Edmonton is looking into compensating businesses impacted by major construction projects.

Council passed a motion Monday to create a draft financial assistance policy, set to be completed by late June and presented to executive committee.

It would be based on a program running in Montreal, where businesses affected by public projects in designated areas must submit an application with financial documentation proving a loss of more than 15 per cent gross profit per year. Businesses can then get up to $30,000 per year in compensation.

Worksites covered include major underground infrastructure sites lasting six months, and public infrastructure sites causing vehicle hindrances lasting at least 36 months.

Coun. Scott McKeen said he has been skeptical of the idea in the past but likes the Montreal model's clear application criteria.

"I think this gives an opportunity to give a little bit of relief under very strict circumstances, when major public works projects are impacting our small businesses," McKeen said during deliberations.

"I think this is definitely worth exploring and is not a bank-breaker for the city."

Montreal's policy set aside about $25 million for the program — $15.6 million from the city's regular budget and $9.2 million from the province of Quebec — as part of its 2018-22 economic development strategy.

According to feedback provided by the City of Montreal, only $1.4 million in subsidies have been provided to 44 accepted applications, with an average of around $32,000 per business.

Of 102 applications received, the majority were restaurants.

Mayor Don Iveson and some other council members expressed apprehension about the program.

"I think this, even this conversation, begins to create expectations that we may or may not be able to fulfil," Iveson said, adding that passing the motion did not mean the city was resolved to implement it.

He said there could be follow-on effects that increase complexity and run counter to incentives for a quick completion.

Coun. Tim Cartmell, the only councillor to vote against the motion, said he was worried it could slow down major projects like the LRT expansion or the Yellowhead Trail upgrades.

"I'm a little concerned that this opens a bit of a Pandora's box and provides a bit of an opportunity to filibuster some of those projects where people aren't supportive of them," Cartmell said.

Coun. Andrew Knack, who introduced the proposal to council, said when the idea came up in years past there were no Canadian cities to reference.

Montreal's example helped alleviate his concerns, he said.

"I would envision it would be constrained and, again, follow some fairly strict criteria to make sure that it's not set not being abused or used to try to prevent something from proceeding," Knack said.

Launched in 2019, the Montreal program was retroactive to 2016 for some types of construction.

Edmonton administration said its initial intention would be for the policy to be on a go-forward basis.