Law:Dry Docks Subsidies Act

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R.s.c., 1985, c. D-4

An Act to encourage the construction of dry docks

Short title

1. This Act may be cited as the Dry Docks Subsidies Act.

R.S., c. D-9, s. 1.

Definitions

2. In this Act,

“dry dock” and “dock”

« bassin de radoub » ou « bassin »

“dry dock” and “dock” include floating dry docks;

“Minister”

« ministre »

“Minister” means the Minister of Public Works and Government Services;

R.S., 1985, c. D-4, s. 2; 1996, c. 16, s. 34.

Subsidy for construction of dry dock

3. (1) The Governor in Council may, as an aid to the construction of any dry dock, authorize the payment out of any unappropriated money forming part of the Consolidated Revenue Fund of a subsidy, in accordance with this Act, to any incorporated company, approved by the Governor in Council as having the ability to perform the work, that enters into an agreement with Her Majesty to construct a dry dock under this Act, with all necessary equipment, machinery and plant, for the reception and repairing of vessels.

Report before grant of subsidy

(2) No such aid shall be granted unless the Governor in Council is satisfied, on a report of the Minister and such other evidence as the Governor in Council deems necessary, that the dry dock is needed in the public interest, and is, as proposed, of sufficient capacity to meet the public requirements where the dry dock is to be located.

R.S., 1985, c. D-4, s. 3; 1996, c. 16, s. 35.

Works of existing dry dock company

4. (1) For the purpose of constructing a dry dock under this Act, the company entering into the agreement contemplated by section 3 may utilize, or acquire for the purpose of utilizing, the works and property of any existing dry dock company whose dock has been constructed under An Act to encourage the construction of Dry Docks by granting assistance on certain conditions to companies constructing them, chapter 17 of the Statutes of Canada, 1882, An Act to encourage the construction of Dry Docks, chapter 9 of the Statutes of Canada, 1899, An Act to encourage the Construction of Dry Docks, chapter 116 of the Revised Statutes of Canada, 1906, or An Act to encourage the Construction of Dry Docks, chapter 24 of the Statutes of Canada, 1908, and the value of the works and property at the time when the agreement is entered into, in so far as the works and property may be useful in the construction of a dry dock of greater dimensions or capacity under this Act, shall be deemed to be for the purposes of subsidy calculation a part of the cost of the dry dock constructed under this Act.

Aggregate subsidies already paid

(2) The aggregate amount of all subsidies paid by the Governor in Council, in respect of the dock so utilized, under any of the Acts mentioned in subsection (1), before the agreement to construct under this Act is entered into, shall be deducted from the subsidy payable under this Act, and the deduction shall be made in equal annual portions during the period in respect of which the subsidy is payable under this Act, and the remaining payments, if any, of the subsidy called for by the agreement entered into under any of the Acts mentioned in subsection (1) shall not be made.

Value of existing works

(3) For the purposes of this section, the value of the works and property of any existing dry dock company shall be estimated by the Minister, and the Governor in Council, having regard to the estimate, shall determine the value of the works and property, and the amount shall be so determined before the said agreement is entered into.

R.S., 1985, c. D-4, s. 4; 1996, c. 16, s. 36.

Plans, specifications and estimates

5. Any company that seeks to enter into an agreement with Her Majesty to construct a dry dock under this Act shall, as part of its application therefor, present detailed working plans and specifications of the proposed works, accompanied by estimates of the cost thereof, including estimates of the cost of all necessary equipment, machinery, plant and site, if the company is obliged to pay for the site in cash and does not obtain or has not obtained a site by way of bonus or gift, and the estimates of cost shall be in such detail as will enable the Minister to verify them for the purposes of the recommendation made by the Minister under section 8.

R.S., 1985, c. D-4, s. 5; 1996, c. 16, s. 37.

Expropriation of lands

6. (1) Where a company that has entered into an agreement with Her Majesty to construct a dry dock under this Act is unable to agree with the owner of any land or other real property or interest therein as to the purchase, acquisition or transfer of the land, property or interest or the price to be paid for it, and the company considers that it is necessary for a site for the dry dock, the company may, with the approval of the Governor in Council and in accordance with the Expropriation Act, expropriate the land, property or interest.

Notice to appropriate minister

(2) Where the Governor in Council approves an expropriation under subsection (1), the company shall so advise the appropriate minister in relation to Part I of the Expropriation Act.

Expropriation Act

(3) For the purposes of the Expropriation Act, land or real property or an interest therein that the Governor in Council has approved the expropriation of under subsection (1) is deemed to be an interest in land that, in the opinion of the appropriate minister in relation to Part I of the Expropriation Act, is required for a public work or other public purpose, and a reference to the Crown in that Act shall be construed as a reference to the company.

