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Integrated Business Planning

Today’s market requires businesses to plan more rapidly and assess multiple scenarios at once. We help connect leading technologies and bespoke methodologies through integrated business planning to break down silos and unlock new routes to savings and growth.

Mike Ballestrin

EY Canada Finance Consulting Leader

KB Brinkley

EY Canada Integrated Business Planning Leader

What EY can do for you

Business, markets, expectations and technology have all changed. These monumental shifts necessitate a new framework for business planning, one that’s more integrated than ever before.

Integrated business planning is about connecting what finance and the business are doing, so the organization can react more quickly to any number of external changes, shocks or disruptions. That collaborative approach accelerates speed to impact.

We’ve created a distinctive, integrated approach to business planning that can set your organization apart. Our approach is scalable to meet the specific needs of any given business, at any stage on the growth journey. We work with organizations to build a customized integrated business planning framework that:

• Dismantles operational silos and aligns processes so functional groups can make better decisions around strategic direction and tactical execution
• Employs machine learning, AI and proprietary EY accelerators to deliver up-to-date insight
• Empowers clients to better understand the state of play
• Surfaces insight to help decision-makers buy, invest, manage and save
• Creates a sustainable, transparent and controlled method of planning ahead
• Cultivates shared planning ownership between finance and operations
• Leverages world-class strategic alliances to help organizations abandon outdated, manual ways of working and embrace new possibilities

Our IBP services include:

• Full-service process and technology implementation
• Upfront collaboration session to define and align key business objectives with stakeholders across functions
• EY wavespace session to co-create an action plan and build out the future vision for your organization on IBP
• Rapid assessment to baseline performance, applying advanced EY tools and building transformation business cases
• Prioritization and implementation of use cases to realize benefits of IBP 

Applying integrated business planning is key to navigating market complexity and long-term financial health. The best-performing companies merge operational and financial planning to foster agility and drive valuable bottom-line results. By bringing together better tech, better thinking and better cross-functional teaming, we can tailor our approach to your specific industry or business journey. This is how we empower clients to overcome today’s challenges, drive material improvements to financial performance, scale up and set ambitious new organizational and growth goals.

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Integrated Regional Plan - Submission Guide

Aussi disponible en français sous le titre : Plan regional intégré - Guide de présentation

Information contained in this publication or product may be reproduced, in part or in whole, and by any means, for personal or public non-commercial purposes without charge or further permission, unless otherwise specified. Commercial reproduction and distribution are prohibited except with written permission from Housing, Infrastructure and Communities Canada.

For more information, contact: Housing, Infrastructure and Communities Canada 180 Kent Street, Suite 1100 Ottawa, Ontario K1P 0B6 [email protected]

© His Majesty the King in Right of Canada, as represented by the Minister of Housing, Infrastructure and Communities, 2024.

Cat. No. T94-69/2024E-PDF ISBN 978-0-660-72375-4

Integrated Regional Plan Submission Guide (PDF Version)

• Purpose of this Guide

Introduction to Integrated Regional Plans

Integrated regional plan contents.

• 1.1. Geographic Boundaries of the Metro-Region
• 1.2. Development of the Integrated Regional Plan
• 1.3. Delivery of the Integrated Regional Plan
• 2.1. Medium Term Investment Strategy
• 2.2. Supportive Policies and Actions
• 3.1. Increase use of public transit & active transportation relative to car travel
• 3.2. Increase housing supply and affordability as part of transit-oriented communities
• 3.3. Contribute To Climate Change Mitigation And Resilience
• 3.4. Improve transportation options for all, especially equity-deserving groups

Appendix A. Approach to Assessment

Appendix b. project and cost eligibility, appendix c. submission checklist, appendix d. harmonized metrics, appendix e. key terms & definitions, purpose of this guide.

This Guide document will support organizations who have been invited to submit an Integrated Regional Plan to Housing, Infrastructure and Communities Canada as a prerequisite to entering into a Metro-Region Agreement for long-term transit funding under the Canada Public Transit Fund. The guidance herein is intended to inform partners about the information needed to prepare and submit an Integrated Regional Plan.

Prospective metro-regions should first complete an Expression of Interest (EOI) online through the Infrastructure Funding Portal and receive an invitation from Housing, Infrastructure and Communities Canada prior to submitting an Integrated Regional Plan. Templates or other applicant resources noted in this Guide will be provided to invitees at this time.

This guidance document may be updated or supplemented with accompanying materials in future to provide additional clarification, address any issues that arise in submissions, and/or refine expectations. 

A New Approach to Investing in Canada’s metro-regions

The Canada Public Transit Fund ( CPTF ) will provide stable and predictable funding starting in 2026-2027 to respond to the public transit and active transportation needs in communities of all sizes, including Canada’s metro-regions where transportation networks are most complex and cut across municipal boundaries.

Through Metro-Region Agreements ( MRAs ), the Government of Canada will commit to work together with provinces, municipalities, and other partners to make informed, impact-focused investments underpinned by planning that integrates housing, land use, environment, equity, and other related needs. An Integrated Regional Plan ( IRP ) created by partner organizations in a metro-region will outline how long-term capital investments in transit complemented by supporting initiatives will advance the core objectives of the Canada Public Transit Fund.

Why An Integrated Regional Plan?

While regional planning is already underway in many regions, the application of a common framework across all jurisdictions is critical to align actors in advancing transit, housing, climate and equity goals. As a business plan for regional transit and active transportation capital needs, Integrated Regional Plans will help enhance intergovernmental collaboration, create opportunities for policy alignment across communities, and provide a common foundation for planning and investment that maximizes outcomes. By providing a line of sight on local priorities, Integrated Regional Plans will also strengthen links between individual capital projects and shared goals.

Canada Public Transit Fund Objectives

Increase the use of public transit and active transportation relative to car travel Funding will encourage the development of efficient, reliable, and cost-effective sustainable transportation systems that make it easier for residents to access their communities. It will enable the construction of new or upgraded transit lines, routes, stations, stops, and safe, comprehensive networks that support walking, cycling, and other forms of active transportation.

Increase housing supply and affordability as part of complete, transit-oriented communities Investments in transit will leverage the Government of Canada’s ability to act as a housing multiplier by encouraging the delivery of adequate, suitable, and affordable housing nearby, while also incentivizing a mix of land uses that foster more walkable neighbourhoods. This will help ensure that development around transit provides the ridership base needed to support the network while addressing the most acute housing pressures.  

Contribute to climate change mitigation and resilience Investments will improve the quality of sustainable transportation options that support emissions reduction in the transportation sector and adapt to the realities of a changing climate. In addition to shifting to more sustainable transportation patterns, incorporating low-carbon materials, natural infrastructure, and resilience measures into design, construction, and operations will ensure that assets endure over time.

Improve public transit and active transportation options for all, especially Indigenous Peoples and equity-deserving groups Investments will seek to support those with a higher reliance on transit and active transportation and make it easier for all residents to get to work, access services, meet family and friends, and carry out everyday tasks. The Government of Canada has also committed to close the infrastructure gap between Indigenous and non-Indigenous peoples as part of its priority to advance reconciliation. Early engagement will ensure that the needs of Indigenous communities are considered in planning stages.

How Will Integrated Regional Plans Be Used?

To Advance Key Outcomes and Inform Federal Funding Commitments

As a precursor to entering into a Metro-Region Agreement, Integrated Regional Plans will demonstrate expected impacts of ongoing and planned actions toward the four core objectives of the Canada Public Transit Fund. Housing, Infrastructure and Communities Canada will evaluate all IRP s with respect to their ambition in advancing the core objectives, considering the targets set on common metrics, efforts to enable a supportive policy environment, and overall comprehensiveness. ​More information on the approach to evaluating Integrated Regional Plans is available in Appendix A. Federal funding allocations for a metro-region will consider the ambition demonstrated in its IRP in conjunction with funding needs, population, and scale of transit systems. Where insufficient information is provided in the IRP to support assessment, the lead applicant may be asked to provide additional information on analysis undertaken. 

Following signing of a Metro-Region Agreement, Integrated Regional Plans will serve as a frame to guide review of project funding applications brought forward by the metro-region to ensure that proposed investments contribute meaningfully to overall plan commitments.

While an IRP will include preliminary information on a broad suite of expected capital investments, more refined timelines, details, and business cases with cost estimates that differentiate eligible and ineligible expenditures (detailed in Appendix B) are expected once a project is submitted to Housing, Infrastructure and Communities Canada for funding review. Applicants will need to demonstrate how the proposed project advances the regional targets and outcomes identified in an Integrated Regional Plan.

To Enable a Shared Approach to Monitoring and Reporting

In establishing a regionally-specific approach to advancing federal objectives, Integrated Regional Plans will require periodic review to facilitate progress-tracking towards agreed-upon goals and to understand the impacts of actions taken.

Metro-regions will be asked to submit regular progress reports to document actions and achievements towards goals identified in the Integrated Regional Plan and track progress towards targets. The frequency and contents of these reports will be determined by signatories to the Metro-Region Agreement with the broad intent of:

• Confirming that proponents are delivering on the commitments agreed upon in a Metro-Region Agreement; and
• Monitoring changes to indicators with a view to understanding the effectiveness of actions and documenting lessons learned on any discrepancies.

It is expected that Integrated Regional Plans would be published online following the signing of a Metro-Regional Agreement as part of the Government of Canada’s commitment to transparency and accountability. Review and renewal of IRP s and MRAs would occur periodically (likely every five years).

What Is Required for an Integrated Regional Plan?

For Integrated Regional Plans to inform initial funding allocations, guide subsequent project assessment, and enable ongoing monitoring, the documents will synthesize important information on local priorities, with a focus on conveying the following three elements:

• ACTORS: Who is involved in coordinating, prioritizing, and advancing initiatives within the metro-region.
• ACTIONS: What actions are expected to advance over the medium-term horizon, including both capital construction and supportive policies.
• IMPACTS: How the actions will impact core federal objectives , in particular the expected outcomes based on harmonized metrics.

Accordingly, a complete IRP would include the following deliverables, which are further detailed in Appendix C :

• A narrative document that contains the relevant information as outlined in the ‘contents’ section of this submission guide, including:
• An overview of the regional geography and participating partner organizations;
• An overview of the funding needs and expected partner contributions over a 10-year horizon;
• The identification of expected outcomes using the harmonized metrics proposed by Housing, Infrastructure and Communities Canada , to the extent possible; and
• An explanation of how targets were developed and how a combination of capital investments, policies, and strategies are expected to result in the stated outcomes.
• A medium-term investment strategy outlining proposed projects over a 10-year horizon (using the template provided);
• A supportive strategy summary outlining policy initiatives that will complement investments and advance core outcomes (using the template provided);
• Supporting geospatial files showing the metro-region boundaries, the current and future transit and active transportation networks, notional locations of major projects identified in the medium-term investment strategy, and locations designated for transit-oriented development/transit-oriented communities.

Each Integrated Regional Plan should conform to the structure outlined in detail in the following sections of this guide. In recognition that planning contexts and needs vary from region to region, Housing, Infrastructure and Communities Canada will work with proponents to ensure requirements are met over time and support proponents in developing capacity for data collection, research, modelling, or other analysis set forth in this submission guide.

Guiding Principles While the contents and proposals within each Integrated Regional Plan will vary depending on the local context, development of all Integrated Regional Plans should broadly adhere to the following principles:

Regional Coordination and Integration Integrated Regional Plans will encourage coordination and integration among key actors in a metro-region where transit and active transportation networks are mutually dependent on land use and housing.

Evidence Integrated Regional Plans will help provide an evidence base to inform transit investments as well as improve coordination between policy and decision-making.

Flexibility Integrated Regional Plans will take into account specific regional contexts and enable unique approaches towards shared goals.

Engagement Integrated Regional Plans will consider the perspectives and needs of key government partners as well as the diversity of local residents and Indigenous Peoples.

Incrementality Integrated Regional Plans will represent an initial milestone to establish mutually-reinforcing commitments around public transit, housing, regional planning, climate action and social inclusion.

1. Actors: Geography and Governance

This section of the Integrated Regional Plan will define the geographic boundaries of the metro-region, describe a corresponding governance approach to plan development and implementation, and demonstrate that early engagement with Indigenous communities has taken place.

1.1 Geographic Boundaries of the Metro-Region

All Integrated Regional Plans are required to define the geographic boundaries of the metro-region and a corresponding governance approach. The metro-region must encompass at least one Census Metropolitan Area and consider factors like the current and future transit network, land use trends, growth management, demographics, housing needs and commuting patterns. Smaller municipalities and Indigenous communities within the region that have emerging transit linkages should also be considered for inclusion within the metro-region.

This section should clearly identify the geographic boundaries of the metropolitan region for the purposes of an Integrated Regional Plan. This description should include:

• A map and brief description of the proposed metropolitan region, including identification of all municipalities within the boundaries. Note that an accompanying file in standard geospatial format (i.e., KML or other) should also be provided as part of the IRP submission; and
• Where regional organizations already exist with a legislated mandate or responsibilities for regional transportation planning, these boundaries may be provided as rationale;
• If the boundaries do not correspond to those of an existing regional transportation planning organization, provide a rationale for the proposed boundaries that conforms to the federal expectations stated above.

1.2 Development of the Integrated Regional Plan

Participating organizations will need to work together to develop the Integrated Regional Plan and identify regional needs and project priorities. A key expectation is that the organizations developing an Integrated Regional Plan include representation from provincial and local entities with responsibility for public transit, transportation infrastructure, housing, and land use planning, and collectively have the authority to oversee, implement and/or enforce the proposed investments, transportation policy initiatives, and housing and land-use policy initiatives. Metro-regions should ensure their IRP incorporates varied perspectives and are encouraged to consider outreach to communities that may be affected or have an interest in the initiatives expected to be pursued in the Integrated Regional Plan.

This section should describe how the Integrated Regional Plan was developed, who was involved, and how feedback from any new or previous public engagement has been incorporated. To complete this section:

• Provide an overview of the municipal, regional and provincial planning frameworks, strategies, and official planning documents that currently guide transportation, land use and housing decisions in the metro-region and their influence on the Integrated Regional Plan.
• Identify how the Integrated Regional Plan was developed, including the role of the relevant partner organizations and stakeholders related to:
• The identification of projects and supportive strategies; and
• The identification of target outcomes.

1.2.1 Engagement and Consultation with Indigenous Peoples

Early engagement in decision-making processes is critical to building relationships and trust with Indigenous Peoples and helps ensure that the transit and active transportation needs of Indigenous communities are considered at the outset.

