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Canadian Industrial Renewal Regulations (SOR/81-850)

Regulations are current to 2024-05-01

Canadian Industrial Renewal Regulations

SOR/81-850

DEPARTMENT OF INDUSTRY ACT

Registration 1981-10-15

Regulations Respecting Canadian Industrial Renewal

P.C. 1981-2916 1981-10-15

His Excellency the Governor General in Council, on the recommendation of the Minister of Industry, Trade and Commerce, the Minister of Regional Economic Expansion and the Treasury Board, pursuant to section 7 of the Department of Industry, Trade and Commerce Act and Vote 1a (Industry, Trade and Commerce) of Appropriation Act No. 1, 1980-81, is pleased hereby to make the annexed Regulations respecting Canadian Industrial Renewal.

Short Title

 These Regulations may be cited as the Canadian Industrial Renewal Regulations.

Interpretation

 In these Regulations,

application

application means a loan application, an insurance application or a contribution application made pursuant to these Regulations; (demande)

board

board[Revoked, SOR/86-718, s. 1]

business enterprise

business enterprise means an eligible manufacturer or a designated business; (entreprise commerciale)

contribution

contribution means any contribution authorized under a vote of an Appropriation Act; (contribution)

designated business

designated business means a person carrying on a manufacturing or processing activity or other commercial activity in a designated community; (entreprise désignée)

designated community

designated community means an area designated for the purposes of these Regulations pursuant to section 6 of the Department of Regional Economic Expansion Act; (communauté désignée)

eligible manufacturer

eligible manufacturer means a manufacturer engaged or about to engage in an eligible manufacturing or processing activity; (fabricant admissible)

eligible manufacturing or processing activity

eligible manufacturing or processing activity means an activity whereby goods or services are manufactured or provided by establishments that are classified or would normally be classified under any of the following:

  • (a) Major Group 3, Establishments under S.I.C. 1624, Rubber Footwear Manufacturers,

  • (b) Major Group 4,

    • (i) Establishments under S.I.C. 172, Leather Tanneries,

    • (ii) Establishments under S.I.C. 174, Shoe Factories,

    • (iii) Establishments under S.I.C. 175 that are primarily engaged in manufacturing gloves and mittens of leather,

  • (c) Major Group 5, Textile Industries, other than Establishments under S.I.C. 1899, Miscellaneous Textile Industries, n.e.s. that are primarily engaged in the manufacture of hygiene products and whose manufacturing of textile materials used in the manufacture of hygiene products is solely for the purposes of manufacturing their own hygiene products,

  • (d) Major Group 6, Knitting Industries,

  • (e) Major Group 7, Clothing Industries, or

  • (f) Major Group 20,

    • (i) Establishments under S.I.C. 3931, Sporting Goods Manufacturers, where the manufacture of sporting, recreational or athletic footwear is a substantial part of production,

    • (ii) Establishments under S.I.C. 3993 that are primarily engaged in manufacturing coated fabrics, including oil cloth, leatherette and water repellant fabrics other than rubberized fabrics,

of Division 5, Manufacturing Industries of the Standard Industrial Classification (S.I.C.) of 1970; (travaux de fabrication ou de transformation admissibles)

external or other business

external or other business means a person that carries on a manufacturing or processing activity or other commercial activity at a place other than a designated community or a person that intends to carry on a manufacturing or processing activity or other commercial activity and that is prepared to carry on a manufacturing or processing activity or other commercial activity

  • (a) in a designated community, or

  • (b) in a community, other than a designated community, that has a population of less than 100,000 and is located within a Canada Employment Centre area where employment in eligible manufacturing accounts for at least 20 per cent of manufacturing employment and 5 per cent of total employment and that has been severely affected by a major shutdown or layoff in an eligible manufacturing or processing activity; (entreprise externe ou autre entreprise)

manufacturer

manufacturer means a person engaged in a manufacturing or processing activity in Canada; (fabricant)

manufacturing or processing activity

manufacturing or processing activity means an activity whereby any goods, products, commodities or wares

  • (a) are made, fabricated, processed or refined out of any raw material or other substance or combination thereof,

  • (b) are converted or rebuilt, but not repaired, or

  • (c) are made by causing any raw material or other substance to undergo a significant chemical, biochemical or physical change including change that preserves or improves the keeping qualities of that raw material or other substance but excluding change by growth or decay; (travaux de fabrication ou de transformation)

Minister

Minister means the Minister of Regional Industrial Expansion; (ministre)

person

person includes an individual, partnership, association, body corporate, trustee, executor, administrator or legal representative but does not include an individual, partnership, association, body corporate, trustee, executor, administrator or legal representative who is primarily engaged in pulp and paper manufacturing falling under group 271 of Division E, Manufacturing Industries of the Standard Industrial Classification (S.I.C.) of 1980; (personne)

private lender

private lender means a financially sound and reliable lender other than

  • (a) the Government of Canada,

  • (b) the government of any province of Canada,

  • (c) an agency of any government referred to in paragraph (a) or (b) or any company that is effectively controlled by that government or any agency thereof, or

