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

Marginal note:Prior contractual commitment

• 9 (1) No development incentive may be authorized under this Act for the establishment, expansion or modernization of a facility for which a contractual commitment was made, whether or not the commitment remains in force, before

  • (a) the 1st day of July 1969, or

  • (b) the day on which an application for the development incentive is received by the Minister,

  whichever is the later date.

• Marginal note:Exception

  (2) Notwithstanding subsection (1), where an application for a development incentive is received by the Minister before the 1st day of January 1970 in respect of a facility for which a contractual commitment was made on or after the 1st day of July 1969, provision of the development incentive may be authorized and the development incentive may be paid in accordance with this Act as if the contractual commitment had not been so made.

• Marginal note:Time limitation

  (3) No primary development incentive or secondary development incentive may be provided under this Act

  • (a) for the establishment of a facility that is not brought into commercial production until after the 31st day of December, 1984; or

  • (b) in the case of the expansion or modernization of a facility, if the expanded or modernized facility is not brought into commercial production until after the 31st day of December, 1984.

• Marginal note:Idem

  (3.1) No special development incentive may be provided under this Act

  • (a) for the establishment of a facility that is not brought into commercial production until after the 31st day of December 1973, or

  • (b) in the case of the expansion or modernization of a facility, if the expanded or modernized facility is not brought into commercial production until after the 31st day of December 1973,

  unless, in the opinion of the Minister, the facility or the expanded or modernized facility was not brought into commercial production until after the 31st day of December 1973 for reasons beyond the control of the applicant.

• Marginal note:Insurance

  (3.2) No development incentive may be provided under this Act unless, at the request of the Minister or at such times as are provided by the regulations, the applicant therefor provides to the Minister evidence that the facility in respect of which the development incentive is authorized is insured to the satisfaction of the Minister or in accordance with the regulations.

• Marginal note:Where incentive previously authorized

  (4) No development incentive may be authorized for the modernization of any facility in respect of which a development incentive has previously been authorized under this Act.

Payment of Incentives

Marginal note:Time for payment of development incentives

10 When the Minister is satisfied that a facility for the establishment, expansion or modernization of which a development incentive has been authorized, the amount of which was based on

• (a) the approved capital costs of establishing, expanding or modernizing the facility, or

• (b) the approved capital costs of establishing or expanding the facility and the number of jobs created directly in the operation,

has been brought into commercial production or, in the case of a facility for the expansion or modernization of which a development incentive has been authorized, the expanded or modernized facility has been brought into commercial production, the Minister shall pay to the applicant an amount on account of the development incentive not exceeding 80% of the amount estimated by the Minister to be the amount of the development incentive, and the remainder of the incentive shall be paid in such amounts and within such period,

• (c) not longer than 30 months from the day the facility or the expanded or modernized facility was brought into commercial production, in a case to which paragraph (a) applies and to which paragraph (b) does not apply, or

• (d) not longer than 42 months from the day the facility or the expanded facility was brought into commercial production, in a case to which paragraph (b) applies,

as are prescribed by the regulations.

Marginal note:Where region ceases to be designated

11 Where, before a facility for the establishment of which a development incentive was authorized is brought into commercial production or, in the case of a facility for the expansion or modernization of which a development incentive was authorized, before the expanded or modernized facility is brought into commercial production, the region in which the facility or the expanded or modernized facility is or is to be situated ceases to be a designated region, no amount on account of the development incentive shall be paid under this Act

• (a) unless the facility or the expanded or modernized facility is brought into commercial production within 18 months after the region ceases to be a designated region; or

• (b) in any other case, unless the Minister is satisfied that

  • (i) substantial progress was made in establishing, expanding or modernizing the facility before the region ceased to be a designated region, and

  • (ii) after the region ceased to be a designated region, the establishment, expansion or modernization of the facility was completed with all reasonable speed.

Tax Provisions

Marginal note:Incentive exempt from income tax

12 An amount payable to an applicant on account of a development incentive under this Act is exempt from income tax.

Manpower Services

Marginal note:Condition respecting utilization of manpower services

• 13 (1) It is a condition precedent to the payment of any amount on account of a development incentive that the applicant keep the Canada Employment and Immigration Commission informed of the employment vacancies and requirements of the applicant in the designated region in which the facility for the establishment, expansion or modernization of which the development incentive was authorized is or is to be situated, and that the applicant further, from time to time, at the request of that Commission or as required by the regulations,

  • (a) discuss with the Commission the long-term plans of the applicant for the recruitment and training of employees in the designated region; and

  • (b) participate in and cooperate with the Commission in respect of any programs of the Commission related to employment counselling, placement and manpower adjustment, mobility and training.

• Marginal note:Duration of condition

  (2) The condition prescribed by this section shall be effective for the period ending on the day the final payment on account of the development incentive is made or the 31st day of December, 1984, whichever is later.

Loan Guarantees

Marginal note:Loan guarantees

• 13.1 (1) Upon application therefor to the Minister by an applicant proposing to

  • (a) establish a new facility or to expand or modernize an existing facility, or

  • (b) establish a commercial facility,

  the Minister may, with the concurrence of the Minister of Finance, subject to this Act and upon such terms and conditions as are prescribed by the regulations, authorize the guarantee by Her Majesty in right of Canada of the repayment by the applicant of a proportion of any loan made to him in respect of the establishment, expansion or modernization of the facility or the establishment of the commercial facility and the payment of interest by the applicant on the proportion of the loan so guaranteed.

