Contributions for Promoting Regional Development in Canada’s Three Territories - Terms and Conditions
Amended [April 3, 2014]
- Legal and Policy Authority
- Purpose, Objectives and Expected Results
- Eligible Recipients
- Eligible Activities
- Eligible Expenditures
- Stacking Limits
- Method for Determining the Amount of Funding
- Maximum Amount Payable
- Basis on Which Payments will be made
- Information (Application) Requirements
- Assessment Criteria
- Monitoring and Reporting Mechanisms
- Redistribution of Contributions
- Repayable and Conditionally Repayable Contributions
- Official languages
- Other terms and conditions
The Canadian Northern Economic Development Agency (CanNor) (the Department) was established in 2009, as the regional development agency (RDA) for the North (the territories: Nunavut, the Northwest Territories and Yukon).
Certain existing regional programming of general application, including this authority, was transferred from AANDC-Northern Affairs to CanNor at the time the latter was created.
Regional Development Authority may be used as the short title of this authority, named Contributions for promoting regional development in Canada's three territories
This Regional Development Authority is a baseline spending authority which can be used for the delivery of a range of northern economic development contribution programs / funding initiatives. The terms and conditions for such programs encompass both their individual project selection criteria, and the terms and conditions of this spending authority. This Regional Development Authority will use set contribution funding approaches for transfer payments, and where appropriate multi-year agreements, in accordance with the funding agreements provisions of the Policy on Transfer Payments and Department's Management Control Framework for Grants and Contributions.
This Regional Development Authority is of general application and does not target a specific category of recipients.
2. Legal and Policy Authority
The authority for contributions under this Regional Development Authority is granted under:
Orders in Council P.C. 2009-1422/1432 – Creation of the Canadian Northern Economic Development Agency
3. Purpose, Objectives and Expected Results
The purpose of these terms and conditions is to establish the policy and criteria for the administration of financial assistance under this Regional Development Authority.
The objective of the Regional Development Authority is to promote the economic development of the North, in order to strengthen territorial economies and increase participation by Northerners. Particularly, objectives under each area are:
- Building the Knowledge Base
- increase the level of publicly available information related to the North's resource base (with particular emphasis on mineral resources and renewable resources)
- increase access to a more comprehensive and up-to-date set of socio-economic indicators as well as sector-specific analytic data
- develop and implement strategic plans in key sectors
- expand knowledge and understanding of northern economic issues and activities
- Economic Infrastructure
- improve connectivity within communities
- improve readiness to attract investment in large-scale infrastructure
- improve infrastructure in smaller or emerging sectors (e.g., tourism, renewable resources, culture and film)
- facilitate innovative approaches to the development of the North
- facilitate seizing of opportunities in the new economy
- Developing Capacity
- increase local participation in economic opportunities
- increase training relevant to existing opportunities
- more effective use of technology in business and economic activity at the local level
- increase capacity at the local level to support economic development
- increase skills to engage in the economy through knowledge and innovation
- increase knowledge, understanding and skills related to roles and responsibilities
- increase the expert knowledge brought to bear on analysis of proposals and the development of positions
- Economic Diversification
- increase the number of small and medium sized business in all sectors
- increase the sustainability of businesses
- expand product development
- expand domestic and export market access
- generate new sustainable jobs in several small communities
- facilitate innovative approaches to development in the North
- facilitate seizing of opportunities in the new economy
3.3. Expected Results
Although closing development gaps between the North and southern Canada will only be achieved over a much longer period, activities under this authority will ensure progress and will lay the foundation for the achievement of further northern development. The activities will consist of providing contribution funding support for building the knowledge base, enhancing the infrastructure base, economic diversification, and capacity development.
The various investments under this authority are intended to lead to the following expected results:
- Building the Knowledge Base
- increased scientific and policy data and knowledge
- increased public access to data and knowledge
- better informed plans and priority setting
- Economic Infrastructure
- increased access to affordable telecommunication services
- proponents better positioned to attract governments or private sector investment in major economic infrastructure projects in the North
- appropriate technology - including innovative technology
- increased multi-user access to equipment
- Developing Capacity
- governments / private sector positioned to carry out skills development
- increased availability of skilled northern workers and organizations
- increased capacity of private and public sector organizations to define their roles and objectives and develop implementation plans
- improved skills, expert support and information systems in private and public sector organizations
- better definition of local and regional priorities for benefitting from major developments
- Economic Diversification
- governments / private sector positioned to invest in projects that diversify the northern economy
- development of innovative solutions to promote development in the North
- sale of a wider range of products from more northern sources to more markets
The expected results under this Regional Development Authority align with CanNor's strategic outcome of developed and diversified territorial economies that support prosperity for all Northerners.
