Enterprise Development Regulations (C.R.C., c. 969)

Insurance to the Aircraft Industry

35 In sections 36 to 41,

private lender

private lender means a lender, lessor or vendor approved by the Minister that provides financing under loans, leases or conditional sales contracts other than

• (a) the Government of Canada,

• (b) the government of any province of Canada,

• (c) an agency of any government referred to in paragraph (a) or (b) or any company that is effectively controlled by any such government or any agency thereof, or

• (d) any municipal corporation; (prêteur privé)

privatization date

privatization date means the date on which all shares in The de Havilland Aircraft of Canada, Limited owned by the Canada Development Investment Corporation are sold to a third party. (date de privatisation)

36 The Minister may provide insurance on the financial obligations to a private lender incurred by a purchaser or other person in Canada or the United States if, in the opinion of the Minister,

• (a) the purchaser or other person requires financing under a loan, lease or conditional sales contract in order to acquire the use or ownership of a de Havilland DHC-7 or DHC-8 aircraft;

• (b) the purchaser or other person is unable to obtain sufficient financing on reasonable terms unless the financial obligation is insured by the Minister; and

• (c) the manufacturer of a de Havilland DHC-7 or DHC-8 aircraft meets criteria in respect of

  • (i) the level of Canadian material and labour content as set out in “EDC at Your Service”, Number 7, published in February, 1984 by the Export Development Corporation, and

  • (ii) industrial benefits to Canada as set out in “Canadian Capital Goods Exports and EDC Financing: An Economic Assessment”, published by the Export Development Corporation, dated November, 1982.

Amount of Insurance

• 37 (1) Insurance provided by the Minister pursuant to section 25, 28 or 29 shall not exceed 90 per cent of the amount of the loan in respect of which it is provided.

• (2) Insurance provided by the Minister pursuant to section 36 shall not exceed 90 per cent of the amount of the financial obligations of the purchaser or other person under the loan, lease or conditional sales contract in respect of which it is provided.

• (3) Notwithstanding subsection (2), where the manufacturer of a de Havilland DHC-7 or DHC-8 aircraft has agreed to indemnify Her Majesty to the extent of ten per cent of the total liability of Her Majesty under an agreement for insurance provided after March 13, 1992 under these Regulations to a purchaser or other person who has acquired the use or ownership of a de Havilland DHC-7 or DHC-8 aircraft, insurance is provided under section 36 for the full amount of the financial obligation of the purchaser or other person under the loan, lease or conditional sales contract in respect of which the insurance is provided.

• (4) Any insurance provided after March 13, 1992 under section 36 for the benefit of a person who acquires the use of a de Havilland DHC-7 or DHC-8 aircraft in Canada under a loan, lease or conditional sales contract shall be subject to the provision by a person (other than a person who has acquired the use of a de Havilland DHC-7 or DHC-8 aircraft under a loan, lease or conditional sales contract) of insurance or self insurance in the amount of not less than 10 per cent of the financial obligation of that person or of the person who acquires the use of that aircraft under the loan, lease or conditional sales contract.

Application for Insurance

38 A private lender who wishes the Minister to provide insurance on a loan or other financial obligation in accordance with these Regulations shall make application therefor to the Minister and shall provide such information relating to the application as the Minister may require.

38.1 [Revoked, SOR/79-335, s. 16]

Reduction of Insurance and Insurance Fee

• 39 (1) The amount of any insurance provided by the Minister pursuant to these Regulations may be reduced at the request of the private lender at such times and in such manner as is specified by the Minister.

• (2) The insurance fee payable by a private lender shall be one per cent per annum of the amount of insurance in force from time to time and shall be paid in advance to the Minister in semi-annual instalments.

• (3) Notwithstanding subsection (2), the Minister may, in respect of insurance provided pursuant to sections 26 to 28, waive or vary the amount and terms of payment of the insurance fee.

• (4) If the amount of a loan made by a private lender is advanced in periodic advances, the Minister may, if required by the private lender, provide insurance pursuant to these Regulations on such advances.

• (5) Notwithstanding subsection (2), the Minister may, in respect of insurance provided to a lender pursuant to section 36, postpone the date of payment of the insurance fee, if, in the opinion of the Minister, the purchaser or other person would be otherwise unable to acquire the de Havilland DHC-7 or DHC-8 aircraft.

• (6) Notwithstanding subsection (2), the annual insurance fee payable after the privatization date on any insurance provided by the Minister under section 36 is

  • (a) where the insurance covers 50 per cent or less of the financial obligation of the purchaser or other person under the loan, lease or conditional sales contract in respect of which the insurance was provided, the product obtained by multiplying 0.0025 by the total amount of insurance provided by the Minister; and

  • (b) where the insurance covers more than 50 per cent of the financial obligation referred to in paragraph (a), the aggregate of

    • (i) the product obtained by multiplying 0.0025 by the total amount of insurance provided by the Minister, and

    • (ii) the product obtained by multiplying

      • (A) 0.0000625

      by

      • (B) the number of percentage points of the coverage of the insurance provided by the Minister that exceeds 50 per cent

      by

      • (C) the total amount of insurance provided by the Minister.

