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

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.