Her Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs and the Minister for International Development and with the concurrence of the Minister of Finance, pursuant to section 8 of the International Financial Assistance Act a, makes the annexed International Financial Assistance Regulations. S.C. 2018, c. 27, s. 659
Definitions
The following definitions apply in these Regulations.
Act means the International Financial Assistance Act. (Loi)
OECD DAC List means the Organisation for Economic Co-operation and Development’s Development Assistance Committee List of Official Development Assistance Recipients, as amended from time to time. (liste établie par le CAD de l’OCDE)
Sovereign Loans
The competent minister must not make a loan under paragraph 3(1)(a) of the Act unless
the competent minister is of the opinion that the recipient or guarantor of the loan is creditworthy, taking into consideration World Bank and International Monetary Fund debt sustainability assessments; and
the recipient or guarantor of the loan is the government of
a country or territory that is included in the OECD DAC List, and
a borrowing member of the International Bank for Reconstruction and Development of the World Bank Group.
The sum of all outstanding loans made by the competent minister under paragraph 3(1)(a) of the Act to the government of a single foreign state and all outstanding loans made by the competent minister under that paragraph that are guaranteed under subsection 3(2) of the Act by the government of that foreign state must not exceed $120 million or the value of 20% of all outstanding loans made by the competent minister under paragraph 3(1)(a) of the Act, whichever is greater.
The maximum term of a loan made under paragraph 3(1)(a) of the Act is 10 years.
The interest rate applicable to a loan made under paragraph 3(1)(a) of the Act is a fixed rate that equals the Government of Canada’s cost of borrowing as determined by reference to the zero-coupon yield curve for Government of Canada bonds published by the Bank of Canada.
The initiation fee for a loan made under paragraph 3(1)(a) of the Act is the lesser of 0.15% of the amount of the loan and $100,000.
In the case of a loan made under paragraph 3(1)(a) of the Act that is to be disbursed in a single disbursement, the per annum commitment fee is 0.25% of the amount of the loan for the period beginning on the day that is 60 days after the effective date of the loan and ending on the day on which the recipient draws the loan, payable on a semi-annual basis.
Subject to subsection (2), principal and interest payments related to a loan made under paragraph 3(1)(a) of the Act are payable by the recipient on at least an annual basis.
The competent minister may grant the recipient a grace period during which the recipient is not required to make principal or interest payments, or both, on a loan made under paragraph 3(1)(a) of the Act if there is an imbalance between the recipient’s cash inflows and outflows.
A loan made under paragraph 3(1)(a) of the Act may only be made in the currency of Canada, the United States, the European Monetary Union, the United Kingdom, Japan or another currency identified by the International Monetary Fund as an official foreign exchange reserve currency.
The competent minister must not carry out any of the following transactions without the approval of the Minister of Finance:
making a loan under paragraph 3(1)(a) of the Act;
amending a financial term of a loan made under paragraph 3(1)(a) of the Act.
The competent minister must consult with the Minister of Finance before a debt or obligation relating to a loan made under paragraph 3(1)(a) of the Act is written off or forgiven.
Innovative Financing
Under paragraph 4(a) of the Act, the competent minister must not guarantee an obligation undertaken by a person or entity unless
the guarantee supports international assistance in a country or territory included in the OECD DAC List; and
the competent minister obtains from the recipient of the guarantee an undertaking to make reasonable efforts to recover losses related to the obligation.
The maximum amount of outstanding guarantees provided under paragraph 4(a) of the Act must not exceed $500 million.
The maximum amount of outstanding guarantees provided under paragraph 4(a) of the Act to a particular recipient must not exceed $100 million.
If the competent minister provides a partial guarantee under paragraph 4(a) of the Act, the competent minister must not guarantee more than 50% of the obligation undertaken by a person or entity.
Subject to section 18 of these Regulations, the initiation fee for a guarantee provided under paragraph 4(a) of the Act is the lesser of 0.15% of the amount of the guarantee and $100,000.
Subject to section 18 of these Regulations, the fee to obtain a guarantee provided under paragraph 4(a) of the Act is an amount equal to the net present value of the expected financial loss to the Government of Canada of the guarantee.
If the competent minister provides a guarantee under paragraph 4(a) of the Act with a co-guarantor, the initiation fee and the fee to obtain the guarantee are the amounts charged for similar fees by the co-guarantor on a prorated basis.
The competent minister must not under paragraph 4(f) of the Act acquire, hold, assign, exchange, sell or otherwise dispose of shares except in respect of an investment that supports international assistance in a country or territory included in the OECD DAC List.
The competent minister must not seek to acquire or hold a controlling or majority interest in a corporation when making the investment referred to in subsection (1).
The competent minister must not carry out any of the following transactions without the approval of the Minister of Finance:
providing a guarantee under paragraph 4(a) of the Act;
executing a transaction under any of paragraphs 4(b) to (f) of the Act, except if the transaction is executed under paragraph 4(f) of the Act through a transfer payment;
amending a financial term of a transaction that was executed under any of paragraphs 4(a) to (f) of the Act, except if the transaction is executed under paragraph 4(f) of the Act through a transfer payment.
Program for Climate Change
The competent minister must not, under section 5 of the Act, seek to acquire or hold a controlling or majority interest in a corporation.
Coming into Force
These Regulations come into force on the day on which section 659 of the Budget Implementation Act, 2018, No. 2 comes into force, but if they are registered after that day, they come into force on the day on which they are registered.[Note: Regulations in force June 25, 2019.]