Performance indicators that apply to contribution programs / funding initiatives delivered under this Regional Development Authority are included in their respective individual Performance Measurement Strategies.
4. Eligible Recipients
Organizations including social enterprises, individuals, other levels of government and other non-federal entities, public or private, that have an interest in economic development in the North.
5. Eligible Activities
Activities to be funded under this authority can be categorized into four business lines.
- Building the Knowledge Base - projects centring on scientific or policy research (e.g., data collection, including surveys, data analysis); planning; consultation (e.g., facilitation and organization of forums, meetings and workshops). Projects could also include the collection and dissemination of information or other activities that relate to the research, solicitation and exchange of information, ideas and points of view, in order to expand knowledge, socio-economic data availability and understanding of northern economic issues and activities.
- Economic Infrastructure - projects that support planning activities and/or the development of multi-user public infrastructure critical to economic growth (categories include: telecommunications, transportation and energy, as well as infrastructure needs specific to resource industries (e.g., minerals, fisheries and forestry), tourism and cultural industries).
- Developing Capacity - projects centring on capacity building measures, other than direct delivery of education and training courses, which support expert analysis of proposals and the development of positions; increase understanding and skills related to roles and responsibilities; or increase skills to participate in the economy through knowledge and innovation and any activity that may have cultural dimensions (e.g., research might involve traditional knowledge); consultation mechanisms to enhance skill development; complementary investments to enhance training; research - gap/needs analysis related to organizational and individual capacity; and advisory / expert services and support.
- Economic Diversification - research; development of products & markets, including feasibility studies and pre-feasibility studies, patents standards and certification; marketing; innovation; and loan fund top-ups for small & medium-sized enterprises.
6. Eligible Expenditures
Expenditures which are, in the opinion of the Department, reasonable and necessary for the recipient to carry out a project for one or more of the purposes of knowledge, infrastructure, capacity development and economic diversification.
These may include, but are not limited to:
- professional fees such as technical, environmental, legal and business;
- salaries and benefits for employees and casual workers;
- contract costs for administrative services or professional services;
- space and equipment rentals or purchases;
- project feasibility studies;
- technical analysis
- research fees such as surveys, data acquisition and research studies;
- provision of funds to Community Futures like entities or Capital Corporations to fund projects for activities eligible under this contribution through loans;
- minor capital (e.g., computers, signage, equipment, renovations or upgrades) not exceeding $500,000
- major capital (e.g., machinery and equipment, buildings and engineering works) valued over $500,000
- travel, including meals and accommodations, and shipping costs.
6.2 Core Activities
Expenditures, which are, in the opinion of the Department, reasonable and necessary for the recipient organization to carry out approved core activities, such as:
- salaries and benefits for employees and casual workers;
- contract costs for administrative services;
- professional fees;
- rental of office and meeting space;
- communications (telephone, fax, internet, postage, courier);
- photocopying and printing;
- office equipment and supplies;
- travel, including meals and accommodations; and
- other administrative costs.
7. Stacking Limits
In general, contributions under this authority will be conditional upon total government assistance to a project not exceeding 75% of total project costs. However, the stacking limit is 100% for: government or not-for-profit recipients, funding for ongoing core activities of an organization, or where total government assistance to a project is $100,000 or less. The Department reserves the right to lower this limit as circumstances warrant.
All recipients of financial assistance under these terms and conditions will be required to inform the Minister of financial assistance received or expected to be received from any government (federal, provincial / territorial, municipal) or other sources prior to the approval of the contribution. Furthermore, the contribution agreements will contain continuing disclosure obligation (for the duration of the agreements) concerning other government assistance. Provisions for repayment shall be included in the funding agreements.
8. Method for Determining the Amount of Funding
In usual circumstances, application will be made to a contribution program / funding initiative, which may have program specific criteria.
