Industrial and Regional Development Regulations (SOR/83-599)

PART IShort Title

1 These Regulations may be cited as the Industrial and Regional Development Regulations.

PART IIInterpretation

2 In these Regulations,

Act

Act means the Industrial and Regional Development Act; (Loi)

applicant

applicant means an eligible person or commercial operation that makes an application under the Act; (requérant)

application

application means a written request by an applicant to the Minister for assistance under the Act; (demande)

capital costs

capital costs means the direct costs of design, acquisition, construction, expansion, modification, conversion, transportation, installation and insurance, during construction, of assets, incurred and paid for by the applicant, and includes the cost of directly related infrastructure development, but does not include

• (a) the cost of land,

• (b) costs related to assets that, according to generally accepted accounting principles, would normally be considered a charge against income in the year in which they were acquired,

• (c) the cost of any motor vehicle unless the vehicle is used primarily on the site, or between two or more sites, of a project or activity receiving assistance under the Act,

• (d) goodwill, or

• (e) the cost of any asset to the extent that it exceeds the fair market value of the asset; (coût d’immobilisation)

commencement of commercial production

commencement of commercial production means the date on which

• (a) a facility or a part of a facility that has been established, expanded or modernized with assistance under the Act has been utilized for not less than 30 continuous working days in the provision of marketable services or in the production in commercial volume of marketable goods, and

• (b) assets accounting for more than 50% of the capital costs to which the Minister has contributed, or agreed to contribute, are used in the facility and will continue to be so used for the foreseeable future; (début de la production commerciale)

control period

control period means a period of 24 months, or such longer period as the Minister may specify in writing, beginning with the commencement of commercial production; (période de contrôle)

equity

equity means, in relation to an applicant, the aggregate of

• (a) the applicant’s

  • (i) share capital,

  • (ii) proprietor’s capital accounts, or

  • (iii) partner’s capital accounts,

• (b) the applicant’s earned, contributed or other surplus,

• (c) the applicant’s deficit accounts,

• (d) loans to the applicant by shareholders if the loans are subordinated to all other liabilities for a period specified by the Minister, and

• (e) where the Minister agrees, loans to the applicant by persons other than shareholders, if the loans are subordinate to all other liabilities for a period specified by the Minister,

less any amounts included in paragraphs (a) to (e) that, in the opinion of the Minister, unreasonably inflate net worth; (avoir propre)

facility

facility means any structure, machine, equipment or other necessary physical component of a commercial operation; (établissement)

infrastructure development

infrastructure development means an activity that provides a framework for the establishment, modernization or expansion of a commercial operation and includes the construction of roads, sewers and water treatment plants; (développement d’une infrastructure)

manufacturing or processing operation

manufacturing or processing operation means an operation in which goods, products, commodities or wares are created, fabricated, refined or made more marketable and includes

• (a) the production of advanced software systems,

• (b) the processing by roasting, leaching or smelting of mineral concentrates to produce metals,

• (c) the converting of wood pulp into paperboard or paper,

• (d) the processing of a material that results in a significant chemical change to the principal component of the material being processed, and

• (e) the application of biological agents to the processing of materials, through innovative scientific or engineering activities, for the purpose of providing goods and services,

but does not include

• (f) the merchandising of goods, products, commodities or wares unless the merchandising is an integral part of the operation by which they are created, fabricated, refined or made more marketable,

• (g) the growing, catching or harvesting of any natural or cultivated product of nature,

• (h) the extraction of minerals by any method or the processing of ores to form mineral concentrate,

• (i) the production of energy unless it is produced as an integral part of the operation by which goods, products, commodities or wares are created, fabricated, refined or made more marketable and unless the energy produced is used solely in such operation,

• (j) the operation of mixing concrete or asphalt if the results of the operation are primarily for the purpose of direct application in plastic form to roadway paving or for direct use in construction in metropolitan and surrounding areas,

• (k) any mobile manufacturing or processing operation,

• (l) construction work,

• (m) an operation that consists of repair work unless the work amounts to rebuilding,

• (n) an operation, the product of which is a fossil fuel,

• (o) the processing of hydrocarbons into initial petrochemical feedstock, or

• (p) an initial processing operation in a resource based industry, other than wood pulp processing, where the operation results in a product that is similar to, or substantially similar to, the natural state of the material being processed by the operation; (affaire de fabrication ou de transformation)

participation loan

participation loan[Revoked, SOR/84-902, s. 1]

party

party includes an individual, partnership, association, cooperative or body corporate or any trustee or legal representative thereof but does not include a legal entity that is owned or controlled by the government of a country other than Canada unless the entity is likely to make a significant contribution to regional industrial development; (partie)

repayable contribution

repayable contribution means a contribution that is repayable in whole or in part at such time and on fulfilment of such conditions as the Minister may stipulate; (contribution remboursable)

restructuring

restructuring[Revoked, SOR/84-902, s. 1]

tax credit

tax credit means an investment tax credit as defined in subsection 127(9) of the Income Tax Act; (crédit d’impôt)

tourism operation

tourism operation[Revoked, SOR/84-902, s. 1]

trade show

trade show means an event in Canada held for the purpose of encouraging business enterprises resident in Canada to

• (a) manufacture machinery or equipment, process products or develop technology not yet widely available from Canadian manufacturers, processors or developers of technology, or