  • (d) any municipal corporation; (prêteur privé)

restructure

restructure means a change that is significant in the operations of a business with respect to its products, methods of production, markets or management procedures and includes, if directly related to such operations, the acquisition of working capital or the acquisition, construction or conversion of machinery, equipment, buildings, land or other facilities. (restructuration)

  • SOR/82-119, s. 1
  • SOR/82-404, s. 1
  • SOR/82-643, s. 1
  • SOR/84-542, s. 1
  • SOR/85-278, s. 1
  • SOR/86-718, s. 1

PART IMinister

[
  • SOR/82-643, s. 2(F)
  • SOR/84-132, s. 1(E)
  • SOR/86-718, s. 24
]
  •  (1) The Minister shall administer the loans, insurance and contributions made or authorized under these Regulations.

  • (2) The Minister may, on behalf of Her Majesty, enter into and execute any agreement necessary to give effect to these Regulations.

  • (3) The Minister may, in respect of any loan, insurance or contribution made or authorized under these Regulations, require such information and documentation and make such stipulations as may be necessary in relation to such loan, insurance or contribution.

  • (4) The Minister may, subject to these Regulations, grant loans, provide insurance or make contributions under these Regulations only where an applicant would likely be unable to implement a project without the assistance of the Minister.

  • (5) The Minister shall do everything that is necessary or appropriate to facilitate the efficient operation of these Regulations, to minimize any loss suffered or threatened to be suffered by Her Majesty arising out of any loan or insurance administered by the Minister pursuant to these Regulations and to maximize the potential economic gains to Canada arising from any contribution administered by the Minister pursuant to these Regulations.

  • SOR/82-119, s. 2
  • SOR/82-404, s. 2
  • SOR/82-643, s. 2
  • SOR/84-132, s. 2
  • SOR/86-718, s. 2

PART IILoans

 Subject to section 7 where, pursuant to these Regulations, the Minister has authorized the provision of insurance on a loan made by a private lender to a person, the Minister may make a loan in an amount not exceeding, in the aggregate, 50 per cent of the amount of the private lender’s loan to that person on the following conditions:

  • (a) the private lender has agreed to make the loan for which the Minister has authorized the provision of insurance pursuant to the terms and conditions set by the Minister in accordance with these Regulations;

  • (b) the loan made by the Minister shall bear interest at a rate of not less than the aggregate of interest to be charged by the private lender on the insured loan and the insurance fee thereon;

  • (c) the loan is essential to prevent a serious delay in implementing the program for which the loan by the private lender was obtained;

  • (d) the loan shall be repaid on the date of the first disbursement of the loan advanced by the private lender or on such date as may be set out in the loan agreement between the Minister and the applicant; and

  • (e) the Minister shall specify the date on which the loan shall be repaid in the event that a disbursement to repay the loan has not been made by the private lender within a reasonable time as established by the Minister.

  • SOR/82-643, s. 3(F)
  • SOR/86-718, ss. 3, 24

 Subject to section 7, where a person or a trustee or receiver authorized by law to carry on the activities of that person has previously obtained assistance by way of a loan or insurance on a loan made or authorized under these Regulations, the Minister may make a loan to that person or to the trustee or receiver for the purpose of protecting the Crown’s interest in respect of the loan previously made or insured.

  • SOR/86-718, s. 24
  •  (1) Where a person submits adequate plans, developed with the assistance of a qualified consultant, that are based on a feasibility study made by a qualified consultant for the merger with or acquisition of a business enterprise and the person that submits the plans requires a loan

    • (a) to purchase the effective ownership control of the business enterprise or the whole or a significant portion of the assets of the business enterprise that are related to its activity, or

    • (b) to effect the merger or amalgamation with the business enterprise,

    the Minister may make a loan to that person in an amount not exceeding $1.5 million.

  • (2) Notwithstanding subsection (1), where a person establishes that the person is capable of undertaking a feasibility study and developing plans described in that subsection, the feasibility study may be undertaken and the plans developed without the assistance of a qualified consultant.

  • SOR/82-643, s. 4(F)
  • SOR/86-718, s. 4

Condition of a Loan

 The Minister shall grant a loan in accordance with section 4 or 5 only where a person is unable to obtain sufficient financing on reasonable terms from other sources for the purposes set out in those sections.

  • SOR/86-718, s. 24

Application for a Loan

  •  (1) A person that requires a loan in accordance with these Regulations shall apply therefor to the Minister and shall provide such information as may be necessary in order to process the application.

