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

• 12 (1) A loan made under these Regulations shall be for such term, not exceeding 20 years, as maybe fixed by the Board.

• (2) The whole or any part of a loan made under these Regulations may, in such manner as may be prescribed by the Board, be repaid in advance of the due date of repayment without notice or bonus.

• 13 (1) Where, in the opinion of the Board, it is advisable to obtain security for the repayment of a loan made under these Regulations, the Board shall obtain and hold such security as it deems proper.

• (2) The Board may surrender, retransfer or reconvey any security obtained by it under subsection (1) in exchange for other security.

• (3) Where, in the opinion of the Board, it is advisable to obtain a stock option as a condition of the making of a loan under these Regulations, the Board shall obtain that stock option upon such terms and conditions as it deems proper.

• (4) Where a stock option for the purchase of capital stock in a corporation was acquired by the Board in connection with the provision of insurance on a loan or a letter of credit made to that corporation pursuant to these Regulations, the Board may exercise or assign such option on behalf of Her Majesty if, in the opinion of the Board,

  • (a) the value of the capital stock of the corporation has increased as a result of the assistance provided under these Regulations; and

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

• (5) Where capital stock in a corporation has been acquired by the Board on behalf of Her Majesty pursuant to subsection (4), the Board shall sell or dispose of such capital stock as soon thereafter as it is in the economic interest of Her Majesty to do so on the following conditions:

  • (a) the capital stock shall be sold at such price and upon such terms as will provide maximum benefit to Her Majesty; and

  • (b) when the Board receives a bona fide offer to purchase the capital stock that the Board is willing to accept, the Board shall give notice of such offer to the person from whom the capital stock was acquired pursuant to the exercise of the option by the Board and that person shall have the assignable right, during the next 7 business days after the Board has given such notice, to elect to purchase the shares for the same price and upon the same terms and conditions as set out in the said offer.

• (6) Where a stock option has been acquired by Her Majesty pursuant to subsection (3) or (4) and the Board wishes to assign such option, the Board shall, prior to assigning such option, give notice of the intended assignment to the person from whom the option was acquired and that person shall have the assignable right during the next 7 business days after the Board has given such notice to acquire that option upon the same terms and conditions as the intended assignment.

Insurance of Loans Made by Private Lenders

• 14 (1) Where, in the opinion of the Board, a manufacturer or a person who is about to engage in a manufacturing or processing activity in Canada

  • (a) requires a loan in order to

    • (i) take advantage of a new opportunity for the production of goods in Canada which will face significant international trade competition, or

    • (ii) restructure his operations in a manner that will significantly improve his position in meeting international trade competition, and

  • (b) is unable to obtain sufficient financing on reasonable terms unless the loan is insured by the Board,

  the Board may, on behalf of Her Majesty, provide insurance on a loan made to such manufacturer or person by a private lender for the purposes stated in this subsection.

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

  • (a) requires a loan in order to

    • (i) 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, or

    • (ii) 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 unless the loan is insured by the Board,

  the Board may, on behalf of Her Majesty, provide insurance on a loan made to such manufacturer by a private lender for the purposes stated in this subsection.

• (3) Where, in the opinion of the Board, a person engaged or about to engage in a business in Canada to provide services directly or indirectly to manufacturers in Canada

  • (a) requires a loan to establish or restructure operations in order to significantly improve the ability of manufacturers in Canada in meeting international trade competition, and

  • (b) is unable to obtain sufficient financing on reasonable terms unless the loan is insured by the Board,

  the Board may, on behalf of Her Majesty, provide insurance on a loan made to such person by a private lender for the purposes stated in this subsection.

• (4) Where a person established to provide directly or indirectly marketing, financial or other services that, in the opinion of the Board, are essential to the operation of a manufacturer who is entitled to assistance under these Regulations

  • (a) requires a loan in order to establish or restructure his operations,

  • (b) has submitted a comprehensive plan setting out the services to be provided, and

  • (c) is unable to obtain such a loan on reasonable terms without the insurance provided for in this subsection,

  the Board may, on behalf of Her Majesty, provide insurance on such a loan to such person by a private lender.

• (5) Where a general contractor, consulting engineer, builder, architect or manufacturer in Canada or any group of such persons

  • (a) requires a letter of credit as a bid or performance surety in connection with a contract to be performed outside Canada or the United States by that contractor, engineer, builder, architect manufacturer or group, and

  • (b) is unable to obtain sufficient financing on reasonable terms without the insurance provided for in this subsection,

  the Board may, on behalf of Her Majesty, if such contract involves, in the opinion of the Board, a significant amount of Canadian content, provide insurance on such letter of credit issued to that contractor, engineer, builder, architect, manufacturer or group by a private lender.