This section should describe how Indigenous Peoples were engaged in the development of the Integrated Regional Plan and/or in the development of existing plans that were used to develop the IRP . To complete this section:

• Describe how Indigenous communities and organizations were engaged to determine their interest in participating in the integrated regional planning process or to discuss their transit needs, challenges, and potential benefits of projects. If they were not engaged in developing the IRP , explain why.
• Describe how Indigenous communities, organizations, and governments were engaged in relation to potential impacts on rights and related interests.

Duty to Consult Considerations

When the Government of Canada contemplates decisions or actions that might adversely impact Aboriginal and/or Treaty rights, it has a constitutional duty to consult and, where appropriate, accommodate Indigenous peoples. In most instances, metro-region partners are best placed to undertake this consultation on behalf of the federal government given their knowledge of the projects and region.

To help Housing, Infrastructure and Communities Canada meet the duty to consult, the lead applicant and relevant partner organizations will be asked to undertake early engagement prior to submitting an Integrated Regional Plan, as a starting point for an ongoing dialogue. Housing, Infrastructure and Communities Canada will provide lead applicants with more focused guidance following the review of an expression-of-interest and will ask partners to start by notifying potentially impacted Indigenous communities of the development of the IRP and of general information on potential projects that could seek or receive federal funding.

Housing, Infrastructure and Communities Canada will keep the lead applicant informed of any further engagement or consultation requirements that may result from the review of information in the IRP , from discussions with Indigenous communities, or from the review of subsequent project funding applications.

1.3 Delivery of the Integrated Regional Plan

Delivery of an Integrated Regional Plan may include such activities as the review and adoption of municipal policies or by-laws, updates or amendments to land use plans, the collection and analysis of data, the initiation of projects or planning studies, the approval of funding or other activities that require official decisions by one or more governing body. Where regional governance does not already exist to implement an IRP , metro-region partners would be expected to propose an approach to coordination, monitoring, and decision-making. Signatories to a Metro-Region Agreement will be responsible for its implementation and coordination among any non-signing organizations, as well as for ongoing monitoring in collaboration with the Government of Canada.

This section should outline the proposed approaches or any regional governance to implement the Integrated Regional Plan including:

• Coordination and decision-making process to enable:
• the prioritization of projects for funding;
• the adoption of policies and strategies detailed in the plan and that advance outcomes for transit and active transportation, housing, climate, and equity; and
• the collection and sharing of data to support periodic monitoring and reporting.
• Where governance has not been formalized or documented publicly, the lead applicant may be asked to demonstrate support of partner organizations in advancing the Integrated Regional Plan.

2. Actions: Medium-Term Investments and Supportive policies

Metro-regions will be asked to summarize expected capital investments, funding sources, and supportive policy actions using templates provided by Housing, Infrastructure and Communities Canada . These key components of an Integrated Regional Plan will provide an overview of the priorities and initiatives metro-region partners expect to advance over a 10-year horizon.

2.1 Medium-Term Investment Strategy

All Integrated Regional Plans must include a medium-term investment strategy that outlines the transit projects the metro-region proposes to undertake over the medium-term (10-years). The strategy will help demonstrate the metro-region’s priorities, funding needs, and present a brief overview of expected outcomes of investments.

Funding Process Considerations

While the medium-term investment strategy will help inform the 10-year funding allocation awarded through a Metro-Region Agreement, funding will only flow through specific contribution agreements following the review and approval of project funding applications. For a project to be considered for federal funding under a Metro-Region Agreement, the project must be included within the medium-term investment strategy, either as a standalone initiative or as part of a broader bundle.

Federal approvals will prioritize projects that deliver on the goals of the Canada Public Transit Fund and represent value for money. Note that projects do not necessarily need to address all objectives to be eligible for funding. See Appendix B for more information on cost eligibility.

For larger and/or more complex projects, preliminary planning to clearly define asset design, construction scope, costing, schedules, key milestones and procurement methodology will be required before Housing, Infrastructure and Communities Canada reviews funding requests for the construction phase. As noted in Appendix B , funding would be available to advance project planning. There is no explicit or inferred commitment to fund the capital portion of a project for which planning funding has been provided. Approval of funding for any project will be up to the Government of Canada at its sole discretion.

Inclusions and Scope

The medium-term investment strategy should include all capital projects advancing over the 10-year horizon regardless of whether they will be submitted for federal funding, including transit expansion projects, maintenance or improvements to existing assets, zero-emission fleet adoption, renewal or expansion, state of good repair projects and active transportation projects.

Major transit or active transportation initiatives that are expected to have transformative implications for the metro-region should be isolated and presented as distinct items in the strategy. Where planning and design work remains to be completed before a final business case for the capital investment can be developed and brought forward, these items should be divided into a planning phase(s) and a construction phase. As the 10-year horizon will include projects at varying stages of readiness, it is expected that project-specific details will correspond with the stage of design completion.

2.1.1 Preliminary Cost Estimates and Funding Sources

Complete the following table with preliminary cost estimates by investment category over the 10-year horizon:

Complete the following table with estimated partner contributions and funding towards medium-term investments :

Federal Funding and Financing Considerations

Funding provided through the Metro-Region Agreement stream of the CPTF will provide funding for eligible projects at the minimum level necessary to further the attainment of the program objectives and the results expected from the recipient. The maximum federal cost share could be up to 40% of eligible expenditures for capital projects, with the potential for a higher cost share for non-capital projects. More detailed information on cost sharing and stacking limits will be provided as part of negotiations for a metro-region agreement.

The CPTF provides additional streams to complement MRAs . Baseline funding will provide predictable, long-term funding to communities with existing transit systems to support routine investments, with a focus on projects of a relatively small scale, including public transit and active transportation system expansions, improvements, and state of good repair, while targeted funding may be available through call-outs that address specific needs.

Projects receiving funding through the Canada Community Building Fund (CCBF), the Canada Infrastructure Bank (CIB) and/or other federal source could bring the maximum federal contribution up to 100%.

The CIB was created to invest in revenue-generating projects that leverage private sector capital into public infrastructure projects. Transit is a priority sector where CIB investment tools can advance government objectives and help projects get built. Early engagement with the CIB on potential investments will allow:

• the CIB to advise on projects that may meet its investment criteria, well before funding decisions are made; and
• consideration of the bundling of smaller projects with similar objectives and time periods, that could be combined to make a larger, single investment by the CIB.

CIB investments will work to complement CPTF funding and enable program funding to be spread over more projects, increasing overall investment and infrastructure delivery. Housing, Infrastructure and Communities Canada will work with metro-regions following submission of an IRP to identify potential investments and processes for early engagement with the CIB.

Metro-regions may also consider other forms of alternative finance such as public-private partnership (P3s) models as part of their overall funding and procurement strategies to transfer some risks and leverage private sector expertise. 

2.1.2 Medium-Term Investment Priorities

Using the template provided, provide an overview of the transit projects the metro-region expects to undertake over the medium-term (10 years), with timelines and estimated costing corresponding to the design stage, expected outcomes in relation to CPTF objectives, and an indication of the priority level of each project. An excerpt may also be provided in the narrative document. Smaller projects with similar scopes and outcomes undertaken by a single implementing agency may be bundled and presented as a single line item. Further guidance for completing each field is provided below.

Project Title : Provide a concise but meaningful description of the asset and the work to be completed. (e.g., Millenium Line UBC Extension (UBCx) ). For bundled initiatives, the title may reference the theme for the collection of works (e.g., Expanded Bikeway Network in Calgary ).

Brief Description : In plain language, provide a brief but meaningful description of the main objectives of the project, the scope of the project (all major quantifiable components), and the approximate output(s) that the project will generate (e.g., 15km of new BRT, purchase of 100 new buses). The description should clearly identify how the project will meet relevant immediate outcomes (e.g., The project will improve capacity of public transit infrastructure by…).

Implementing Agency : Provide the name of the organization that will deliver the project (e.g., City of Toronto ).

Project Type : Use the drop-down menu to indicate whether the project includes only planning work, capital, or both.

Design Complete (%) : Indicate the percentage of design work completed to date (e.g., 66% ). For bundled initiatives where design completion is not practical to isolate, ‘N/A’ may be indicated.

Forecasted Start : Indicate the expected year and quarter when construction should start or when procurement of assets would occur. Note that the quarters are as follows Q1 = January – March; Q2 = April - June; Q3 = July – September; Q4 = October – December. (e.g., 2028-Q3 would indicate a construction start date between July and September 2028). For bundled initiatives, where timelines are not practical to isolate, ‘N/A’ may be indicated.

Forecasted Completion : Indicate the expected year and quarter when construction should end. Note that the quarters are as follows Q1 = January – March; Q2 = April - June; Q3 = July – September; Q4 = October – December. (e.g., 2032-Q4 would indicate a construction end date between October and December 2032). For bundled initiatives or asset procurement, where timelines are not practical to isolate, ‘N/A’ may be indicated.

Estimated Total Project Costs : Provide an estimated of the total project cost of a project including both eligible and ineligible expenditures. These costs should relate to the planning, implementation and closing of the project including costs related to any real estate transactions, consultation, professional fees, construction (materials, labor, equipment, furniture, land development, etc.), inflation and risk reserves, and miscellaneous costs related to permits or other.

Estimated Total Eligible Project Costs : Where possible, provide an estimated of the total eligible costs for each project or bundle. See Appendix B for more information on cost eligibility.

Key CPTF Outcomes : Note in 1-2 sentences the expected outcomes that would result from implementing the project or bundle of projects and/or the expected consequences of not proceeding.

Effectiveness : Use the drop-down menu to rank the anticipated effectiveness in achieving CPTF Outcomes as very strong effect, strong effect, moderate effect, low effect, no effect.

Regional Priority : Use the drop-down menu to rank the project’s priority as very high, high, medium, or low.

2.2 Supportive Policies and Actions

Capital investments in transit and active transportation are most effective when complemented by land-use and transport policy measures that encourage development in proximity to transit networks and that make sustainable transportation attractive alternatives to personal vehicles. Metro-regions will be asked to use the template provided to summarize the supportive policies and actions that the metro-region is pursuing or intends to pursue over the medium-term (10 years). While the summary of supportive policies need not provide an exhaustive list, it should capture the initiatives that most clearly contribute to the CPTF ’s core objectives and outcomes.

Initiative Title : Provide a concise but meaningful description of the initiative (e.g., Minimum Parking Review )

Geographic Scope : Indicate whether this initiative would apply to specific areas or the entire metro-region.

Brief Description : Provide a brief but meaningful description of the initiative’s objectives, scope, and expected outcomes.

Expected Implementation Timeline : Indicate the approximate timelines in years from initiation to final approval.

Implementing Agency : Provide the name of the organization(s) that will undertake the initiative.

Status : Select from the drop-down menu to indicate whether the initiative is complete, underway or not started.

3. Impacts: Advancing Core Objectives

All Integrated Regional Plans will be required to clearly describe how planned initiatives will contribute to the four core objectives of the CPTF and support key outcomes identified by Housing, Infrastructure and Communities Canada :

To demonstrate the significance that the actions outlined in the medium-term investment strategy and list of supporting policies will have in advancing the core objectives of the CPTF , metro-regions will need to provide Housing, Infrastructure and Communities Canada with a detailed understanding of the anticipated impacts that these actions will have on the key outcomes listed above.

To help Housing, Infrastructure and Communities Canada develop this understanding in the short-term, a combination of quantitative and narrative analysis may be sought from metro-regions. A hybrid approach will support the systematic measurement of impacts of actions towards outcomes and objectives, while still providing room for other tools or methods, particularly in contexts where analytical tools remain to be developed or where complexities may not be adequately captured by existing approaches.

Housing, Infrastructure and Communities Canada recognizes that different methodologies and approaches to collecting data and modelling outcomes are used throughout the country, meaning that a quantitative target provided by one metro-region may use a different indicator than that provided by another. To support a common platform for monitoring and modelling of performance, a medium-term priority for Housing, Infrastructure and Communities Canada is to incentivize the uptake of a suite of harmonized metrics aligned to key outcomes to the greatest extent possible (see Appendix D ).

In the short-term, to advance an approach that best reflects the varied contexts of data and modelling in Canada, prospective metro-regions are offered three interim options for demonstrating how its actions will drive impacts on each key outcome:

• Indicate a target supported by robust modelling (e.g., a regional transportation model or land-use change simulation tool) of how the mix of projects and policy initiatives is expected to produce the result.
• Indicate a target supported by a narrative analysis of how the mix of projects and policy initiatives is expected to produce the result.
• Explain why a target cannot be provided at this time .

The provision of an interim target or an explanation of why a target cannot be provided at this time should be accompanied by commitments to (1) begin collecting data and reporting on current performance against this metric and (2) set a target for that metric within at most 5 years from the date of signing the Metro-Region Agreement. Housing, Infrastructure and Communities Canada will support regions in meeting these commitments through consultation and partnership, including in areas where existing and future data and research can be leveraged and by making planning funding available to regions developing Integrated Regional Plans. As part of Metro-Region Agreements, partners will confirm an approach to submitting regular progress reports that document actions and achievements towards goals and targets identified in the Integrated Regional Plan.

3.1 Increase use of public transit and active transportation relative to car travel

Key Priorities

• The Government of Canada is continuing to support investment in public transit and active transportation in order to help provide sustainable and safe transportation options to Canadians in communities across Canada. Over a long-time horizon, these investments shape how communities grow and change, with transportation and land use interacting dynamically with other parts of the built environment and the economy, affecting a broad range of cross-cutting shared policy objectives and outcomes.
• Growing the segment of those that use public transit and active transportation while reducing the use of passenger vehicles in Canada will reduce transportation costs for households, time spent commuting, lessen traffic congestion, collisions and safety risks. This can be achieved through investments in infrastructure, transportation policies and initiatives that encourage the use of these modes, and land-use policies that locate more housing, services, and recreational opportunities in communities centred on transit and with active transportation at their core.
• Active transportation is a key part of these efforts, providing transportation options and critical links to public transit, with the Government’s strategic approach and benefits highlighted in the National Active Transportation Strategy released in 2021. The strategy aims to support data-driven and evidence-based investments that build new and expanded active transportation networks and to create safe environments for more equitable, healthy, active and sustainable travel options to thrive.
• In 2019, the Government of Canada funded the Canadian Bikeway Comfort and Safety (Can-BICS) Classification System, a common naming convention for cycling facilities in Canada. Housing, Infrastructure and Communities Canada uses this classification system to help understand its investments in communities, with a focus on building the type of safe, protected bike facilities that people of all ages and abilities feel comfortable using. Since then, Statistics Canada has analyzed existing facilities across the country and has published Can-BICS data for 74 municipalities in 48 metro-regions across Canada in the Open Database of Infrastructure . Describing bike facilities using this common naming system makes it easier for Canadians to understand where they can find safe, protected facilities and makes it easier to focus investments on facilities that yield the greatest benefits in terms of inclusive modal shift.