• (b) purchase such machinery, equipment, products or technology from Canadian manufacturers, processors or developers; (exposition commerciale)

unemployment insurance beneficiaries to population ratio

unemployment insurance beneficiaries to population ratio means the ratio of

• (a) the number of recipients of unemployment insurance benefits, except for

  • (i) recipients receiving illness, pregnancy or special severance benefits,

  • (ii) recipients receiving benefits as self-employed fishermen, and

  • (iii) recipients receiving benefits during a course or program referred to in subsection 39(1) of the Unemployment Insurance Act, 1971,

  as provided by Statistics Canada on the basis of data supplied by the Canada Employment and Immigration Commission

to

• (b) that portion of the population of the district that is from 15 to 64 years of age, as provided by Statistics Canada. (indice des bénéficiaires de prestations d’assurance-chômage à la population)

3 For the purposes of the Act and these Regulations,

approved lender

approved lender[Revoked, SOR/84-902, s. 2]

commercial operation

commercial operation means a party,

• (a) carrying on or about to carry on a manufacturing or processing operation,

• (b) [Revoked, SOR/84-902, s. 2]

• (c) carrying on or about to carry on an operation that is of a class of operations, within the service industry, designated pursuant to subsection 7(2) of the Act. (affaire commerciale)

PART IIIDevelopment Index

• 4 (1) For the purposes of arranging districts into Tier Groups in accordance with section 3 of the Act, the Minister shall establish a development index in accordance with the formula

  Q = 50E + 40Y + 10R

  where

  • (a) “Q” is the ranking indicator;

  • (b) “E” is the employment measurement;

  • (c) “Y” is the income measurement; and

  • (d) “R” is the revenue measurement.

• (2) For the purposes of subsection (1),

  • (a) E is calculated in accordance with the formula

    ([EP + ((100 - U) + 1)]) ÷ 2

    where

    • (i) “EP” is the scaled average employment to population ratio as provided by Statistics Canada to the Minister either

      • (A) for the district, or

      • (B) if not provided for the district individually, for the grouping of districts formulated by Statistics Canada in which the district is located,

      for the three most recent calendar years for which data is available,

    • (ii) “U” is the scaled average unemployment rate as provided by Statistics Canada to the Minister either

      • (A) for the district, or

      • (B) if not provided for the district individually, for the grouping of districts formulated by Statistics Canada in which the district is located,

    for the three most recent calendar years for which data is available;

  • (b) Y is calculated in accordance with the formula

    ([I + D + ((100 - T) + 1)]) ÷ ( 3)

    where

    • (i) “I” is the total income for the district, as determined by the Minister based on the aggregate of total income declared on income tax returns for individuals bearing addresses within the district, as provided by the Department of National Revenue, divided by the population of the district as provided by Statistics Canada, averaged over the three most recent calendar years for which data is available,

    • (ii) “D” is the total income as determined under subparagraph (i) less

      • (A) for districts not in the Province of Quebec, the aggregate of total tax payable by individuals bearing addresses within the district determined by the Minister based on data provided by the Department of National Revenue, or

      • (B) for districts in the Province of Quebec, the aggregate of total tax payable by individuals bearing addresses within the district as determined by the Minister based on data provided by the Department of National Revenue and the aggregate of provincial tax payable as estimated by the Minister,

      divided by the population of the district, as provided by Statistics Canada, averaged over the three most recent calendar years for which data is available,

    • (iii) “T” is the transfer payments for the district paid under the Unemployment Insurance Act, 1971, Old Age Security Act, Family Allowances Act, 1973, Canada Pension Plan and An Act respecting the Quebec Pension Plan, as reported on income tax returns for individuals bearing addresses within the district as provided by Statistics Canada, divided by total income as provided by Statistics Canada averaged over the three most recent calendar years for which data is available, and

    • (iv) I, D and T are scaled in accordance with the formula set out in subsection (3); and

  • (c) R is the average of the indices of fiscal capacity of the province in which the district is located for stipulated fiscal years,

    where

    • (i) an index of fiscal capacity of a province means the product of 100 times a fraction of which

      • (A) the numerator is the aggregate, for each of the revenue sources included in the definition of “revenue source” in subsection 4(2) of the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, 1977 of the amounts calculated in accordance with the formula

        ((B_p × T)) ÷ P_p, and

      • (B) the denominator is the aggregate, for each of the revenue sources included in the definition of revenue source in subsection 4(2) of the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, 1977, of the amounts calculated in accordance with the formula

        ((B₁₀ × T)) ÷ P₁₀

        where

        • (I) “B_p” is the revenue base of the province defined under subsection 4(2) of the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, 1977,for the revenue source for the fiscal year defined in that subsection,

        • (II) “T” is the national average rate of tax for the fiscal year defined under subsection 4(2) of the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, 1977,

        • (III) “P_p” is the population of the province for the fiscal year defined in the Federal-Provincial Fiscal Arrangements and Established Programs Financing Regulations, 1977,

        • (IV) “B₁₀” is the aggregate revenue base for all of the provinces defined under subsection 4(2) of the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, 1977, and

        • (V) “P₁₀” is the aggregate for all of the provinces of the population of a province for a fiscal year as defined in the Federal-Provincial Fiscal Arrangements and Established Programs Financing Regulations, 1977, and

    • (ii) stipulated fiscal year is

      • (A) for the purpose of the first arrangement of districts into Tier Groups under the Act, the current year and the immediately preceding fiscal year, and

      • (B) for the purposes of all subsequent arrangements of districts into Tier Groups under the Act, the current year and two immediately preceding fiscal years.

