General Adjustment Assistance Regulations (C.R.C., c. 971)

Short Title

1 These Regulations may be cited as the General Adjustment Assistance Regulations.

Interpretation

2 In these Regulations,

Board

Board means the General Adjustment Assistance Board established by section 3; (Commission)

consulting assistance

consulting assistance means technical and professional services, including advice from a consultant acceptable to the Board, in respect of the operations of a manufacturer or other person eligible for assistance under these Regulations; (aide consultative)

letter of credit

letter of credit means a letter, document or other instrument issued by a private lender prior to January 1, 1978 to secure or guarantee the financial aspects of a trade transaction; (lettre de crédit)

manufacturer

manufacturer means a person, firm or corporation in Canada engaged in a manufacturing or processing activity; (fabricant)

manufacturing or processing activity

manufacturing or processing activity means an activity whereby any goods, products, commodities or wares

• (a) are made, fabricated or refined out of any raw material or other substance, or combination thereof,

• (b) are converted or rebuilt, but not repaired, or

• (c) are made by causing any raw material or other substance to undergo a significant chemical, biochemical or physical change including change that preserves or improves the keeping qualities of that raw material or other substance but excluding change by growth or decay; (travaux de fabrication ou de traitement)

private lender

private lender means any lender approved by the Board 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 in the opinion of the Board is effectively controlled by any such government or any agency thereof, or

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

restructure

restructure and restructuring means a change that, in the opinion of the Board, is significant in the operations of a manufacturer or other person eligible for assistance under these Regulations, with respect to its or the person's products, methods of production, markets or management procedures and, if directly related to such operations, may refer to the acquisition of working capital or the acquisition, construction, or conversion of machinery, equipment, buildings, land or other facilities; (restructuration)

stock option

stock option means

• (a) an agreement pursuant to which Her Majesty acquires an unconditional assignable option to purchase shares in the capital stock of a corporation upon terms and conditions set forth in the agreement, and

• (b) Her Majesty's rights under that agreement. (option sur le capital-actions)

General Adjustment Assistance Board

• 3 (1) A committee is hereby established to be known as the General Adjustment Assistance Board consisting of

  • (a) three members, not being members of the Public Service within the meaning of the Public Service Employment Act, to be appointed by the Governor in Council, one of whom shall be designated by the Governor in Council as Chairman of the Board and one of whom shall be designated by the Governor in Council as Vice-Chairman of the Board; and

  • (b) four members who are members of the Public Service within the meaning of the Public Service Employment Act, one member to be designated by each of the Ministers of Industry, Trade and Commerce, Finance, Employment and Immigration and Regional Economic Expansion, from a senior position within his Department.

• (2) The Chairman and any other three members of the Board constitute a quorum for the purpose of carrying out any duty or performing any function assigned to the Board under these Regulations.

• (3) The Vice-Chairman of the Board may exercise and perform all or any of the duties and functions of the Chairman in the event of the absence or incapacity of the Chairman, if the office of the Chairman is vacant, or at the request of the Chairman.

• (4) Each of the Ministers of Industry, Trade and Commerce, Finance, Employment and Immigration and Regional Economic Expansion shall designate one person holding a senior position in his Department to exercise all powers, duties and functions of the member designated by him pursuant to paragraph (1)(b) in the event of the absence or temporary inability to act of such member.

• (5) The Governor in Council shall determine the emolument to be paid and the expenses to be allowed to the members of the Board who are not members of the Public Service.

• 4 (1) The Board shall administer the insurance available to a private lender, the loans, the grants for consulting assistance and the stock options under these Regulations.

• (2) In carrying out its duties and functions, the Board shall use the existing staff and facilities of the Department of Industry, Trade and Commerce and, to the extent deemed necessary by the Board, may use such other services of the Government of Canada as are available.

• (3) The Board may authorize the formation of a subcommittee to be known as the Executive Committee, consisting of three members of the Board, one of whom shall be the Chairman or the Vice-Chairman of the Board, one of whom shall be the member of the Board designated by the Minister of Industry, Trade and Commerce and one of whom shall be the member of the Board designated by the Minister of Finance.

• (4) The Executive Committee established pursuant to subsection (3) may

  • (a) determine whether a manufacturer or other person or group of persons is eligible for insurance on a loan or a letter of credit under these Regulations;

  • (b) determine whether insurance on a loan or a letter of credit made or issued to a manufacturer or other person or group of persons may be provided pursuant to these Regulations;

  • (c) authorize the making of loans not exceeding $250,000 pursuant to subsections 9(3) and (4);

  • (d) authorize the providing of insurance of loans not exceeding $250,000 pursuant to subsections 14(5) and (6);

  • (e) in the event of default on the part of a borrower

    • (i) call any loan made pursuant to section 9,

    • (ii) consent to the calling by a private lender of any loan insured pursuant to section 14, and

    • (iii) direct a private lender to call a loan insured pursuant to section 14 or to take other appropriate action to protect Her Majesty's interest in the assets securing such a loan;

  • (f) authorize amendments to be made to the provisions of securities obtained to secure repayment of

    • (i) a loan made pursuant to section 9,

    • (ii) a loan insured pursuant to section 14, or

    • (iii) a letter of credit insured pursuant to section 14

  for the purpose of improving or protecting Her Majesty's interest therein; and

  • (g) authorize the payment of grants for consulting assistance pursuant to section 18.