3.1.1 Regional Transportation Needs

This section should describe the current regional picture for transportation, with a focus on public transit and active transportation. Applicants should describe key needs and movement patterns across the metro-region. To the extent possible, note any geographical variations between urban cores, inner suburbs, outer suburbs or similar divisions.

This section should include:

• An overview of movement patterns across the metro-region, including origin-destinations and approximate volumes, supplemented with graphics or maps, where possible;
• A description of key trends and challenges in relation to increasing public transit and active transportation use, including those related to transportation demand management, land use, population growth, travel patterns, and the impact of road infrastructure capacity, geography, affordability, safety or other relevant factors; and  
• An overview of existing infrastructure quality with a focus on the most critical states.

3.1.2 Future Transportation Network

Integrated Regional Plans will require an outline of the future regional transportation network for the metro-region, a vision of what the road, transit and active transportation networks could resemble in the long-term. Outlining the future regional network in the Integrated Regional Plan provides a tangible basis for greater investment coordination both at a regional level and between levels of government over time.

• A map of the region’s current and long-term (20-30 year) transit network that differentiates planned route type and frequency to the extent possible and illustrates key investments identified in the medium-term investment strategy. Note that an accompanying file in standard geospatial format (i.e., KML or other) should also be provided;
• A map of the region’s current and long-term (20-30 year) active transportation network that differentiates facility types to the extent possible and illustrates key investments identified in the medium-term investment strategy. Note that an accompanying file in standard geospatial format (i.e., KML or other) should also be provided; and
• Narrative description explaining how proposed investments in the medium-term investment strategy will support the long-term vision.

3.1.3 Reducing Personal Vehicle Travel

Personal passenger vehicle kilometres travelled (VKT) captures the overall level of driving in a region, which in turn contributes to other impacts of car travel including GHG emissions, collisions, and traffic congestion. VKTs are a keystone indicator used to complement metrics such as mode share and ridership. Measuring on a per capita basis supports comparability and controls for the effects of population growth within a region.

This section should explain how the target outcome was established for the metro-region and how it will be achieved. In particular:

• The methods used to determine the target outcome including any baseline data, relevant sources, key assumptions, and limitations;
• The relation to targets or projections previously established in existing plans or studies;
• The investments, strategies, and policies that will have the most impact in advancing the outcome and when these will be advanced (short vs. medium term); and
• The risks that could hinder target achievement.

3.1.4 Increasing Public Transit Use and Ridership

Public transit modal share (the percentage of all trips taken using public transit) captures the relative use of public transit compared to other modes like private vehicles, walking and cycling, etc. It signals whether public transit is competitive with other travel modes and whether people are likely to choose public transit over driving.

Public transit ridership captures the overall level of use of public transit systems across a region, which is key to understand how well a system is meeting travel demand. Transit ridership provides insight on whether the system enables people to get where they need to go and captures changes in travel behaviour independently of other modes.

This section should explain how the target outcomes were established for the metro-region and how it will be achieved. In particular:

3.1.5 Increasing Active Transportation Use & Safety for Users

Active transportation mode share (the percentage of trips taken using walking, cycling, or other active modes) captures the relative use compared to public transit and car travel. It signals whether the active transportation network is competitive with other networks in in terms of meeting residents’ travel needs, and whether people are incentivized to choose active travel. Safety is a key driver of active transportation usage, especially for women, and is an especially important area of focus as active transportation networks are expanded and the number of users grows. Providing high comfort facilities ensures that a wide variety of people can benefit from the infrastructure.

This section should explain how the target outcomes were established for the metro-region and how they will be achieved. In particular:

• The methods used to determine the target outcomes including any baseline data, relevant sources, key assumptions, and limitations;

3.2 Increase housing supply and affordability as part of complete, transit-oriented communities

• One of the greatest challenges Canadian metro-regions face is increasing the supply and affordability of housing. Investments in transit and housing are inexorably linked: transit near housing allows people to efficiently move about their community and commute to school or work. Investments in higher-order transit, such as subways, light rail, and bus rapid transit are the key catalysts for developing transit-oriented communities. Concentrating more homes, jobs, shops, and services around transit helps generate the ridership base needed to ensure the viability of transit investments.
• Encouraging development and focusing more residents, jobs, and activities around transit routes and nodes is key to achieving walkable, liveable communities, promoting more sustainable travel patterns, preventing loss of farmland, shortening commute times, optimizing use of lands with existing infrastructure, and leveraging the significant investments made in transit networks.
• Given these important linkages between transit and housing, the Government of Canada views housing as an integral part of this program and will give particular consideration to actions and policies that will help increase supply and improve affordability near transit projects that receive federal funding.
• The Government of Canada has launched a number of initiatives to make housing more attainable and affordable for residents. Most recently, Canada’s Housing Plan established key federal actions for building more homes, making it easier to rent or own a home, and to help Canadians who cannot afford a home. To successfully implement this plan and address the country’s pressing housing challenges, the Government of Canada will work with provincial, regional, and municipal partners to identify and commit to housing actions and targets to build the right kind of housing that communities need.

3.2.1 Housing Conditions

As a condition of Metro-Region Agreements, and to ensure that funding impacts are maximized for the most effective and responsive transit-housing outcomes, partners will be asked to meet a specific set of minimum federal housing conditions that are based on best practices from the Housing Accelerator Fund, as listed below. Partners will need to clearly demonstrate:

• an existing policy, plan or strategy that meets the expectation; or,
• a commitment or intent to meet the expectation.

Conditions do not need to be met before submission as Integrated Regional Plans provide an initial opportunity to understand ongoing actions and a metro-region’s proposed approaches to meeting these conditions.

This section should identify the regional implementation status and roadmap for meeting each condition below, including whether conditions have been met across the region, with reference to specific enabling policies and regulations, and any remaining gaps to implementation. Where conditions have not yet been met, describe the process to work with individual communities to address any gaps.

• Promote diverse forms of multi-unit housing within 400 metres of transit stops, as appropriate to the local context.
• Concentrate more housing development near transit by allowing high-density housing as-of-right within 800 metres of high-frequency or higher-order transit.
• Eliminate mandatory minimum off-street parking requirements within 800 metres of high-frequency or higher-order transit stations, excluding accessibility requirements.
• Enable more housing supply near post-secondary institutions by allowing high-density housing as-of-right within 800 metres of recognized post-secondary institutions.
• Identify, set aside and/or optimize publicly owned land with a view toward prioritizing new affordable and deeply affordable housing in proximity to transit, where it makes sense to do so.
• Develop and/or implement supportive policies appropriate to the local context to minimize or mitigate any displacement of existing residents and loss of existing affordable housing as a direct result of major transit projects. 

3.2.2 Regional Housing Narrative

Metro-regions are expected to provide needs-based evidence for the housing outcomes and targets that are included in their IRP . This section should describe important regional considerations with implications for housing, such as economic conditions; convey where current housing needs exists; explain how future growth and housing supply can support more transit-oriented communities that provide the right kind of housing for all residents; and, provide projections for future housing needs on a 10-year horizon.

To the extent possible, please use publicly available data, such as:

• Statistics Canada Census Data
• CMHC Housing Market Information Portal
• Statistics Canada Housing Statistics Dashboard
• CMHC Demographic Projections: Housing Market Insights, June 2022
• CMHC Proximity Measures Database
• Housing Assessment Resource Tool Dashboard

Where this data has limitations, regions should incorporate internal and non-public facing, non-confidential data in order to more fully capture local contexts and realities as needed. To the extent possible, data and information collected at the local level – including for municipal Housing Needs Assessments Footnote 2 – should be used to illustrate housing patterns, needs and dynamics.

Where there are clear gaps in information, proponents are asked to identify these as well as the plan to further build this regional evidence base going forward.

• An overview of demographic composition and economic conditions, including total number of households, household income, number of tenant and owner households, average household size, and number of households in core housing need.
• An overview of existing housing stock and development patterns , such as areas of high growth, how housing needs have changed over time, areas of greatest need, the current stock of affordable housing units available in the region and for specific groups (e.g., affordable housing units for seniors aging-in-place) and waitlist lengths for social and community housing owned by public entities or non-profits.
• A description of future housing needs , including the type/quantity of housing needed to support projected regional population and household growth over the next 10 years, including the estimates of household and population growth in 5-year increments, using the projection methodology of the metro-region’s choice and assumptions that informed that methodology.
• An overview of the current areas designated for transit-oriented development or intensification based on current zoning by-laws or other policies, supplemented with graphics or maps, where possible.
• A high-level overview of the housing gaps and opportunities within proximity of current and planned high-order transit , supplemented with graphics or maps, where possible.
• A high-level overview of any gaps in enabling infrastructure systems needed for housing (e.g., water, transit, community, natural infrastructure, etc.) and how these will be addressed to accommodate forecasted housing growth.
• An identification of challenges or systemic barriers to increasing housing supply and affordability near transit or to realizing transit-oriented development.

3.2.3 Increasing New Housing Supply in Proximity to Transit

Providing more housing options on lands surrounding transit stops and stations is essential to generating the ridership base needed to ensure the viability of transit investments and sustain service levels that create an attractive alternative to driving.

This section should explain how the target outcome(s) were set up for the metro-region and how the expected increase(s) in housing supply in proximity to transit will be achieved. In particular, applicants should describe:

• The methods used to project the expected increase in housing supply, including any baseline data, relevant sources, key assumptions, and limitations;
• The relation to targets or expected outcomes previously established in existing plans or studies;
• The investments, strategies, and policies that will have the most impact in increasing supply and when these will be advanced (short vs. medium term); and

3.2.4 Increasing Affordable Housing in Proximity to Transit

Affordable housing stock has been dwindling at an alarming rate in cities across the country. Providing more attainable viable options for low- to middle-income Canadian households – those most likely to take public transit – to rent or own in proximity to transit is critical.

This section should explain how the target outcome was established for the metro-region and how the expected increase in affordable housing will be achieved. In particular, applicants should describe:

• How “affordable” is defined if not aligned with the federal definition, and how the affordable housing targets correspond to the affordability needs of households in different income groups;

3.2.5 Increasing Housing Suitable for families in Proximity to Transit

Creating more market, non-market and affordable housing that is suitable for different-sized households, including families, near transit can help ensure that those in the greatest housing need and those seeking to live in communities that are well-serviced by infrastructure can do so.

This section should explain how the target outcomes were established for the metro-region and how it will be achieved. In particular, applicants should describe:

3.2.6 Increasing Access to Jobs and amenities

Transportation enables people to move from place to place and fundamentally relates to surrounding land uses that offer various destinations. Access to jobs via the public transit system captures the core relationship between transit and land use by highlighting a common destination. Work as a destination also offers an effective proxy for access to other amenities, such as services and recreational facilities.

• The relation to targets or projections previously established in existing plans or studies.

Looking Forward: Spatial Access Measures

Housing, Infrastructure and Communities Canada and Statistics Canada have been working to develop a standardized method of computing key spatial access metrics such as a Access to Jobs and Access to Amenities. This method goes beyond density maps of potential origin and destination points by exploring the exact routing available to residents of a particular geographic area across a variety of modes. Currently known as Spatial Access Measures, Housing, Infrastructure and Communities Canada hopes to further develop this project so that it can be used collaboratively with partners to identify gaps in access, ensure the equitable distribution of infrastructure investments, and plan for future projects.  

At present, the Government of Canada is conducting further development work to be in a position to leverage this data as a support for partners’ planning. Partners can expect data for public transit to be available first, with cycling and walking data available at a later date. In future, spatial access measures may be integrated into requirements for and assessment of integrated regional plans. In the interim, Housing, Infrastructure and Communities Canada may leverage this data to identify potential network gaps and apply this lens in the assessment of projects brought forward for funding consideration.

3.3 Contribute To Climate Change Mitigation And Resilience

Key Priorities  

• The Government of Canada has developed a number of plans and set targets to reduce greenhouse gas emissions, protect the environment, and adapt to the realities of a changing climate by making our infrastructure low-carbon and more resilient.
• As noted in the Strengthened Climate Plan , public transit can help set Canada on a path to net-zero by 2050 by transitioning to zero-emission systems across Canada and enabling the development of compact, liveable, communities around transit stations and corridors. The Plan outlines the Government of Canada’s progressive approach to public transit funding based on data, evidence and regional planning, critical to achieving Canada’s climate goals.
• The 2030 Emissions Reduction Plan (ERP): Clean Air, Strong Economy lays out how Canada will reach its target of cutting emissions by 40% below 2005 levels by 2030 and reach net-zero by 2050. The ERP recognizes that maximizing transit’s benefits in terms of emissions reductions depends on encouraging intensification and effective land-use planning in communities. The Government of Canada has also adopted the  Canadian Net-Zero Emissions Accountability Act , enshrining in legislation the commitment to achieve net-zero emissions by 2050.
• The ERP also includes a commitment to introduce a new Buy Clean Strategy for federal investments to support and prioritize the use of made-in-Canada low-carbon materials in Canadian infrastructure projects. Housing, Infrastructure and Communities Canada is encouraging funding recipients to consider the use of low-carbon materials and design in their infrastructure projects, following the approach of the Greening Government Strategy in federal procurement.
• In 2022, Canada released the National Adaptation Strategy , which emphasizes that all infrastructure decisions should consider climate risk, incorporate climate-resilient designs and standards at all lifecycle stages, and prioritize benefits for marginalized populations and those at high risk of climate hazards. The National Adaptation Strategy commits to ensure resilience to climate change impacts is factored into all new federal infrastructure funding programs, setting a national goal for 2050 that ‘all infrastructure systems in Canada are climate-resilient and undergo continuous adaptation to adjust for future impacts to deliver reliable, equitable, and sustainable services to all of society.’

3.3.1 Regional Climate Context & GHG Baseline

This section should describe the current regional picture including baseline data in relation to current GHG emissions from transportation, in particular personal passenger vehicle travel and public transit fleet operations, referencing any relevant sources, assumptions, and limitations.

3.3.2 Reducing GHG Emissions from Personal Passenger Vehicles

Personal passenger vehicle kilometers is frequently used to assess the general prevalence of personal vehicle usage. Historically, increasing personal vehicle usage represented by vehicle kilometers travelled (VKTs) has contributed to growing GHG emissions in the transportation sector. While transitions to zero-emission alternatives are underway, capturing the GHG emissions from modal shift highlights the avoided emissions from increasing transit and active transportation use relative to personal vehicles. Measuring VKTs per capita controls for population growth and enables comparability.