• (3) For the purposes of this section, scaling of variables shall be in accordance with the formula

  (x – minimum) (99 ÷ range) + 1

  where

  • (a) “X” is the value of the variable prior to scaling,

  • (b) “minimum” is the lowest value, prior to scaling, of the given variable, and

  • (c) “range” is the difference between the highest and lowest values, prior to scaling, of the given variable.

PART IVDesign Canada Grant

5 In this Part,

Design Canada Scholarship

Design Canada Scholarship means a grant made to a person in the 1984-85 fiscal year pursuant to paragraph 5(1)(a) of Order in Council P.C. 1983-2228, for the purpose of defraying the costs necessarily and directly related to the pursuit of advanced studies in design.

6 The Minister may grant a Design Canada Scholarship to a person who already received such a Scholarship to a person who already received such a Scholarship in the 1984-85 fiscal year.

7 [Revoked, SOR/84-902, s. 3]

PART VInnovation

8 In this Part, eligible costs are the costs necessary to carry out a project or activity and includes capital costs but does not include the cost of infrastructure development.

9 Subject to section 14, the Minister may make a contribution to an applicant in respect of

• (a) the eligible costs of the development or the demonstration of a new or improved product or production process that entails significant technical risk, if the development or demonstration is scientifically and technically feasible, if the results of the development or demonstration would offer significant technological advancement and if there is a good prospect for commercially exploiting the development or demonstration; and

• (b) the eligible costs of the design of a new, mass-producible durable product that offers good prospects for commercial exploitation, if the design necessitates the expansion of the industrial design program of the applicant and is directed by a qualified industrial designer.

10 Subject to section 14, the Minister may make a contribution to an applicant in respect of eligible costs of the improvement or expansion of the technological capability of the applicant where the improvement or expansion entails significant technological risk and does not lead directly to identifiable sales, if the improvement or expansion is scientifically and technically feasible and of importance to the applicant and to regional development priorities.

• 11 (1) Subject to section 14, the Minister may make a repayable contribution to an applicant in respect of the eligible costs of a development or demonstration of a new or improved and technologically advanced product or production process where the development or demonstration does not entail significant technical risk, if the development or demonstration is scientifically and technically feasible and there is a good prospect for commercially exploiting the development or demonstration.

• (2) A contribution under subsection (1) is repayable on successful commercial exploitation of the development or demonstration.

12 Subject to section 14, the Minister may make a contribution to an applicant in respect of the eligible costs of research or the development, demonstration or adaptation of new or improved technology, products, production processes, equipment or facilities if

• (a) the research, development, demonstration or adaptation entails significant technical risk;

• (b) the object of the research, development, demonstration or adaptation is the elimination or reduction of pollution generated by commercial operations;

• (c) the research, development, demonstration or adaptation is scientifically and technically feasible; and

• (d) the research, development, demonstration or adaptation is likely to result in a significant improvement in pollution abatement technology in Canada.

13 Subject to section 14, the Minister may make a contribution to an applicant in respect of the costs of engaging the services of a qualified consultant

• (a) to perform a study concerning the feasibility of a proposed project or activity that is likely to be eligible for assistance under section 9, 10, 11 or 12; or

• (b) to perform

  • (i) market research,

  • (ii) a study concerning technology transfer to the applicant, or

  • (iii) a venture capital search

  in connection with a proposed project or activity that is likely to be eligible for assistance under section 9, 10, 11 or 12.

• 14 (1) The Minister’s contribution under this Part shall not exceed

  • (a) 33.3 per cent of the costs or eligible costs, as the case may be, of

    • (i) projects and consulting services for projects carried out in districts located in Tier Group I, and

    • (ii) activities and consulting services for activities to be carried out by eligible persons located in Tier Group I;

  • (b) 40 per cent of the costs or eligible costs, as the case may be, of

    • (i) projects and consulting services for projects carried out in districts located in Tier Group II, and

    • (ii) activities and consulting services for activities to be carried out by eligible persons located in Tier Group II; or

  • (c) 50 per cent of the costs or eligible costs, as the case may be, of

    • (i) projects and consulting services for projects carried out in districts located in Tier Group III or Tier Group IV, and

    • (ii) activities and consulting services for activities to be carried out by eligible persons located in Tier Group III or Tier Group IV.

• (2) The Minister shall not make a contribution to an applicant under section 9, 10, 11 or 12 if

  • (a) the application therefor is received after February 18, 1987; and

  • (b) the total eligible costs of the project of activity are less than $100,000.

PART VIEstablishing a New Facility

15 In this Part, establishing a new facility includes a purchase of the assets of an existing facility if

• (a) at the time of the application, commercial production in the facility has ceased or is about to cease;

• (b) the cessation or imminent cessation of commercial production in the facility is dictated by circumstances beyond the control of the vendor of the assets;

• (c) the purchase of the assets is a bona fide arm’s length transaction and has not been contrived for the purpose of an application under the Act or these Regulations; and

• (d) the purchase price of the assets for the purposes of assistance under this Part is not in excess of the fair market value of the assets.

• 16 (1) Subject to subsections (2) and (3), the Minister may make a contribution to a commercial operation in respect of the capital costs of establishing a new facility in a district in Tier Group II, Tier Group III or Tier Group IV.