Payment of Insurance

40 Subject to section 40.1, where a private lender has demanded repayment of a loan, or has given notice of default under a lease or conditional sales contract, in respect of which insurance has been provided pursuant to these Regulations, the amount payable to the private lender shall not exceed the lesser of

• (a) the amount of insurance in effect on the date of such demand or notice; and

• (b) in the case of

  • (i) a loan or other financial obligation insured pursuant to section 25, 29 or 36, 90 per cent of the loss incurred by the private lender, and

  • (ii) a loan insured pursuant to section 26, 27, 30 or 32, 100 per cent of the loss incurred by the private lender.

40.1 Where a private lender has demanded repayment of a loan or has given notice of default under a lease or conditional sales contract, in respect of which insurance has been provided before March 14, 1992 pursuant to these Regulations, the amount payable to the private lender shall not exceed the lesser of

• (a) the aggregate of the amount of the insurance provided by the Minister and the amount of the insurance provided by another person pursuant to these Regulations that is in effect on the date of the demand or notice, and

• (b) in the case of a loan or other financial obligation insured pursuant to section 36, one hundred per cent of the loss incurred by the private lender.

41 Where a private lender has demanded repayment of a loan or has given notice of default under a lease or conditional sales contract in respect of which insurance has been provided by the Minister pursuant to subsection 37(3), the amount payable to the private lender shall not exceed the amount of insurance in effect on the date of such demand or notice.

42 Notwithstanding section 40, where a private lender has demanded repayment of a loan in respect of which insurance has been provided by the Minister pursuant to section 28, the amount payable to the private lender shall not exceed the lesser of

• (a) the amount of insurance in effect on the date of such demand; and

• (b) 90 per cent of the loss incurred by the private lender excluding any amount recovered or recoverable under the guarantee obtained by the private lender in accordance with subparagraph 28(3)(a)(i).

PART IVStock Options

• 43 (1) The Minister may obtain a stock option to purchase capital stock of a company on behalf of Her Majesty, where, in the opinion of the Minister, it is advisable to obtain the stock option as a condition of or in connection with a loan or insurance administered by the Minister pursuant to subsection 4(1).

• (2) Where a stock option to purchase capital stock of a company is acquired by the Minister pursuant to subsection (1) or is administered by the Minister pursuant to subsection 4(1), the Minister may exercise or assign the stock option on behalf of Her Majesty if, in the opinion of the Minister,

  • (a) the value of the capital stock of the company has increased as a result of the assistance provided; and

  • (b) the exercise or assignment of such option would permit Her Majesty to benefit from the increased value of the capital stock of the company.

• (3) Where capital stock of a company is acquired by the Minister pursuant to subsection (2) or is administered by the Minister pursuant to subsection 4(1), the Minister shall, subject to the following conditions, sell or dispose of the capital stock as soon thereafter as it is in the interest of Her Majesty to do so:

  • (a) the capital stock shall be sold at such price and on such terms as will, in the opinion of the Minister, provide maximum benefit to Her Majesty; and

  • (b) when the Minister receives an acceptable offer to purchase any such capital stock he shall notify the person from whom the capital stock was obtained and that person shall have the assignable right, during the next seven business days following the day the notice was given, to elect to purchase the capital stock at the price and on the terms and conditions specified in the offer.

• (4) Where the Minister intends to assign a stock option acquired pursuant to subsection (1) or administered pursuant to subsection 4(1) the Minister, prior to assigning the stock option, shall give notice of any intended assignment thereof to the person from whom the option was acquired and that person shall have the assignable right, during the next seven business days following the day the notice was given, to elect to purchase the stock option at the same price and on the same terms and conditions as the intended assignment.

PART VContributions

44 The Minister shall administer contributions made in accordance with terms and conditions approved by Treasury Board

• (a) in respect of special authorities, by

  • (i) T.B. 758051 dated June 15, 1978,

  • (ii) T.B. 758166 dated June 29, 1978,

  • (iii) T.B. 767837 dated November 29, 1979 as amended by T.B. 799107 dated July 31, 1985,

  • (iv) T.B. 769206 dated January 25, 1980,

  • (v) T.B. 774918 dated January 29, 1981,

  • (vi) T.B. 780230 dated December 17, 1981,

  • (vii) T.B. 784473 dated August 27, 1982,

  • (viii) T.B. 788476 dated June 22, 1983,

  • (ix) T.B. 784863 dated October 15, 1982, and

  • (x) T.B. 788706 dated June 16, 1983; and

• (b) in respect of general authorities, by

  • (i) T.B. 748284 dated March 17, 1977, as amended by T.B. 763854 dated March 29, 1979,

  • (ii) T.B. 771519 dated July 3, 1980,

  • (iii) T.B. 776183 dated March 12, 1981,

  • (iv) T.B. 777458 dated June 4, 1981,

  • (v) T.B. 778288 dated December 17, 1981,

  • (vi) T.B. 782926 dated June 17, 1982,

  • (vii) T.B. 784945 dated October 22, 1982,

  • (viii) T.B. 785132 dated October 22, 1982,

  • (ix) T.B. 786640 dated March 10, 1983, and

  • (x) T.B. 788332 dated May 26, 1983.