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Enterprise Development Regulations (C.R.C., c. 969)

Regulations are current to 2023-05-17

Enterprise Development Regulations

C.R.C., c. 969

DEPARTMENT OF INDUSTRY ACT

APPROPRIATION ACTS

APPROPRIATION ACT NO. 2, 1977

Regulations Respecting the Enterprise Development Program

Short Title

 These Regulations may be cited as the Enterprise Development Regulations.

Interpretation

  •  (1) In these Regulations,

    application

    application means

    • (a) in respect of a loan, an application referred to in section 21, and

    • (b) in respect of insurance, an application referred to in section 38; (demande)

    Board

    Board[Revoked, SOR/83-708, s. 1]

    contribution

    contribution means any contribution authorized under a Department of Industry, Trade and Commerce vote of an Appropriation Act; (contribution)

    letter of credit

    letter of credit[Revoked, SOR/79-335, s. 1]

    manufacturer

    manufacturer means an individual, firm or corporation in Canada engaged in a manufacturing or processing activity; (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 Industry, Trade and Commerce; (ministre)

    private lender

    private lender means a 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 any such government or any agency thereof, or

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

    restructure

    restructure means a change that, in the opinion of the Minister, is significant in the operations of a manufacturer or other person eligible for assistance under these Regulations with respect to its or the person’s 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/79-335, s. 1
    • SOR/83-708, s. 1
  • (2) [Revoked, SOR/79-335, s. 1]

PART ILimitation

 Except for applications made under section 36, subparagraphs 44(b)(iii), (v), (vii), (ix) and (x) and sections 45 and 46 the Minister shall not consider any applications received under these Regulations after September 15, 1983.

  • SOR/79-335, s. 2
  • SOR/83-708, s. 2
  •  (1) The Minister shall administer

  • (2) The Minister may, in respect of any loan, insurance, stock option or contribution administered by the Minister pursuant to subsection (1), require such information and documentation and make such stipulations as he deems appropriate in relation to such loans, insurance, stock options or contributions.

  • (3) The Minister shall do everything that in his opinion is necessary or appropriate to facilitate the efficient operation of the Enterprise Development Program, 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 subsection (1) and to maximize the potential economic gains to Canada arising from any contribution administered by him pursuant to subsection (1).

  • SOR/78-504, s. 1
  • SOR/79-335, s. 3
  • SOR/81-379, s. 1
  • SOR/83-708, s. 2

 [Revoked, SOR/83-708, s. 2]

PART IILoans

  •  (1) Subject to sections 19 and 20, the Minister may make a loan to a manufacturer for the purpose of assisting the manufacturer in restructuring his manufacturing or processing activity if

    • (a) the manufacturer was engaged in a manufacturing or processing activity prior to the first reduction of tariffs or first modification of non-tariff barriers by Canada resulting from the Tokyo Round agreements; and

    • (b) in the opinion of the Minister

      • (i) the manufacturer requires a loan in order to restructure his manufacturing or processing activity for the purpose of improving his position in international competition, and

      • (ii) the manufacturer is seriously injured or threatened with serious injury by reason of increased imports as a direct result of the Tokyo Round agreements.

  • (2) Subject to sections 19 and 20, the Minister may make a loan to a manufacturer for the purpose of assisting the manufacturer to adjust to changes in conditions affecting his access to foreign markets if, in the opinion of the Minister,

    • (a) the manufacturer requires a loan for such purpose; and

    • (b) the changes are attributable to the imposition by a country other than Canada of an import surtax or to the taking by such country of other actions having the same effect.

  • SOR/79-335, s. 14
  • SOR/83-708, s. 9

 Subject to sections 19 and 20, where, pursuant to these Regulations, the Minister has authorized the provision of insurance on a loan not exceeding $200,000 made by a private lender to a manufacturer or other person in Canada, the Minister may make a loan in an amount not exceeding, in the aggregate, 50 per cent of the amount of the loan to the manufacturer or other person on the following conditions:

  • (a) a loan may be made pursuant to this section only when a private lender has agreed to make the loan on which the Minister has authorized the provision of insurance on the terms and conditions under which the Minister authorized such insurance;

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

  • (c) a loan may be made pursuant to this section only where, in the opinion of the Minister, such loan is essential to prevent a serious delay in implementing the restructuring program for which the loan by the private lender was obtained;

  • (d) a loan made pursuant to this section shall be repaid on the date of the first disbursement of the loan advanced by the private lender or on such earlier date as the Minister may determine; and

  • (e) the Minister shall specify the date on which the loan made pursuant to this section 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/79-335, s. 15
  • SOR/83-708, s. 9

 Subject to sections 19 and 20, where a manufacturer or other person, or a trustee or receiver authorized by law to carry on the business of such manufacturer or other person, has previously obtained assistance by way of a loan or insurance on a loan or other financial obligation administered by the Minister pursuant to subsection 4(1), a loan may be made by the Minister to the manufacturer or other person or to the trustee or receiver for the purpose of protecting the Crown’s interest in respect of the loan previously made or the loan or other financial obligation previously insured.

