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Special Import Measures Regulations (SOR/84-927)

Regulations are current to 2024-05-28 and last amended on 2023-02-15. Previous Versions

PART IIAmount of Subsidy (continued)

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  • SOR/95-26, s. 17(F)
]

Grant

 Where the subsidy in relation to any subsidized goods is in the form of a grant, the amount of subsidy shall be determined by distributing, in accordance with generally accepted accounting principles, the amount of the grant over

  • (a) where the grant was, or is, to be used for operating expenses in the production, purchase, distribution, transportation, sale, export or import of subsidized goods, the estimated total quantity of subsidized goods to which the grant is attributable;

  • (b) where the grant was, or is, to be used for the purchase or construction of a fixed asset, the estimated total quantity of subsidized goods for the production, purchase, distribution, transportation, sale, export or import of which the fixed asset was, or will be, used for the anticipated useful life of the fixed asset;

  • (c) where the use of the grant was, or is, not for the purposes described in paragraph (a) or (b) or is unknown, the estimated total quantity of subsidized goods the production, purchase, distribution, transportation, sale, export or import of which was, or will be, carried out by the person who received the grant during the weighted average useful life, not exceeding 10 years, of fixed assets used by the industry of that person.

  • SOR/92-236, s. 2(E)
  • SOR/95-26, s. 17
  •  (1) Any amount that relates to the direct transfer of funds or liabilities by the practices of a government shall be treated as a grant under section 27.

  • (2) Any amount otherwise owing and due to a government that is exempted or deducted and any amount owing and due to a government that is forgiven or not collected by the government shall be treated as a grant under section 27.

  • SOR/95-26, s. 6

Loan at a Preferential Rate

 Where the subsidy in relation to any subsidized goods is in the form of a preferential loan, the amount of subsidy shall be determined by distributing, in accordance with generally accepted accounting principles, over the quantity of goods determined in accordance with section 31, the present value of the sum of

  • (a) the amount determined in accordance with section 29, and

  • (b) any costs, other than interest, that would have been incurred by the recipient of the preferential loan with respect to a non-guaranteed commercial loan that the recipient could have obtained,

such present value being determined as of the date the loan funds were advanced and by reference to the discount rate referred to in section 30.

  • SOR/95-26, s. 7
  • SOR/96-255, ss. 12, 25
  •  (1) The amount referred to in paragraph 28(a) is the difference between

    • (a) the amount of interest that would be payable, by the recipient of the preferential loan, on a non-guaranteed commercial loan in the same currency in which the payments for the preferential loan are expressed and on the same credit terms, other than the interest rate, as are applicable to the preferential loan, and

    • (b) the amount of interest payable on the preferential loan.

  • (2) For the purposes of paragraph (1)(a), the interest rate is

    • (a) the prevailing interest rate in the territory of the government that made the preferential loan, at the date the preferential loan was made, in respect of non-guaranteed commercial loans that the recipient of the preferential loan could have obtained, in the same currency in which the payments for the preferential loan are expressed and on credit terms, other than the interest rate, that are the same or substantially the same as the credit terms of the preferential loan;

    • (b) where the interest rate described in paragraph (a) cannot be ascertained or where there is no such interest rate, the prevailing interest rate in the territory of the government that provided the preferential loan, at the date the preferential loan was provided, in respect of non-guaranteed commercial loans that the recipient of the preferential loan could have obtained, in the same currency in which the payments for the preferential loan are expressed and on credit terms, other than the interest rate, that most closely approximate the credit terms of the preferential loan; or

    • (c) where the interest rates described in paragraphs (a) and (b) cannot be ascertained or where there are no such interest rates, the prevailing interest rate in the territory of the government that provided the preferential loan, at the date the preferential loan was made, in respect of non-guaranteed commercial loans that

      • (i) producers of like goods, whose financial creditworthiness is the same or substantially the same as or, in the absence of that condition, approximates that of the recipient of the preferential loan, could have obtained,

      • (ii) where subparagraph (i) is not applicable, producers of goods of the same general category, whose financial creditworthiness is the same or substantially the same as or, in the absence of that condition, approximates that of the recipient of the preferential loan, could have obtained, or

      • (iii) where subparagraphs (i) and (ii) are not applicable, producers of goods of the group or range of goods that is next largest to the category referred to in subparagraph (ii), whose financial creditworthiness is the same or substantially the same as or, in the absence of that condition, approximates that of the recipient of the preferential loan, could have obtained,

      in the same currency in which the payments for the preferential loan are expressed and on credit terms, other than the interest rate, that most closely approximate the credit terms of the preferential loan.

  • SOR/95-26, s. 7
  • SOR/96-255, ss. 13, 25

 The discount rate for the purposes of section 28 is the same as the interest rate determined in accordance with subsection 29(2).