The amount of funding is determined based on review and consideration of the proposal, and taking into account: the relevance of the proposal to the objective, expected results, specific criteria and guidelines of the funding initiative being applied to.
9. Maximum Amount Payable
The maximum amount payable to any single eligible recipient per annum is $6,000,000.
The maximum amount of financial assistance to any eligible end recipient of developmental lending capitalized under this authority shall not normally exceed $150,000. In unusual circumstances, where there is a demonstrated benefit to a community, an eligible end recipient of developmental lending may be eligible to receive financial assistance from more than one developmental lending organizations capitalized under this authority.Each participating developmental lender may provide up to $150,000 in such situations.
10. Basis on Which Payments will be made
Assistance will be administered and paid according to specific funding agreements between the Minister and the recipient, which will identify the conditions of the assistance, the obligations of both parties and the conditions under which payment will be made.
Payments will be made based on one of the following:
- Documented claims for eligible expenditures incurred and paid,
- The achievement of pre-determined performance expectations or milestones, or
- Where advance payments of a contribution are essential to the achievement of objectives, they are specifically provided for in the funding agreement and are based on the recipients cash flow requirements.
Claims for payments will be certified by officials designated by the Minster as per the requirements of the Financial Administration Act.
Where payments are made based on pre-determined performance expectations or milestones or advances are made based on recipient cash flows a final accounting of all project expenditures will be required.
A holdback portion of any payment will be realized when deemed appropriate based on the risk of non-performance or overpayment.
11. Information (Application) Requirements
In usual circumstances, application will be made to a contribution program / funding initiative, which will have specific application information requirements, and funding criteria. Where contribution programs / funding initiatives utilize this Regional Development Authority as a portion of the program terms and conditions, to implement funding decisions, the application and project selection processes of the contribution program / funding initiative will also need to assure that funding decisions are consistent with these terms and conditions.
Prospective recipients will be required to submit sufficient information to determine that they are eligible recipients as well as any information required to assess the recipient and / or project against the contribution program / funding initiative's assessment criteria. This includes, but is not limited to:
- Full name and description of the applicant;
- Information on the legal and financial status of the applicant;
- A description of the management and organizational capacity of the applicant;
- A detailed description of the proposed project and description of activities to be undertaken;
- Timelines for the project;
- A cost forecast of the project, as well as details of financing, including all sources of funding for the project;
- Anticipated economic benefits of the project, including expected outcomes and proposed performance measures; and
- Any other information considered necessary by the Department.
Recipients of Core Funding will be expected to provide the following additional information:
- A budget / cashflow statement for core activities indicating anticipated overall revenues by source (other grant and contribution programs within CanNor; other federal government departments and organizations; other levels of government; the private sector; the applicant; and other sources) and timing for funding from this authority.
- Where applicable, a complete set of financial statements for the most recently completed fiscal year. The financial statements may not be older than eighteen months at the date of submitting the proposal. The purpose will be twofold:
- to assess the financial health of the applicant to aid in determining the applicant's ability to successfully complete the activities; and
- to review, where applicable, how past funding by the authority was spent.
12. Assessment Criteria
Requests for assistance will be assessed on the basis of meeting the objective, expected results, specific criteria and guidelines of the contribution program / funding initiative being applied to.
In addition, the following assessment criteria and principles will be used, as appropriate:
- Initiatives will not overlap or duplicate existing programs, and those providing synergies with existing programming will be given particular attention;
- Cost sharing and leveraging will be promoted;
- Unique regional challenges and opportunities will be recognized and accommodated, while maintaining consistency with federal priorities;
- Investments will provide continuing benefits to the territorial and Canadian economies;
- Investments will meet the criteria and objectives of the terms and conditions of this Regional Development Authority; and
- Investments will avoid market disruptions.
Types and levels of assistance will be commensurate with assessment of the risk involved and the resources of the recipient.
The assessment of the required level of funding will take into consideration all other sources of funding available to the recipient. The assessment of the required level of assistance will take into consideration the total government assistance (federal, provincial / territorial and municipal assistance) towards the eligible costs supported by the contribution. This includes assistance such as all grants and contributions being considered, implicit subsidies, forgivable loans, investment tax credits and any other grant or contribution.
