Atlantic Enterprise Loan Insurance Regulations (SOR/86-524)

Regulations are current to 2014-10-15

INSURANCE

 The Minister may provide insurance to a lender on a loan made by the lender to an applicant under a loan agreement if

  • (a) the loan is for an amount of not less than $100,000 and the term of the loan does not exceed 15 years;

  • (b) the total amount of the loan is to be used to finance a project or Atlantic project;

  • (c) except as provided in section 4, the loan is to be applied only to capital costs;

  • (d) the lender acquires enforceable security for the repayment of the loan by way of a security interest in a form consistent with standard banking practice;

  • (e) the applicant is unable to obtain loan financing on reasonable terms without loan insurance provided to the lender by the Minister;

  • (f) the project or Atlantic project would not be likely to be carried out within the proposed time or scope or in the proposed location if no loan insurance were provided to the lender by the Minister;

  • (g) the project or Atlantic project and the applicant’s existing commercial operations are or will become commercially viable within reasonable bounds of risk;

  • (h) in the case of a project, the project would constitute a significant contribution to the economic benefit of Canada and the designated region or, in the case of an Atlantic project, the Atlantic project would constitute a significant contribution to the economic benefit of Canada and the provinces of Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland; and

  • (i) all other requirements of these Regulations are met.

  • SOR/87-34, s. 2;
  • SOR/88-134, ss. 2, 6.

 Notwithstanding paragraph 3(c), the Minister may, with the concurrence of the Minister of Finance, provide insurance on a loan for working capital necessary to carry out a project or Atlantic project if

  • (a) all other requirements of section 3 are met; and

  • (b) such insurance is essential to the viability of the project or Atlantic project.

  • SOR/88-134, s. 6.
  •  (1) The Minister may insure a loan made in respect of a project in the tourism sector as described in item 11 of the schedule if the quality and scope of the project are such that it would attract international or interprovincial tourists.

  • (2) The Minister may insure a loan made in respect of an Atlantic project in the tourism sector as described in item 11 of the schedule if the quality and scope of the Atlantic project are such that it would attract or provide services for tourists.

  • SOR/88-134, s. 3.

 Where a loan is made in respect of the establishment, expansion, modernization or renovation of a facility designed to serve food or drink, no insurance shall be provided under these Regulations in respect of that loan unless that facility

  • (a) constitutes part of or supports a tourism facility; or

  • (b) is of a sufficiently thematic or unique nature to constitute a tourism attraction in its own right.