• (2) A contribution under subsection (1) shall not exceed

  • (a) 17.5 per cent of the capital costs of projects in districts in Tier Group II;

  • (b) 25 per cent of the capital costs of projects in districts in Tier Group III; or

  • (c) 30 per cent of the capital costs of projects in districts in Tier Group IV.

• (3) The Minister shall not make a contribution under subsection (1) unless the capital costs of the project will be

  • (a) $50,000 or more with respect to projects in districts in Tier Group II;

  • (b) $25,000 or more with respect to projects in districts in Tier Group III; or

  • (c) $5,000 or more with respect to projects in districts in Tier Group IV.

17 The Minister may, with the approval of Treasury Board, make a contribution to a commercial operation in respect of the capital costs of establishing a new facility in a district in Tier Group I.

• 18 (1) Subject to subsection (2), the Minister may make a contribution to a commercial operation in respect of the cost of engaging a qualified consultant

  • (a) to perform a study concerning the feasibility of a proposed project that would likely be eligible for a contribution under section 16 or 19; or

  • (b) to perform market research or a venture capital search in connection with a proposed project that would likely be eligible for a contribution under section 16 or 19.

• (2) A contribution by the Minister under this section shall not exceed

  • (a) 33.3 per cent of the costs of consulting services for projects to be located in districts in Tier Group I;

  • (b) 40 per cent of the costs of consulting services for projects to be located in districts in Tier Group II; or

  • (c) 50 per cent of the costs of consulting services for projects to be located in districts in Tier Group III or Tier Group IV.

• 18.1 (1) Subject to subsection (2), the Minister may make a contribution to a commercial operation in respect of the cost of engaging a qualified consultant to perform a study concerning the feasibility of establishing a new commercial operation in Canada where

  • (a) the Minister has requested the commercial operation to engage the consultant and the commercial operation has agreed; or

  • (b) the commercial operation has agreed that the Minister will have free and unrestricted right to obtain and use the results of the study if the commercial operation fails to initiate a new commercial operation within such period as the Minister shall determine.

• (2) A contribution made by the Minister under this section shall not exceed 75 per cent of the costs of consulting services.

• 19 (1) Subject to subsections (2) and (3), where the average unemployment insurance beneficiaries to population ratio of a district in Tier Group I for any period of six consecutive months commencing at any time after June 1, 1982 exceeds by 1 per cent or more the average national unemployment insurance beneficiaries to population ratio for the same period, the Minister may, notwithstanding section 17, make a contribution to a commercial operation in respect of the capital costs of establishing a new facility to be located in that district if the application therefor is made

  • (a) within 12 months after the day on which the data used to determine the ratios first become available; or

  • (b) with respect to any such period for which the data used to determine the ratios became available before January 1, 1984, within 12 months of the coming into force of this subsection.

• (2) A contribution by the Minister under this section shall not exceed 17.5 per cent of the capital costs.

• (3) The Minister shall not make a contribution under this section unless the capital costs of the project will be $50,000 or more.

• (4) For the purposes of subsection (1),

  • (a) average unemployment insurance beneficiaries to population ratio of a district in Tier Group I for any period of six consecutive months means the average of the monthly unemployment insurance beneficiaries to population ratios for each of the six months in the period, expressed as a percentage; and

  • (b) average national unemployment insurance beneficiaries to population ratio for any period of six consecutive months means the average of the monthly national unemployment insurance beneficiaries to population ratios for each of the six months in the period, expressed as a percentage.

PART VIIModernization and Expansion

• 20 (1) Subject to subsections (1.1) and (3), the Minister may make a contribution to a commercial operation in respect of the eligible costs of a project carried out

  • (a) in a district in Tier Group II, Tier Group III or Tier Group IV; or

  • (b) notwithstanding section 20.1, in a district in Tier Group I if a new facility in the district would be eligible for assistance under subsection 19(1) and an application for assistance under this subsection is made within the time period specified in subsection 19(1).

• (1.1) The Minister may make a contribution referred to in subsection (1) if the project expands, modernizes or enhances the productivity of the commercial operation through

  • (a) the first incorporation or application of microelectronic devices in its products, processes, production methods or facilities;

  • (b) the design of custom microelectronic devices for incorporation or application in its products, processes, production methods or facilities; or

  • (c) the incorporation or application of electronic or electronic-dependent products or systems in its production or design processes or facilities.

• (2) The Minister may make a contribution to a commercial operation in respect of the cost of engaging a qualified consultant to perform a study concerning the feasibility of a proposed project that would be likely to be eligible for a contribution under subsection (1).

• (3) A contribution under this section shall not exceed

  • (a) 30 per cent of the costs or eligible costs, as the case may be, of projects and consulting services for projects in districts in Tier Group I and Tier Group II; and

  • (b) 37.5 per cent of the costs or eligible costs, as the case may be, of projects and consulting services for projects in districts in Tier Group III and Tier Group IV.

  • (c) [Revoked, SOR/84-902, s. 8]

• (4) In this section, eligible costs means the costs necessary to carry out the project and includes capital costs but does not include the costs of infrastructure development.

• 20.1 (1) The Minister may, with the approval of Treasury Board, make a contribution to a commercial operation in respect of the eligible costs of a project in a district in Tier Group I that expands, modernizes or enhances the productivity of the commercial operation through

  • (a) the first incorporation or application of microelectronic devices in its products, processes, production methods or facilities;

  • (b) the design of custom microelectronic devices for incorporation or application in its products, processes production methods or facilities; or

  • (c) the incorporation or application of electronic or electronic-dependent products or systems in its production or design processes or facilities.

