Canadian Industrial Renewal Regulations (SOR/81-850)

15 Subject to section 17, the Minister may provide insurance on a loan made by a private lender to a person engaged or about to engage in a business in Canada that provides services, directly or indirectly, to a business enterprise in Canada that is engaged in international trade competition if that person requires the loan to establish, restructure or improve its operations in order to improve the position of the business enterprise in international trade competition.

16 Subject to section 17, 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 provide insurance on a loan to that person, trustee or receiver for the purpose of protecting the Crown’s interest in respect of the loan previously made or insured.

Condition of Insurance

17 The Minister shall grant insurance pursuant to sections 12, 13, 15 and 16 only where the business enterprise or person referred to in those sections that requires the loan is unable to obtain sufficient financing on reasonable terms unless the loan is insured by the Minister.

Amount of Insurance

18 Insurance provided by the Minister pursuant to

• (a) section 12, 14 or 15 shall not exceed 90 per cent, or

• (b) section 13 or 16 shall not exceed 100 per cent

of the amount of the loan in respect of which it is provided.

Application for Insurance

19 A private lender who wishes the Minister to provide insurance on a loan in accordance with these Regulations shall apply therefor to the Minister and shall provide such information as may be necessary to process the application.

Reduction of Insurance and Insurance Fee

• 20 (1) The amount of any insurance provided by the Minister pursuant to these Regulations may be reduced at the request of the private lender at such times and in such manner as may be agreed to by the Minister.

• (2) The insurance fee payable by a private lender shall be 1 per cent per annum of the amount of insurance in force from time to time and shall be paid in advance to the Minister in semi-annual installments.

• (3) Notwithstanding subsection (2), the Minister may, in respect of insurance provided pursuant to section 13, 14 or 16, waive or reduce the amount and vary the terms of payment of the insurance fee accordingly.

• (4) If the amount of a loan made by a private lender is advanced in periodic advances, the Minister may, if required by the private lender, provide insurance pursuant to these Regulations on such advances.

Payment of Insurance

21 Where a private lender has demanded repayment of a loan in respect of which insurance has been provided pursuant to these Regulations, the amount payable to the private lender shall not exceed the lesser of

• (a) the amount of insurance in effect on the date of such demand; and

• (b) in the case of

  • (i) a loan insured pursuant to section 12 or 15, 90 per cent of the loss incurred by the private lender, and

  • (ii) a loan insured pursuant to section 13 or 16, 100 per cent of the loss incurred by the private lender.

22 Notwithstanding section 21, where a private lender has demanded repayment of a loan in respect of which insurance has been provided by the Minister pursuant to section 14, the amount payable to the private lender shall not exceed the lesser of

• (a) the amount of insurance in effect on the date of such demand; and

• (b) 90 per cent of the loss incurred by the private lender excluding any amount recovered or recoverable under the guarantee obtained by the private lender in accordance with subparagraph 14(3)(a)(i).

PART IVContributions

23 The Minister shall administer contributions in accordance with the provisions of this Part.

24 The Minister may make contributions to a business enterprise in respect of any of the following:

• (a) the costs of engaging the services of a qualified consultant to develop a proposal to qualify for a loan or loan insurance under these Regulations or contributions under paragraph (c) or (d);

• (b) the costs of engaging the services of a qualified consultant to identify new or improved products or to conduct product testing or market testing on such products;

• (c) the costs of development and design of a new or improved and technologically advanced product, process or service capability that offers good prospects for commercial exploitation and benefit to Canada, which development and design are scientifically and technically feasible but represent technical risk;

• (d) the costs of a project for the design of a new mass-produced durable product through an expansion of the industrial design program of the business enterprise where the industrial design activity is directed by a qualified industrial designer;

• (e) the costs of engaging the services of a qualified consultant to develop a market strategy or market feasibility study to exploit a project in respect of which a loan, loan insurance or contribution was made or authorized by the Minister under these Regulations;

• (f) the costs of engaging the services of a qualified consultant to undertake a study to determine the feasibility of implementing plans for a project to significantly enhance the productivity or efficiency of the project where

  • (i) the enhancement project involves a significant departure from the traditional productivity or efficiency practices of the business enterprise and only involves the existing available technology, and

  • (ii) there exists a potential for significant productivity or efficiency gains and a demonstrable uncertainty as to the benefits of the enhancement project; and

• (g) the costs of engaging the services of a qualified consultant to protect Her Majesty’s interest in respect of any loan, insurance or a contribution made by the Minister pursuant to these Regulations.