  • (2) Where an appplication for a loan is approved by the Minister, the applicant shall enter into a loan agreement with Her Majesty.

  • SOR/86-718, s. 5

Interest

 The rate of interest for any loan made pursuant to section 5 or 6 shall be determined by the Minister as of the day the application therefor is approved by the Minister and shall be not less than the rate of interest charged by the Government of Canada to Crown corporations for loans of a similar term nor higher than 3 per cent above the rate.

  • SOR/86-718, s. 24

Term of Loan and Repayment

  •  (1) A loan made pursuant to these Regulations shall be for such term, not exceeding 20 years, as may be fixed by the Minister.

  • (2) The whole or any part of a loan made pursuant to these Regulations may be repaid in advance of the repayment date in accordance with the terms of the loan agreement and without notice, bonus or penalty.

  • SOR/82-643, s. 5(F)
  • SOR/86-718, ss. 6, 24

Security

  •  (1) Where it is advisable to obtain security for the repayment of a loan made or authorized under these Regulations, the Minister shall obtain or hold the appropriate security.

  • (2) The Minister may surrender, retransfer or reconvey any security obtained or held by it pursuant to subsection (1) in exchange for other security or amend the provisions thereof.

  • (3) The Minister may designate any trustee, receiver, receiver-manager or other person required to be appointed by the Minister under the security referred to in subsection (1).

  • SOR/82-643, s. 6(F)
  • SOR/86-718, ss. 7, 24

PART IIIInsurance

General

 Subject to section 17, the Minister may provide insurance on a loan made by a private lender to

  • (a) a business enterprise if the business enterprise requires the loan to restructure its operations in order to improve its position in international trade competition;

  • (b) an eligible manufacturer if the eligible manufacturer requires the loan to engage in the manufacture of products that will be subject to international trade competition;

  • (c) a designated business if the designated business is about to engage in a manufacturing or processing activity or other commercial activity and will be subject to international trade competition; or

  • (d) a person if the person requires a loan to acquire a corporation or group of corporations engaged in an eligible manufacturing or processing activity or located in a designated community and the acquisition will result in a significant increase in manufacturing or processing activities or other commercial activities.

  • SOR/82-643, s. 7(F)
  • SOR/86-718, s. 8

 Subject to section 17, the Minister may provide insurance on a loan made by a private lender to a business enterprise or a trustee or receiver authorized by law to carry on the activities of the business enterprise if

  • (a) the business enterprise is subject to international trade competition;

  • (b) the business enterprise is in financial difficulty that threatens the cessation of a significant portion of its operations and the layoff of a significant number of its employees; and

  • (c) the business enterprise proposes the sale of all or a significant portion of its assets or the person that holds effective ownership control of the business enterprise proposes the sale of such control and

    • (i) the business enterprise requires a loan to continue its operations until the assets are sold or effective ownership control of the business enterprise is sold, as the case may be,

    • (ii) the sale will be effected within a reasonable period of time, and

    • (iii) the sale will enhance the prospects for the continued employment of a significant number of its employees.

  • SOR/86-718, ss. 9, 24
  •  (1) Subject to subsection (3), the Minister may provide insurance on a loan made by a private lender to a person if the person requires the loan to

    • (a) acquire effective ownership control of a business enterprise;

    • (b) acquire from a business enterprise the whole or a significant portion of the assets of the business enterprise; or

    • (c) restructure its operations as a result of the acquisition by the person of the whole or a significant portion of the assets of a business enterprise.

  • (2) Subject to subsection (3), the Minister may provide insurance on a loan made by a private lender to a business enterprise in Canada to restructure its operations if the business enterprise requires the loan to restructure its operations as a result of the acquisition of its effective ownership control by a person.

  • (3) The Minister may provide insurance pursuant to subsection (1) or (2) on the following conditions:

    • (a) the person referred to in subsection (1) or the business enterprise referred to in subsection (2) that requires a loan has agreed

      • (i) to provide or to cause to be provided to the private lender an appropriate guarantee for 10 per cent of the amount of the loan to be provided, and

      • (ii) to provide the private lender with appropriate security on the assets acquired or on the assets of the corporation the effective ownership control of which has been acquired; and

    • (b) the acquisition or restructuring in respect of which the loan is required

      • (i) is essential to prevent a serious disruption in the activity of the corporation acquired or the activity resulting from the use of the assets acquired,

      • (ii) will result in the growth, efficiency or international competitiveness of a manufacturing or processing activity or other commercial activity in Canada,

      • (iii) would not proceed unless the loan required is insured by the Minister, and

      • (iv) would not proceed unless the Minister and the private lender agree to limit the liability of the person referred to in subsection (1) or the business enterprise referred to in subsection (2) to the lender to 10 per cent of the amount of the loan to be provided.

  • SOR/82-643, s. 8
  • SOR/86-718, s. 10
 

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