This section should explain how the target outcome was established for the metro-region and how the expected decrease in GHG emissions from personal passenger vehicles will be achieved. In particular:

• The methods used to project the expected reduction in GHG emissions from personal passenger vehicle travel, including how zero-emission vehicle transition impact was excluded, and any key assumptions used;
• The investments, strategies, and policies that will have the most impact reducing GHG emissions from personal passenger vehicles and when these will be advanced (short vs. medium term); and

3.3.3 Reducing GHG Emissions from Public Transit Fleet Operations

GHG emissions from public transit fleet operations result from combustion of fuels for vehicles, electricity used to power vehicles, and energy use at facilities..

This section should explain how the target outcome was established for the metro-region and how the expected decrease in GHG emissions from public transit fleet operations will be achieved. In particular:

• The methods used to project the expected reduction in GHG emissions from public transit fleet operations, and any key assumptions used;
• The investments, strategies, and policies that will have the most impact reducing GHG emissions from fleet operations and when these will be advanced (short vs. medium term), including efforts to source lower-carbon content fuel and lower-emitting electricity; and

3.3.4 Reducing GHG emissions from materials in transit infrastructure (embodied emissions) Footnote 5

This section should describe any existing or planned policies to reduce emissions from materials in design and procurement. This may include existing disclosures, strategies on low-carbon materials, ambitions to set reductions targets, or related sustainable materials procurement programs.

3.3.5 Increasing Resilience of transit and active transportation networks

Resilience to climate change impacts will be a key factor in project-funding decisions under the CPTF . This section should:

• Provide an overview of significant system-level climate risks and how these will be minimized to ensure transit networks are resilient.
• Confirm that climate risk assessment processes adhere to ISO 14091 and are based on an ensemble of climate models and the most applicable significant future climate scenario (RCP 8.5 or SSP5-8.5).
• Provide an overview of how natural infrastructure and nature-based solutions that promote services and co-benefits will be considered in project design and integrated as part of construction. For example: climate resilience, stormwater management, GHG sequestration, temperature regulation (i.e., heat island mitigation), and measures to protect and enhance biodiversity.

Looking Forward: Climate Considerations for Project Design & Implementation

The Government of Canada gives particular consideration to climate change mitigation and resilience in projects receiving federal funding. Additional requirements may be specified at the project-approval stage following execution of a Metro-Region Agreement. While the specifics will respond to the scope and nature of the particular project for which funding is sought, requirements may include, but are not limited to:

• The submission of project GHG assessments;
• The establishment of targets for reducing embodied carbon emissions in project design, procurement, and construction practices. Note that projects submitted for federal funding over $10 million will be expected to disclose information on embodied carbon emissions from key structural materials and to implement measures to use low-carbon materials and designs, where applicable;
• The incorporation of natural infrastructure into projects;
• The completion of climate risk assessment to inform project design, implementation, planned operations and maintenance; and
• The prioritization of zero-emission vehicles (ZEVs) Footnote 6 in asset procurement (specific exceptions may apply on a case-by-case basis and will align with climate principles of the Government of Canada, including supporting the use of renewable fuels, maintaining existing assets, supporting a long-term transition, and acknowledging and supporting differing capacities to transition).

Projects receiving funding from Housing, Infrastructure and Communities Canada must respect federal environmental statutory requirements. Projects submitted to Housing, Infrastructure and Communities Canada may be subject to the  Impact Assessment Act , Northern Regulatory Regimes, and/or other federal environmental statutory requirements such as the  Fisheries Act , the  Canadian Navigable Waters Act , and the  Species at Risk Act  that are administered by other federal government departments.

3.4 Improve public transit and active transportation options for all, especially Indigenous Peoples and equity-deserving groups

• Transportation related costs and benefits are not always distributed equally, and particular consideration should be given to groups with distinct needs or who may experience disadvantages in the existing systems. Designing public transit and active transportation systems for everyone requires proactive engagement with equity deserving groups as well as the incorporation of equity considerations in all stages of planning and project delivery. 
• The Government of Canada has committed to use the Gender-Based Analysis Plus (GBA Plus) approach, an analytical tool to help identify potential impacts of program, policy, and projects on diverse groups of people. The analysis considers intersectionality and different demographics to ensure decisions represent the needs of all communities.  
• The Government of Canada is committed to advancing reconciliation with Indigenous peoples, whether they live in Indigenous communities, such as on-reserve, in urban centres, or elsewhere. Ensuring that public transit, cycling, and walking networks are designed and delivered in a manner that meets the needs of Indigenous peoples is critical to advancing reconciliation.

3.4.1 Regional Context and Needs

This section should describe the key needs and challenges for providing access to transit and active transportation for equity-deserving groups including but not limited to women, Indigenous peoples, racialized people, persons with disabilities, newcomers, seniors, and low-income individuals.

• Mapping of priority neighbourhoods with a higher proportion of equity-deserving populations. Note that an accompanying file in standard geospatial format (i.e., KML or other) should also be provided;
• A narrative of the processes used to understand the issues, challenges, and lived experiences different groups face in using the transit system; and
• An overview of how equity considerations are used to prioritize investments.

3.4.2 Reduce Barriers to Sustainable Transportation for Indigenous Peoples and Equity-Deserving Groups

This section should describe:

• Strategies to reduce financial, physical, mental, safety, cultural, and language barriers faced by equity-deserving groups and approaches to make the current transit and active transportation network fully accessible for all users regardless of their age, ability, or circumstances.
• An overview of the strategy to make the current public transit and active transportation network fully accessible for persons with disabilities, including an approach to engagement to ensure that the perspectives of persons with lived experience of disability are reflected.

3.4.3 Increasing Relative Access to Jobs/Amenities for Indigenous Peoples and Equity-Deserving Groups

As access to jobs effectively captures the core relationship between a transportation system and land-use patterns, comparing levels of access for equity-deserving groups to those of the general population signals whether different groups are provided similar levels of access and able to travel effectively to key destinations.

• An overview of the target and strategy for improving access for Indigenous peoples to jobs and amenities by transit and active transportation relative to the general population;
• An overview of the target and strategy for improving access for recent immigrants (immigrants who settled permanently in Canada no more than five years ago) to jobs and amenities by transit and active transportation relative to the general population; and
• An overview of the target and strategy for improving access for low-income persons (defined by Statistics Canada’s after-tax low-income measure) to jobs and amenities by transit and active transportation relative to the general population.

Looking Forward: Equity Considerations for Project Design and Implementation

The Government of Canada gives particular consideration to accessibility, GBA Plus and community benefits and engagement in projects receiving federal funding. Specific requirements related to these themes may be specified at the project-approval stage following execution of Metro-Region Agreements. While the specifics will respond to the scope and nature of the particular project for which funding is sought, funding conditions may include: 

• The completion of a GBA Plus analysis to ensure projects promote fairness, equality and the highest level of service;
• Mitigating potential impacts of project construction on residents, businesses, and people with disabilities;  
• Incorporating community benefits related to local employment, equitable employment, and workforce development into projects;
• Supporting Indigenous and/or social procurement;
• Including meaningful engagement with Indigenous communities and other equity deserving groups as part of project design and implementation; and
• Meeting the highest applicable accessibility standards.

Housing, Infrastructure and Communities Canada may also leverage its ongoing work with Statistics Canada on spatial access measures in the equity space. In the long-run, spatial access measures focused on equity-deserving groups may be incorporated into requirements for and assessment of integrated regional plans. In the interim, Housing, Infrastructure and Communities Canada may leverage this data to identify potential gaps in equitable access to infrastructure and through it to jobs and amenities, and may apply this lens in the assessment of projects brought forward for funding consideration.

*Where insufficient details are provided in an IRP to support assessment, the lead applicant may be asked to provide additional information or supplementary materials on analysis undertaken. 

Eligible Expenditures

Investments will support public infrastructure, which is defined as tangible capital assets primarily for public use and/or benefit, and will include capital transit, school transportation, and active transportation infrastructure projects or non-capital projects. Investments must support program objectives and expected results and must meet applicable federal requirements. 

• For a capital infrastructure project to be eligible for funding, it must include the acquisition, enhancement, modernization, rehabilitation, construction, expansion, restoration, renovation, repair, refurbishment, or replacement of assets that fall under one of the following categories: 
• Public transit systems and related infrastructure; or, 
• Active transportation infrastructure or networks. 
• Non-capital projects will support transit-related development, planning, design, or integrated regional governance of public infrastructure projects. For a non-capital project to be eligible for funding, it must support one of the following: 
• A potential future capital project that would be considered eligible under the program; or 
• Transit and active transportation projects related to planning, regional governance capacity support, feasibility studies, stand-alone design work or other related capacity building, research, or data projects. Projects that support the development of transit-oriented communities are also eligible; this would include projects like transit-related housing needs assessments. 

Eligible expenditures are costs that are considered direct and necessary to the project as agreed to by Housing, Infrastructure and Communities Canada in writing in advance of the cost being incurred, excluding those explicitly defined as ineligible (see below). Project expenditures related to construction and/or acquisition of assets will only be eligible as of project approval. Costs related to non-capital projects, and non-capital components of capital projects may be retroactively eligible. The decision on whether to provide funding retroactively would rest with the Minister or delegated authority.

Expenditures can only be reimbursed to the recipient if a funding agreement is signed, project approval conditions are met, including, where applicable, confirmation that environmental assessment and Indigenous consultation and accommodation obligations have been met and continue to be met. 

Ineligible Expenditures

• Capital project costs incurred before project approval, except for expenditures associated with non-capital components;
• Cost incurred for cancelled projects;
• Leasing land, buildings, and other facilities; leasing equipment other than equipment directly related to the construction of the project; real estate fees and related costs;  
• Any overhead costs, including salaries and other employment benefits of any employees of the Eligible Recipient or ultimate recipient, its direct or indirect operating or administrative costs and more specifically its costs related to planning, engineering, architecture, supervision, management, and other activities normally carried out by its staff. The incremental costs of employees of an eligible recipient may be included as eligible expenditures under the following conditions:  
• The eligible recipient can demonstrate that it is not economically feasible to tender a contract; and 
• The arrangement is approved in advance and in writing by Canada. 
• Financing charges, and loan interest payments, including those related to easements (e.g., surveys),  
• Legal fees, except those explicitly eligible; 
• Principal and interest payments to the Canada Infrastructure Bank;  
• Any goods and services costs which are received through donations or in kind; 
• Provincial sales tax, goods and services tax, and harmonized sales tax for which the ultimate recipient is eligible for a rebate, and any other costs eligible for rebates;  
• Costs associated with operating expenses and regularly scheduled maintenance work are ineligible with the exception of: 
• essential capital equipment purchased at the onset of the construction/acquisition of the main asset and approved by Canada; or 
• operating costs including staff training, salaries and benefits, fuel, maintenance, repairs, and insurance associated with pilot projects undertaken by Indigenous recipients or Indigenous benefitting organizations, and low-capacity recipients in rural, northern, or remote communities. 
• Cost related to furnishing and non-fixed assets which are not essential for the operation of the asset/project;
• All capital costs, including site preparation and construction costs, until HICC has confirmed that environment/impact assessment and Indigenous consultation obligations have been met and continue to be met.

Submission of an Integrated Regional Plan (IRPs) through the Funding Portal must include a completed submission checklist to facilitate a thorough and timely assessment. The submission checklist will help proponents confirm that all relevant contents and supporting documents are provided.

Integrated Regional Plan Development

• The submitted Integrated Regional Plan was developed with representation from provincial and municipal partners, authorities for public transit, active transportation, housing, land use planning and any other relevant entities with the authority to implement identified commitments.
• Indigenous rights-holders as identified by Housing, Infrastructure and Communities Canada were engaged on potential impacts on their rights.
• Metro-region partners have established an organizational structure and decision-making process to enable the prioritization of projects for funding. 
• Metro-region partners have established responsibilities for ongoing coordination and implementation of the Integrated Regional Plan.

Integrated Regional Plan ( IRP ) Contents

• The submitted IRP defines the geographic boundaries of the metro region.
• The submitted IRP describes how the plan was developed including key inputs, analysis, and consultation.
• The submitted IRP outlines proposed projects over 10-year horizon with estimated costs, timelines, expected outcomes commensurate with the stage of design completion.
• The submitted IRP outlines supporting strategies that will complement transit investments and support the core objectives of the Canada Public Transit Fund.
• The submitted IRP provides a regional transportation narrative that conveys current challenges, key trends, and future vision for transit and active transportation.
• The submitted IRP provides a regional housing narrative that conveys where current and future housing needs exist, and how future housing supply, types, and locations can support more transit-supportive communities that meet regional needs.
• The submitted IRP identifies expected outcomes based on planned investments and strategies, including:
• Reduced personal vehicle travel
• Increased public transit ridership
• Increased public transit use
• Increased active transportation use
• Improved safety for active transportation users
• Increased housing supply in proximity to transit
• Increased housing affordability in proximity to transit
• Increased housing suitable for families in proximity to transit
• Increased access to jobs/amenities by transit and active transportation
• Reduced GHG emissions from passenger vehicle travel
• Reduced GHG emissions from fleet operations
• Reduced GHG emissions from materials in transit infrastructure
• Increased resilience of transit and active transportation networks
• Reduce barriers to sustainable transportation for equity-deserving groups
• Increased relative access to jobs for equity-deserving groups

A complete IRP submission in the Housing, Infrastructure and Communities Canada Funding Portal will include the following documents:

• Integrated Regional Plan (PDF)
• Medium-term-investment strategy in template (Excel)
• Supporting strategies in template (Excel)
• Standard geospatial file (KML or similar) showing the metro-region boundaries
• Documentation confirming early engagement with Indigenous rights-holders as identified by Housing, Infrastructure and Communities Canada .
• Completed Submission Checklist (PDF).

Supplementary Documents and Analysis:

• Standard Geospatial File (KML or similar) showing the region’s transit network and illustrating the notional locations of key investments identified in the medium-term investment strategy
• Standard Geospatial File (KML or similar) showing the region’s active transportation network and illustrating the notional locations of key investments identified in the medium-term investment strategy
• Map of current locations designated for transit-oriented development/transit-oriented communities within the metro-region (PDF or KML)
• Map of priority neighbourhoods with a higher proportion of equity-deserving populations within the metro-region (PDF or KML)

Should any component not be supplied at the time of submission, please provide an explanation and approximate timeline for completion.

Active Transportation : The movement of people or goods by human activity and includes walking, cycling and the use of human-powered or hybrid mobility aids such as wheelchairs, scooters, e-bikes, rollerblades, snowshoes, cross-country skis, and more.