• 25 (1) Contributions made under section 24 shall be in an amount that is considered necessary to induce a business enterprise to undertake any of the matters described in that section without incurring significant economic hardship for the business enterprise.

• (2) Notwithstanding subsection (1), contributions made in respect of

  • (a) any of the matters described in paragraphs 24(a) to (f) shall not exceed 75 per cent of its costs to the business enterprise; and

  • (b) an interest described in paragraph 24(g) shall not exceed 100 per cent of its costs to the business enterprise.

• (3) Where the Minister makes a contribution to a business enterprise in respect of the costs referred to in paragraph 24(b), the business enterprise shall pay to Her Majesty a royalty of up to 5 per cent of the amount of any export sales of a new or improved product referred to in that paragraph, except that

  • (a) the aggregate of royalties shall not exceed the amount of the contribution; and

  • (b) no royalties are required to be paid in respect of sales made more than five years from the day the contribution is made to the business enterprise.

26 Notwithstanding section 24, the Minister may make contributions to a business enterprise pursuant to that section in respect of a project only where,

• (a) the project and the exploitation of the results thereof represent a significant burden in respect of the resources of the business enterprise; or

• (b) the project would not be undertaken in Canada without a contribution by the Minister and the project and the exploitation of the results thereof offer significant benefit to Canada.

• 27 (1) Subject to section 28.1, the Minister may make contributions to a designated business in respect of

  • (a) the costs of engaging the services of a qualified consultant required by the designated business to undertake a comprehensive analysis of the operations of the designated business and to develop adequate plans to restructure its operations to improve its ability to achieve efficient and sustained growth in the production and trade of Canadian goods and services or to adjust to changes in the domestic and external economic environment or to assist in the implementation of those plans, or

  • (b) the costs of a project to adjust or to restructure its operations to improve its ability to contribute to the efficient and sustained growth in the production and trade of internationally competitive Canadian goods and services or to adjust to changes in the domestic and external economic environment if the project would not be likely to be undertaken without a contribution by the Minister.

• (2) A contribution made pursuant to subsection (1) shall not exceed

  • (a) 75 per cent of the costs of the services of a consultant referred to in paragraph (1)(a);

  • (b) 50 per cent of the capital costs of a project referred to in paragraph (1)(b) that is undertaken by the designated business within the designated community; and

  • (c) 50 per cent of the preproduction expenses associated with a project referred to in paragraph (b).

• (3) Notwithstanding subsection (1), where a designated business establishes that it is capable of undertaking a comprehensive analysis and of developing plans for restructuring referred to in that subsection, the analysis may be undertaken and the restructuring plans developed without the assistance of a qualified consultant.

• 28 (1) Subject to section 28.1, the Minister may make contributions to an external or other business in respect of

  • (a) the costs of engaging the services of a qualified consultant to develop a proposal in respect of which a contribution may be made pursuant to paragraph (b), and

  • (b) the capital costs of a project to establish a manufacturing or processing activity or other commercial activity in a designated community

  if the project would not be likely to be undertaken in the designated community without a contribution by the Minister.

• (2) A contribution made pursuant to subsection (1) shall not exceed

  • (a) 75 per cent of the costs of the services of a consultant referred to in paragraph (1)(a);

  • (b) 50 per cent of the capital costs of a project referred to in paragraph (1)(b) that is undertaken by the external or other business in the designated community; and

  • (c) 50 per cent of the preproduction expenses associated with a project referred to in paragraph (b).