• (2) In this section, eligible costs, in respect of a project, means the costs necessary to carry out the project and includes the capital costs of the project but does not include the costs of the infrastructure development of the project.

• 21 (1) In this section,

  eligible costs

  eligible costs means capital costs but does not include the costs of infrastructure development; (coûts admissibles)

  expanding existing facilities

  expanding existing facilities includes the replacement of facilities with new facilities on the same site and the relocation of facilities in whole or in part. (agrandissement des établissements existants)

• (2) Subject to subsections (3) and (4), the Minister may make a contribution to a commercial operation in respect of the costs set out in subsection (3) if the project to be assisted is carried out in a district

  • (a) in Tier Group II, Tier Group III or Tier Group IV; or

  • (b) notwithstanding section 22.1, in Tier Group I if a new facility in the district would be eligible for assistance under subsection 19(1) and an application for assistance under this subsection is made within the time period specified in subsection 19(1).

• (3) The contribution referred to in subsection (2) shall be

  • (a) in respect of the eligible costs of machinery or equipment that modernizes or increases significantly the productivity of the commercial operation; or

  • (b) in respect of the capital costs of expanding existing facilities of the commercial operation.

• (4) The Minister shall not make a contribution under this section unless the capital costs of the project will be

  • (a) $50,000 or more with respect to projects carried out in districts in Tier Group I or Tier Group II;

  • (b) $25,000 or more with respect to projects carried out in districts in Tier Group III; or

  • (c) $5,000 or more with respect to projects carried out in districts in Tier Group IV.

• (5) The minister shall not make a contribution under this section in an amount that exceeds

  • (a) 17.5 per cent of the capital costs or eligible costs, as the case may be, of projects in districts in Tier Group I or Tier Group II; or

  • (b) 25 per cent of the capital costs or eligible costs, as the case may be, of projects in districts in Tier Group III or Tier Group IV.

• (6) Notwithstanding any other provision of these Regulations, a project for the relocation of facilities is eligible for a contribution only under paragraph 21(3)(b) or 22.1(2)(b).

• 22 (1) The Minister may make a contribution to a commercial operation in respect of the cost of engaging a qualified consultant

  • (a) to perform a study concerning the feasibility of a proposed project that would likely be eligible for a contribution under section 21; or

  • (b) to perform a productivity improvement study, market research or a venture capital search in connection with a proposed project that would likely be eligible for a contribution under section 21.

• (2) The Minister’s contribution under subsection (1) shall not exceed

  • (a) 30 per cent of the costs of consulting services for projects in districts in Tier Group I or Tier Group II; and

  • (b) 37.5 per cent of the costs of consulting services for projects in districts in Tier Group III or Tier Group IV.

  • (c) [Revoked, SOR/84-902, s. 11]

• 22.1 (1) In this section, eligible costs and expanding existing facilities have the same meaning as in section 21.

• (2) The Minister may, with the approval of Treasury Board, make a contribution to a commercial operation for a project in a district in Tier Group I

  • (a) in respect of the eligible costs of machinery or equipment that modernizes or increases significantly the productivity of the commercial operation; or

  • (b) in respect of the capital costs of expanding existing facilities of the commercial operation.

PART VIIIMarketing

• 23 (1) The Minister’s contribution under this section shall not exceed 45% of the costs.

• (2) The Minister may make a contribution to an eligible person, other than a municipal corporation, in respect of the costs of

  • (a) activities that promote the acceptance of Canadian standards and product specifications,

  • (b) the publication and dissemination of catalogues and other literature to promote Canadian products,

  • (c) market research and analysis,

  • (d) advertising, and

  • (e) a trade show, seminar or other event,

  where the purpose of the activity, literature, research, analysis, advertising or event is to increase marketing of the products or services of commercial operations.

• (3) [Revoked, SOR/84-902, s. 13]

24 Subject to section 25, the Minister may make a contribution to an eligible person, other than a municipal corporation, in respect of the cost of engaging a qualified consultant to conduct a study concerning the feasibility of a proposed activity that would likely be eligible for a contribution under subsection 23(2).

25 The Minister’s contribution under section 24 shall not exceed

• (a) 25 per cent of the cost of consulting services for activities to be carried out by eligible persons located in Tier Group I;

• (b) 30 per cent of the cost of consulting services for activities to be carried out by eligible persons located in Tier Group II; or

• (c) 37.5 per cent of the cost of consulting services for activities to be carried out by eligible persons located in Tier Group III or Tier Group IV.

PARTS IX AND X

[Revoked, SOR/84-902, s. 15]

PART XIConditions of Assistance

• 29 (1) Notwithstanding any other provisions of these Regulations, the Minister may not make a contribution in respect of a cost of a proposed project or activity if the applicant had, prior to the receipt by the Minister of an application for a contribution to the proposed project or activity, entered into a legal commitment in respect of the cost.

• (2) In this section, legal commitment does not include an option to purchase.