Affordable Housing : According to Canada Mortgage and Housing Corporation (CMHC), housing is considered to be affordable when a household spends less than 30% of its pre-tax income on the cost of shelter, including rent and utilities. The household income is defined as 80% or less of the Area Median Household Income (AMHI) for the metropolitan area. Households that spend more than 30% of their income on housing are deemed to be in core housing need. Those that spend 50% or more on shelter are in severe housing need. The term “affordable housing” refers not only to rental housing that is subsidized by the government but, also includes housing provided by the private, public and non-profit sectors. It also includes all forms of housing tenure: rental, ownership, and co-operative ownership, as well as temporary and permanent housing.

Census Metropolitan Area (CMA) : According to Statistics Canada, a census metropolitan area represents an area formed by one or more adjacent municipalities centred on a population centre (known as the core) with a total population of at least 100,000 based on data from the current Census of Population Program, of which 50,000 or more must live in the core based on adjusted data from the previous Census of Population Program.

Disability: Any impairment, including a physical, mental, intellectual, cognitive, learning, communication, or sensory impairment – or a functional limitation – whether permanent, temporary or episodic in nature, or evident or not, that, in interaction with a barrier, hinders a person’s full and equal participation in society.

Duty to Consult: The Crown has a duty to consult and, where appropriate, accommodate when it contemplates conduct that might adversely impact established or potential Aboriginal and/or treaty rights under section 35 of the Constitution Act, 1982 .

Equity-deserving Groups : A group of people who, because of historical and or systemic discrimination, face barriers that prevent them from having the same access to resources and opportunities that are available to other members of society, and that are necessary for them to attain just socioeconomic outcomes. In Canada, these groups are generally considered to include women, Indigenous people, people with disabilities, people who are part of 2SLGBTQI+ communities, religious minority groups and racialized people. The types of groups may vary based on factors such as geography, sociocultural context or the presence of specific subpopulations.

Higher-Order Transit : Higher-order transit refers to transit that operates in whole or in part in a dedicated right of way, including heavy rail, light rail, and bus rapid transit.

Implementing Agency : Organization expected to undertake or lead a project or initiative.

Lead Applicant : The organization that serves as the primary point of contact for the metro-region with Housing, Infrastructure and Communities Canada and responsible for submissions and coordination among partner organizations. The Lead he Lead Applicant must be one of: a municipal, regional, or provincial transit agency; a municipal/local government; a regional government; a province; or a provincial Crown corporation.

Metro-Region : A self-identified and organized partnership of organizations based around one or multiple core Census Metropolitan Area(s) (CMA).

Metro-Region Agreements : A long-term partnership between the Government of Canada with the province(s), municipalities, and other partners in a self-identified metro-region to provide predictable, long-term transit and active transportation funding.

Nature-based Solutions : Actions to protect, conserve, restore, sustainably use and manage natural or modified terrestrial, freshwater, coastal and marine ecosystems, which address social, economic and environmental challenges effectively and adaptively, while simultaneously providing human well-being, ecosystem services and resilience and biodiversity benefits.

Natural Infrastructure : The interconnected set of natural and constructed ecological systems, green spaces and other landscape features that deliver ecosystem services, as well as hybrid/grey-green infrastructure which combines engineered and natural features to mimic ecosystem services.

Partner Organizations: All participating entities in the Integrated Regional Plan such as municipal, regional, or provincial transit agency; municipal governments, regional governments; a province or a provincial Crown corporation and Indigenous organizations.

Recipient : Organization receiving funding from Housing, Infrastructure and Communities Canada .

Suitable Housing: Suitable housing has enough bedrooms for the size and make-up of resident households, according to guidelines outlined in National Occupancy Standard (NOS). For example, enough bedrooms based on NOS means one bedroom for each cohabiting adult couple, one for unattached household member 18 years of age and over and one for each same-sex pair of children under age 18. A household of one individual can occupy a bachelor unit (i.e., a unit with no bedroom).

Transit-Oriented Development/Communities : An approach to transportation and land use planning that concentrates jobs, housing, services and amenities around public transit stations in compact neighbourhoods with high quality active transportation infrastructure to provide more opportunities for people to live, work, and shop within walking distance of public transit.

Zero-Emission Vehicles (ZEVs): Vehicles that can operate without producing tailpipe emissions, such as battery-electric, plug-in hybrid electric, and hydrogen fuel cell vehicles.

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Disagreement over new U.S. border rules for dogs could halt canine travel

Canadian government agency says it can't sign forms required by u.s..

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Unless an agreement can be reached, Canadians travelling with dogs may not be able to cross the American border come August.

Recently announced rule changes by the American Centers for Disease Control that go into effect Aug. 1 require any dog owners to equip their pets with a microchip and present CDC dog import forms, among other requirements.

However, part of the CDC import form requires one section to be filled out by the dog's veterinarian, with an endorsement from an "official government veterinarian" in the exporting country.

But the Canadian Food and Inspection Agency, which would be the government agency to approve the CDC form, has said it's unable to offer the signoff.

"Please note that the CFIA is currently unable to provide endorsement for export documents for dogs entering the U.S., as the process is being discussed with the CDC," the CFIA website says.

"The CFIA recognizes the concerns and impact that the CDC requirements have on Canadians. We have shared this information with the CDC to support the development of a more streamlined process for Canadians."

• N.B. dog owners prepare to be hounded by new U.S. border requirements

The website says the CFIA is "continuing to actively work" with the CDC to develop a specific process for dogs going from Canada to the U.S., and that more information for travellers with dogs is anticipated by mid-July.

In an emailed statement, CDC spokesperson Dave Daigle said the agency is aware of concerns about the dog importation rule.

"We value the feedback received from various countries, industry partners, and the public, and are actively working with federal and international partners to discuss the feedback received," Daigle said.

The new rules are designed to protect the public from diseases that can spread from dogs to humans, including rabies, he said.

"Dog rabies is a deadly disease that has been eliminated from the United States for 17 years. These measures are designed to allow for continued dog importation while minimizing health risks,' Daigle said.

In an email statement, a CFIA spokesperson said they anticipate "more information to be available in the coming week" and encouraged dog owners to check the agency's website for updates.

N.B. veterinarian association 'left in the dark'

"The new sudden changes are something we were not expecting," said Nicole Jewett, registrar with the New Brunswick Medical Veterinary Association.

She said the Canadian Veterinary Medicine Association and CFIA have been in discussions with the CDC to try and find a solution before the deadline.

"As soon as we have the final rules, we'll be able to institute a plan into how to execute it. But until then, we don't really know what might change week to week until Aug.1," Jewett said.

She urged dog owners to keep checking the CDC website for updates, and said she understands the stress they may be experiencing.

"We're kind of in the dark," Jewett said.

In addition to the uncertainty around the CFIA, she's unsure if New Brunswick veterinarians will have the capacity needed to fill out the forms required of them.

There's no data on how often New Brunswick dog owners cross into the U.S., Jewett said, so it's hard to tell how frequently vets will need to fill out the form.

"It's definitely possible that everything's going to work out, we're going to figure out a way that works for both our countries, and it's going to be easy and simple," Jewett said. "Or it might still be complicated. And we don't know yet."

Veterinarian on border says wait for clarity

Natalie Rosamund is one New Brunswick veterinarian whose clients may be impacted more than others. Based at Mayfield Veterinary Clinic in Dufferin, just outside St. Stephen, she sees clients in both New Brunswick and Maine.

"Right now, what I'm honestly telling people is to avoid crossing the border for the first little bit of August, if they can, until things settle down," Rosamund said.

While she and other vets are trying their best to assure clients, there's just not enough information yet, she said.

While strict regulations around animals crossing international borders are not uncommon, "I think the difference here is the close relationship between Canada and the U.S. and how fluid the border has been," Rosamund said.

She said she is unsure how her Maine clients will be affected and if they will have to arrange paperwork for their return trip home from her clinic.

Clients on Campobello Island are also a concern for Rosamund, since they can only access the rest of New Brunswick by driving through Maine, outside of summer months when a ferry runs to the mainland.

She said the CVMA is organizing a seminar for Canadian veterinarians on the new U.S. border rules next week, and she hopes there will be more clarity from the CFIA after that.

"I don't want people to panic. It's not the CFIA saying 'we're not going to help you.' They're saying 'hold on and let us figure it out,' is my interpretation of it," Rosamund said.

ABOUT THE AUTHOR

Sam Farley is a Fredericton-based reporter at CBC New Brunswick. Originally from Boston, he is a journalism graduate of the University of King's College in Halifax. He can be reached at [email protected]

Related Stories

• New U.S. border rules for dogs starting Aug. 1 have health minister concerned
• U.S. border rules have dog breeders thinking twice about taking their business south
• These Canadian dog owners hope for last-minute changes as strict border rules loom
• Travelling to the United States with your dog? Here's what you need to know

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2024 Investment Climate Statements: Georgia

• EXECUTIVE SUMMARY

Georgia, located at the crossroads of Western Asia and Eastern Europe, is a small but open market that benefits from international trade, tourism, and transportation.  The country has made sweeping economic reforms since 1991 that have produced a relatively well-functioning and stable market economy.  In December 2023 the European Union granted Georgia candidate status and identified nine steps for the Georgian government to take to proceed with its accession process, including advancing deoligarchization and anti-corruption efforts.  Georgia’s alignment with EU legislation will entail making structural reforms in many areas, including technical regulations and standards, competition law, government procurement, intellectual property rights, and sanitary and phytosanitary measures.

With a favorable business climate, Georgia routinely ranks high on international rankings for transparency, competitiveness, and economic freedom.  The average growth rate was over five percent from 2005 through 2023.  Fiscal and monetary policy are focused on low deficits, low inflation, and a floating real exchange rate.  The Georgian economy continued to perform well despite double shocks from the COVID pandemic and Russia’s continued invasion of Ukraine in 2022.  Having recovered from the COVID-19 pandemic, Georgia’s economy rebounded in 2021, with 10.4 percent growth, and continued to outperform expectations in 2022 with 10.2 percent growth due to tourism revenues, a surge in war-related immigration and financial inflows, and a rise in transit trade through Georgia.  In 2023, the economy grew 7.5 percent and inflation dropped to 0.4, marked by a return to more traditional economic drivers:  tourism, increasing exports, and strong foreign capital inflows.  Following three years of sustained growth, Georgia’s GDP is expected to continue this trajectory with 2024 forecasts between five and seven percent growth.

Overall, business and investment conditions are sound, and Georgia favorably compares to regional peers.  However, there is a continued lack of confidence in the judicial sector’s ability to adjudicate commercial cases independently or in a timely, competent manner, with some business dispute cases languishing in the court system for years.  Other companies complain of inefficient decision-making processes at the municipal level, lack of effective anti-trust policies, accusations of political meddling, selective enforcement of laws and regulations, including commercial laws, and difficulties resolving disputes over property rights.  The Georgian government continues to work to address these issues, and despite these remaining challenges, Georgia ranks high in the region as a good place to do business.

The United States and Georgia signed a Bilateral Investment Treaty in 1994, and Georgia is eligible to export many products duty-free to the United States under the Generalized System of Preferences program.

Georgia suffered considerable instability in the immediate post-Soviet period.  After regaining independence in 1991, civil war and separatist conflicts flared up along the Russian border in the Georgian territories of Abkhazia and South Ossetia.  In August 2008, tensions in the region of South Ossetia culminated in a brief war between Russia and Georgia.  Russia invaded and occupied the Georgian territories of Abkhazia and South Ossetia.  Russia continues to occupy these Georgian regions, and the central government in Tbilisi does not have effective control over these areas.  The United States supports Georgia’s sovereignty and territorial integrity within its internationally recognized borders and does not recognize the Abkhazia and South Ossetia regions of Georgia as independent.  Tensions still exist both inside the occupied territories and near the administrative boundary lines, but other parts of Georgia, including Tbilisi, are not directly affected.

Transit and logistics are priority sectors as Georgia seeks to benefit from increased east-west trade along the Middle Corridor following Russia’s further invasion of Ukraine in 2022.  The expanding Central Asian market has also driven recent increases in cargo through the Middle Corridor connecting Europe to Central Asian markets and could be the source of long-term growth for Georgia, particularly with strategic infrastructure investments and regional cooperation.  In February 2023, the Georgian government announced a new tender for the development of the Anaklia port, a deep seaport whose original tender the government canceled in 2020.  In March 2024, the government announced the international tender for the design and construction of Anaklia port’s marine infrastructure.

In April 2024 the government announced plans to build a new Tbilisi International Airport.

 1. Openness To, and Restrictions Upon, Foreign Investment 

Georgia is open to foreign investment.  Legislation establishes favorable conditions for foreign investment, but not preferential treatment for foreign investors.  The Law on Promotion and Guarantee of Investment Activity protects foreign investors from subsequent legislation that alters the condition of their investments for a period of ten years.  Investment promotion authority is vested in the Investment Division of Enterprise Georgia, a legal entity of public law under the Ministry of Economic and Sustainable Development.  The Investment Division’s primary role is to attract, promote, and develop foreign direct investment in Georgia.  For this purpose, it acts as the moderator between foreign investors and the Georgian government, ensures access to updated information, provides a means of communication with government bodies, and serves as a “one-stop-shop” to support investors throughout the investment process. ( http://www.enterprisegeorgia.gov.ge/en/about   ).  Enterprise Georgia also operates a website for foreign investors: www.investingeorgia.org   .

Georgia’s Investors Council, an advisory body operating since 2015, aims to promote dialogue among the private business community, international organizations, donors, and the Georgian government for the development of a favorable, non-discriminatory, transparent, and fair business and investment climate in Georgia ( http://ics.ge   ).

• Limits on Foreign Control and Right to Private Ownership and Establishment 

Georgia does not have comprehensive mechanisms in place for screening foreign investment and Georgia does not have FDI thresholds.  Governmental reviews of investment projects in Georgia are ad hoc.  The Ministry of Economy and Sustainable Development’s Investment Policy and Support Department is responsible for analyzing proposed foreign investment projects at the request of state agencies.  Georgia’s State Security Service, National Security Council (NSC), Revenue Service, Ministry of Regional Development and Infrastructure, National Bank, Ministry of Finance, Ministry of Justice, Ministry of Internal Affairs, and Ministry of Defense all have potential equities and could play a role in reviewing a foreign transaction or investment proposal for national security concerns in certain circumstances.

Foreign investors have participated in most major privatizations of state-owned property.  Transparency of privatization has been an issue at times.  No law or regulation authorizes private firms to adopt articles of incorporation or association that limit or prohibit foreign investment, participation, or control.  Georgian legislation does not protect private firms from takeovers.  There are no regulations authorizing private firms to restrict foreign partners’ investment activity or limit foreign partners’ ability to gain control over domestic enterprises.