• (3) and (4) [Revoked, SOR/82-404, s. 5]

• 28.1 (1) The Minister may make a contribution pursuant to sections 27 and 28 only where

  • (a) the date on which the application for assistance is approved by the Minister precedes the commencement of the services of consultants and relative costs or a capital project and relative costs, including preproduction expenses;

  • (b) the contribution to be made by the Minister in respect of the capital costs of a project and the preproduction expenses associated with the project and the preproduction expenses associated with the project, and any contribution in respect of those capital costs and preproduction expenses made or agreed to be made by the Government of Canada or by a government of any province of Canada does not exceed an amount equivalent to 50 per cent of the sum of the capital costs of the project and preproduction expenses associated with the project;

  • (c) full repayment of the contribution to be made by the Minister in respect of a capital project and in respect of preproduction expenses associated with the project has been made a condition of the contribution;

  • (d) the project offers net significant economic benefit to Canada and will not be likely to create competitive overcapacity in the relevant sector or industry; and

  • (e) in the case of projects to adjust, restructure or establish operations, the sum of the capital costs and the preproduction expenses associated with such projects will not be less than $100,000.

• (2) Notwithstanding paragraph (1)(c), where

  • (a) the condition for repayment of a contribution provided for in that paragraph would result in the project not being undertaken in the designated community, and

  • (b) the project offers exceptional benefits to Canada,

  the Minister may waive the requirement for repayment or may require repayment of less than the full amount of the contribution.

• 29 (1) Where a designated business, an eligible manufacturer or an external or other business requires the services of a qualified consultant,

  • (a) to undertake a feasibility study and to assist in the development of plans for

    • (i) in the case of an external or other business, its merger with or its acquisition of a business enterprise, or

    • (ii) in the case of an eligible manufacturer or designated business, the establishment of a person to provide purchasing, marketing, training or other services to the eligible manufacturer or designated business, or

  • (b) to implement the plans referred to in paragraph (a),

  the Minister may make a contribution to the designated business, eligible manufacturer, external or other business, person or consultant in an amount of not more than 75 per cent of the cost of the services.

• (2) Notwithstanding subsection (1), where a designated business, an eligible manufacturer or an external or other business establishes that it is capable of undertaking a feasibility study and of developing plans referred to in that subsection, the feasibility study may be undertaken and the plans developed without the assistance of a qualified consultant.

• 30 (1) Where

  • (a) a business enterprise submits plans for restructuring of its operations or for making an adjustment in its operations that will enable the business enterprise to adapt to changes in the domestic and external trading environment, and

  • (b) the business entreprise requires a contribution from the Minister to

    • (i) pay for the costs of the services of a consultant to prepare plans,

    • (ii) pay for the costs of the services of a consultant to conduct a comprehensive analysis of the plans referred to in subparagraph (i),

    • (iii) pay for the costs of the services of a consultant to assist the business enterprise to implement the plans referred to in subparagraph (i), and

    • (iv) pay for the costs of implementing the restructuring or adjustment plan referred to in paragraph (a),

  the Minister may make a contribution to the business enterprise in an amount not exceeding

  • (c) 75 per cent of the costs of the services of the consultant referred to in subparagraph (b)(i), (ii) and (iii), and

  • (d) 50 per cent of the direct costs of the acquisition, construction, expansion, modification, installation or conversion of machinery, equipment or buildings in respect of those segments of the restructuring plan that involve either a modernization of the operations of the business enterprise or an adjustment in its operations that will enable the business enterprise to adapt to changes in the domestic and external trading environment, where such direct costs will be not less than $50,000.

• (2) Notwithstanding subsection (1), where a business enterprise establishes that it is capable of undertaking a comprehensive analysis and of developing plans referred to in that subsection, the comprehensive analysis may be undertaken and the plans developed without the assistance of a qualified consultant.