13. Monitoring and Reporting Mechanisms
The level of detail in reporting that is required from the recipient of a contribution will be aligned with the risk of the project and may include schedules, plans, and reports in sufficient detail to enable the Department to:
- Assess the progress of the project;
- Assess the financial status of the project / recipient;
- Carry out the post-completion monitoring called for in the funding arrangement;
- Administer the repayment of the contribution where applicable; and
- Evaluate the effectiveness of the contribution.
Reporting requirements will be determined by the Department for each project or initiative. Progress and financial reports will be required from recipients at a minimum on an annual basis. Recipients will also be required to submit a final report at the conclusion of a project, in accordance with the terms of the funding arrangement, for review and acceptance by the Department.
A process to monitor each project funded under this Regional Development Authority will be developed and managed by the Department. The purpose of the monitoring process will be to gather periodic information regarding the progress of the initiative against the milestones proposed in the application and to identify unanticipated risks or impediments to achieving intended results.
The evaluation process or criteria to be used to assess the effectiveness of the contribution program / funding initiative may include, but is not limited to, program / initiative rationale, success, cost-effectiveness, and design and delivery, the results achieved and the nature of impacts and effects resulting from the implementation of programs.
Recipient contribution agreements will contain applicable audit provisions.
Further details may be set out in the individual Program Performance Measurement Strategies of each contribution program / funding initiative, consistent with the requirements in the Policy on Transfer Payments.
14. Redistribution of Contributions
Where the recipient delegates authority or transfers program funding to an association, organization, development corporation or other entity authorized to act on behalf of the recipient, the recipient shall remain liable to the Minister for the performance of the obligations under the funding agreement. Neither the objectives of the programs, nor the expectations of transparent, fair and equitable service shall be compromised by this delegation or redistribution of contribution funding.
Recipients will not be acting as an agent of the government in making further distributions and will have independence in the choice of end recipients.
15. Repayable and Conditionally Repayable Contributions
Contributions may be conditionally or unconditionally repayable and funding agreements will contain the factors that determine whether and how the repayment is to be made and the amount of the repayment, the terms of repayment, and a description of the process to be used to monitor funding agreements and establish when repayments are due. The agreements will take into consideration the particular capacities and concerns of the recipient.
Where contributions are conditionally repayable, repayment is provisional upon specific conditions occurring or being met. The amount to be repaid is to be commensurate with benefits which accrue to the recipient from the project. Specifically, the amount to be repaid will be based on success factors such as the achievement of sales forecasts, the expected return on investment, the recipient's financial position and ability to repay. Where due diligence indicates that the business's ability to repay the contribution is not dependent on the achievement of the success factors of the project, the contribution will be unconditionally repayable. Unconditionally repayable contributions are those which must be repaid, in part or in full, irrespective of the benefits resulting from the project.
The establishment of a repayment period will be based on such factors as the useful life of the funded assets, the duration of the project, the period during which the recipient will realize the benefits of the project, and the recipient's financial position and ability to repay.
The terms of repayment are to be based on a fixed time schedule with due consideration to any seasonal nature of a recipient's operation with provisions for full repayment by a specified due date, not exceeding a period of 10 years from the project's completion date.
Recipients may be exempt from the requirement to repay a contribution when one or more of the following apply:
- The contribution is less than $100,000 and the administrative burden of repayable contributions is not justified;
- The recipient is a not-for-profit organization;
- The benefits from the contribution accrue broadly rather than to the recipient;
- The contribution is made with the primary aim of furthering basic research and development, including a payment made through a granting council or other government entity whose mandate is to promote research and development;
- The recipient is an Aboriginal-controlled business whose articles of incorporation do not permit dividends to be paid or distributed to shareholders.
The Department's corporate finance systems will be used to assist with the verification of invoice dates, appropriate follow-up on overdue accounts, viability reviews, collections or rescheduling decisions, and the handling of defaulted accounts.
16. Official languages
Implementation of activities will respect the requirements stipulated in the Official Languages Act, related regulations, and federal government policies. Compliance will be achieved by ensuring that all external communications and public consultations and associated documents will be in both official languages.
17. Other terms and conditions
The Department may retain the right to use intellectual property created by a recipient that is a direct result of an authorized contribution.
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