RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q2/CAN/13
1 November 1999
(99-4709)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Replies to Questions posed by the EUROPEAN COMMUNITY1
Regarding the New and Full Notification of CANADA2
The following communication, dated 29 October 1999, has been received from the Permanent
Mission of Canada.
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II. ATLANTIC ENTERPRISE PROGRAMME
Question re:  point 5 of Notification
5. One form of assistance was provided in th e form of contributions to reduce interest
costs.  What form did these contributions take?
Reply
Contributions were made in the form of non-repayable contributions.  The non-repayable
contributions were made against interest expenditures incurred by a given recipient.  The non-
repayable contributions were the lesser of 6 per cent of the interest cost of, or 50 per cent of interest
expenditures, incurred by the business.  These non-repayable contribution arrangements were made
for a maximum of 7 years.
Question re:  point 7 of Notification
7. It is stated that the last date for government financial commitments was
31 December 1990.  How, therefore, can there still be expenditure by Industry Canada and
Atlantic Canada Opportunities Agency in FY 1995/96 and FY 1996/97?
Was funding provided to an eligible business by both Industry Canada and Atlantic
Canada Opportunities Agency for the same project, or only from one of these agencies?
Reply
Financial assistance was the subject of a contract between a business enterprise and the
government.  Such contracts were signed until 31 December 1990.  Typically these contracts were for
a maximum of 7 years.  As the non-repayable contributions were made only to reimburse an agreed
                                                     
1 G/SCM/Q2/CAN/11
2 G/SCM/N/38/CANG/SCM/Q2/CAN/13
Page 2
share of interest expenditures incurred by businesse s, contributions could only be paid once the costs
were incurred.  Consequently, government expenditures continue after the last date for government
financial commitments, i.e. 31 December 1990.  However, no new government commitments were
made beyond 31 December 1990.
Funding on a given project was provided by either Industry Canada or Atlantic Canada
Opportunities Agency, but not by both agencies.
XXII. INDUSTRIAL RESEARCH ASSISTANCE PROGRAMME
Question re:  point 5 of Notification
5. Please explain more fully how "short-term non-funded technical advice" is provided.
Reply
The Industrial Research Assistance Programme provides technical advice as part of the
technical services to small and medium-sized ente rprises through technical staff located in various
regions.  If a project requires more than 2 days of technical assistance then the enterprise is referred to
a private consultant or a technical organization.  The cost incurred by the enterprise is covered in part
by the programme through a non-repayable contribution.
Question re:  point 6 of Notification
6. During FY 1995/96 and FY 1996/97, has assi stance of 50 per cent or more of project
costs been provided and, if so, up to what percentage?
Reply
17-20 per cent of projects received over 50 per cent of IRAP funding per project for a net
average for those projects of 60 per cent.  The vast  majority of projects, which received over 50 per
cent of IRAP funding were small projects receiving an average of $20,000 per project.  The total
amount of assistance for projects that have received more than 50 per cent of funding are:
FY 1995/96 – 419 projects for $6.4 million;  FY 1996/97 – 481 projects for $7.8 million.
XXIII. ATLANTIC CANADA OPPORTUNITIES  AGENCY ASSISTANCE PROGRAMME
Question re:  point 7 of Notification
7. Under the Business Development Programme (BDP), expenditures increased from
$20.8 million in FY 1995/96 to $70.4 million in FY 1996/97 even though the last date for
government financial commitments under this programme was 31 March 1995.  Please explain
the continued and increased level of expenditure.
Reply
The notification does not state that the government programme was not to accept new
financial commitments after that date.  Indeed, it states that the Business Development Programme
replaced the Action Programme in 1995.G/SCM/Q2/CAN/13
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XXX. WESTERN DIVERSIFICATION PROGRAMME
Question re:  point 4 of Notification
4. Assistance may be provided in the form of conditionally repayable contributions.  Please
explain under what conditions these contributions would be repayable.
Reply
Western Diversification's programme provides, inter alia , assistance to small business and
emerging industries through conditionally repayable or repayable contributions.
Repayable contributions are invested in research, development, demonstration, and market
development activities of products and process technology with a view to stimulating economic
activity in Western Canada.  WD conditionally repayable contributions are tied to company success.
The royalty/repayment schedule includes a provision for the repayment of the original contribution
and, in the case of a royalty schedule, a return on the investment.  The actual return is a direct functionof the product's market success.
XXXI. INNOVATION, ENTRPRENEURSHIP ENHANCEMENT AND EXPORTS
PROGRAMME(IDEE) FOR SMALL- AND MEDIUM-SIZED ENTERPRISES
Question re:  point 5 of Notification
5. It is stated that since January 1996, the assistance provided is generally repayable.  For
which enterprises/projects or under which conditions is assistance non-repayable?
Reply
Assistance to not-for-profit organizations is not repayable.
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