  • SOR/79-335, s. 16
  • SOR/83-708, s. 3

Condition of a Loan

 The Minister shall grant a loan pursuant to sections 16 to 18 only where the manufacturer or other person is unable to obtain sufficient financing on reasonable terms from other sources for the purposes set out in those sections.

  • SOR/79-335, s. 16
  • SOR/83-708, s. 9

 Where a loan is to be made by the Minister pursuant to these Regulations to a manufacturer enabling the manufacturer to make adjustments to his operations that will result in 20 or more of his employees being laid off for a period of two or more months, the making of that loan shall be on condition that the manufacturer agree to give at least three months notice of the lay-off to the Minister and to each employee who is to be laid off.

  • SOR/79-335, s. 16
  • SOR/83-708, s. 9

Application for a Loan

  •  (1) A manufacturer or other person who requires a loan in accordance with these Regulations shall make application therefor to the Minister and shall provide such information relating to the application as the Minister may require.

  • (2) Where an application for a loan is approved by the Minister, the applicant shall enter into a loan agreement with Her Majesty and that agreement shall, subject to these Regulations, be in such form and contain such provisions as the Minister considers necessary.

  • (3) The amount of a loan made pursuant to these Regulations shall be advanced to the manufacturer or other person on the requisition of the Minister.

  • SOR/79-335, s. 16
  • SOR/83-708, s. 9

Interest

  •  (1) Subject to paragraph 17(b), the rate of interest for any loan made pursuant to these Regulations shall be determined as of the day the application is approved by the Minister and shall be the rate within the prescribed range described in subsection (2) that the Minister deems reasonable in the circumstances.

  • (2) The prescribed range of rates of interest for loans made pursuant to these Regulations 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 three per cent above that rate.

  • SOR/79-335, s. 16
  • SOR/83-708, s. 9

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, in such manner as may be prescribed by the Minister, be repaid in advance of the due date of repayment without notice, bonus or penalty.

  • SOR/79-335, s. 16
  • SOR/83-708, s. 9

Security

  •  (1) Where, in the opinion of the Minister, it is advisable to obtain security for the repayment of a loan administered by him pursuant to subsection 4(1), the Minister shall obtain or hold such security as he deems proper.

  • (2) The Minister may surrender, retransfer or reconvey any security obtained or held by him 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 any security.

  • SOR/79-335, s. 16
  • SOR/83-708, ss. 4, 9

PART IIIInsurance

General

  •  (1) Subject to sections 33 and 34, the Minister may provide insurance on a loan made by a private lender to a manufacturer, individual, firm or corporation in Canada, as the case may be, if, in the opinion of the Minister,

    • (a) in the case of a manufacturer, the manufacturer requires a loan

      • (i) to restructure his operations in order to improve his position in international trade competition,

      • (ii) to adjust to changes affecting his access to foreign markets, which changes are attributable to the imposition by a country other than Canada of an import surtax or to the taking by such country of other actions having the same effect, or

      • (iii) to engage in the manufacture or production of products that will be subject to international trade competition;

    • (b) in the case of an individual, firm or corporation about to engage in a manufacturing or processing activity in Canada, the individual, firm or corporation requires a loan to engage in the manufacture or production of products that will be subject to international trade competition; or

    • (c) the individual, firm or corporation requires a loan to acquire a corporation or group of corporations engaged in a manufacturing or processing activity and the acquisition will result in a significant increase in the manufacturing or processing activity in Canada.

  • (2) Subject to sections 33 and 34 and subsection (3), the Minister, with the approval of the Treasury Board, may provide insurance on any loan made by a private lender to an individual, firm or corporation engaged or about to engage in the business of general contracting or special trades contracting in Canada, if, in the opinion of the Minister, the individual, firm or corporation requires a loan to restructure his or its operations in order to improve his or its position in international trade competition and the restructuring will improve his or its capability to undertake foreign turnkey and other capital projects that would result in significant benefits to Canada.

  • (3) The aggregate amount of insurance that may be provided by the Minister pursuant to subsection (2) shall not exceed $12 million at any time.

  • (4) Notwithstanding any other provision of these Regulations, the Minister shall not, without the approval of the Treasury Board, authorize the amendment of the terms and conditions of any loan insured pursuant to subsection (2) or exercise any of his powers under subsection 24(2) in respect of security taken for the loan except, only, where the Minister is satisfied that such amendment or the exercise of such powers will not substantially increase the risk of any loss to Her Majesty.

  • SOR/79-335, s. 16
  • SOR/79-635, s. 1
  • SOR/79-778, s. 1
  • SOR/83-708, ss. 5, 9

 Subject to sections 33 and 34, the Minister may provide insurance on a loan made by a private lender to a manufacturer to assist that manufacturer in restructuring his manufacturing or processing activity if

  • (a) the manufacturer was engaged in a manufacturing or processing activity prior to the first reduction of tariffs or first modification of non-tariff barriers by Canada resulting from the Tokyo Round agreements; and

  • (b) in the opinion of the Minister

    • (i) the manufacturer requires a loan in order to restructure his manufacturing or processing activity for the purpose of improving his position in international competition, and

    • (ii) the manufacturer is seriously injured or threatened with serious injury by reason of increased imports as a direct result of the Tokyo Round agreements.

  • SOR/79-335, s. 16
  • SOR/83-708, s. 9
 
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