Charges for services

(4) The appropriate minister in relation to Part I of the Expropriation Act may make regulations prescribing fees or charges to be paid by a company in respect of an expropriation referred to in subsection (1), and rates of interest payable in respect of those fees and charges.

Debt due to Her Majesty

(5) The fees or charges are a debt due to Her Majesty in right of Canada by the company, and shall bear interest at the prescribed rate from the date they are payable.

Security

(6) The Minister may require the company to provide security, in an amount determined by the Minister and subject to any terms and conditions that the Minister may specify, for the payment of any fees or charges that are or may become payable under this section.

R.S., 1985, c. D-4, s. 6; 1996, c. 10, s. 215.

Three classes of dry docks

7. Dry docks constructed under this Act shall, for the purposes of this Act, be divided into three classes as follows:

(a) dry docks of the first class for naval and general purposes costing, for the purposes of the subsidy calculation, not more than five million five hundred thousand dollars in the case of dry docks specified in subparagraph (i), and not more than four million dollars in the case of dry docks specified in subparagraph (ii), being

(i) dry docks, other than floating dry docks, of dimensions when completed of not less than the following principal dimensions, that is to say, clear length on bottom from caisson groove or hollowquoin to head, eleven hundred and fifty feet, clear width of entrance, one hundred and twenty-five feet, depth of water over sill at high water ordinary spring tides, thirty-eight feet, and

(ii) floating dry docks of a lifting capacity of at least twenty-five thousand tons in which vessels can be received and repaired with ease and safety,

but any such dry dock shall not for the purposes of this Act be deemed to be a dry dock of the first class unless there can be received and repaired therein with ease and safety the largest ships or vessels of the British Navy existing at the time at which the contract is entered into;

(b) dry docks of the second class, costing for the purposes of subsidy calculation not more than two and one-half million dollars, being

(i) dry docks, other than floating dry docks, of dimensions when completed of not less than the following principal dimensions, that is to say, clear length on bottom from caisson groove or hollowquoin to head, six hundred and fifty feet, clear width of entrance, eighty-five feet, depth of water over the sill at high water ordinary spring tides, thirty feet if constructed on tidal waters and twenty-five feet over the sill at ordinary low water if constructed on non-tidal waters, and

(ii) floating dry docks of a lifting capacity of at least fifteen thousand tons in which vessels can be received and repaired with ease and safety; and

(c) dry docks of the third class, costing for the purposes of subsidy calculation not more than one and one-half million dollars, being

(i) dry docks, other than floating dry docks, of dimensions when completed of not less than the following principal dimensions, that is to say, clear length on bottom from caisson groove or hollowquoin to head, four hundred feet, clear width of entrance, sixty-five feet, depth of water over the sill at high water ordinary spring tides, twenty-two feet if constructed on tidal waters and eighteen feet over the sill at ordinary low water if constructed on non-tidal waters, and

(ii) floating dry docks of a lifting capacity of at least three thousand five hundred tons in which vessels can be received and repaired with ease and safety.

R.S., c. D-9, s. 7.

Basis of subsidy

8. The cost on which the subsidy shall be calculated shall be fixed and determined by the Governor in Council, on the recommendation of the Minister, and the cost shall include the cost of all necessary equipment, machinery and plant, and any sum in good faith expended or to be expended by the company in the purchase of a site for the dry dock, but shall not include the value of any site received or to be received by the company by way of bonus or gift, and the amount of the subsidy shall be so fixed and determined before the agreement for payment of the subsidy is entered into.

R.S., 1985, c. D-4, s. 8; 1996, c. 16, s. 38.

Amount of subsidies for first class docks

9. (1) The subsidy in respect of dry docks of the first class that have been constructed under this Act shall be a sum not exceeding four and one-half per cent per annum of the cost of the work as fixed and determined under section 8, payable half-yearly during a period not exceeding thirty-five years from the time the Governor in Council has determined under this Act that the work has been completed.

Issue of bonds

(2) No bonds, debentures or other securities shall be issued with respect to and as a charge on any dock until it has been established to the satisfaction of the Minister that not less than one million dollars have been spent on the work and the material on or for the dock, and that there are no outstanding and unsettled liens, encumbrances or claims on or in respect of the dock, but thereafter the Minister may permit the issue of bonds, debentures or other securities, and any subsidy mentioned by this section may, with the approval of the Minister, be assigned to a trustee for the holder of the bonds, debentures or other securities, and the subsidy shall, in that event, be payable directly to the trustee.

Idem

(3) Until the dock has been completed to the satisfaction of the Minister, the total amount of the bonds, debentures or other securities issued shall not at any time exceed seventy-five per cent of the amount actually expended for the work and the materials on or for the dock, and in no case shall any bonds, debentures or other securities be issued without the consent in writing of the Minister.

