WORLD TRADE  
ORGANIZATION  G/SCM/Q2/CAN/22 
26 April 2006 
 (06-1955) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES  
 
Questions from the UNITED STATES  
Regarding the New and Full Notification of CANADA1 
 
  The following communication, dated 24 April 2006,  is being circulated at the request of the 
Delegation of the United States.  
_______________ 
 
 
Canadian Network for the Advancement of Research, Industry and Education (CANARIE) 
 
• The description of this programme states that, "maximum assistance is either 50 per cent or 
100 per cent of eligible costs depending on the type of project""  Please explain what types of 
expenditures are considered to be "eligible  costs" for the purposes of this programme. 
 
The Structured Financing Facility 
 
• Based on the description of this programme provi ded in Canada’s notification, it appears that 
various forms of financing assistance are provide d to purchasers/lessors of Canadian built 
vessels.  To the extent that incentives throug h this programme are specific to purchases of 
Canadian built vessels, this programme could be  considered a prohibited subsidy as provided 
under Article 3 of the Agreement on Subsidies and Countervailing Measures (Subsidies Agreement).  Please explain how this progra mme conforms with Canada’s commitment under 
Article 3(b) of the Subsidies Agreemen t not to provide prohibited subsidies. 
 
Canadian Support Programme for the Econ omy of Gaspe and the Magdalen Islands 
 
• In the description of this programme it states that, "assistance is provided to any individual, 
corporation, municipalities, non-profit organi zations and SMEs planning to carry out an 
eligible project".  Please explain what types of project are considered to be "eligible projects" 
under this programme. 
 
The Regional Strategic Innovation Programme 
 • In the description of this programme it states that assistance is provided "in the form of 
non-repayable contributions to non-profit organiza tions up to 90 per cent of eligible costs and 
repayable contributions to SMEs  up to 50 per cent of eligible costs".  Please explain what 
types of expenditures are considered to be "elig ible costs" for the purposes of this programme. 
 
                                                     
 
1 G/SCM/N/123/CAN G/SCM/Q2/CAN/22 
Page 2  
 
  Western Economic Partnership Agreements 
 
• The description of this programme states that one of the key sectors for which assistance is 
provided under this programme is the area of trad e.  In addition, this notification states that 
these partnership agreements are "intended to focus on those strategic priorities that will 
enable the West to take advantage of opportuni ties and to become a more dynamic, globally 
competitive economy".  Please explain in further detail what kinds of projects are funded through Canada’s Western Econom ic Partnership Agreements.  Please also explain in further 
detail the conditions that must be met for a project to qualify for funding under this 
programme.   
 
Investissement Québec 
 
Investissement Québec is an economic devel opment organization that provides financial 
assistance to companies in Québec.  Assistance is  normally provided throu gh loan or financial 
commitment guarantees and non-refundable financial contributions. For example, in December 2004,  
Investissement Québec provided $750 million in loan guarantees to Bombardier in order to back sales 
of about 100 regional jets. Investissement Qu ébec also plans to provide $118 million in financing for 
a plant near Montreal that will be used to assemble Bombardier’s new C-Series aircraft.  In addition, 
in May 2005 Investissement Québec provided $75 million in royalty-based financing to Pratt & 
Whitney for research and development. This will be  distributed over 3 years and repayment is not 
scheduled to begin until 2030. 
 • Please explain why this programme does not qualify as notifiable under Article 25 of the 
Subsidies Agreement.  If the programme does qualify as notifiable, please provide the information required under Article 25. 
 
Additional Assistance to the C-Series Aircraft  
 
Based on publically available information, it appears that Bombardier may be receiving 
assistance for the production of its new C-Series aircraft. In addition to the assistance mentioned above, in May 2005 the government of Quebec announ ced that it plans to build and lease back an 
assembly plant in Mirabel to be used in the producti on of C-Series aircraft.  This is valued between 
$270 and $350 million.  • Please explain why this programme does not qualify as notifiable under Article 25 of the 
Subsidies Agreement.  If the programme does qualify as notifiable, please provide the 
information required under Article 25. 
 
Assistance to the Film Industry   
 
Information from public sources indicates that Canada administers several programmes at 
both the Federal and sub-Federal le vel, which benefit the film industry.   Many of the programmes 
administered at the Federal level, including th e Canadian Film or Video Production Tax Credit 
Programme, the Film or Video Production Servi ces Tax Credit Programme (PSTC), the Canadian 
Television Film Fund and the Culture Industries Devel opment Fund,  appear to be specific to the film 
industry and also appear to be notifiable under Artic le 25 of the Subsidies Agreement.  In addition, 
there are other significant programmes administered at the provincial level, such as the Ontario 
Production Services Tax Credit (OPSTC), the Ontari o Film and Television Tax Credit (OFTTC), the 
Ontario Computer Animation and Special Effect  Tax Credit (OCASE), and the Quebec Film or 
Television Production Services Tax Credit, which also appear to meet the notification requirements of 
Article 25.      G/SCM/Q2/CAN/22 
 Page 3 
 
 
  • Please explain why Canada's programmes which be nefit the film industry, such as those listed 
above, do not qualify as notifiable under the Subsidies Agreement.   If these programmes do meet the requirements of Article 25, please provide the information required under that 
article.  In doing so, please provide informati on regarding all programmes administered by 
either the Canadian Federal or provisional governments that benefit the film industry. 
 
__________