The Communities Economic Development Fund Act

The Communities Economic Development Fund Act, C.C.S.M. c. C155 bilingual version (HTML) Table of Contents Section 1 Definitions 2 Continuation of fund 3 Objects of fund 4 Repealed 5 Board 6 Chairperson and remuneration 6.1 Activities of the fund 7 Powers 8 Forms of financial assistance and criteria 9 Interest rates 10 Supervision of financial assistance 11 Sale of mortgaged security 12 Fund to obtain progress reports 13 Advances to protect security 14 Repealed 15 Board supervision of fund, limitation on directors' interests 16 Chief executive officer 17 Shares in companies 18 Fiscal year 19 Audit 20 Fund an agency of Crown 21 Acquisition and disposal of property 22 Reports and publications 23 Information required by Assembly 24 Regulations 25 Application of Securities Act 26 Application of other Acts, rights and capabilities of fund 27 Penalty for use of name 28 Protection from liability 29 Money required by fund HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows: Definitions 1(1) In this Act, "board" means the board of directors of the fund; (« conseil ») "chairperson" means the chairperson of the board; (« président ») "chief executive officer" means the person appointed as the chief executive officer under subsection 16(1); (« premier dirigeant ») "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 ») "minister" means a member of the Executive Council charged by the Lieutenant Governor in Council with the administration of this Act; (« ministre ») "northern Manitoba" means all that part of Manitoba north of the southern boundary of Township 21; (« Nord du Manitoba ») "regulation" means a regulation made under this Act. (« règlement ») Registered common-law relationship 1(2) 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. S.M. 1991-92, c. 38, s. 2 ; S.M. 1993, c. 48, s. 5 ; S.M. 2002, c. 24, s. 12 ; S.M. 2002, c. 39, s. 535 ; S.M. 2002, c. 48, s. 28 ; S.M. 2010, c. 16, s. 2 . Continuation of fund 2 The Communities Economic Development Fund is continued as a body corporate and consists of the directors appointed under this Act. Objects 3(1) The objects of the fund are to encourage the economic development of (a) northern Manitoba; (b) aboriginal people in the province outside of the City of Winnipeg; and (c) the fishing industry in Manitoba. Focus of the fund 3(2) In carrying out its objects, the fund is to (a) give emphasis to the needs of small business, community development corporations and corporations without share capital; and (b) seek to provide its financial assistance in a way that encourages other lending and financial institutions to provide additional financing. S.M. 1991-92, c. 38, s. 3 ; S.M. 2010, c. 16, s. 3 . 4 [Repealed] S.M. 2010, c. 16, s. 4 . Board 5 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. S.M. 1993, c. 48, s. 5 . Chairperson 6(1) 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. Board may designate acting chairperson 6(1.1) The board may designate one of the members as acting chairperson to act in the place of the chairperson when (a) the office of chairperson is vacant; (b) the chairperson is absent or unavailable for any reason; or (c) the chairperson requests the board to do so. Remuneration to directors 6(2) 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. S.M. 1991-92, c. 38, s. 4 ; S.M. 2010, c. 16, s. 5 . Activities of the fund 6.1(1) For the purpose of achieving its objects, the fund may (a) provide financial assistance to persons or economic enterprises; (b) provide information, advice and training respecting the administration and operation of economic enterprises; and (c) promote good management practices in economic enterprises. General powers of fund 6.1(2) Subject to this Act and the regulations, the fund may (a) enter into an agreement with a person or economic enterprise or the Government of Manitoba, the Government of Canada, a local government or an agency of any of them; (b) accept a gift, grant, loan or other form of contribution to the fund that is made with or without conditions; (c) receive and manage funds on behalf of another; and (d) charge and collect interest and fees in respect of the activities of the fund. S.M. 2010, c. 16, s. 6 . Power to provide financial assistance 7(1) The fund may (a) subject to the approval of the Lieutenant Governor in Council, establish one or more programs 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) [repealed] S.M. 2010, c. 16, s. 7 , (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. Power respecting corporation 7(2) 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. Fund may acquire personal property 7(3) 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. Acquisition and lease of property 7(4) 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. Fund may establish corporations 7(5) 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. S.M. 1991-92, c. 38, s. 5 ; S.M. 2010, c. 16, s. 7 . Forms of financial assistance 8(1) 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. Reports and information etc. 8(2) Before providing financial assistance, the board may require an applicant to provide it with any information that the board considers necessary for determining whether to provide financial assistance. Terms and conditions must be considered 8(3) The board must consider any terms and conditions respecting financial assistance established by by-law under subsection 15(1) when determining whether to provide financial assistance. S.M. 1991-92, c. 38, s. 6 ; S.M. 2010, c. 16, s. 8 . Interest rates 9(1) The board may by resolution fix or vary rates of interest payable on loans or other financial assistance. Professional and expert assistance 9(2) The board may obtain the professional or expert advice and assistance it considers necessary to carry out its responsibilities under this Act. S.M. 1991-92, c. 38, s. 7 ; S.M. 2010, c. 16, s. 9 . Supervision of financial assistance 10(1) 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. Record of supervision of financial assistance 10(2) The board shall cause a record to be kept of the supervision of financial assistance provided under this Act. Powers of board where money misapplied 10(3) 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. Audit of affairs of borrower 10(4) 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). S.M. 1991-92, c. 38, s. 8 . Sale of mortgaged security 11 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. S.M. 1991-92, c. 38, s. 9 . Fund to obtain progress reports 12 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. S.M. 1991-92, c. 38, s. 10 . Advances to protect security 13 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. S.M. 1991-92, c. 38, s. 11 . 