|This is an unofficial archived version of The Communities Economic Development Fund Act|
as enacted by SM 1987-88, c. 9 on July 17, 1987.
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R.S.M. 1987, 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")
"chairman" means the chairman of the board; ("président")
"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" )
"fund" means the Communities Economic Development Fund; ("Fonds" )
"minister" means a member of the Executive Council charged by the Lieutenant Governor in Council with the administration of this Act; ("ministre")
"remote and isolated communities" means those communities which meet the criteria of remoteness and of isolation established under this Act, either by by-law of the board or by order of the Lieutenant Governor in Council. ("communautés éloignées")
The Communities Economic Development Fund is continued as a body corporate and consists of the directors appointed under this Act.
The objects of the fund are to encourage the optimum economic development of remote and isolated communities within the province and to that end
(a) to provide financial or other assistance to
(i) existing economic enterprises or to economic enterprises to be established; and
(ii) community development corporations;
(b) to emphasize and encourage the expansion and strengthening of small to medium-sized economic enterprises which are locally owned and operated; and
(c) generally to assist the minister in furthering economic development on behalf of the residents of remote and isolated communities, particularly as regards economically disadvantaged persons.
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 affairs of the fund shall be managed 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 chairman 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 chairman by the fund.
Each director shall be reimbursed by the fund for any reasonable travelling and other out-of-pocket expenses necessarily incurred by him in discharging his duties; and, in addition, but subject to subsection (1), any director, other than the chairman, may be paid and accept, as remuneration for his or their services, such daily or periodical amounts as are fixed by by-law of the board.
The fund may
(a) subscribe for. obtain, or otherwise acquire and hold, and dispose of shares, share warrants and securities of any company or acquire assets or any interest of any person carrying on any business capable of being conducted to enhance the economic development of remote and isolated communities;
(b) subject to the approval of the Lieutenant Governor in Council, cause to be incorporated, establish, make loans to and operate corporations and dispose of shares, assets or interest in the shares or the assets of such corporations and grant options respecting the same to prospective purchasers;
(c) generally exercise the powers set out in Part III of The Corporations Act.
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.
The fund shall not make a loan if, in its opinion, the applicant for the loan can obtain sufficient moneys for his requirements from other sources on reasonable terms.
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.
In providing for financial assistance, the fund shall take into consideration
(a) the technical and economic requirements for the enterprise in respect of which the loan is sought;
(b) the terms upon which similar financial assistance is normally provided by other institutions;
(c) explicit or implicit requirements additional to the actual financial assistance by the fund, including investment capital, grants, infrastructure such as roads and utilities, or social investments such as for education;
(d) the effect on the community, both economic and social;
(e) the location and type of employment created, as well as the location and type of employment displaced, if any ;
(f) the actual source of labour to be employed;
(g) the effect on the working conditions, the wage levels, the income and the distribution and stability of income of the people affected, either favourably or unfavourably, by the enterprise in respect of which the financial assistance is sought;
(h) the effect on conservation and on the environment, including the costs and and mechanisms of pollution control;
(i) the extent and implications of local ownership and control;
(j) the economic activity generated or strengthened in other local economic enterprises, by the enterprise in respect of which the financial assistance is sought;
(k) the implications for welfare costs and dependency, and the concrete steps to be taken to employ some disadvantaged persons and to upgrade the skills of the workers involved, including on-the-job training;
(l) the risk involved;
and in fixing the terms and conditions on which the financial assistance is provided for, the fund shall take those considerations into account.
The board may by resolution fix or vary the rates of interest payable on loans made by the fund, but no resolution varying the rates of interest payable on loans has retroactive effect.
The fund may accept from borrowers repayment of the whole or any part of moneys borrowed without requiring notice thereof and without payment of any bonus.
In making loans, the fund shall seek to maintain a reasonable diversity in the location and type of economic enterprises, as reflected in the total amount loaned and outstanding at any time.
No Ioan shall be made under this Act or financial assistance 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 a loan or 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 the expenditure by each borrower of the moneys loaned to him in order to ensure that the moneys are duly expended for the purpose for which they were loaned.