• 30 (1) Every applicant shall provide the Minister with any information in his possession that is likely to assist the Minister in considering

  • (a) the probable cost of each job likely to be created or maintained as a result of the proposed project or activity calculated in terms of the proposed contribution;

  • (b) the leverage of private investment;

  • (c) factors relating to the district or portion thereof in which the project or activity is to be carried out, including the local rate of unemployment;

  • (d) the amount of any federal, provincial or municipal assistance or tax credit, whether past, present or future, that is likely to be relevant to the proposed project or activity;

  • (e) the degree of benefit likely to result when compared to the likelihood of successful completion of the proposed project or activity;

  • (f) implications of the proposed project or activity in relation to Canada’s balance of payments;

  • (g) the probable impact of the proposed project or activity on commercial operations, eligible persons and districts;

  • (h) the probable cost of preventing or eliminating any significant air, water or other pollution that could result from the proposed project or activity;

  • (i) in the case of a project to establish or expand a processing facility, whether the resources to be exploited would be adequate, on a sustained-yield basis, to support the facility together with any existing facility that utilizes the same resources; and

  • (j) such other factors relating to the economic and social benefits and costs of the proposed project or activity as the Minister considers relevant.

• (2) Every applicant shall provide in his application, an outline of the proposed project or activity in reasonable scope and detail.

31 If

• (a) the contribution to be authorized by the Minister for a proposed project or activity is likely to be at least $100,000, or

• (b) at least 100 jobs are likely to be directly affected by a proposed project or activity,

the Minister may consult with the Canada Employment and Immigration Commission concerning the human resource implications of the proposed project or activity prior to entering into an agreement to provide a contribution.

32 If, as a result of a consultation under section 31, the Minister and the Canada Employment and Immigration Commission are satisfied that the applicant should have a human resource plan for the project or activity, the Minister may require, as a condition of the contribution that the applicant submit a human resource plan satisfactory to the Canada Employment and Immigration Commission within a stipulated time.

33 Notwithstanding any provision of these Regulations, the Minister shall not make a contribution unless the project with respect to which the contribution is being provided is commercially viable within reasonable bounds of risk, and the commercial operation carrying out the project is or will become commercially viable within reasonable bounds of risk.

34 The Minister shall not make a contribution in respect of any project or activity that is eligible for assistance under

• (a) the Canadian Industrial Renewal Regulations; or

• (b) the Industry and Labour Adjustment Program.

• 34.1 (1) Subject to subsection (3) the Minister shall not make a contribution in respect of any project or activity where the maximum amount of eligible costs of such project or activity, the number of employees of the applicant and the value of tangible assets of the applicant meet the eligibility criteria set out in a subsidiary agreement on small business incentives made pursuant to an Economic and Regional Development Agreement.

• (2) Subject to subsection (3), the Minister shall not make a contribution in respect of any project or activity that is eligible for assistance under the Low Interest Loan Assistance Program of the Province of British Columbia in effect October 1, 1985.

• (3) Subsections (1) and (2) do not apply to any contribution make pursuant to section 9, 10, 11, 12, 13, 23 or 24.

• 35 (1) It is a condition of every contribution that the aggregate of

  • (a) the contribution,

  • (b) any other federal, provincial or municipal government assistance in respect of the project or activity, and

  • (c) the estimate by the Minister of any tax credit to which the applicant is or will be entitled in respect of any property or expenditure related to the project or activity on or before the date of its completion,

  does not exceed 90 per cent of the costs, eligible costs or capital costs, as the case may be, of the project or activity.

• (2) Assistance under these Regulations shall be in such amount as the Minister considers necessary for the successful completion of the project or activity from which the value of any assistance described in paragraph (1)(b) will be deducted.

36 Notwithstanding any other provision of these Regulations, the Minister shall not make any contribution or pay any part thereof, in respect of a cost that is not a reasonable and proper direct cost of a project or activity.

PART XIIPayment Conditions

• 37 (1) Subject to these Regulations, the Minister shall pay a contribution under section 16, 17, 19, 21 or 22.1 as follows:

  • (a) after commencement of commercial production, the Minister shall make a payment to the commercial operation;

  • (b) after the payment referred to in paragraph (a), the Minister may make one or more additional payments; and

  • (c) prior to a day six months after the end of the control period, or such subsequent day as will allow the Minister reasonable time for processing, the Minister shall pay any outstanding amount of the contribution.

• (2) Payments under paragraph (1)(a) or (b) shall not exceed 90 per cent of the contribution owing in respect of the claim for payment submitted by the commercial operation.

• (3) The Minister shall not make any payment under paragraph (1)(b) with respect to any claim for less than 10 per cent of the total amount the Minister has agreed to contribute.

• (4) Notwithstanding any other provision of this section, no payment shall be made by the Minister until the level of equity in the commercial operation, as specified by the Minister in subsection 49(1), has been provided to the satisfaction of the Minister.

• (5) The Minister shall not contribute to any capital costs in excess of 125 per cent of the amount the Minister originally agreed to contribute unless the Minister has consented to do so in writing before the excess costs are incurred.

• 38 (1) The Minister shall pay a contribution, other than a contribution under section 16, 17, 19, 21 or 22.1, in accordance with this section.

• (2) While the project or activity is being carried out, the Minister shall pay the applicant, on the basis of claims for payment submitted by the applicant in respect of costs incurred and paid, not more frequently than once every three months.

• (3) The Minister shall not pay the applicant more than 90 per cent of the contribution owing in respect of a claim for payment described in subsection (2) prior to the completion of the project or activity.

• (4) Every claim for payment submitted prior to the completion of a project or activity shall be certified by an officer of the applicant or other person satisfactory to the Minister.

