Structured Financing Facility

The objective of the Structured Financing Facility (SFF) is to help ensure that shipyard capability exists for federal procurement and maintenance needs in 2009 and beyond.

Eligibility Criteria

An applicant is a purchaser of a vessel. An applicant can propose that the contribution for financing support be provided to a recipient who can be a lender.

What are the eligible products?

New vessels or marine structures and existing vessels and marine structures undergoing major refurbishment, refit or conversion in a Canadian shipyard, primarily intended for use in a commercial operation, service or venture and shall include, but not be restricted to:

• vessels, offshore or other marine structures designed and used for commercial purposes without regard to the method of propulsion;
• passenger vessels, ferries, dry-bulk vessels, self-unloading vessels, tankers, container vessels, roll-on roll-off vessels, tugs, tow boats, barges, dredges, vessels for oceanographic research, pollution abatement, ice breaking, anchor handling and offshore supply, oil drilling, oil exploration, fishing, floating industrial plants and search and rescue;
• major conversions or structural alterations that change the end-use of the vessel or significantly renew the structure or capacity of the vessel or increase its useful life by at least five years (such as forebody conversion of Great Lakes vessels); and
• any other vessel or marine structure, the financing support of which, under this Facility, will, in the opinion of the Minister, contribute to the achievement of the Facility's objectives.

Pleasure craft, as defined in the Canada Shipping Act, vessels constructed of wood or fiberglass and vessels powered by only sail, are not included.

Summary

The renewed SFF has one element:

• financing support which can provide financing assistance within prescribed limits, up to 15% of the purchase price of a new Canadian built vessel. The support is in the form of a non-repayable contribution.  

In order to receive SFF support, the applicant must waive the right to the Accelerated Capital Cost Allowance (ACCA). The income tax regulations have been revised to this effect.

Application Process

An applicant provides a project outline to Industry Canada with the following information:

• company information - name of company, address, contact person, preferred language of communication;
• company profile - ownership and organization (legal status), brief summary of company history, nature of business, most recent financial statements;
• proposed project - what type of vessel is being purchased from which Canadian yard, overall costs, proposed financing arrangements, proposed contracts for use and destination of vessel, customer(s), timing;
• market - where will the vessel be used;
• competition - which shipyards are competing for the construction of the vessel, what is the price differential amongst the alternative shipyards, why is support under the SFF required;
• benefit to Canada - outline benefits such as jobs created in Canada both in the construction of the vessel and in its use, identify any design or development that may be required, technology transfers, etc.;
• a draft contract with the shipyard;
• a term sheet from the financing institution.

The shipyard shall provide a description of the investment which will be made to improve efficiency, productivity and competitiveness at the shipyard as a result of the SFF contribution to the project.

The Minister of Industry Canada shall have the sole discretion to determine the acceptability of an applicant, a recipient or a lender, a lessor and a shipyard; the Minister may, from time to time, make policies regarding acceptability.

Industry Canada will assess the above information and provide the applicant within a few weeks with an indication of whether the proposed project appears to be eligible under the SFF. If the project appears to be eligible, the Department will inform the applicant of any additional information that may be required in order for the Department to proceed with a full analysis and obtain the appropriate approval authorities.

If the project is approved, the recipient will be requested to submit data, schedules, plans and reports in sufficient detail to enable the Minister to:

• (a) assess the progress of the project;
• (b) carry out the post-completion monitoring called for in the contribution agreement.

New Brunswick Contact(s):
See National Contact.

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National Contact(s):
Émile Rochon
Senior Program Co-ordinator
Aerospace, Defence and Marine Branch
Industry Canada
235 Queen Street
Ottawa, Ontario  K1A 0H5
Telephone: 613-954-3468
Fax: 613-998-6703
E-mail: rochon.emile@ic.gc.ca

Walter Sims
Senior Commerce Officer
Aerospace, Defence and Marine Branch
Industry Canada
235 Queen Street
Ottawa, Ontario  K1A 0H5
Telephone: 613-954-3333
Fax: 613-998-6703
E-mail: Sims.Walter@ic.gc.ca

Joan Woodside
Program Officer
Aerospace, Defence and Marine Branch
Industry Canada
235 Queen Street
Ottawa, Ontario  K1A 0H5
Telephone: 613-954-3167
Fax: 613-998-6703
E-mail: Woodside.Joan@ic.gc.ca