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

Act current to 2020-11-17

Tax Provisions

Marginal note:Incentive exempt from income tax

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

  • 1968-69, c. 56, s. 12

Manpower Services

Marginal note:Condition respecting utilization of manpower services

  •  (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.

  • R.S., 1970, c. R-3, s. 13
  • 1974-75-76, c. 84, s. 2
  • 1976-77, c. 54, s. 74
  • 1980-81-82-83, c. 14, s. 2

Loan Guarantees

Marginal note:Loan guarantees

  •  (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.

  • R.S., 1970, c. 25(2nd Supp.), s. 7
  • 1974-75-76, c. 84, ss. 3, 4
  • 1980-81-82-83, c. 14, s. 3

General

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

 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.

  • R.S., 1970, c. R-3, s. 14
  • 1980-81-82-83, c. 167, s. 34

Regulations

Marginal note:Regulations

 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.

  • R.S., 1970, c. R-3, s. 15
  • R.S., 1970, c. 25(2nd Supp.), s. 8
 
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