• 5 (1) The Board may, on behalf of Her Majesty, enter into and execute such agreements as the Board considers necessary to give effect to these Regulations.

• (2) The Board may, in respect of any loan, insurance of a loan, insurance of a letter of credit, grant for consulting assistance or stock option made, effected or obtained under these Regulations, require such information and documentation and make such stipulations as it deems appropriate in relation to the loan, insurance of a loan, insurance of a letter of credit, grant for consulting assistance or stock option.

6 Subject to these Regulations, the Board may make such rules as may be necessary for the conduct of its meetings, the management of its affairs and the performance of its duties.

7 The Board shall do everything that in its opinion is necessary or appropriate to facilitate the efficient operation of the program contemplated by these Regulations and to minimize any loss suffered or threatened to be suffered by Her Majesty arising out of any insurance provided or any loan made by the Board.

8 The Board shall keep such records and books and make such reports on its activities from time to time as the Minister of Industry, Trade and Commerce may require.

Loans Made by the Board

• 9 (1) Where, in the opinion of the Board, a manufacturer

  • (a) requires a loan in order to adapt efficiently to competition from goods imported at such prices, in such quantities or under such conditions as to cause or threaten to cause him serious injury, and

  • (b) is unable to obtain sufficient financing on reasonable terms from other sources for the purposes of making the necessary adjustments,

  a loan may be made to the manufacturer by the Board on behalf of Her Majesty for the purpose of assisting the manufacturer to restructure his operations.

• (2) Where, in the opinion of the Board, a manufacturer

  • (a) requires a loan in order to adjust to changes in conditions affecting his access to foreign markets, which conditions are attributable to the imposition by a country other than Canada of a temporary import surtax or to the taking by such country of other actions having a like effect, and

  • (b) is unable to obtain sufficient financing on reasonable terms from other sources for the purpose of assisting the manufacturer to adjust to the changes described in paragraph (a),

  a loan may be made to the manufacturer by the Board on behalf of Her Majesty for the purpose of assisting the manufacturer to make such changes.

• (3) Where a loan has been made or insured or a letter of credit has been insured pursuant to these Regulations and a trustee, receiver, receiver-manager or other person has been authorized by law to carry on the business of the borrower, a loan may be made by the Board on behalf of Her Majesty to such trustee, receiver, receiver-manager or other person, for the purpose of protecting Her Majesty's interest in the assets securing the loan previously made or insured or letter of credit insured.

• (4) Where a loan has been made or insured or a letter of credit has been insured pursuant to these Regulations, a loan may be made by the Board on behalf of Her Majesty to the borrower or person to whom the letter of credit has been issued for the purpose of protecting Her Majesty's interest in the assets securing the loan previously made or insured or letter of credit insured.

• (5) Where, pursuant to these Regulations, the Board has authorized the provision of insurance on a loan by a private lender not exceeding $200,000 to a manufacturer or other person in Canada, the Board may, on behalf of Her Majesty, make a loan in an amount not exceeding, in the aggregate, 50 per cent of the amount of the loan to the manufacturer or other person on the following conditions:

  • (a) a loan may be made pursuant to this subsection only when a private lender has agreed to make the loan on which the Board has authorized the provision of insurance on the terms and conditions under which the Board authorized such insurance;

  • (b) a loan made pursuant to this subsection shall be subject to interest at a rate of not less than the aggregate of the interest to be charged by the private lender on the insured loan and the insurance fee thereon;

  • (c) a loan may be made pursuant to this subsection only where, in the opinion of the Board, such loan is essential to prevent a serious delay in implementing the project for which insurance on the loan by the private lender was authorized under these Regulations;

  • (d) a loan made pursuant to this subsection shall be repaid on the date of the first disbursement of the loan advanced by the private lender or on such earlier date as the Board may determine; and

  • (e) the Board shall specify the date on which the loan shall be repaid in the event that a disbursement to repay the loan advanced hereunder has not been made by the private lender within a reasonable time as established by the Board.

• 10 (1) A manufacturer or other person who requires a loan under these Regulations shall make application therefor to the Board and shall provide such information relating to the application as the Board may require.

• (2) Where an application for a loan is approved by the Board, the applicant shall enter into a loan agreement with Her Majesty and that agreement shall, subject to these Regulations, be in such form and contain such provisions as the Board considers necessary.

• (3) The amount of a loan made under these Regulations shall be advanced to the manufacturer or other person upon the requisition of the Board.

• 11 (1) Subject to subsection 9(5)(b), the rate of interest for any loan made under these Regulations shall be determined as of the day the application is approved by the Board and shall be that rate within the prescribed range described in subsection (2) that the Board deems reasonable in the circumstances.

• (2) The prescribed range of rates of interest for loans made under these Regulations shall be not less than the rate of interest charged by the Government of Canada to crown corporations for loans of a similar term nor more than 2 1/4 per cent above that rate.