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This version was current from June 30, 2004 to June 16, 2010.
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C.C.S.M. c. C155
The Communities Economic Development Fund Act
|Table of Contents|
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:
In this Act,
"board" means the board of directors of the fund; (« conseil »)
"chairperson" means the chairperson of the board; (« président »)
"City of Winnipeg" has the same meaning as it has in The City of Winnipeg Charter; (« Ville de Winnipeg »)
"community development corporation" means a corporation incorporated under Part XXI of The Corporations Act; (« corporation de développement local »)
"economic enterprise" means an enterprise in which is carried on any industry, trade, business or other undertaking of any kind whatsoever; (« entreprise économique »)
"family" includes a person who, not being married to a director, is cohabiting with him or her in a conjugal relationship of some permanence; (« famille »)
"financial assistance" includes a loan or guarantee, a lease of personal property or real property, the purchase or sale of shares, assets or securities of a corporation, and the underwriting of the securities of a corporation; (« aide financière »)
"fund" means the Communities Economic Development Fund; (« Fonds »)
"general manager and chief executive officer" means the person appointed as general manager and chief executive officer under subsection 16(1); (« directeur général et premier dirigeant »)
"minister" means a member of the Executive Council charged by the Lieutenant Governor in Council with the administration of this Act; (« ministre »)
For the purposes of this Act, while they are cohabiting, persons who have registered their common-law relationship under section 13.1 of The Vital Statistics Act are deemed to be cohabiting in a conjugal relationship of some permanence.
The Communities Economic Development Fund is continued as a body corporate and consists of the directors appointed under this Act.
The object of the fund is to encourage economic development
(a) in Northern Manitoba, as defined by the Lieutenant Governor in Council by regulation;
(b) subject to the approval of the Lieutenant Governor in Council, in the fishing industry in the province, by acting as a lending authority and administering a loan program with respect thereto; and
(c) in conjunction with financial assistance provided by the Government of Canada under any economic development program to assist aboriginal people in the province outside The City of Winnipeg;
with particular emphasis on the needs of small business enterprises and community development corporations.
The fund may provide financial assistance and other assistance, as set out in subsection (3), to assist in the establishment of new economic enterprises and the development of existing economic enterprises.
The fund may provide, with or without charge,
(a) information and advice respecting the techniques, methods and practices required for the successful administration of economic enterprises;
(b) training for individuals, including employees, managers and directors, in an economic enterprise; and
(c) conferences, seminars and other meetings for the promotion of good management practices in economic enterprises.
For the purpose of providing assistance under subsection (3), the fund may enter into agreements with any individual, company, organization, business or level of government.
In pursuance of its objects, the fund shall permit and encourage any person to assist in the achievement thereof by way of providing assistance to the fund, financial or otherwise; and, subject to subsection (2), the fund may accept gifts in money or otherwise, grants, or loans or any or all of them from any person or from the Government of Canada.
If the making of any such gift, grant, or loan, is conditional on the agreement by the fund to observe and carry out any terms or conditions, the fund shall not accept the gift, grant, or loan, unless its acceptance thereof and those terms or conditions are approved by order of the Lieutenant Governor in Council.
The management of the fund shall be directed by a board consisting of not fewer than four and not more than eight persons to be appointed by the Lieutenant Governor in Council to hold office for such term as the Lieutenant Governor in Council may fix.
The Lieutenant Governor in Council shall appoint one of the directors to be chairperson of the fund to hold such office during the pleasure of the Lieutenant Governor in Council and shall fix the salary to be paid the chairperson by the fund.
Each director shall be reimbursed by the fund for any reasonable travelling and other out-of-pocket expenses necessarily incurred in discharging his or her duties; and, in addition, but subject to subsection (1), any director, other than the chairperson, may be paid and accept, as remuneration for services, such daily or periodical amounts as are fixed by by-law of the board.
The fund may
(a) subject to the approval of the Lieutenant Governor in Council, establish a program of financial assistance for a class of applicants or economic enterprises; and
(b) provide financial assistance to an applicant for an economic enterprise if, in the opinion of the board,
(i) the applicant is engaged or about to engage in an economic enterprise in the province,
(ii) appropriate financial assistance is not otherwise available to the applicant on reasonable terms and conditions,
(iii) the nature and amount of investment in the economic enterprise by any person other than the fund indicate that the person is committed to the economic enterprise, and
(iv) the economic enterprise is reasonably likely to be successful.