14 [Repealed] S.M. 1991-92, c. 38, s. 12 ; S.M. 2010, c. 16, s. 10 . Board to supervise fund 15(1) 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. Disallowance of by-law by minister 15(1.1) 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. Limit respecting financial assistance 15(2) 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. Appointment of directors of corporate borrowers 15(3) 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. Appointment under subsection (3) does not create significant interest 15(4) 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. Limitation on actions of directors where financial interest involved 15(5) 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. Decision as to interest 15(6) 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". Disclosure of facts by directors 15(7) 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. Offence and penalty 15(8) 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. S.M. 1991-92, c. 38, s. 13 ; S.M. 1993, c. 48, s. 5 ; S.M. 1998, c. 23, s. 2 . Appointment of chief executive officer 16(1) The board shall appoint a person to be the chief executive officer of the fund. Duties of chief executive officer 16(2) Under the control and direction of the board, the chief executive officer is responsible for the overall management and day to day operations of the fund. S.M. 1991-92, c. 38, s. 14 ; S.M. 1993, c. 48, s. 5 ; S.M. 2010, c. 16, s. 11 . Shares in companies 17(1) All stock in any company owned by the fund shall be issued in the name of the fund. Qualifying shares in companies 17(2) 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. Transfer of qualifying shares in companies 17(3) 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. Transfer of shares in subsidiary company 17(4) 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. Fiscal year 18 The fiscal year of the fund begins on April 1 in each year and ends on March 31 in the next succeeding year. Audit 19 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 Minister of Finance; and the cost of the audits shall be paid by the fund. S.M. 2001, c. 39, s. 31 ; S.M. 2018, c. 29, s. 7 . Fund an agency of Crown 20 The fund is an agency of His Majesty in right of the province. Acquisition of property 21(1) 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. Disposal of property 21(2) 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 His Majesty. Where approval of Lieutenant Governor in Council not required 21(3) 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. Acceptance of certificate by district registrar 21(4) The district registrar of any land titles office may accept as conclusive the certificate or affidavit of the 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. S.M. 1991-92, c. 38, s. 15 ; S.M. 1993, c. 48, s. 5 ; S.M. 2010, c. 16, s. 11 . Annual reports 22(1) 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. Further reports 22(2) 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. Quarterly financial statements 22(3) 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. Tabling of statements in the Assembly 22(3.1) 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. Available to public 22(3.2) 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. Special reports respecting loan 22(4) 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. S.M. 1991-92, c. 38, s. 16 ; S.M. 1993, c. 48, s. 5 . Production of information for assembly 23(1) 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. Production on most recent audited statement 23(2) 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. S.M. 2004, c. 42, s. 99 . Regulations 24(1) The Lieutenant Governor in Council may make regulations (a) [repealed] S.M. 2010, c. 16, s. 12 ; (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. 24(2) [Repealed] S.M. 2010, c. 16, s. 12 . S.M. 1991-92, c. 38, s. 17 ; S.M. 1992, c. 58, s. 2 ; S.M. 2010, c. 16, s. 12 . Application of Securities Act 25 The Securities Act does not apply to the fund or any subsidiary of the fund. Application of other Acts 26(1) Part XXIV of The Corporations Act and The Consumer Protection Act do not apply to the fund or to any subsidiary of the fund. General capacity 26(2) 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. Taking security 26(3) 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. Exercise of rights, etc. 26(4) 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. Acts to prevail 26(5) Where there is any conflict between any provision of this Act and a provision of The Corporations Act , the provisions of this Act prevail. 26(6) [Repealed] S.M. 2010, c. 16, s. 13 . S.M. 1990-91, c. 12, s. 3 ; S.M. 1991-92, c. 38, s. 18 ; S.M. 2010, c. 16, s. 13 . Penalty 27 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. Protection from liability 28(1) No action or proceeding may be brought against the chief executive officer, a director, an officer or employee of the fund or any other person acting under the authority of this Act for anything done or omitted to be done, in good faith, in the exercise or intended exercise of a power or duty under this Act. Fund's director of corporate borrower 28(2) 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. S.M. 1991-92, c. 38, s. 19 ; S.M. 1993, c. 48, s. 5 ; S.M. 2010, c. 16, s. 14 . Moneys required by fund 29 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.