There are no specific licensing requirements for foreign investment other than those that apply to all companies.  The government requires licenses for activities that affect public health, national security, and the financial sector:  weapons and explosives production, narcotics, poisonous and pharmaceutical substances, exploration and exploitation of renewable or non-renewable substances, exploitation of natural resource deposits, establishment of casinos and gambling houses and the organization of games and lotteries, banking, insurance, securities trading, wireless communication services, and the establishment of radio and television channels.  The law requires the state to retain a controlling interest in air traffic control, shipping traffic control, railroad control systems, defense and weapons industries, and nuclear energy.  For investment projects requiring licenses or permits, the relevant government ministries and agencies have the right to review the project for national security concerns.  By law, the government has 30 days to make a decision on licenses, and if the licensing authority does not state a reasonable ground for rejection within that period, the government must approve the license or permit for issuance.  In the real estate sector, only Georgian nationals or companies, with some exceptions, may own agricultural land.

Per Georgian law, it is illegal to undertake any type of economic activity in Abkhazia or South Ossetia if such activities require permits, licenses, or registration in accordance with Georgian legislation.  Laws also ban mineral exploration, money transfers, and international transit via Abkhazia or South Ossetia.  Only the state may issue currency, banknotes, and certificates for goods made from precious metals, import narcotics for medical purposes, and produce control systems for the energy sector.  The United States and most other countries consider these regions part of Georgia.  However, de facto local authorities claim independence, and Russian forces occupy both regions.  Russian authorities’ influence over the occupied territories includes providing a majority of the de facto governments’ budgets.  Additional information is available at travel.state.gov .

• Other Investment Policy Reviews 

The most recent Investment Policy Review of the Organization for Economic Cooperation and Development (OECD) was published an Investment Policy Review in December 2020 ( http://www.oecd.org/investment/oecd-investment-policy-reviews-georgia-0d33d7b7-en.htm   ).

The WTO’s third Trade Policy Review of Georgia   was released in 2022, commending Georgia for its overall positive economic performance in recent years and for its pursuit of economic policies based on a commitment to open markets and integration into the global economy.  According to the report, “The tariff system and structure remained largely liberal and simple, and Georgia had the fourth-lowest average MFN applied tariff among WTO Members. Georgia continued efforts to facilitate trade by modernizing and simplifying its customs procedures and formalities through the adoption of a new Customs Code and an Authorized Economic Operator Programme and completed the full implementation of the Agreement on Trade Facilitation in 2019. Many trade-related reforms implemented by Georgia were related to the Deep and Comprehensive Free Trade Area with the European Union, which provides for the approximation of Georgia’s domestic laws to EU trade-related legislation. In addition to changes in customs procedures, this entailed far-reaching structural reforms in many other areas, including sanitary and phytosanitary measures, technical regulations and standards, competition law, state aid, government procurement, intellectual property rights, energy, and telecommunications, as well as postal, financial, and international maritime transport services.” The report also marks areas that need improvement, such as the level of competition and foreign participation in government procurement. The report also identified large participation of state-owned enterprises in the economy and the inadequate legal protection of foreign investment as areas requiring further reform.

• Business Facilitation 

Georgia is a signatory of the WTO Investment Facilitation for Development Agreement.

Registering a business in Georgia is relatively quick and streamlined.  Registration takes one day to complete through Georgia’s single window registration process.  The National Agency of Public Registry (NAPR) ( www.napr.gov.ge   – webpage is in Georgian only), located in Public Service Halls (PSH) under the Ministry of Justice of Georgia, carries out company registration.  The PSH website https://www.psh.gov.ge/https://www.psh.gov.ge/main/page/2/85 outlines procedures and requirements for business registration in English.  For registration purposes, the law does not require a verification of the amount or existence of charter capital.  A company is not required to complete a separate tax registration; the initial registration includes both the revenue service and national business registration.  The following information is required to register a business in Georgia:  bio data for the founder and principal officers, articles of incorporation, and the company’s area of business activity.  Other required documents depend on the type of entity to be established.

To register a business, the potential owner must first pay the registration fee, register the company with the Entrepreneurial Register, and obtain an identification number and certificate of state and tax registration.  Registration fees are GEL100 (around $37) for a regular registration and GEL200 (around $75) for an expedited registration, plus a GEL1 bank processing fee.  The owner must also open a bank account (free).

Georgia’s business facilitation mechanism provides equitable treatment of women and men.  There are a variety of state-run and donor-supported projects that aim to promote women entrepreneurs through specific training or other programs, including access to financing and business training.

• Outward Investment 

The Georgian government does not have any specific policy on promoting or restricting domestic investors from investing abroad and Georgia’s outward investment is insignificant. According to Georgia’s central bank, the net international investment position of Georgia, which measures the difference between external financial assets and liabilities of a country, totaled negative $29.2 billion as of September 30, 2023.  However, as Georgia’s economy develops, several companies are considering investing in the U.S. market, especially in metallurgy and energy areas.  The U.S. Embassy is assisting Georgian investors who seek to invest in the United States through the Department of Commerce’s SelectUSA   program.

2. Bilateral Investment and Taxation Treaties  

• Bilateral Investment Treaties 

Georgia has bilateral agreements on investment promotion and mutual protection with 34 countries   , including the United States: International Investment Agreements Navigator | UNCTAD Investment Policy Hub   .  Signed agreements awaiting ratification are with Egypt and Qatar.  Negotiations are underway with the governments of Canada and South Korea.   Additionally, in 2007, Georgia signed a Trade and Investment Framework Agreement (TIFA) with the United States.

On June 27, 2014, Georgia signed an Association Agreement and a Deep and Comprehensive Free Trade Area with the European Union.  In 2016, the government signed a free trade agreement with the European Free Trade Association countries of Iceland, Liechtenstein, Norway, and Switzerland.  Georgia’s free trade agreement with China entered into force in January 2018.  A free trade agreement is also in force with the Commonwealth of Independent States (of 1994).  Other free trade agreements exist bilaterally with Ukraine, Russia (though trade is restricted by the Russian government), Kazakhstan, Azerbaijan, Armenia, Moldova, Uzbekistan, Turkmenistan, and Turkey.  In addition, Georgia has a Partnership and Cooperation Agreement with the UK (2019).  Georgia is engaged in free trade agreement consultations with Kyrgyzstan, the Cooperation Council of Gulf Arab States, India, and Tajikistan.  The free trade agreement between Georgia and Hong Kong entered into force in 2019.

The United States and Georgia established a High-Level Dialogue on Trade and Investment in 2012, a bilateral dialogue aimed at identifying measures to increase bilateral trade and investment.  The United States and Georgia have shared a Bilateral Investment Treaty since 1997, and Georgia can export many of its products duty-free to the United States under the Generalized System of Preferences program.

• Bilateral Taxation Treaties 

The United States and Georgia are beneficiaries of the U.S.-Georgia Bilateral Taxation Treaty, and Georgia is covered under the U.S. treaty with the former Union of Soviet Socialist Republics (USSR).  Double taxation issues are covered under the Convention with the Union of Soviet Socialist Republics on Matters of Taxation of 1973 ( http://www.irs.gov/pub/irs-trty/ussr.pdf ).

Georgia has concluded agreements for avoidance of double taxation with 58 countries.  Respective list available at the Ministry of Finance’s website:  https://www.mof.ge/en/5128   Georgia and Russia signed a double taxation avoidance treaty in 1999, which the Georgian Parliament ratified in 2000.  Although the Russian Duma has not ratified it, Russia regards it as an active agreement.

In 2015, Georgia ratified the agreement on Foreign Account Tax Compliance Act (FATCA) between Georgia and the United States.  In 2017, Georgia signed a “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting.”

3. Legal Regime 

• Transparency of the Regulatory System 

Georgia’s legal, regulatory, and accounting systems are transparent and consistent with international norms.

In Georgia, the lawmaking process involves Parliament (drafting and consideration) and the President (signing).  Under Georgia’s constitution, the following subjects have the right to initiate legislation:  the President, the government, members of Parliament, a committee, faction, the representative bodies of the Autonomous Republics of Abkhazia and Adjara, and groups of at least 30,000 voters.

A subject who does not have the right to launch a legislative initiative does, however, have the right to submit a “legislative proposal,” which should be a well-reasoned address to Parliament advocating for the adoption of a new law or of changes/amendments to existing legislation.  According to Article 150 of the Law on Parliament, the following can submit a legislative proposal:  citizens of Georgia, state bodies (except the establishments of the executive branch of government), the representative and executive bodies of local self-government, political and public unions registered in Georgia according to the established rule, and other legal entities.

There are no informal regulatory processes managed by nongovernmental organizations or private sector associations, except their entitlement for participating in the law-making process prescribed by the above law.  Publicly listed companies are required to prepare financial statements in accordance with IFRS – International Financial Reporting Standards.  Draft bills or regulations are available for public comment.  NGOs, professional associations, and business chambers actively participate in public hearings on legislation.  The government publishes laws and regulations in Georgian in the official online legislative herald gazette, the Legislative Messenger, ‘Matsne’ ( www.matsne.gov.ge   ).  Another online tool to research Georgian legislation is www.codex.ge   or the webpage of the Parliament of Georgia, www.parliament.ge   .

General oversight of the executive branch is vested in the parliament.  The new Constitution, which entered into force in December 2018, and subsequently adopted new Parliamentary Rules and Procedures, aims to strengthen Parliament’s oversight role.  Under their strengthened roles, public officials are obliged to respond to Parliament’s questions.  Government institutions also submit annual reports.  However, local watchdog organizations continue to raise concerns that one party controls all branches of government, undermining checks and balances.  Independent agencies, such as the State Audit Office the Ombudsman’s office (including the Business Ombudsman), and business associations also provide an oversight function.  Georgia maintains an active civil society that frequently reports on government activities.

Georgia has six types of taxes:  corporate profit tax (0% or 15%; no corporate income tax on retained and reinvested profit; profit tax applies only to distributed earnings), value added tax (VAT; 18%), property tax (up to 1%), personal income tax (20%), excise (on few selected goods), and import tax (0%, 5% or 12%).  Dividend income tax is five percent.  There are no dividend or capital gains taxes for publicly traded equities (a free float in excess of 25 percent).  Georgia imposes excise taxes on cigarettes, alcohol, fuel, and mobile telecommunication.  Most goods, except for some agricultural products, have no import tariffs.  For goods with tariffs, the rates are five or 12 percent, unless excluded by an FTA.

Detailed information on the types and rates of taxes applicable to businesses and individuals, as well as a payment calendar, is available on the Georgia Revenue Service website:  http://www.rs.ge/   .

In 2019, the Georgian government introduced new regulations to simplify the tax regime and streamline processes for small businesses.  The new legislation decreased turnover tax from five percent to one percent for small businesses and defined small business as those with less than GEL 500,000 ($160,000) annual turnover, a fivefold increase from the previous GEL 100,000 ($30,000) threshold.  In addition, the new regulations allow small businesses to pay taxes by the end of month, instead of requiring advance payments.  For medium and large businesses, the reform introduced an automatic system of VAT returns and activated a special system whereby entrepreneurs can pay VAT returns in five to seven business days by filling out an electronic application.

Enterprise Georgia operates the Business Service Center in Tbilisi, which provides domestic and foreign businesses with information on doing business in Georgia.  The Business Service Center facilitates an online chat tool for interested individuals (http://www.enterprisegeorgia.gov.ge/en/SERVICE-CENTER).  Additionally, the Investor’s Council provides an opportunity for the private sector to discuss legislative reforms, economic development plans, and actions to spur economic growth with the government.  Different commercial chambers, such as the American Chamber of Commerce ( www.amcham.ge   ), International Chamber of Commerce ( www.icc.ge   ), Business Association of Georgia ( www.bag.ge   ), Georgian Chamber of Commerce and Industry ( www.gcci.ge   ), and EU-Georgia Business Council ( http://eugbc.net   ) remain important tools for facilitating ongoing dialogue between domestic and foreign business communities and the government.

International accounting standards are binding for joint stock companies, banks, insurance companies, companies operating in the insurance field, limited liability companies, limited partnerships, joint liability companies, and cooperatives.  Private companies are required to perform accounting and financial reporting in accordance with international accounting standards.  Sole entrepreneurs, small businesses, and non-commercial legal entities perform accounting and financial reporting according to simplified interim standards approved by the Parliamentary Accounting Commission.  Shortcomings in the use of international accounting standards persist, and qualified accounting personnel are in short supply.

The Law of Georgia on Free Trade and Competition provides for the establishment of an independent structure, the Competition Agency, to exercise effective state supervision over a free, fair, and competitive market environment.  Nonetheless, certain companies have dominant positions in pharmaceutical, petroleum, and other sectors.

Public finances and debt obligations are transparent, and Georgia’s budget and information on debt obligations were widely and easily accessible to the public through government websites including the Ministry of Finance’s site ( www.mof.gov.ge   ).  International Budget Partnership ranked Georgia first out of 121 countries for budget transparency in the 2021 Open Budget Survey   (OBS) with a score of 87 points out of 100.  Georgia’s State Audit Office ( www.sao.ge   ) reviews the government’s accounts and makes its reports publicly available.

The Heritage Foundation’s   Economic Freedom Index 2024   ranked Georgia 32nd among 184 countries and characterized Georgia’s economy as “moderately free.”  In the European region, Georgia is ranked 19th out of 44 countries.  According to the report, “despite a challenging external and political environment, Georgia’s economy performed quite well in key policy areas. Reforms to enhance regulatory efficiency have been implemented, and open-market policies are maintained along with low tax rates. The economy has demonstrated a high level of resilience. However, institutional weaknesses still require much more committed reforms because marginal reforms have not generated much improvement. Public spending has been growing as a share of GDP, and the budget balance has been negative. Inflation has been relatively high.” According to the 2024 assessment report     of the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes, Georgia maintains a “largely compliant” overall rating.  The report notes that, “Georgia’s legal and regulatory framework is generally in place to ensure the availability of legal ownership, accounting and banking information.”  In the report the OECD stressed the need for further improvement to ensure the availability of beneficial ownership information, “which is only available through anti-money laundering obligations” and “such obligations do not cover all relevant legal persons and arrangements.”

• International Regulatory Considerations 

Georgia’s Association Agreement of 2014 with the European Union introduced a preferential trade regime, the DCFTA, which increased market access between the EU and Georgia based on better-aligned regulations.  The agreement is designed to introduce European standards gradually in all spheres of Georgia’s economy and sectoral policy:  infrastructure, energy, the environment, agriculture, tourism, technological development, employment and social policy, health protection, education, culture, civil society, and regional development.  It also provides for the approximation of Georgian laws with nearly 300 separate European legislative acts.

