Community Economic Development Act, 1993, S.O. 1993, c. 26

• Jurisdiction: Ontario

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Community Economic Development Act, 1993

S.O. 1993, CHAPTER 26

Note: This Act was repealed on January 1, 2003. See: 2002, c. 17, ss. 7, 8 (1).

Amended by: 1994, c. 23, s. 1; 1999, c. 6, s. 10; 2002, c. 17, s. 7.

(NOTE: By Order in Council approved July 12, 1995, the powers and duties of the Minister were transferred to the Minister of Municipal Affairs and Housing.)

PART I
GENERAL

Interpretation

1. (1) In this Act,

“associate”, where used to indicate a relationship with any person, means,

(a) a corporation of which the person beneficially owns, directly or indirectly, more than 10 per cent of the equity shares of the corporation for the time being outstanding,

(b) a corporation of which the person is an officer or director,

(c) a person who beneficially owns, directly or indirectly, more than 10 per cent of the equity shares of the person,

(d) a trust in which the person has a substantial beneficial interest,

(e) a partner of the person,

(f) a spouse or same-sex partner of the person, both as defined in Part III of the Family Law Act, or

(g) a relative of the person or of his or her spouse or same-sex partner if the relative has the same home as the person; (“personne qui a un lien”)

“Class A security” means,

(a) for a community investment share corporation, a share of any class or series of shares of the corporation carrying a voting right or, in the case of a co-operative corporation, a preference share of the corporation, with other characteristics as set out in the regulations, and

(b) for a community loan fund corporation, a debt obligation of the corporation that is not subordinate to any other debt obligation of the corporation and has other characteristics as set out in the regulations; (“valeur mobilière de catégorie A”)

“community economic development corporation” means a community investment share corporation or a community loan fund corporation; (“société de développement économique communautaire”)

“community investment share corporation” means a corporation that is registered under Part V and that satisfies the requirements of section 7; (“société de participation communautaire”)

“community loan fund corporation” means a corporation that is registered under Part V and that satisfies the requirements of section 17; (“société de financement communautaire”)

“equity share” means a share of any class or series of shares of a corporation carrying a voting right or, in the case of a co-operative corporation, a preference share; (“action participante”)

“Minister” means the Minister of Municipal Affairs or such other member of the Executive Council to whom administration of this Act is assigned; (“ministre”)

“Ministry” means the Ministry of the Minister; (“ministère”)

“prescribed” means prescribed by the regulations; (“prescrit”)

“regulations” means the regulations made under this Act; (“règlements”)

“security offering” means an issuance by a community economic development corporation of its securities to the public; (“offre”, “offre de valeurs mobilières”)

“sponsor” means,

(a) a municipality, including a metropolitan, regional and district municipality and the County of Oxford,

(b) a community development corporation within the meaning of section 112.2 of the Municipal Act,

(c) a corporation without share capital,

(d) a co-operative corporation without share capital,

(e) an aboriginal community group, including a council of an Indian band within the meaning of subsection 2 (1) of the Indian Act (Canada), or

(f) a community group. (“parrain”) 1993, c. 26, s. 1 (1); 1999, c. 6, s. 10.

Corporate terms

(2) Except as otherwise provided in this Act, all terms and expressions in this Act that relate to corporations have the same meaning that they have in the Business Corporations Act, the Corporations Act and the Co-operative Corporations Act, as appropriate. 1993, c. 26, s. 1 (2).

Non-application of the Securities Act

2. (1) The Securities Act does not apply to the securities of a community economic development corporation. 1993, c. 26, s. 2 (1).

Same

(2) The Securities Act does not apply to the issuance of shares by a corporation pursuant to a transaction in which a community investment share corporation invests in the corporation, but any trade in shares issued pursuant to such transaction, other than as contemplated by subsection (3), shall be deemed to be a distribution under the Securities Act. 1993, c. 26, s. 2 (2).

Same

(3) The Securities Act does not apply to,

(a) the conversion or other exchange of shares of a community investment share corporation for shares of a corporation in which the community investment share corporation has invested;

(b) the conversion or other exchange of shares of a community investment share corporation for shares of another class of the community investment share corporation;

(c) the conversion or other exchange by a community investment share corporation of shares in a corporation in which the community investment share corporation has invested for shares of another class of that corporation; or

(d) any acts by a community investment share corporation in furtherance of a transaction described in clause (a), (b) or (c). 1993, c. 26, s. 2 (3).

