by auditors on behalf of the Government of Canada.
         
         
      6. PWGSC will seek to resolve any disputes as efficiently as possible.
         
         

8. Waiver

   Signature by a claimant of a Waiver and Release constitutes a condition for payment to settle the claim against the Government of Canada.

9. Executing Agency

   PWGSC has been designated by the Department of Foreign Affairs and International Trade for administering claims for payment under these guidelines.

The above guidelines apply to the G8 Summit and retroactively to the designated G20 Finance Ministers' meeting held in Ottawa in November 2001.

First published: 2002-05-22 Last Updated: 2002-06-04