The DCFTA and the government’s broader EU accession efforts should promote a gradual approximation with European standards for food safety, establish a transparent and stable business environment in Georgia, increase Georgia’s potential to attract investment, introduce innovative approaches and new technologies, stimulate economic growth, and support the country’s economic development.  In December 2023, the EU granted Georgia candidate status and provided nine steps to move the country toward accession negotiations, including deoligarchization and anti-corruption efforts.  According to polling, the overwhelming majoring of Georgians (86 percent) support Georgia joining the EU.

Georgia has been a WTO member since 2000 and consistently meets requirements and obligations included in the Agreement on Trade Related Investment Measures.  Since WTO accession, Georgia has not introduced any Technical Barriers to Trade.  In January 2016, Georgia ratified the WTO Trade Facilitation Agreement.

• Legal System and Judicial Independence 

Georgia’s legal system is based on civil law and the country has a three-tiered court system.  The first tier consists of 25 trial courts throughout the country that hear criminal, civil, and administrative cases.  Two appellate courts, Tbilisi Appeal Court (East Georgia) and Kutaisi Appeal Court (West Georgia), represent the second tier.  The Supreme Court of Georgia occupies the third, or the highest, instance and acts as the highest appellate court.  In addition, there is a separate Constitutional Court for arbitrating constitutional disputes between branches of government and ruling on individual claims concerning human rights violations stemming from the Constitution.

Georgia does not have an integrated commercial code.  There are several different laws and codes (Tax Code, Law on Entrepreneurs, and Law on Insolvency) that regulate commercial activity in Georgia.  There are no specialized courts, such as a commercial court, to handle commercial disputes; however, in Tbilisi there are specialized court panels that handle high value disputes, including some commercial disputes.  The Ministry of Justice’s Public Service Halls provide property registration.

The Public Defender’s Office, the nongovernmental Coalition for an Independent and Transparent Judiciary, and the international community continued to raise concerns regarding a lack of judicial independence, including the influence of a group of judges primarily consisting of High Council of Justice (HCOJ) members and court chairpersons that allegedly stifled critical opinions within the judiciary and obstructed proposals to strengthen judicial independence.  Concerns regarding the integrity of the judicial appointment process and the capacity of the courts to deliver quality outcomes continue to affect investor confidence in the court system.    On April 5, 2023, the State Department designated three current and one former judge under Section 7031(c) of the FY 2023 Department of State, Foreign Operations, and Related Programs Appropriations Act which prevent these individuals and their immediate family members from entering the United States based on credible information that they had engaged in acts of corruption.

• Laws and Regulations on Foreign Direct Investment 

The U.S.-Georgia Bilateral Investment Treaty (BIT) guarantees U.S. investors national treatment and most favored nation treatment.  Exceptions to national treatment have been carved out for Georgia in certain sectors, such as maritime fisheries, air, and maritime transport and related activities, ownership of broadcast, common carrier, or aeronautical radio stations, communications satellites, government-supported loans, guarantees, and insurance, and landing of submarine cables.

Georgia’s legal system is based on civil law.  Legislation governing foreign investment includes the Constitution, the Civil Code, the Tax Code, and the Customs Code.  Other relevant legislation includes the Law on Entrepreneurs, the Law on Promotion and Guarantee of Investment Activity, the Bankruptcy Law, the Law on Courts and General Jurisdiction, the Law on Limitation of Monopolistic Activity, the Accounting Law, and the Securities Market Law.

Ownership and privatization of property is governed by the following acts:  the Civil Code, the Law on Ownership of Agricultural Land, the Law on Private Ownership of Non-Agricultural Land, the Law on Management of State-Owned Non-Agricultural Land, and the Law on Privatization of State Property.  Property rights in extractive industries are governed by the Law on Concessions, the Law on Deposits, and the Law on Oil and Gas.  Intellectual property rights are protected under the Civil Code and the Law on Patents and Trademarks.  Financial sector legislation includes the Law on Commercial Banks, the Law on National Banks, and the Law on Insurance Activities.

Information about the procedures and requirements during the investment process is available in English Language at the Invest in Georgia (by Enterprise Georgia) website:  https://investingeorgia.org/en/downloads/useful-guides  

• Competition and Antitrust Laws

The Georgian Law “On Free Trade and Competition” of 2005 that governs competition is in line with the Georgian Constitution and international agreements.

The agency in charge of reviewing transactions for competition-related concerns is the Competition Agency, an independent legal entity of public law, subordinated to the Prime Minister of Georgia.  The agency aims to promote market liberalization, free trade, and competition ( www.competition.ge   ).  Competition Agency decisions can be appealed at court.  Georgia has also signed several international agreements containing competition provisions, including the EU-Georgia Association Agreement (AA).  The DCFTA within the AA goes further than most FTAs, with regulatory alignment, the elimination of non-tariff barriers, and binding rules on investments and services.

In July 2020, Georgia adopted the Law of Georgia on the Introduction of Anti-dumping Measures in Trade   that became effective January 1, 2021.  The aim of the law is to protect local industry from price dumping on imports.  The Law establishes the basic conditions and rules for the introduction of anti-dumping measures to be implemented when importing goods via the customs territory of Georgia.

In 2022, the Georgian Parliament adopted a bill on Consumer Protection, which is an essential component among the obligations under the EU-Georgia Association Agreement; it establishes rules for consumer protection and prohibits “unfair commercial practices” that violate the values of “trust and good faith.”  The National Competition Agency is responsible for executing the Consumer Protection law.

• Expropriation and Compensation

The Georgian Constitution protects property ownership rights, including ownership, acquisition, disposal, and inheritance of property.  Foreign citizens living in Georgia possess rights and obligations equal to those of the citizens of Georgia, except for certain property rights (see Section 5).  The Constitution allows restriction or revocation of property rights only in cases of extreme public necessity, and then only as allowed by law.

The Law on Procedures for Forfeiture of Property for Public Needs establishes the rules for expropriation in Georgia.  The law allows expropriation for certain enumerated public needs, establishes a mechanism for valuation and payment of compensation, and provides for court review of the valuation at the option of any party.  The Georgian Law on Investment allows expropriation of foreign investments only with appropriate compensation.  Amendments to the Law on Procedures for Forfeiture of Property for Public Needs allow payment of compensation with property of equal value as well as money.  Compensation includes all expenses associated with the valuation and delivery of expropriated property.  Compensation must be paid without delay and must include both the value of the expropriated property as well as the loss suffered by the foreign investor because of expropriation.  The foreign investor has a right to review an expropriation in a Georgian court.  In 2007, Parliament passed a law generally prohibiting the government from contesting the privatization of real estate sold by the government before August 2007.  The law is not applicable, however, to certain enumerated properties.

The U.S.-Georgia BIT permits expropriation of covered investments only for a public purpose, in a non-discriminatory manner, upon payment of prompt, adequate and effective compensation, and in accordance with due process of law and general principles of fair treatment.

Expropriation disputes are not common in Georgia, although under the previous government there were cases of property transfers that lacked transparency and allegedly were implemented under coercion.

Dispute Settlement

• ICSID Convention and New York Convention

Since 1992, Georgia has been a member of the International Centre for Settlement of Investment Disputes (ICSID Convention) and a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention).  As a result of these international obligations, Georgia is bound to accept international arbitration and recognize arbitral awards.  The Ministry of Justice oversees the government’s interests in arbitrations between the state and private investors.  Georgia’s Law on Arbitration of 2010 provides for recognition and enforcement of arbitration awards rendered outside of Georgia.

• Investor-State Dispute Settlement

Georgia has signed bilateral investments treaties (BITs) with 34 countries   including the United States:  https://investmentpolicy.unctad.org/international-investment-agreements/countries/77/georgia   .  Georgia signed four more bilateral investment treaties with Japan, UAE, Kyrgyzstan, and Egypt, but these have not yet entered into force.  Georgian investment law allows disputes between a foreign investor and a government body to be resolved in Georgian courts or at ICSID unless a different method of dispute settlement is agreed upon between the parties.  If the dispute cannot be heard at ICSID, the foreign investor can also submit the dispute to ad-hoc international arbitration under United Nations Commission for International Trade Law (UNCITRAL model law) rules.  The right to use ICSID or UNCITRAL model law is guaranteed under the U.S.–Georgia BIT.

Although the constitution and law provide for an independent judiciary, there remain indications of interference in judicial independence and impartiality.  Judges are vulnerable to political pressure from within and outside of the judiciary.  There are consistent reports of political interference and lack of respect for rule of law in a number of property rights cases.  Disputes over property rights at times have undermined confidence in the impartiality of the Georgian judicial system and rule of law and, by extension, Georgia’s investment climate.

Over the past 10 years, there have been over a dozen investment disputes involving U.S. citizens. As of September 2023, most of them were resolved through arbitral awards, out-of-court settlements, or a government decision, but three were outstanding.  Local courts recognize and enforce foreign arbitral awards issued against the government.  There is no substantial history of extrajudicial action against foreign investors.

• International Commercial Arbitration and Foreign Courts

Georgia’s arbitration law went into force on January 1, 2010.  Georgia has enacted legislation based on the UNCITRAL Model Law.  Domestic private arbitration firms, such as the International Arbitration Center ( www.giec.ge   ), operate in dispute resolution between two private parties.

• Bankruptcy Regulations

On 1 April 2021, a new insolvency law, “On Rehabilitation and Collective Satisfaction of Creditors,” entered into force in Georgia.  The main aim of the law is to protect the interests of the creditors, promote mechanisms for rehabilitation, strengthen the role of the courts during the insolvency proceedings, and separate and clarify the rights and responsibilities of individuals involved in the process and the creation of fair regulations.  This law has eased the process for struggling businesses to return to growth.

The law defines two types of creditors:  secured and non-secured.  Creditors can file a court claim for opening an insolvency proceeding, given certain conditions are satisfied (conditions vary, depending on the outstanding debt amount and the delayed days of repayment).  Creditor meetings are held in court and chaired by a judge.  The creditor meeting can decide several issues, including the appointment of a supervisor of the bankruptcy or rehabilitation proceedings, and the appointment of a member of the facilitation council.

Secured creditors :  Secured creditors must make unanimous decisions on approving a debtor’s new debts, the encumbrance of the debtor’s property, and suretyship.  If there are no secured creditors, the creditor’s meeting is authorized to make the same decisions.  The secured creditors, in a creditor’s meeting, may suspend enforcement of the material conditions of the agreement with the bankruptcy or rehabilitation supervisor or on the definition of the terms of the rehabilitation.  After the debtor’s property is sold on auction, secured creditors have priority for being repaid.  All secured creditors must approve the rehabilitation plan and plan amendments.  New equity investment in the debtor’s company is only possible if there are prior consents from all secured creditors and the rehabilitation supervisor.

Non-secured creditors :  Non-secured creditors are satisfied only after all secured creditors are satisfied (unless otherwise agreed by all creditors unanimously).  Non-secured creditors do not have voting rights for the rehabilitation plan approval.

The priority system shall not apply to creditors whose claim is secured by financial collateral.

Foreign creditors :  The law provides additional time for foreign creditors to file claims.  Creditors may file claims to the court and request to declare the agreements made by the insolvent debtor voidable and/or request reimbursement of damages, if such agreements inflicted damages to the creditor.

The Debt Registry of the National Agency of the Public Register is Georgia’s credit monitoring authority.

4. Industrial Policies 

• Investment Incentives

The Georgian government has created several tools to support investment in Georgia’s economy.

The JSC “Development Fund of Georgia”   ( https://fund.ge/   ) is a state investment fund. It continues to operate on the basis of JSC “Partnership Fund”, founded in 2011, which operated under this name until September 2023, before the reform of the fund.  DFG’s main objective is to attract and support private investors through participation at the early stage of investment projects (co-investment in equity, subordinated loan, etc.).

In 2013, the government launched the Georgian Co-Investment Fund   (GCF) to promote foreign and domestic investments.  The GCF ( www.gcfund.ge   ) provides investors with exposure to the fast-growing sectors of the Georgian economy. It utilizes a private equity structure designed to cater to investors diverse needs.  The Fund considers investment opportunities across sectors and industries which significantly contribute to the development of the Georgian economy, including  Energy and Infrastructure   ,  Hospitality and Real Estate   ,  Agriculture and Logistics   ,  and   Manufacturing   .  

Enterprise Georgia is the government agency working under the Ministry of Economy and Sustainable Development of Georgia. The agency is responsible for business support, export promotion and investment attraction.  Some recent incentives that the Georgian Government has put in place under the umbrella of Enterprise Georgia include the following:

• FDI Grant:  The Government of Georgia offers support to foreign investment projects with the cashback of 15% of capital expenditures and training costs. The program aims at promoting the growth of Foreign Direct Investments in the country as well as influx of knowledge and technology and the creation of new jobs in Georgia. See more information and eligibility criteria at https://investingeorgia.org/incentives/  
• International Company Status:  The International Company Status (ICS) is a special tax status in Georgia available to certain types of Georgian enterprises, which must be operated in Georgia. This can include Georgian enterprises which represent foreign (non-resident) enterprises. For instance, “International Company Status” grants IT sector companies a preferential tax regime, which qualifies them for reduced rates of Corporate Tax (5%), Dividends Tax (0%), and Personal Income Tax (5%).  More information is available at https://www.rs.ge/LegalEntityPreferentialTax-en?cat=10&tab=1   .
• Business Universal – Loan Interest Rate Subsidizing and Collateral Guarantee, covering the following industries: Manufacturing, Hotels Industry/Balneological Resorts, Tourism Services, Agrotourism, Ecotourism.
• Credit Guarantee Mechanism:  This program aims at improving access to finance for small and medium size businesses, facilitates lending, and ensures inclusive economic growth.  The program opens opportunity for small and medium size businesses which do not meet the requirements of the loan collateral.  See more information at https://www.enterprisegeorgia.gov.ge/en/business-development/Credit-guarantee-mechanism   .

The National Agency of State Property oversees the Physical Infrastructure Transfer Component, the free-of-charge transfer of government-owned real property to an entrepreneur under certain investment obligations.

In October 2018, Georgia’s Prime Minister introduced the concept of electronic residency, allowing citizens of 34 countries to register their companies electronically and open bank accounts in Georgia while not having a physical presence in the country.

Incentives for Construction of renewable energy generation:  Under Article 5 of the Energy Law, one of the general principles of organization, regulation and monitoring of energy activities is the promotion of the generation of electricity from renewable energy sources and of the combined generation of electricity and heat.  Moreover, Article 7 of the Energy Law states: “The State Energy Policy shall provide measures aimed at the use of renewable energy sources for the generation of electricity and consumption of electricity produced from such sources, as well as any incentives and support mechanisms applied for the promotion of the use of renewable energy sources.”