• (6) Where a general contractor, consulting engineer, builder, architect or manufacturer in Canada or any group of such persons

  • (a) requires insurance on a loan for the repayment of any financial obligations incurred under a letter of credit previously insured by the Board, and

  • (b) is unable to obtain sufficient financing on reasonable terms for the purpose referred to in paragraph (a),

  the Board may, on behalf of Her Majesty, provide insurance of a loan made to that contractor, engineer, builder, architect, manufacturer or group by a private lender for that purpose.

• (7) For the purposes of subsection (5), the amount of Canadian content shall in no event be less than the amount of insurance provided by the Board.

• (8) The amount of insurance provided under subsection (1), (2), (3), (4), (5) or (6) shall not exceed 90 per cent of the amount of the loan to be insured.

• (9) 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, the Board may, on behalf of Her Majesty, provide insurance on the full amount of any loan made to such person by a private lender for the purpose of protecting Her Majesty, provide insurance on the full amount of any loan made to such person by a private lender for the purpose of protecting Her Majesty's interest in the assets securing the loan previously made or insured or the letter of credit previously insured.

• (10) Where a loan has been made or insured or a letter of credit has been insured pursuant to these Regulations, the Board may, on behalf of Her Majesty, provide insurance on the full amount of any further loan made or letter of credit issued to the borrower for the purpose of protecting Her Majesty's interest in the assets securing the loan previously made or insured or a letter of credit previously insured or letter of credit issued.

15 A private lender who wishes the Board to provide insurance on a loan or letter of credit in accordance with these Regulations shall make application therefor to the Board and shall submit to the Board such information relating to the application as the Board may require.

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

• (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 Her Majesty in semi-annual instalments.

• (3) If the amount of a loan by a private lender to a manufacturer or to a person or group of persons described in subsection 14(3), (4), (5) or (6) is advanced in periodic advances, the Board may, if required by the private lender, approve interim insurance and the insurance fee payable by the private lender shall be one per cent per annum of the amount of such interim insurance payable at the time such interim insurance is provided by the Board.

• (4) Where, in the opinion of the Board, it is advisable to obtain a stock option for the purchase of capital stock in a corporation in connection with the provision of insurance on a loan or a letter of credit made to that corporation pursuant to these Regulations, the Board may, in addition to the insurance fee, obtain a stock option for the acquisition of shares in that corporation upon such terms and conditions as the Board deems proper.

17 Where a private lender has demanded repayment of a loan or moneys paid by it pursuant to a letter of credit, in respect of which insurance has been provided under these Regulations, the amount payable by Hear Majesty to the private lender shall not exceed the lesser of the amount of insurance in effect on the date of such demand and

• (a) 90 per cent of the loss incurred by the private lender in the case of a loan insured pursuant to subsections 14(1), (2), (3), (4) and (5) or letter of credit insured pursuant to subsection 14(5); or

• (b) 100 per cent of the loss incurred by the private lender, in the case of a loan insured pursuant to subsection 14(9) or (10).

Consulting Assistance

• 18 (1) Where a manufacturer or other person described in subsection 14(3), (4), (5) or (6) or any group of such persons to whom a loan has been made or insured or may be made or insured, or to whom a letter of credit has been issued and insured, under these Regulations requires the services of qualified consultants in order to develop a satisfactory proposal for a loan or insurance or a loan or insurance on a letter of credit for the purposes described in sections 9 and 14, the Board may authorize a grant to be paid to him or them in an amount not exceeding

  • (a) 50 per cent of the cost of the services required if the sales of the manufacturer or other person described in subsection 14(3), (4), (5) or (6) or any group of such persons exceeded $5 million in the year immediately preceding his application for that grant, or

  • (b) 80 per cent of the cost of the services required if the sales of the manufacturer or other person described in subsection 14(3), (4), (5) or (6) or any group of such persons did not exceed $5 million in the year immediately preceding his application for that grant,

  if, in the opinion of the Board, the cost of those services would be a significant burden on the resources of the manufacturer or other person described in subsection 14(3), (4), (5) or (6) or any group of such persons.

• (2) Notwithstanding subsection (1), where

  • (a) a loan has been made pursuant to section 9, or

  • (b) insurance of a loan has been provided pursuant to section 14

  and the Board is of the opinion that the services of a qualified consultant are required in order to protect Her Majesty's interest in the assets securing the loan made or the loan or letter of credit insured by the Board, the Board may authorize a grant to be paid to the consultant up to the full amount of the cost of such consulting services.

• (3) The Board may authorize a grant to be paid to a consultant pursuant to subsection (2) in respect of any consulting services required after April 1, 1971 for the purposes described in that subsection.

Notice of Lay-off

19 If, as a result of an adjustment in its operations financed by a loan made by the Board or by a private lender in accordance with these Regulations, a lay-off of 20 or more employees for a period of two or more months is likely to occur, a manufacturer shall give at least three-months notice of the lay-off to the Board and to the employees who are to be laid off.