  • SOR/95-26, s. 7

 The quantity of goods, for the purpose of section 28, is

  • (a) where the preferential loan was, or is, to be used for operating expenses in the production, purchase, distribution, transportation, sale, export or import of subsidized goods, the estimated total quantity of subsidized goods to which the preferential loan is attributable;

  • (b) where the preferential loan was, or is, to be used for the purchase or construction of a fixed asset, the estimated total quantity of subsidized goods for the production, purchase, distribution, transportation, sale, export or import of which the fixed asset was, or will be, used for the anticipated useful life of the fixed asset;

  • (c) where the use of the preferential loan was not or is not for the purposes described in paragraph (a) or (b) or is unknown, the estimated total quantity of subsidized goods the production, purchase, distribution, transportation, sale, export or import of which was or will be carried out by the person who received the preferential loan during the weighted average useful life of fixed assets, not exceeding 10 years, used by the industry in which that person is engaged.

  • SOR/92-236, s. 3(E)
  • SOR/96-255, ss. 14, 25

Loan Guarantees

  •  (1) Where the subsidy in relation to any subsidized goods is in the form of a loan guarantee, the amount of subsidy shall be determined by distributing, in accordance with generally accepted accounting principles, over the quantity of goods determined in accordance with subsection (2), the present value of the difference between

    • (a) the amount of interest and any administrative fees the person on whose behalf the guarantee is provided would have had to pay in respect of the loan had it not been for the guarantee, and

    • (b) the amount of interest and any administrative fees the person on whose behalf the guarantee is provided will actually pay in respect of the loan secured by the guarantee,

    such present value being determined as of the date the loan funds were advanced and by reference to the discount rate determined in accordance with subsection (3).

  • (2) For the purposes of subsection (1), the quantity of goods is

    • (a) where the loan secured by the guarantee was, or is, to be used for operating expenses in the production, purchase, distribution, transportation, sale, export or import of subsidized goods, the estimated total quantity of subsidized goods to which the loan is attributable;

    • (b) where the loan secured by the guarantee was, or is, to be used for the purchase or construction of a fixed asset, the estimated total quantity of subsidized goods for the production, purchase, distribution, transportation, sale, export or import of which the fixed asset was, or will be, used during the anticipated useful life of the fixed asset;

    • (c) where the use of the loan secured by the guarantee was not or is not a use set out in paragraph (a) or (b) or is unknown, the estimated total quantity of subsidized goods the production, purchase, distribution, transportation, sale, export or import of which was or will be carried out by the person who received the loan during the weighted average useful life of fixed assets, not exceeding 10 years, used by the industry in which that person is engaged.

  • (3) For the purposes of subsection (1), the discount rate is

    • (a) the prevailing interest rate in the territory of the government that provided the loan guarantee, at the date the loan was made, in respect of commercial loans that the recipient of the loan could have obtained, in the same currency in which the payments for the loan are expressed and on credit terms, other than the interest rate, that are the same or substantially the same as the credit terms of the loan;

    • (b) where the interest rate described in paragraph (a) cannot be ascertained or where there is no such interest rate, the prevailing interest rate in the territory of the government that provided the loan guarantee, at the date the loan was made, in respect of commercial loans that the recipient of the loan could have obtained, in the same currency in which the payments for the loan are expressed and on credit terms, other than the interest rate, that most closely approximate the credit terms of the loan; or

    • (c) where the interest rates described in paragraphs (a) and (b) cannot be ascertained or where there are no such interest rates, the prevailing interest rate in the territory of the government that provided the loan guarantee, at the date the loan was made, in respect of commercial loans that

      • (i) producers of like goods, whose financial creditworthiness is the same or substantially the same as or, in the absence of that condition, approximates that of the recipient of the loan, could have obtained,

      • (ii) where subparagraph (i) is not applicable, producers of goods of the same general category, whose financial creditworthiness is the same or substantially the same as or, in the absence of that condition, approximates that of the recipient of the loan, could have obtained, or

      • (iii) where subparagraphs (i) and (ii) are not applicable, producers of goods of the group or range of goods that is next largest to the category referred to in subparagraph (ii), whose financial creditworthiness is the same or substantially the same as or, in the absence of that condition, approximates that of the recipient of the loan, could have obtained,

      in the same currency in which the payments for the loan are expressed and on credit terms, other than the interest rate, that most closely approximate the credit terms of the loan.

  • SOR/95-26, s. 8
  • SOR/96-255, ss. 15, 25
  • SOR/2002-67, s. 1(F)

Income Tax Credits, Refunds and Exemptions

 Where the subsidy in relation to any subsidized goods is contingent on the export of those goods and in the form of a credit against, a refund of or an exemption from income taxes levied during any period, the amount of subsidy shall be determined by dividing

  • (a) the amount of the credit, refund or tax not paid by reason of the exemption, as the case may be,

by

  • (b) the quantity of goods exported during the period.