Advances during construction

(4) Half-yearly payments on account of the subsidy at the rate of four and one-half per cent per annum on seventy-five per cent of the cost of all work done and materials provided at the time of the payment may be made during the construction of the dock, and for such period as may be determined by the Governor in Council, not exceeding thirty-five years from and including the first payment thereof, the amount of such cost to be determined by the Minister, but no payment on account shall be made until the work done and materials provided have cost the sum of at least one million dollars.

Restrictions on payments

(5) No payments on account shall be made unless the Minister determines that the work of construction of the dry dock with respect to which the payment is to be made has been done to the satisfaction of the Minister, and no subsidy shall be paid, except payments on account pursuant to subsection (4), unless the Governor in Council, in the manner prescribed in this Act, has determined that the work required by the agreement is completed.

Total subsidy limited

(6) The total subsidy, including payments on account during construction, shall not in any case exceed the amount of subsidy hereinbefore authorized.

Payment of subsidy

(7) When the amount actually expended for the work and the materials on or for the dock has equalled at least seventy-five per cent of the cost thereof as fixed and determined under this Act, and the Minister has certified thereto and has further certified that the work has been done to the Minister’s satisfaction, half-yearly payments on account of the subsidy at the rate of four and one-half per cent per annum may be made on ninety per cent of the cost of all work done and materials provided at the time of the payment, but in all other respects this Act applies to the issue of any bonds, debentures or other securities and to any payments on account of the subsidy during construction of the dock.

R.S., 1985, c. D-4, s. 9; 1996, c. 16, s. 39.

Subsidies for second class docks

10. (1) The subsidy in respect of dry docks of the second class that have been constructed under this Act shall be a sum not exceeding four and one-half per cent of the cost of the work, as fixed and determined under section 8, payable half-yearly during a period not exceeding thirty-five years from the time the Governor in Council has determined under this Act that the work has been completed.

Issue of bonds

(2) No bonds, debentures or other securities shall be issued with respect to and as a charge on any dock until it has been established to the satisfaction of the Minister that not less than one-half million dollars have been spent on the work and the material on or for the dock, and that there are no outstanding and unsettled liens, encumbrances or claims on or in respect of the dock, but thereafter the Minister may permit the issue of bonds, debentures or other securities, and any subsidy mentioned by this section may, with the approval of the Minister, be assigned to a trustee for the holder of the bonds, debentures or other securities, and the subsidy shall, in that event, be payable directly to the trustee.

Idem

(3) Until the dock has been completed to the satisfaction of the Minister, the total amount of the bonds, debentures or other securities issued shall not at any time exceed seventy-five per cent of the amount actually expended for the work and the materials on or for the dock, and in no case shall any bonds, debentures or other securities be issued without the consent in writing of the Minister.

Advances during construction

(4) Half-yearly payments on account of the subsidy at the rate of four and one-half per cent per annum on seventy-five per cent of the cost of all work done and materials provided at the time of the payment may be made during the construction of the dock, and for such period as may be determined by the Governor in Council, not exceeding thirty-five years from and including the first payment thereof, the amount of such cost to be determined by the Minister, but no payment on account shall be made until the work done and materials provided have cost the sum of at least one-half million dollars.

Restrictions on payment

(5) No payments on account shall be made unless the Minister determines that the work of construction of the dry dock with respect to which the payment is to be made has been done to the satisfaction of the Minister, and no subsidy shall be paid, except payments on account pursuant to subsection (4), unless the Governor in Council, in the manner prescribed in this Act, has determined that the work required by the agreement is completed.

Total subsidy limited

(6) The total subsidy, including payments on account during construction, shall not in any case exceed the amount of subsidy hereinbefore authorized.

Payment of subsidy

(7) When the amount actually expended for the work and the materials on or for the dock has equalled at least seventy-five per cent of the cost thereof as fixed and determined under section 8, and the Minister has certified thereto and has further certified that the work has been done to the Minister’s satisfaction, half-yearly payments on account of the subsidy at the rate of four and one-half per cent per annum may be made on ninety per cent of the cost of all work done and materials provided at the time of the payment, but in all other respects this Act applies to the issue of any bonds, debentures or other securities and to any payments on account of the subsidy during construction of the dock.

R.S., 1985, c. D-4, s. 10; 1996, c. 16, s. 40.

Subsidies for third class docks

11. The subsidy in respect of dry docks of the third class that have been constructed under this Act shall be a sum not exceeding three per cent of the cost of the work, as fixed and determined under section 8, payable each year during a period not exceeding twenty years from the time the Governor in Council has determined under this Act that the work has been completed.