Where the applicant referred to in subsection (1) is a corporation, the fund may
(a) enter into an underwriting agreement in respect of the whole or any part of an issue of securities of the corporation; and
(b) purchase or otherwise acquire the whole or any part of an issue of securities of the corporation from the corporation or a shareholder thereof, or from a person with whom the fund enters into an underwriting agreement in respect of the issue, and may later sell or otherwise dispose of any of the securities.
Where the fund provides financial assistance to a person, it may acquire by purchase or otherwise and, subject to a right of redemption by the person, hold any personal property used or to be used in the economic enterprise, and may later sell or otherwise dispose of the personal property.
The fund may acquire, by purchase or otherwise, and lease to a person to whom it provides financial assistance, any real or personal property used or to be used in the economic enterprise, and may later sell or otherwise dispose of any such property.
Subject to the approval of the Lieutenant Governor in Council, the fund may cause to be incorporated, make loans to and operate a corporation, dispose of shares, assets or an interest in the shares or assets of the corporation, and grant options respecting the shares and assets to prospective purchasers of the corporation.
The fund may provide financial assistance in such forms as it may decide; including making loans to borrowers for the provision of fixed capital or working capital or for both.
In determining whether to provide financial assistance under this Act, the board shall consider any criteria established by a by-law passed under subsection 15(1), or by a regulation made by the Lieutenant Governor in Council under subsection 24(1).
Repealed, S.M. 1991-92, c. 38, s. 7.
In providing for financial assistance, the fund shall seek to do so in such a manner, and under such conditions as will encourage other lending institutions and financial institutions to assist in financing the enterprise in respect of which the financial assistance is provided by the fund.
Repealed, S.M. 1991-92, c. 38, s. 7.
The board may by resolution fix or vary rates of interest payable in respect of loans or other financial assistance.
Repealed, S.M. 1991-92, c. 38, s. 7.
No financial assistance shall be given under this Act if the making or giving thereof contravenes any provision of this Act.
Before providing for financial assistance, the fund shall secure such reports and appraisals as the board of directors considers necessary to meet the requirements of this Act.
The board, in order to discharge its duties, may obtain the advice and assistance of such accountants, surveyors, architects, engineers, solicitors, and other professional or expert personnel as it may deem necessary; but it shall not obtain such advice and assistance if it is available from the officers and employees of any government department.
An applicant for financial assistance under this Act may be required, if an individual, to appear, and if a company, to cause such of its directors, officers, or employees as the board may designate to appear, before the board or such persons as may be designated by the board, to submit evidence as to any matter related.
The fund shall supervise any financial assistance provided under this Act to ensure that the financial assistance is used for the purpose for which it is provided.
The board shall cause a record to be kept of the supervision of financial assistance provided under this Act.
Where the board is of the opinion that financial assistance provided under this Act has not been used for the purpose for which it was provided, or if a security held by the board in respect of financial assistance provided under this Act depreciates in value, the fund may, notwithstanding the terms of any agreement with the recipient of the financial assistance, refuse to provide further financial assistance and, in the case of a loan, the fund may declare the amount of the loan to be due and payable, and the borrower shall immediately repay the money borrowed, with interest, and in default of payment the fund may use such remedies to recover the money as would be available if the time for repayment of the loan and interest had expired.
The fund may at any time at the discretion of the board, order an audit of the financial affairs of a borrower, and failure of the borrower to permit such an audit, or to provide the fund with information respecting the financial affairs of the borrower, shall constitute cause for action under subsection (3).
It shall be a term of every loan given that, upon the sale of any land mortgaged to the fund as security for the loan, or as collateral security in support of it, the loan shall, at the option of the fund, immediately become due and payable.
The fund shall from time to time obtain reports on the condition of any security it holds, and on the progress and prospects of economic enterprises and persons receiving financial assistance under this Act.
Nothing herein prevents the fund from making advances for the purpose of paying insurance premiums, taxes or other encumbrances, or otherwise to protect any security held in respect of any loan or other financial assistance.
Where the office of the chairperson becomes vacant or in the absence of the chairperson or during his or her inability to act as chairperson or at the request of the chairperson or the minister, then a director to be named by the board, shall act in place and stead of the chairperson and while so acting shall be designated as "acting chairperson".
The board shall meet at least quarterly and may pass by-laws for the following purposes:
(a) to determine the terms and conditions upon which financial assistance, including loans or a class of loans, may be made and security to be given therefor;
(b) to prescribe the form in which applications for loans and other financial assistance shall be made and the basic or minimum information to be furnished by applicants;
(c) to determine the terms and conditions under which the fund will acquire an equity position in a company by the purchase of shares of that company, by convertible debentures, share purchase options or otherwise;
(d) generally, to determine the conditions for the carrying out of its powers;
(e) to regulate its own procedure.