  • SOR/95-26, s. 17

Deferral of Income Taxes

 Where the subsidy in relation to any subsidized goods is contingent on the export of those goods and in the form of a deferral of income taxes, the amount of subsidy shall be determined by distributing, in accordance with generally accepted accounting principles, the amount determined in accordance with section 34 over the quantity of goods exported during the period for which taxes would have been paid had the taxes not been deferred.

  • SOR/95-26, s. 17
  •  (1) The amount for the purpose of section 33 is the present value of the interest that would have been payable, by the recipient of the deferral of income taxes, on a commercial loan in an amount equal to the amount of the deferred taxes, for a period equal to the period of the deferral, and with repayment terms similar to those in the payment schedule that applies to the deferred taxes, such present value being determined as of the date the deferral of income taxes came into effect in respect of the recipient of the deferral and by reference to the discount rate determined in accordance with subsection (2), and the interest rate in respect of such a loan being equal to the rate that is

    • (a) the prevailing interest rate in the territory of the government that permitted the deferral of income taxes, at the date the taxes would have been payable had they not been deferred, in respect of commercial loans that the recipient of the deferral could have obtained and that have a period the same or substantially the same as the period of the deferral and repayment terms comparable to those in the payment schedule applicable to the deferred taxes;

    • (b) where the interest rate described in paragraph (a) cannot be ascertained or where there is no such interest rate, the prevailing interest rate in the territory of the government that permitted the deferral, at the date the taxes would have been payable had they not been deferred, in respect of commercial loans that the recipient of the deferral could have obtained and that have a period that most closely approximates that of the period of the deferral and repayment terms that most closely approximate those in the payment schedule applicable to the deferred taxes; or

    • (c) where the interest rates described in paragraphs (a) and (b) cannot be ascertained or where there are no such interest rates, the prevailing interest rate in the territory of the government that permitted the deferral, at the date the taxes would have been payable had they not been deferred, in respect of commercial loans that

      • (i) producers of like goods, whose financial creditworthiness is the same or substantially the same as or, in the absence of that condition, approximates that of the recipient of the deferral, could have obtained,

      • (ii) where subparagraph (i) is not applicable, producers of goods of the same general category, whose financial creditworthiness is the same or substantially the same as or, in the absence of that condition, approximates that of the recipient of the deferral, could have obtained, or

      • (iii) where subparagraphs (i) and (ii) are not applicable, producers of goods of the group or range of goods that is next largest to the category referred to in subparagraph (ii), whose financial creditworthiness is the same or substantially the same as or, in the absence of that condition, approximates that of the recipient of the deferral, could have obtained,

      and that have a period that most closely approximates that of the period of the deferral and repayment terms that most closely approximate those in the payment schedule applicable to the deferred taxes.

  • (2) The discount rate for the purposes of subsection (1) is the same as the interest rate determined in accordance with that subsection.

  • SOR/95-26, s. 9
  • SOR/96-255, ss. 16, 25

Excessive Relief of Duties and Taxes on Exported Goods

 Where the subsidy in relation to any subsidized goods is contingent on the export of the goods and is in the form of an exemption from or remission, refund or drawback equal to an amount greater than the duties or taxes levied on the production, purchase, distribution, transportation, sale, export or import of the goods, the amount of subsidy shall be determined by deducting the amount of duties or taxes levied on or in respect of the exported goods, or the amount of duties or taxes that would have been levied on or in respect of the goods if they had not been exported, from the amount of the exemption, remission, refund or drawback that was granted in connection with the goods, and dividing the result by the quantity of goods, in relation to which the exemption, remission, refund or drawback was granted, that were exported during the period for which the duties or taxes were exempted, remitted, refunded or drawn back.

  • SOR/95-26, s. 17
  • SOR/96-255, ss. 17, 25
  • SOR/2000-138, s. 4

Excessive Relief of Duties and Taxes on Inputs

  •  (1) Where the subsidy in relation to any subsidized goods is contingent on the export of the goods and is in the form of an exemption from or remission, refund or drawback equal to an amount greater than the duties or taxes levied on goods consumed in the production of the exported goods, the amount of subsidy shall be determined by deducting the amount of duties or taxes levied on or in respect of the consumed goods from the amount of the exemption, remission, refund or drawback that was granted in connection with the consumed goods, and dividing the result by the quantity of goods, in relation to which the exemption, remission, refund or drawback was granted, that were exported during the period for which the duties or taxes were exempted, remitted, refunded or drawn back.

  • (2) For the purpose of subsection (1), the only goods considered to be consumed in the production of the exported goods are

    • (a) energy, fuel, oil and catalysts that are used or consumed in the production of the exported goods; and

    • (b) goods incorporated into the exported goods.

  • SOR/96-255, ss. 17, 25
  • SOR/2000-138, s. 4
 

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