R.S., c. D-9, s. 11.

Agreement to accord with plans

12. Any agreement under this Act shall be for the construction of a dry dock in accordance with the plans and specifications referred to in section 8.

R.S., c. D-9, s. 12.

Supervision of construction

13. (1) The work of constructing any dry dock for which a subsidy is authorized under this Act shall be done under the supervision of the Department of Public Works and Government Services, and shall be completed within the time limited by and according to the provisions of the agreement in that behalf, unless the time for construction is extended by the Governor in Council.

Payment of subsidy

(2) The subsidy referred to in subsection (1) shall be payable, during the period agreed to by the Governor in Council under this Act, from the time the Governor in Council, on a report from the Minister, determines that the work required by the agreement has been completed, and that the reception and repairing of vessels as contemplated by this Act may forthwith be proceeded with at the dock.

R.S., 1985, c. D-4, s. 13; 1996, c. 16, s. 41.

Dock to be kept in repair and working order

14. Every agreement under this Act shall include a provision that the dock shall, after completion, be kept in repair and working order by the company, and keeping in repair and working order within the meaning of this Act includes, in the case of a floating dry dock, painting and the employment of such other means to lessen and hinder corrosion of the submerged parts thereof as may be practicable.

R.S., c. D-9, s. 14.

Taking possession of dock if not in working order

15. Whenever it appears to the Governor in Council that any dock constructed under this Act is not in a condition of repair and working order, the Governor in Council may authorize and empower the Minister to cause possession to be taken of the dock on behalf of Her Majesty and to expend out of any unappropriated money forming part of the Consolidated Revenue Fund a sufficient sum to put the dock in a state of efficiency and repair.

R.S., c. D-9, s. 15.

Operation by Government

16. The Minister shall operate the dry dock after repairs are completed and while it is in the possession of Her Majesty, and shall charge and collect the tolls or rates approved under this Act in respect of the letting or hiring, operation or use of the dock or of space therein, or of any works connected therewith, and the Minister shall, after payment thereout of operating expenses and maintenance, apply the balance first in repayment of the advances made under section 15, and secondly in payment of accrued interest on bonds or other fixed obligations or securities of the company.

R.S., c. D-9, s. 16.

Restoration to company

17. The Governor in Council may at any time direct the delivery of possession of the said dock to the company.

R.S., c. D-9, s. 17.

Tolls and regulations

18. (1) No tolls or rates shall be charged or taken by the company in respect of the letting or hiring, operation or use of the said dock or of space therein, or of any works connected therewith, until the company has submitted a tariff of tolls or rates and the tariff has been approved by the Governor in Council, and no by-laws, rules, regulations or conditions respecting the letting, hiring, operation or use shall have any force or effect until so submitted and approved.

Disallowance of tolls

(2) The Governor in Council may at any time disallow the whole or any part of a tariff or of any by-laws, rules, regulations or conditions, and may require the company, within a specified time, to submit a tariff, or substitute other tariff, tolls, by-laws, rules, regulations or conditions in lieu thereof, and, in default, may fix a tariff or prescribe another.

R.S., c. D-9, s. 18.

Floating dry docks

19. (1) Before entering into an agreement for the construction of a floating dry dock under this Act, the Governor in Council shall ascertain from expert engineering opinion what the probable time will be during which the floating dry dock, with reasonable maintenance, will be serviceable for the reception and repairing of vessels as contemplated by this Act.

Idem

(2) Where the Governor in Council is not satisfied that, with reasonable maintenance, the dock will be serviceable as mentioned in subsection (1) for a period at least twice as long as that during which the subsidy under this Act is payable, provision shall be made in the agreement that the company shall set aside annually such sum, to be therein mentioned, as the Governor in Council may deem sufficient to provide a fund wherewith to renew the whole of the floating part of the dock at the expiration of the time at which that part of the dock ceases to be serviceable.

Investment of fund

(3) The fund described in subsection (2) shall be kept and invested in such manner as the Governor in Council may direct.

R.S., c. D-9, s. 19.

British and Canadian naval ships

20. On the application of the Governor in Council or any member of the Queen’s Privy Council for Canada, ships or vessels in the British Naval Service, ships or vessels of the Canadian Forces and other ships or vessels the property of or employed by Her Majesty are at all times entitled to the use of such docks in priority to all other vessels.

R.S., c. D-9, s. 20.

Statements to be filed by company

21. The company, before receiving the first payment of subsidy under the authority of this Act, and annually thereafter, on or before January 1, shall file in the office of the Minister a statement, verified to the satisfaction of the Minister, setting forth the financial state of the company, including a statement in detail of the receipts from every source, and the expenditures for the year.

R.S., c. D-9, s. 21.


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