A certified copy of a by-law made by the board under subsection (1) shall be sent to the minister immediately after it is made by the board and may be disallowed by the minister at any time after he or she receives it.
Subject to subsection (4), no financial assistance shall be given to a company, organization, firm, or business of which any director of the fund is a director, officer, owner, or operator or in which he or she has a significant beneficial interest through ownership of capital stock or otherwise.
The board may require, as a condition of providing financial assistance to any corporate borrower, that one or more persons nominated by the board be appointed as a director or directors of the corporate borrower to which the financial assistance is provided, to serve while any part of the financial assistance is outstanding; but neither the fund nor any person so appointed as a director by the fund is liable for wages or any other sums due for services by virtue of such an appointment.
A director of the fund who is a director of a corporate borrower, solely by reason of being nominated as such in accordance with subsection (3), does not have a significant beneficial interest in the corporate borrower by reason only of the fact, and he or she shall not be excluded from meetings of the board or from voting on any matter relating to the corporate borrower by reason only of that fact.
No director shall be present at any meeting of the board during a time at which there is under discussion any matter relating to a company, organization, firm, or business of which he or she is a director, officer, owner, or operator or in which he or she has a significant beneficial interest through ownership of capital stock by himself or herself or members of his or her family or otherwise; and a director shall not vote with respect to any such matter.
If a question arises as to whether a director has a significant beneficial interest as mentioned in subsection (5), the matter shall be decided by a unanimous vote of the other directors present at a meeting of the board; and their decision is final, and shall be made on the basis that any interest whether more or less than a controlling interest, that may influence the judgment of a director is a "significant beneficial interest".
A director who, under subsection (5), is or may be debarred from being present at the time of the discussion of any matter or from voting thereon shall, when the matter arises, disclose any facts that so debar or may so debar him or her, and shall withdraw; but, if the disability arises by reason of a question as to whether the director has a significant beneficial interest as mentioned in subsection (5), and if the other directors declare, as provided in subsection (6), that he or she does not have such a significant interest, the director may resume his or her seat on the board and discuss and vote on the matter.
A director who contravenes or neglects to comply with this section is quilty of an offence and is liable, on summary conviction, to a fine not exceeding $200.
The board shall appoint a person to be the general manager and chief executive officer of the fund.
Under the control and direction of the board, the general manager and chief executive officer is responsible for the overall management and day to day operations of the fund.
All stock in any company owned by the fund shall be issued in the name of the fund.
With respect to any person acting on behalf of the fund as a director of a company that is a Manitoba company, qualifying shares of that company shall be deemed to have been issued to and held by that director without any transfer thereof on the books of the company or the issue of any stock certificate to the director with respect thereto.
Qualifying shares owned under subsection (2) are held in trust for the fund and on the person ceasing to be a director shall be conclusively deemed to have been transferred to, and vested in, the fund without any transfer thereof on the books of the company or the issue of any stock certificate to the fund with respect thereto.
With respect to any subsidiary company that is not a Manitoba company, shares belonging to the fund and held in the name of any person acting as director on behalf of the fund shall be held by that person in trust for the fund; and upon the person ceasing to be a director shall be transferred to the fund or as directed by the fund.
The fiscal year of the fund begins on April 1 in each year and ends on March 31 in the next succeeding year.
The books and accounts of the fund shall be audited at least annually, by an auditor, who may be the Auditor General, appointed by the Lieutenant Governor in Council; and the cost of the audits shall be paid by the fund.
The fund is an agency of Her Majesty in right of the province.
Upon such terms and conditions as the fund deems reasonable, it may acquire from the Crown or any other person by purchase, lease, licence, or otherwise, any property, real or personal, that the fund deems necessary for its purposes.
The fund may execute any conveyance, transfer, bill of sale, agreement, lease, caveat, withdrawal of caveat, discharge of mortgage or any other document relating to any property acquired by the fund or that may be sold, leased or otherwise disposed of by the fund under this Act; and it may, on behalf of the Crown, contract and acquire property in its own name without specific reference to the Crown or Her Majesty.
The approval of the Lieutenant Governor in Council is not required for any sale, lease, or disposition, by the fund of any property that is acquired by the fund in its own name.
The district registrar of any land titles office may accept as conclusive the certificate or affidavit of the general manager and chief executive officer as to whether any particular property has been acquired by the fund, as to the purpose for which it has been acquired, and as to whether it was acquired, dealt with or disposed of by the fund pursuant to the powers contained in this section.