• (5) On completion of a project or activity, the applicant shall submit a statement of all costs certified by the applicant’s external auditor or by an auditor approved by the Minister.

• (6) On approval by the Minister of the statement submitted in accordance with subsection (5), the Minister shall pay any outstanding amount of the contribution.

• 39 (1) If an applicant is required, pursuant to these Regulations or the contribution agreement with the Minister, to provide documentation certified by an external auditor, the Minister may, in addition to the amount otherwise payable under the contribution agreement, contribute to the cost incurred by the applicant for this purpose, at a percentage that does not exceed the agreed contribution percentage as set out in the contribution agreement.

• (2) The Minister may make the contribution referred to in subsection (1) without amending the contribution agreement.

40 Notwithstanding subsection 38(1), when the Minister has entered into an agreement to provide a contribution to an eligible person in respect of an activity, the Minister may make a payment or payments on account of the contribution, prior to the costs, in respect of which the payment or payments are made, being incurred or paid if the advance payment is essential to the successful completion of the activity.

41 [Revoked, SOR/84-902, s. 23]

41.1 Notwithstanding section 38, where the Minister has entered into an agreement to provide a contribution in respect of a project, the Minister may not more frequently than once every month make payments with or without holdbacks, on account of the contribution if the payments are, in his opinion, essential to the successful completion of the project.

PART XIIIGeneral

42 Notwithstanding any other provision of these Regulations, the Minister may only make payment on account of a contribution on the basis of claims for payment submitted by the applicant that have supporting documentation that is satisfactory to the Minister.

43 Subject to section 57 but notwithstanding any other provision of these Regulations, the Minister, in calculating the cost of a project or activity, shall not take into account any costs incurred by the applicant prior to July 15, 1983.

44 If a proposed project or activity

• (a) has a high risk of failure but has a commensurate opportunity to achieve a high rate of return, or

• (b) is of such a nature that it merits a contribution but a non-repayable contribution would not be in the public interest or the applicant does not wish to receive a non-repayable contribution,

any contribution made by the Minister in respect of the project or activity shall be a repayable contribution.

45 [Revoked, SOR/84-902, s. 24]

46 The rate of interest payable pursuant to section 11 of the Act is the lowest rate charged by the Federal Business Development Bank on its term loans on the day the first payment on account of the contribution was made pursuant to the Act.

47 The Minister shall not make a contribution to an applicant in respect of the cost of the services of any consultant that is not at arm’s length from the applicant.

48 It is a condition of every contribution made under section 16, 17, 19, 21 or 22.1 that prior to the end of the control period,

• (a) the facility shall not be sold or otherwise disposed of without the prior written consent of the Minister; and

• (b) no asset in respect of the cost of which the contribution has been made shall cease to be used in the facility without the prior written consent of the Minister.

48.1 It is a condition of every contribution made under section 16, 17, 19, 21 or 22.1, except a contribution made under paragraph 21(3)(b) or 22.1(2)(b) in respect of the replacement of facilities with new facilities on the same site or the relocation of facilities in whole or in part, that throughout the control period, the commercial operation, and any affiliated commercial operation, maintain levels of production at its other facilities in Canada that manufacture or process products or provide services, similar to those manufactured, processed or provided at the facility granted assistance under section 16, 17, 19, 21 or 22.1, at the same level as at the time of application for assistance.

48.2 Section 48.1 does not apply where

• (a) the project in respect of which a contribution was made is located in Nova Scotia, New Brunswick, Prince Edward Island or Newfoundland; and

• (b) the applicant is unable to comply with that section because of circumstances beyond the control of the applicant that could not reasonably have been anticipated when the Minister agreed to make the contribution and that did not result from the making of the contribution.

• 49 (1) The Minister shall not make a contribution under section 16, 17, 19, 21 or 22.1 unless the commercial operation attains the level of equity specified by the Minister on or before the commencement of commercial production.

• (2) The Minister shall not specify a level of equity under subsection (1) that is less than the aggregate of

  • (a) 20 per cent of the capital costs of the project; and

  • (b) 20 per cent of the net book value of the commercial operation’s fixed assets at the time of application.

• (3) Notwithstanding subsection (1), where the Minister is satisfied that special circumstances exist, he may extend the deadline for the provision of all or part of the required equity to a date not later than the end of the control period.

• (4) The applicant shall maintain the level of equity, specified by the Minister under subsection (1), throughout the control period except to the extent that the level is reduced by

  • (a) operational losses allowed by the Minister; or

  • (b) other reductions to which the Minister has given his prior consent.

50 It is a condition of every contribution that

• (a) until 36 months after the end of the control period, in the case of projects assisted under section 16, 17, 19, 21 or 22.1, or

• (b) until 36 months after the completion of the project or activity to the Minister’s satisfaction, in the case of other projects and activities,

the applicant shall

• (c) preserve and keep available for audit and examination by the Minister proper books, accounts and records of the costs of the project or activity; and

• (d) supply, promptly on request, such data in respect of the project or activity and its results as the Minister may require for statistical purposes.

• 51 (1) The Minister shall, for every contribution, stipulate a date on or before which the project or activity must be commenced and a date on or before which the project or activity must be completed, and it is a condition of the contribution that the project or activity be commenced on or before the date stipulated and completed on or before the date stipulated.

