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.