• Marginal note:Ineligible facilities

  (2) No loan guarantee may be authorized under this Act in respect of the establishment of a new facility or the expansion or modernization of an existing facility unless

  • (a) a development incentive

    • (i) has been or could be authorized under this Act for the establishment of the facility or the expansion or modernization thereof, or

    • (ii) could not be authorized under this Act for the establishment of the facility or the expansion or modernization thereof by reason only that the Minister is of the opinion that the facility could be established, expanded or modernized without the provision of a development incentive; and

  • (b) the Minister is of the opinion that

    • (i) the applicant could not obtain sufficient financing on reasonable terms for the establishment of the facility or the expansion or modernization thereof without such guarantee, and

    • (ii) in the case of the establishment of a new facility, it will be brought into commercial production on or before the 31st day of December, 1984 and, in the case of the expansion or modernization of a facility, the expanded or modernized facility will be brought into commercial production on or before that date.

• Marginal note:Ineligible commercial facilities

  (3) No loan guarantee may be authorized under this Act in respect of the establishment of a commercial facility unless

  • (a) the commercial services to be provided are of a class prescribed by the regulations and the facility will be located within an area prescribed by the regulations for the purposes of this section that is within a designated region; and

  • (b) the Minister is of the opinion that

    • (i) the establishment of the commercial facility would make a significant contribution to economic expansion and social adjustment within the designated region,

    • (ii) the capital costs of the commercial facility will exceed such minimum amount as is prescribed by the regulations,

    • (iii) the applicant could not obtain sufficient financing on reasonable terms for the establishment of the commercial facility without such guarantee, and

    • (iv) the commercial facility will be brought into commercial operation on or before the 31st day of December, 1984.

• Marginal note:Maximum loan a proportion of which may be guaranteed

  (4) No loan guarantee may be authorized under this Act where the amount of the loan to the applicant exceeds 80% of the amount estimated by the Minister to be the total capital costs of establishing, expanding or modernizing the facility or of establishing the commercial facility in respect of which the loan is made minus an amount estimated by the Minister to be the aggregate of any development incentive and all other federal, provincial and municipal grants or other financial assistance given or to be given in connection therewith or for which the applicant would ordinarily have been eligible by reason of the establishment, expansion or modernization of the facility or of the establishment of the commercial facility.

• Marginal note:Insurance

  (5) A loan guarantee authorized under this Act ceases to be of any force or effect if the lender by whom the loan was made fails to provide to the Minister, at his request or at such times as are provided by the regulations, evidence that the facility or commercial facility in respect of which the guaranteed loan was made is insured to the satisfaction of the Minister or in accordance with the regulations.

General

Marginal note:Limitations on agreements under Department of Regional Economic Expansion Act

14 Where, in the opinion of the Minister, a development incentive could be provided under this Act in respect of an undertaking referred to in subsection 10(1) of the Special Areas Act, notwithstanding anything in section 10 of that Act,

• (a) an agreement providing for a guarantee described in paragraph 10(1)(a) of that Act may be entered into only if, in the opinion of the Minister, the approved capital costs of the undertaking would exceed

  • (i) $75,000 for each job that the Minister estimates would be created directly in the undertaking, or

  • (ii) $30,000,000; and

• (b) no agreement providing for a payment described in paragraph 10(1)(b) or (c) of that Act may be entered into in respect of the undertaking.

Regulations

Marginal note:Regulations

15 The Governor in Council may make regulations

• (a) defining for the purposes of this Act the expressions “manufacturing or processing operation”, “initial processing operation”, “resource-based industry” and “commercial operation”;

• (b) prescribing, for any designated region or for any class of manufacturing or processing operation, an amount less than the maximum amount of a development incentive provided for by this Act, which lesser amount shall, in relation to that region or any manufacturing or processing operation of that class, be deemed to be the maximum amount provided for by this Act;

• (b.1) prescribing any one or more development incentives that may not be authorized by the Minister in respect of facilities within a designated region or regions prescribed for the purposes of this paragraph;

• (c) prescribing classes of fixed assets the value of which may be included in the capital to be employed in the operation or in the total capital costs of a facility or commercial facility;

• (d) respecting the determination of

  • (i) the working capital required for the purposes of any class of operation, and

  • (ii) 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;

• (e) for determining whether a product is a product not previously manufactured or processed in an operation;

• (f) respecting the determination of the amount or present value of any federal, provincial or municipal assistance given or to be given in respect of a facility or commercial facility;

• (f.1) prescribing terms and conditions on which a guarantee by Her Majesty in right of Canada may be authorized pursuant to section 13.1, including terms and conditions relating to the payment to Her Majesty by any lender of a guarantee fee;

• (f.2) prescribing the maximum proportion of any loan the repayment of which and the payment of interest on which may be guaranteed pursuant to section 13.1;

• (f.3) prescribing the nature and extent of the insurance to be maintained in force on any facility in respect of which a development incentive is authorized or on any facility or commercial facility in respect of which a loan guarantee is authorized under this Act and the times at which evidence of such insurance shall be provided to the Minister;

• (g) respecting the determination of any matter that under this Act is to be determined by the Minister;

• (h) respecting any other matter or thing that under this Act is to be prescribed by the regulations; and

• (i) generally for carrying into effect the purposes and provisions of this Act.