• (2) The Minister shall, for every contribution, stipulate a date before which any capital equipment must be in operation, and it is a condition of every contribution or participation loan that the equipment be in operation on or before the date stipulated.

52 It is a condition of every contribution that no significant change in ownership, management, financing, location, size of facilities, timing, federal, provincial or municipal assistance occur in respect of the project or activity without the prior written consent of the Minister.

• 53 (1) The Minister shall not acquire a stock option as a condition of a contribution unless the amount of the contribution is at least $500,000.

• (2) Where the Minister acquires a stock option as a condition of a contribution, the Minister may exercise or assign the stock option where the exercise or assignment is of benefit to Her Majesty.

• (3) Capital stock acquired by the Minister under a stock option may be sold by the Minister at such price and on such terms as will provide maximum benefit to Her Majesty.

• (4) Where the Minister receives an offer to purchase a stock option or capital stock acquired under a stock option and he finds the offer acceptable, he shall notify the person from whom the stock option or capital stock, as the case may be, was obtained and that person shall have the assignable right, during the seven business days following the day notice was given, to elect to purchase the stock option or the capital stock, as the case may be, at the price and on the terms and conditions, including the closing date, specified in the offer to purchase.

• (5) Notwithstanding any other provision of this section,

  • (a) [Revoked, SOR/84-226, s. 7]

  • (b) the Minister shall sell capital stock acquired under a stock option pursuant to these Regulations no later than one year from the date of acquisition of the stock; and

  • (c) the Minister shall not exercise a stock option without the prior consent of Treasury Board.

• 54 (1) If, as a result of an arrangement of districts carried out by the Minister pursuant to section 3 of the Act, a district changes Tier Groups and an application in respect of that district is being considered by the Minister at the time of the change, the applicant may choose to have the application considered on the basis of the Tier Group of the district either before or after the change.

• (2) The Minister shall not enter into an agreement to make a contribution in respect of an application described in subsection (1) more than six months after the date of the change in Tier Groups if the applicant chooses to have the application considered on the basis of the former Tier Group.

55 For the purposes of subsection 11(2) of the Act, the Minister may advise an applicant that the amount of the contribution will not be recovered from the applicant

• (a) in the case of recovery due to damage to or destruction of all or part of a facility, if the assets destroyed or damaged have been replaced or repaired or will be replaced or repaired without undue delay;

• (b) in the case of recovery due to the sale or other disposition of a facility, if

  • (i) the facility will continue to be used in substantially the same manner as contemplated at the time of the application by the commercial operation,

  • (ii) a successor will carry out the remaining terms and conditions of the Minister’s agreement with the commercial operation, and

  • (iii) the commercial operation and its successor, at or about the time control over the facility is assumed by the successor, assume joint and several liability to repay any amounts received from the Minister, in the event of a subsequent cessation of use without the prior written consent of the Minister of any of the assets in respect of which the contribution was made; and

• (c) where, due to circumstances beyond the control of the applicant that could not reasonably have been anticipated when the Minister agreed to make the contribution,

  • (i) the applicant has been forced to make a significant change in the project or activity, or

  • (ii) the project or activity has not been completed.

55.1 Notwithstanding section 55, for the purpose of subsection 11(2) of the Act, the Minister may advise an applicant that all or part of the amount of the contribution made to an applicant under Part V or Part VIII will not be recovered from the applicant where, on the basis of technical, marketing, financial or other considerations, the Minister determines that the project or activity or production of the results thereof should not be continued.

• 56 (1) A Board established by the Minister pursuant to section 14 of the Act may advise and make recommendations to the Minister concerning projects and activities and proposed projects and activities regarding

  • (a) their commercial viability;

  • (b) the degree of risk associated with them;

  • (c) the nature and amount of assistance under these Regulations that would be required for their successful completion;

  • (d) the nature and amount of assistance under these Regulations that would be appropriate, taking into consideration the amount of private investment;

  • (e) the appropriate terms and conditions for assistance to them under these Regulations;

  • (f) their benefit to Canada or any district;

  • (g) their impact in terms of creation and maintenance of employment; and

  • (h) any other circumstance or matter upon which the Board considers it appropriate to advise or recommend.

• (2) Each member of a Board established pursuant to section 14 of the Act is entitled to be paid

  • (a) remuneration of $200 for each day that the member performs duties under the Act; and

  • (b) reasonable travel and other expenses incurred by him while absent from his ordinary place of residence in the course of duties under the Act.

57 These Regulations apply to

• (a) every application for assistance under the Regulations received by the Minister after these Regulations come into force; and

• (b) every application for assistance under

  • (i) the Enterprise Development Regulations, except for the Industry and Labour Adjustment Program,

  • (ii) the Cooperative Overseas Market Development Program,

  • (iii) the Institutional Assistance Program,

  • (iv) the Regional Development Incentives Act,

  • (v) the Montreal Special Area Program, and

  • (vi) the Magdalen Islands Special Area Program,

  where the application was received by the Minister not more than six months before or is received not more than two months after these Regulations come into force, if

  • (vii) such application has not been disallowed by the Minister prior to the coming into force of these Regulations,

  • (viii) an agreement for such assistance has not been entered into in respect of the application, and

  • (ix) the applicant has opted in writing for the application to be dealt with under these Regulations.

58 Notwithstanding any other provision of these Regulations, any application received by the Minister prior to the date this section came into force shall be governed by these Regulations as they read immediately prior to the date this section came into force.