Not later than July 31 in each year the board shall make a report on the operations of the fund during the fiscal year ending on March 31 in that year and the board shall forthwith forward the report to the minister who shall lay it before the Legislative Assembly if it is then in session, and if it is not then in session, at the next ensuing session thereof.
The Lieutenant Governor in Council may, at such times and as often as he or she deems it necessary, require the board to furnish to him or her such reports or information respecting the business and operations of the fund as he or she may direct; and the board shall comply with the requisition.
In addition to the reports required under subsections (1) and (2), the board shall cause to be prepared, within 45 days after the end of every three month period, financial statements showing the financial condition of the fund and shall forward the statements to the minister without delay.
After receiving the quarterly financial statements of the fund under subsection (3), the minister shall lay the statements before the Legislative Assembly, if it is then in session, without delay, and, if it is not then in session, within 15 days after the commencement of the next ensuing session.
After the financial statements of the fund are laid before the Legislative Assembly under subsection (3.1) and not before, the board shall make the statements available for inspection by the public during normal business hours at the head office of the fund.
The minister may, at such times and as often as he or she deems it necessary, request an independent committee appointed by the Lieutenant Governor in Council and designated for the purposes of this section by the Lieutenant Governor in Council, to prepare a special report in respect of an individual loan where he or she has received a written request from a borrower who believes he or she has not been fairly treated and the fund shall provide, with the permission of the borrower, in confidence to such committee, details of the loan transaction involved and the actions taken; and the minister shall lay the report of the committee before the Legislative Assembly if it is then in session, and if it is not then in session, at the next ensuing session thereof.
The fund may produce or be required to produce to the assembly or to any committee thereof or to any other person, any information respecting an applicant or borrower, or respecting a loan or other financial assistance, the release of which would not in the opinion of the board be prejudicial to the interests of the applicant or borrower, or of the fund.
Notwithstanding subsection (1), the fund may be required to provide to the Legislative Committee on Social and Economic Development the most recent annual audited statements of assets and liabilities and profit and loss in respect of any company in which the fund has acquired an equity position by the purchase of shares of that company or otherwise.
The Lieutenant Governor in Council may make regulations
(a) defining "Northern Manitoba" for the purpose of clause 3(1)(a);
(b) establishing criteria for determining whether to provide financial assistance to an applicant or economic enterprise, or to a class of applicants or economic enterprises;
(c) respecting matters that are incidental to the purposes of this Act and for which no provision is made in this Act.
No regulation or order made under subsection (1) has any force or effect until published in one issue of The Manitoba Gazette; and every such regulation or order shall be laid before the Legislative Assembly, if it is then in session, within 15 days after the publication thereof, or, if the assembly is not then in session, within 15 days after the beginning of the next following session thereof.
The Securities Act does not apply to the fund or any subsidiary of the fund.
Part XXIV of The Corporations Act and The Consumer Protection Act do not apply to the fund or to any subsidiary of the fund.
The fund and any subsidiary of the fund has the general capacity and powers of a common law corporation; and no act of the fund or any subsidiary of the fund and no conveyance, transfer or security given to the fund is invalid.
Security of any kind and in any form may be taken, accepted, acquired, held, sold, transferred or conveyed, or otherwise in any way dealt with, disposed of or realized on by the fund in the same manner as by a private individual.
The fund has, and may exercise, all the rights, powers and privileges in respect thereof that a private individual would have or might exercise in like circumstances.
Where there is any conflict between any provision of this Act and a provision of The Corporations Act, the provisions of this Act prevail.
No loan, guarantee or other financial assistance granted or provided by the fund to an economic enterprise before or after the coming into force of this subsection, and no security taken or acquired by the fund in respect of the financial assistance, is invalid or unenforceable by reason only that the economic enterprise is not located in a remote and isolated community.
Every person who, without the consent in writing of the fund, uses the name of the fund in any prospectus or advertisement, is guilty of an offence and is liable, on summary conviction, to a fine not exceeding $500. or to imprisonment for a term not exceeding one month or to both.
Neither the general manager and chief executive officer, nor the chairperson, nor any director, nor anyone acting under the instructions or directions of any of them or of the board or under the authority of this Act, is personally liable for any loss or damage suffered by any person by reason of anything in good faith done or omitted to be done by him, her or them or any of them under, or in the exercise or supposed exercise of, the powers conferred by this Act.
A person who has been appointed a director of a corporate borrower pursuant to subsection 15(3) shall, with respect to any action or omission by the person as a director, be deemed to be acting under the authority of this Act with respect to the acts or omissions.
Moneys required by the fund for the purposes of this Act may be advanced from the Consolidated Fund as authorized by an Act of the Legislature to be paid and applied for those purposes.