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Regional Development Incentives Regulations (C.R.C., c. 1386)

Regulations are current to 2024-02-06

Conditions and Limitations (continued)

 It is a condition of any development incentive that is based in part on the number of jobs created in the operation that, if during the second and third years immediately following the date on which the facility is brought into commercial production, the number of jobs created directly in the operation is less than the estimated number of jobs on which payments, on account of the development incentive are based, the applicant shall repay to Her Majesty the amount paid on account of the development incentive that was related to the number of jobs that were not so created.

Payment of Development Incentives

 The Minister may determine that a new, expanded or modernized facility has been brought into commercial production when he is satisfied that the facility has been utilized in the continuous production of quantities of goods for a period of not less than 30 days and that most, by value, of the eligible assets approved by the Minister in respect of the facility are being utilized in the manufacturing or processing of those goods and will continue to be so utilized.

  •  (1) The amount that the Minister shall, pursuant to section 10 of the Act, pay on account of a development incentive at the time he is satisfied that the facility has been brought into commercial production shall not exceed an amount equal to 80 per cent of the total development incentive calculated without taking into account the approved capital costs of any eligible assets not then in use in the operation.

  • (2) Subject to subsection (3), where

    • (a) during the 30 months following the date on which a facility is brought into commercial production, in the case of a facility in respect of which a development incentive is based only on the approved capital costs, or

    • (b) during the 42 months following the date on which the facility is brought into commercial production, in the case of a facility in respect of which a development incentive is based in part on the number of jobs created in the operation,

    the Minister is satisfied that 80 per cent of the development incentive will be greater by at least 25 per cent than the amount of the payment made in accordance with subsection (1), he may make to the applicant a further payment or payments on account of the development incentive.

  • (3) The total of all payments made on account of a development incentive in respect of a facility prior to the expiration of

    • (a) 24 months from the date on which the facility is brought into commercial production, in the case of a facility in respect of which the development incentive is based only on the approved capital costs, or

    • (b) 36 months from the date on which the facility is brought into commercial production, in the case of a facility in respect of which the development incentive is based in part on the number of jobs created in the operation,

    shall not exceed 80 per cent of the development incentive that the Minister estimates that he will pay after the expiration of such period.

Regions

  •  (1) The Minister shall not authorize a primary development incentive, a secondary development incentive or a special development incentive with respect to a facility located in the region designated in the Designated Region Order 1970-1Footnote 1.

  • (2) The Minister shall not authorize a special development incentive with respect to a facility located in any region designated in the Regional Development Incentives Designated Region Order, 1974 that is within the Province of Quebec, Ontario, Manitoba, Saskatchewan, Alberta or British Columbia.

Loan Guarantees

 A loan guarantee may be authorized by the Minister in respect of the establishment in the areas comprised by

  • (a) the regions designated as designated regions for the purposes of the Act by the Regional Development Incentives Designated Region Order, 1974, and

  • (b) the region designated as a designated region for the purposes of the Act by the Designated Region Order 1970-1Footnote 1,

of a commercial facility that provides commercial services of one or more of the following classes:

  • (c) business offices;

  • (d) warehousing and freight-handling facilities;

  • (e) shopping centres;

  • (f) convention facilities;

  • (g) hotel accommodation; or

  • (h) recreational facilities.

 A loan guarantee shall not be authorized in respect of a commercial facility unless the total capital costs of the commercial facility will, in the opinion of the Minister, exceed

  • (a) $2,500,000 if the commercial facility is located in the metropolitan area of Montreal;

  • (b) $500,000 if the commercial facility is located in the metropolitan area of Winnipeg or Quebec City; or

  • (c) $250,000 if the commercial facility is located in any other place within the areas prescribed by section 22.

  •  (1) A loan guarantee shall not exceed 90 per cent of the total amount of the advances made by the lender to the borrower plus the interest thereon.

  • (2) The Minister shall not authorize a loan guarantee unless he is satisfied that the terms and conditions of the loan are in accordance with reasonable commercial practice with respect to

    • (a) the security provided for the loan; and

    • (b) the circumstances in which the borrower shall be in default.

  •  (1) It is a condition of any loan guarantee that the lender shall, semi-annually or at such shorter intervals as may be specified in the loan guarantee agreement, provide the Minister with a report showing

    • (a) the amount and date of any advances made under the loan;

    • (b) the amount and date of any payment received on account of principal or interest on the loan;

    • (c) any amount due on the last day of each month of the period covered by the report; and

    • (d) the amount and type of insurance carried on the facility or commercial facility.

  • (2) It is a condition of any incremental loan guarantee that the lender pay to the Receiver General, at the time he provides the Minister with a report pursuant to subsection (1), a guarantee fee of two per cent per annum, calculated on the guaranteed portion of the loan outstanding as of the last day of each month of the period covered by the report.

  • (3) It is a condition of any shared-risk loan guarantee that the lender pay to the Receiver General, at the time he provides the Minister with a report pursuant to subsection (1),

    • (a) where the percentage guaranteed does not exceed 50 per cent of the loan, a guarantee fee of one per cent per annum calculated on the guaranteed portion of the loan outstanding as of the last day of each month of the period covered by the report; and

    • (b) where the percentage guaranteed exceeds 50 per cent of the loan, a guarantee fee of

      • (i) one per cent per annum, calculated on the first 50 per cent of the guaranteed portion of the loan outstanding as of the last day of each month of the period covered by the report,

      • (ii) two per cent of the percentage guaranteed that exceeds 50 per cent but does not exceed 70 per cent of the guaranteed portion of the loan outstanding as of the last day of each month of the period covered by the report, and

      • (iii) three per cent of the percentage guaranteed that exceeds 70 per cent of the guaranteed portion of the loan outstanding as of the last day of each month of the period covered by the report.

  • (4) For the purposes of this section,

    incremental loan guarantee

    incremental loan guarantee means a guarantee under which, after default by the borrower, the lender is entitled to apply any proceeds obtained from the realization of the security firstly in satisfaction of that portion of the unpaid balance of the loan that is not guaranteed by Her Majesty; (garantie croissante d’un prêt)

    shared-risk loan guarantee

    shared-risk loan guarantee means a guarantee under which, after default by the borrower and before Her Majesty’s liability is determined, the lender is required to apply any proceeds obtained from realization of the security in satisfaction of the loan. (garantie d’un prêt à risques partagés)

 A loan guarantee agreement shall contain conditions respecting

  • (a) the notification to be given to the Minister where the borrower is in default;

  • (b) the terms and conditions under which the loan guarantee may be invoked;

  • (c) the manner in which any assets of the borrower may be taken or seized by the lender;

  • (d) the disposition or management of assets taken or seized by the lender;

  • (e) the payments to the Receiver General to be made by the lender out of the disposition or management of assets taken or seized by the lender; and

  • (f) such other terms and conditions as the Minister considers appropriate.

 

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