A record of the supervision shall be made in the accounts of the fund respecting each borrower.
If at any time, in the opinion of the board, any money loaned under this Act has not been, or is not being, applied for the purpose for which it was advanced, or is not being carefully and economically expended, or if the security depreciates in value, the fund may refuse to make any further advance and may call in the whole amount then advanced and all interest thereon and declare that amount and interest to be immediately due and payable: whereupon the borrower shall at once repay the moneys borrowed with interest thereon at the rate agreed upon, and in default of payment the fund has the like remedies for the recovery of the moneys as if the time for repayment thereof has fully arrived.
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 made that, upon the sale of any land mortgaged to the fund as security therefor, the loan, shall at the option of the fund, immediately become due and payable.
The fund shall, from time to time, secure reports as to the condition of any securities taken by it for loans under this Act and as to the progress and prospects of the borrower and of the enterprise in respect of which the loan is made; and for that purpose any governmental agency may cooperate with the fund by rendering assistance of any educational or other nature that appears calculated to facilitate the success of the borrower or of the enterprise.
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.
Where the office of the chairman becomes vacant or in the absence of the chairman or during his inability to act as chairman or at the request of the chairman or the minister, then a director to be named by the board, shall act in place and stead of the chairman and while so acting shall be designated as "acting chairman".
The board shall meet at least quarterly and shall administer the business and affairs of the fund and may, subject to the approval of the Lieutenant Governor in Council, pass by-laws for the following purposes:
(a) to determine the terms and conditions upon which loans generally, or any 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.
Subject to subsection (4), no loan or other financial assistance shall be made or 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 has a significant beneficial interest through ownership of capital stock or otherwise.
The board may require, as a condition of making a loan or giving 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 loan or assistance is being made or given, to serve while any part of the loan remains unpaid; 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 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 is a director, officer, owner, or operator or in which he has a significant beneficial interest through ownership of capital stock by himself or members of his 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, and shall withdraw; but, if the disability arises by reason of a question as to his having a significant beneficial interest as mentioned in subsection (5), and if the other directors declare, as provided in subsection (6) that he does not have such a significant interest, he may resume his seat on the board and discuss and vote on the matter.
A director who contravenes or neglects to comply with this section is guilty of an offence and is liable, on summary conviction, to a fine not exceeding $200.
The chairman is the chief executive officer of the fund and, subject to the regulatory bylaws of the fund, is responsible for the overall direction and control of the operations of the fund.
While the board is not in session, the chairman may exercise the powers conferred upon the fund by this Act and by regulations made hereunder; and he shall report thereon to the board at its next following regular meeting.
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 Provincial Auditor, 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 chairman of the board 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 June 30 in each year the chairman shall make a report to the board 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 deems it necessary, require the board to furnish to him such reports or information respecting the business and operations of the fund as he may direct; and the board shall comply with the requisition.
The board shall cause to be published in The Manitoba Gazette within 30 days of the end of each quarter of the fiscal year, in the form prescribed by the Lieutenant Governor in Council,
(a) the balance sheet of the fund at the end of the quarter;
(b) the amount of assistance granted or to be granted by the fund and the parties to whom the assistance was or is to be granted, whether by way of loan, guarantee, lease, grant, investment or otherwise; and
(c) the terms under which the assistance was or is to be granted.
The minister may, at such times and as often as he 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 has received a written request from a borrower who believes he 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 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.
For the purpose of carrying out the provisions of this Act according to their intent, the Lieutenant Governor in Council may make such regulations and orders as are ancillary thereto and are not inconsistent therewith; and every regulation or order made under and in accordance with the authority granted by this section has, subject to subsection (2), the force of law.
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.
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.
The chairman, or any director, or any one acting under the instructions of any of them or of the board, or under the authority of this Act, is not 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 or them or any of them pursuant to, 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 him as such a director, be deemed to be acting under the authority of this Act with respect to his acts or omissions as such director.
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.