The Joint Committee recommends that the Act be amended to exclude unconditionally repayable loans from "government assistance"

CAE indicated that a government loan lacking sufficient "ordinary commercial terms" – including one that was made otherwise than to promote the governmental commercial interests or that has a below-market interest rate – will be considered "government assistance" within the meaning of ss. 12(1)(x) and 127(9).

As an example of an implication, the mandates of each of the Business Development Bank of Canada, Canada Infrastructure Bank, Export Development Canada, and Farm Credit Canada include providing loan financing to projects which are desirable for socio-political reasons and which may not have fully commercial terms – thereby resulting in such loans being treated as government assistance so as to cause such projects to not be economically viable due to the increased tax burden.

The Joint Committee recommends an amendment to exclude unconditionally repayable loans from "government assistance" for s. 12(1)(x) and 127(9) purposes and that Finance issue a comfort letter.

Neal Armstrong. Summary of Joint Committee, "Impact of CAE case", 11 August 2023 Submission of the Joint Committee under s. 127(9) – government assistance.