Deemed distribution

(4) Any trade in shares acquired as a result of a conversion or exchange of shares described in clause (3)(a), (b) or (c) shall be deemed to be a distribution under the Securities Act. 1993, c. 26, s. 2 (4).

Conflict

3. In the event of a conflict between this Act or the regulations and an Act under which a community economic development corporation is incorporated, this Act and the regulations prevail unless the other Act expressly states that it prevails over this Act. 1993, c. 26, s. 3.

Delegation

4. The Minister of Finance may delegate in writing any of his or her powers or duties under this Act to any employee or public servant of the Ministry of Finance, subject to any limitations, restrictions, conditions and requirements set out in the delegation. 1993, c. 26, s. 4.

Register

5. (1) The Minister shall maintain a register of community economic development corporations setting out the names of the corporations, the names and addresses of their officers and directors and any other corporate information as prescribed. 1993, c. 26, s. 5 (1).

Public inspection

(2) The Minister shall ensure that the register is open for public inspection during normal office hours. 1993, c. 26, s. 5 (2).

PART II
COMMUNITY INVESTMENT SHARE CORPORATIONS

Definition

6. In this Part,

“eligible business” means a new or expanding corporation located in Ontario,

(a) that is a taxable Canadian corporation, as defined in paragraph 89 (1) (i) of the Income Tax Act (Canada),

(b) that is primarily engaged in prescribed business activities, and

(c) that meets the other prescribed criteria. 1993, c. 26, s. 6.

Requirements for registration

7. A corporation must satisfy the following requirements in order to be registered as a community investment share corporation:

1. The corporation is a corporation with share capital incorporated under the Business Corporations Act or the Co-operative Corporations Act.

2. The corporation was incorporated by one or more sponsors.

3. The corporation has never carried on any business, except as may be necessary for the purpose of becoming registered under this Act.

4. The corporation’s articles of incorporation restrict the business of the corporation to providing capital to eligible businesses through the acquisition and holding of equity shares issued by eligible businesses and to providing business advice to eligible businesses.

5. The corporation’s articles of incorporation establish a share capital structure as prescribed, including the rights, privileges, restrictions and conditions attaching to the shares of each class.

6. The corporation’s name includes the words “Community Investment Share” in English or “de participation communautaire in French.

7. The corporation’s articles of incorporation prohibit the corporation from lending money or providing financial assistance to a shareholder or member.

8. The corporation’s articles of incorporation limit the aggregate consideration the corporation may receive on the issue of its Class A securities to a prescribed amount unless the Lieutenant Governor in Council consents to a greater amount for the corporation.

9. The corporation has obtained the approval of the Minister of Finance for a security offering and offering statement of its Class A securities. 1993, c. 26, s. 7.

Restriction on issue of Class A securities

8. (1) A community investment share corporation shall issue its Class A securities to the following only:

1. Individuals who are ordinarily resident in Ontario.

2. Corporations other than community economic development corporations, labour sponsored venture capital corporations under the Labour Sponsored Venture Capital Corporations Act, 1992 or other prescribed classes of corporations.

3. Charitable, labour and not-for-profit organizations, as prescribed. 1993, c. 26, s. 8 (1).

Same

(2) A community investment share corporation shall not issue any Class A securities to a person if the issue would result in the person and the person’s associates holding Class A securities issued for an aggregate consideration exceeding a prescribed amount or amounts determined in a prescribed manner. 1993, c. 26, s. 8 (2).

Form of assets

9. Every community investment share corporation shall maintain its assets in one or more of,

(a) investments in eligible businesses permitted by sections 10 and 11; and

(b) any other form prescribed by the regulations. 1993, c. 26, s. 9.

Permitted investments

10. (1) A community investment share corporation may invest in one or more eligible businesses. 1993, c. 26, s. 10 (1).

Monetary restrictions

(2) A community investment share corporation shall not invest any amount, up to and including $150,000, in an eligible business except...