Regional Development Incentives Act (R.S.C. 1970, c. R-3)

Short Title

Marginal note:Short title

1 This Act may be cited as the Regional Development Incentives Act.

Interpretation

Marginal note:Definitions

2 In this Act

applicant

applicant means an applicant for a development incentive or an applicant for a loan guarantee under this Act; (requérant)

approved capital costs

approved capital costs means the capital costs, as determined by the Minister, of

• (a) establishing, expanding or modernizing a facility in respect of which a development incentive is authorized or a loan guarantee is authorized under this Act, or

• (b) establishing a commercial facility in respect of which a loan guarantee is authorized under this Act; (coût d’immobilisation approuvé)

capital to be employed in the operation

capital to be employed in the operation means, in relation to the establishment or expansion of a facility, the aggregate of

• (a) the approved capital costs,

• (b) the value, as accepted by the Minister, of the fixed assets that are to be employed in the operation and that are not included in the approved capital costs, and

• (c) such amount in respect of the working capital required for the purposes of the operation as is approved by the Minister; (capital affecté à l’entreprise)

commercial facility

commercial facility means the structures, machinery and equipment that constitute the necessary components of a commercial operation; (établissement commercial)

designated region

designated region means a region designated pursuant to section 3; (région désignée)

development incentive

development incentive means a primary development incentive, a secondary development incentive or a special development incentive described in section 4; (subvention au développement)

facility

facility means the structures, machinery and equipment that constitute the necessary components of a manufacturing or processing operation, other than an initial processing operation in a resource-based industry; (établissement)

Minister

Minister, in relation to any class of matters to which this Act extends in any province or region of a province, means such member of the Queen’s Privy Council for Canada as is designated by the Governor in Council as the Minister for the purposes of this Act in relation to that class of matters in that province or region of a province; (ministre)

operation

operation means,

• (a) in relation to a facility, the manufacturing or processing operation of which the facility constitutes the necessary components, and

• (b) in relation to a commercial facility, the commercial undertaking of which the commercial facility constitutes the necessary components; (entreprise)

total capital costs

total capital costs means

• (a) the approved capital costs,

• (b) the value, as accepted by the Minister, of the fixed assets that are to be employed in the operation and that are not included in the approved capital costs, and

• (c) the value, as accepted by the Minister, of the capitalized expenses incurred in bringing a new facility or commercial facility into commercial production or operation or in bringing an expanded or modernized facility into commercial production. (coût d’immobilisation total)

Designation of Regions

Marginal note:Designation of regions

• 3 (1) Subject to subsection (2), the Governor in Council, after consultation with the government of any province or provinces, may for the purposes of this Act by order designate as a designated region, for the period set out in the order, any region comprising the whole of that province or those provinces, or any portion thereof not less than 12 500 square kilometres in size, that is determined to require special measures to facilitate economic expansion and social adjustment.

• Marginal note:Criteria for designation

  (2) A region may be designated pursuant to subsection (1) only if the Governor in Council, upon the report of the Minister, is satisfied that

  • (a) existing opportunities for productive employment in the region are exceptionally inadequate; and

  • (b) the provision of development incentives under this Act for the establishment of new facilities or the expansion or modernization of existing facilities in the region will make a significant contribution to economic expansion and social adjustment within the region.

Development Incentives

Authorization of Incentives

Marginal note:Incentives for new and existing facilities

4 Upon application therefor to the Minister by an applicant proposing to establish a new facility or to expand or modernize an existing facility in a designated region, the Minister may authorize the provision to the applicant, subject to this Act and upon such terms and conditions as are prescribed by the regulations, of

• (a) a primary development incentive by way of financial assistance to the applicant for the establishment, expansion or modernization of the facility;

• (b) in the case of a proposal to establish a new facility or to expand an existing facility to enable the manufacturing or processing of a product not previously manufactured or processed in the operation, a secondary development incentive by way of additional financial assistance to the applicant for the establishment of the new facility or the expansion of the existing facility for that purpose; and

• (c) a special development incentive by way of financial assistance to the applicant for the establishment, expansion or modernization of the facility.

Maximum Amounts

Marginal note:Maximum primary development incentive

• 5 (1) The amount of a primary development incentive shall be based on the approved capital costs of establishing, expanding or modernizing the facility in respect of which the primary development incentive is authorized and shall not exceed

  • (a) 20% of those approved capital costs, or

  • (b) $6,000,000,

  whichever is the lesser amount.

