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

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.