• Marginal note:Maximum secondary development incentive

  (2) The amount of a secondary development incentive shall be based on the approved capital costs of establishing or expanding the facility in respect of which the secondary development incentive is authorized and on the number of jobs created directly in the operation and shall not exceed

  • (a) 5% of those approved capital costs,

  plus

  • (b) $5,000 for each job determined by the Minister to have been created directly in the operation.

• Marginal note:Maximum special development incentive

  (3) The amount of a special development incentive shall be based

  • (a) on the approved capital costs of establishing, expanding or modernizing the facility in respect of which the special development incentive is authorized, or

  • (b) where such incentive is authorized in respect of a new facility or for the expansion of an existing facility to enable the manufacturing or processing of a product not previously manufactured or processed in the operation, on the approved capital costs of establishing or expanding the facility and on the number of jobs created directly in the operation,

  and shall not exceed,

  • (c) in a case to which paragraph (a) applies and to which paragraph (b) does not apply, 10% of those approved capital costs, or

  • (d) in a case to which paragraph (b) applies,

    • (i) 10% of those approved capital costs,

    plus

    • (ii) $2,000 for each job determined by the Minister to have been created directly in the operation.

• Marginal note:Maximum incentive or combined incentive in certain cases

  (4) No development incentive or combination of development incentives authorized in respect of a new facility or for the expansion of an existing facility to enable the manufacturing or processing of a product not previously manufactured or processed in the operation shall exceed the lesser of

  • (a) $30,000 for each job determined by the Minister to have been created directly in the operation, and

  • (b) one-half of the capital to be employed in the operation.

Determination of Amount of Incentive

Marginal note:Criteria for determining amount of incentive

6 Subject to this Act, the Minister may authorize the provision of a development incentive in the maximum amount provided for by this Act or in any lesser amount, and in determining whether to authorize the provision of a development incentive in the maximum amount so provided for or in any lesser amount, the Minister shall take into consideration the following factors:

• (a) the extent of the contribution that the establishment, expansion or modernization of the facility would make to economic expansion and social adjustment in the designated region;

• (b) the probable cost to provincial, municipal or other public authorities of providing services or utilities required for or in connection with the facility;

• (c) the amount or present value of any federal, provincial or municipal assistance given or to be given, other than under this Act, in respect of the establishment, expansion or modernization of the facility;

• (d) the probable cost of preventing or eliminating any significant air, water or other pollution that could result from the establishment, expansion or modernization of the facility;

• (e) in the case of any proposal to establish or expand a facility constituting the necessary components of a processing operation, whether the resources to be exploited would be adequate, on a sustained-yield basis, to support the facility together with existing facilities that utilize the same resources; and

• (f) such other factors relating to the economic and social benefits and costs of the facility as the Minister considers relevant.

Ineligible Facilities

Marginal note:Ineligible facilities

• 7 (1) No development incentive may be authorized under this Act for the establishment, expansion or modernization of any facility if, in the opinion of the Minister,

  • (a) it is probable that the facility would be established, expanded or modernized without the provision of such an incentive; or

  • (b) the establishment, expansion or modernization of the facility would not make a significant contribution to economic expansion and social adjustment within the designated region.

• Marginal note:Idem

  (2) No development incentive may be authorized under this Act for the establishment, expansion or modernization of any facility the capital costs of which would not, in the opinion of the Minister, exceed such minimum amount as is prescribed by the regulations.

Limiting Provisions

Marginal note:Servicing expenditures as approved capital costs

• 8 (1) In calculating the amount of any development incentive for the establishment, expansion or modernization of any facility, there may be included in the approved capital costs of establishing, expanding or modernizing the facility any capital expenditures made by the applicant to provincial, municipal or other public authorities for the provision of services or utilities required for or in connection with the facility, if the Minister is of the opinion that the expenditures were reasonably and responsibly made, but no such expenditures shall be so included in excess of 20% of the total amount of the approved capital costs of establishing, expanding or modernizing the facility, after deducting from those approved capital costs all federal, provincial and municipal grants or other financial assistance made or to be made in connection therewith or for which the applicant would ordinarily have been eligible by reason of the establishment, expansion or modernization of the facility.

• Marginal note:Limitation re capital to be employed in the operation

  (2) In calculating the amount of any secondary development incentive for the expansion of any facility, there may be included in the capital to be employed in the operation only such part of that capital as is to be employed in connection with the manufacturing or processing of a product not previously manufactured or processed in the operation.