The energy legislation promotes domestic and foreign investment in rehabilitation and improving industries such as coal, natural gas, water supply, and using local hydropower and other sustainable and alternative tools.  It also emphasizes the value of small power plants with an installed capacity of 15 megawatts (MW) for the effective and environmentally friendly use of renewable energy resources.

Resolution No 403 of the Government of Georgia, On the approval of Support Scheme (Hydroelectric Power Plants) of the Generation and Use energy from Renewable Energy Sources Energy Support and Use Scheme from Renewable Sources , was adopted in 2020 and amended in 2021 ( https://matsne.gov.ge/ka/ document /view/4914589?publication=0 , in Georgian).  This resolution outlines support schemes for construction and operation of power plants which are initiated by the private developer and have installed capacity more than 5 MW.

• Foreign Trade Zones/Free Ports/Trade Facilitation

In June 2007, the Parliament of Georgia adopted the Law on Free Industrial Zones, which defines the form and function of free industrial/economic zones.  Financial operations in such zones may be performed in any currency.  Foreign companies operating in free industrial zones are exempt from taxes on profit, property, and VAT.  Currently, there are four free industrial zones (FIZ) in Georgia:

• Poti Free Industrial Zone (FIZ):  This is the first free industrial zone in the Caucasus region, established in 2008.  UAE-based RAK Investment Authority (RAKIA) initially developed the zone, but in 2017, CEFC China Energy Company Limited purchased 75 percent of shares, with the Georgian government holding the remaining 25 percent.  Poti FIZ ( www.potifreezone.ge   ), a 300-hectare area, benefits from its proximity to the Poti Sea Port.
• A 27-hectare plot in Kutaisi is home to the Egyptian company Fresh Electric, which constructed a kitchen appliances factory in 2009.  The company has committed to building about one dozen textile, ceramics, and home appliances factories in the zone, and announced its intention to invest over USD two billion.
• Chinese private corporation “Hualing Group,” based in Urumqi, China, developed another FIZ in Kutaisi in 2015.  This FIZ is a 36-hectare area that houses businesses focused on sales of wood, furniture, stone, building materials, pharmaceuticals, auto spare parts, electric vehicles, and beverages ( www.hualingfiz.ge   ).
• The Tbilisi Free Zone (TFZ) in Tbilisi occupies 17 hectares divided into 28 plots.  TFZ has access to the main cargo transportation highway, Tbilisi International Airport (30 km), and the Tbilisi city center (17 km).  For more information, visit: https://www.tfz.ge/en/510/   .
• Performance and Data Localization Requirements

Performance requirements are not a condition of establishing, maintaining, or expanding an investment, but the government has imposed requirements on a case-by-case basis in some privatizations of large state assets, such as commitments to maintain employment levels or to make additional investments within a specified time period.  Performance requirements such as scope and time limit on licenses to extract natural resources or production sharing agreements have triggered complaints from some companies that transactions lacked transparency.  Most types of performance requirements are prohibited by the U.S.-Georgia BIT.

Georgia’s Law on Promotion and Guarantees of Investment Activity prohibits setting the required minimum number of Georgian citizens to be elected or appointed in leading bodies of enterprises.

The government does not follow a forced localization policy though recent legislative changes have created difficulties in acquiring residence permits for foreign employees working for VAT exempt entities.  Foreign investors have no obligation to use domestic content in goods or technology.  In addition, there are no requirements for foreign IT providers to turn over source codes and/or provide access to surveillance.

Customer and business-related data transfer is not restricted in Georgia, neither within nor outside the country, unless it concerns personal or national security matters, which are protected by the law.

The Data Exchange Agency (DEA), under the Ministry of Justice, coordinates e-governance development, data exchange infrastructure, unified governmental networks, informational and communication standards, and cybersecurity policy.  The DEA requires any company managing critical data to implement a number of security protocols to protect that information ( https://data.gov.ge/   ).

5. Protection of Property Rights

• Real Property

Processes to register property are streamlined, transparent, and take one day to process at Public Service Halls.  In June 2017, the Parliament adopted a legislative amendment that placed a moratorium on the sale of agricultural land to foreign citizens and stateless persons.  Under the amendment, foreigners, legal entities registered abroad, and legal entities registered by foreigners in Georgia were not able to purchase agricultural land in Georgia.  Furthermore, the new Constitution that came into force in December 2018 determined that agricultural land can only be owned by the state, self-governing entities, citizens of Georgia, or a group of Georgian citizens.  The Constitution also states that exclusions may be specified in organic law, which requires votes from at least two-thirds of Parliament to pass.

Mortgages and liens are registered through the public registry, and information can be obtained from www.napr.gov.ge   .

The government has taken multiple steps to regulate land titling, including facilitating simplified procedures, free registration campaigns, and mediation services.  Unclear or unregistered titling, which persists, has the potential to hamper investment projects.

Property ownership cannot revert to other owners when legally purchased property stays unoccupied.

Intellectual Property Rights

Georgia is not listed in USTR’s Special 301 Report or in the Notorious Markets List.

Georgia acceded to the World Trade Organization (WTO) and the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement in 2000.  The Ministry of Economy and Sustainable Development is responsible for WTO compliance.

Georgia’s legal framework for protection of intellectual property rights (IPR) aligns with international standards and IPR enforcement is largely harmonized with EU standards.   Six laws regulate IPR in Georgia:  the Law on Patents, the Law on Trademarks, the Law on Copyrights and Neighboring Rights, the Law on Appellation of Origin and Geographic Indication of Goods, the Law on Topographies of Integrated Circuits, and the Law on IP-Related Border Measures.  Georgian law provides protection for works of literature, art, science, and sound recordings for 50 years.

The National Intellectual Property Center of Georgia (Sakpatenti) administers the regulatory system for issuing and managing trademarks, copyright, patents, and geographical indicators of origin.  Sakpatenti coordinates the government’s approach to IPR enforcement under the Interagency Coordination Council for IPR Enforcement.  This Council is an efficient platform for government institutions to exchange their views on IPR enforcement issues. Georgia has improved enforcement of IPR and has effectively reduced the availability and use of unlicensed software, pirated video and audio recordings, and other unlicensed content online.

As part of the Ministry of Finance, the Revenue Service, enforces IPR matters.  The Revenue Service is responsible for border control and can halt import or export of items based on the register data. Recently, counterfeit alcohol spirits have become a larger challenge for Georgia, but the country has taken steps to raise awareness and address the issue.  The Customs Service Department and the Tax Monitoring Department, both being under the Revenue Service, and the Investigation Service of the Ministry of Finance, – each are authorized to act ex officio and with the notice from the rights holder.  After the registration procedure is completed, the Revenue Service is liable to suspend counterfeit goods.  According to the law, the goods may be suspended for no longer than 10 working days, which may be extended by the Revenue Service for another 10 working days.  The Law of Georgia on Border Measures Related to Intellectual Property provides for the possibility of destruction of counterfeit goods based on a court decision.

In 2023, Georgia amended its Trademark Law, the Law on Appelations of Origin and Geographical Indication of Goods, and the Law on Copyright to be in accordance with current international standards.

Georgian legislation covers various types of liability for intellectual property right infringement, including civil, administrative and criminal responsibilities  The Code of Civil Procedure of Georgia provides for the court’s authority to take provisional measures necessary for securing full and proper execution of the court’s decision.

In 2023, the Ministry of Finance’s Investigation Service initiated 39 cases for the unlawful use of trademark or other commercial designations, illegal transportation or sale of forged goods and manufacturing, and the sale or use of forged credit cards or charge cards.  As a result, 209,026 counterfeit items were seized, with the total value of around $208,000.  In addition, the Customs Department issued 301 orders for the suspension of goods.  Out of these, in 249 cases the right holder and the owner of the goods agreed on the destruction of the goods, with a combined value of approximately $130,000.  In 2023, the Tax Monitoring Department of LEPL Revenue Service revealed 23 cases of trademark infringements.  The government seized 1,917 counterfeit items, with the total value of $11,340.

Despite strong legal structure, enforcement of IP generally remains challenging.  Civil cases on IPR infringement have not reflected the full extent of the situation regarding counterfeiting and piracy in Georgia, as the private sector has often not used available legal mechanisms for IPR enforcement.  Infringement of industrial property rights, copyrights, performers’ rights, rights of makers of databases, trademarks or other illegal use of commercial indications can incur civil, criminal, and administrative penalties.  Depending on the type and extent of the violation, penalties include fines, corrective labor, social work, or imprisonment.

The Criminal Code of Georgia regulates prosecution of IPR violations, in particular: Articles 189, 1891 and 196.  More detailed information can be found at https://matsne.gov.ge/document/view/16426?publication=232   .

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at:  http://www.wipo.int/directory/en/   .

6. Financial Sector

• Capital Markets and Portfolio Investment

The National Bank of Georgia regulates the securities market.  All market participants submit their reports in line with international standards.  All listed companies must make public filings, which are then uploaded to the National Bank’s website, allowing investors to evaluate a company’s financial standing.  The Georgian securities market includes the following licensed participants:  two Stock Exchanges, a Central Securities Depository, nine brokerage companies, and three independent securities registrars. ( https://www.nbg.gov.ge/index.php?m=487&lng=eng   )

The Georgian Stock Exchange (GSE, https://gse.ge/en/   ) is the only organized securities market in Georgia.  Designed and established with the help of USAID and operating under a legal framework drafted with the assistance of U.S. experts, the GSE complies with global best practices in securities trading and offers an efficient investment facility to both local and foreign investors.  The GSE’s automated trading system can accommodate thousands of securities that can be traded by brokers from workstations on the GSE floor or remotely from their offices.

The government and Central Bank (National Bank of Georgia) follow IMF Article VIII and do not impose any restrictions on payments and transfers in current international transactions. Credit from commercial banks is available to foreign investors as well as domestic clients, although interest rates are high, which is a hindering factor for many businesses, especially SMEs.  Banks offer business, consumer, and mortgage loans.

• Money and Banking System

Banking is one of the fastest growing sectors in the Georgian economy.  As of March 1, 2024, Georgia’s banking sector consists of 17 commercial banks, including 15 foreign-controlled banks, with 148 commercial bank branches and 760 service centers throughout the country.  In January 2024, Georgian commercial banks held GEL 78.5 billion (around USD 29.4 billion) in total assets.  The private sector Credit-to-GDP ratio stands at 73.9 % as of 2023Q4, still quite high compared to regional peers.  As of early 2024, there were 18 insurance companies and 34 microfinance (MFI) organizations operating in Georgia.  The two largest Georgian banks are listed on the London Stock Exchange:  TBC Bank and the Bank of Georgia.

The banking system is stable, well capitalized, liquid, and profitable.  The financial sector maintains solid capital and liquidity buffers against potential threats.  The share of non-performing loans (2.7% as of February 1, 2024) is declining.  Georgia’s banking supervision practices and regulations have significantly progressed and are largely in line with Basel/EU directives.

The National Bank of Georgia   (NBG, www.nbg.gov.ge   ) is Georgia’s central bank, as defined by the Constitution.  The rights and obligations of the NBG as the central bank, the principles of its activity, and the guarantee of its independence are defined in the Organic Law of Georgia on the National Bank of Georgia.  The National Bank supervises the financial sector to facilitate the financial stability and transparency of the financial system, as well as to protect the rights of the sector’s consumers and investors.  NBG is the supervisory authority for the financial institutions in terms of undertaking measures against money laundering (AML) and terrorism financing (CFT).  The NBG´s approach to the AML/CFT supervision is fully risk-based and carried out through its Money Laundering Inspection and Supervision Department.

Credit rating agencies positively assess Georgia’s macroeconomic stance.  In 2024, Moody’s affirmed Ba2 rating and changed Georgia’s outlook to stable from negative.  In 2023, Fitch affirmed Georgia at ‘BB’ and updated its outlook from stable to positive.

In February 2023, Parliament adopted amendments to the NBG law which increased the number of the executive board members and set the rules for appointing an ad interim National Bank president if the position is vacant. The President of Georgia vetoed the amendments, saying they may undermine the Bank’s independence.  The IMF released a statement in February 2023 noting that action to amend the NBG law to change the NBG’s management structure risked undermining the authorities’ hard-won credibility, and any changes to the central bank’s governance framework should be carefully contemplated and follow a deliberative consultation process to ensure that central bank independence and credibility are safeguarded.  The IMF’s Stand by Arrangement-supported program has been paused since June 2023.

The International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), the U.S. International Development Finance Corporation (DFC), the Asian Development Bank (ABD), and other international development agencies have a variety of lending programs making credit available to large and small businesses in Georgia.  Georgia’s two largest banks – TBC and Bank of Georgia – have correspondent banking relationships with the United States mainly through Citibank and JP Morgan.  The correspondent banking remains a major challenge for small and medium size banks.

Georgia does not restrict foreigners from establishing a bank account in Georgia.  Several local banks are subsidiaries of international banking groups and subject to the same regulations. For proper and efficient monitoring of sanctions’ compliance by the financial intuitions, the NBG has established a new unit which is responsible for elaboration of respective methodological guidelines for the financial intuitions on international sanctions’ compliance and assists representatives of financial sector to understand and fulfill all the requirements envisaged by the sanctions’ regimes. Compliance with international financial sanctions is systematically checked during the onsite inspections of financial institutions.

Foreign Exchange and Remittances

• Foreign Exchange

The sole legal tender in Georgia is the lari (GEL), which is traded on the Bloomberg Trading Platform.  The NBG publishes the official exchange rate daily on its website.  The official exchange rate of the Georgian lari against other foreign currencies is determined according to the rate on international markets or the issuer country’s domestic interbank currency market based on cross-currency exchange rates.  The sources used for the acquisition of exchange rates are the Reuters and Bloomberg systems and the corresponding webpages of central banks.  The information is received, calculated, and disseminated automatically.

Georgia has a floating exchange rate.  The National Bank of Georgia does not intend to peg the exchange rate and does not generally intervene in the foreign exchange market, except under certain circumstances when large one-off transaction may cause excessive fluctuation, as well as to accumulate FX international reserves when market allows.

Georgian law guarantees the right of an investor to convert and repatriate income after payment of all required taxes.  The investor is also entitled to convert and repatriate any compensation received for expropriated property.  Georgia has accepted the obligations of Article VIII, Sections 2, 3, and 4 of the IMF Articles of Agreement, effective as of December 20, 1996, to refrain from imposing restrictions on payments and transfers for current international transactions and from engaging in discriminatory currency arrangements or multiple currency practices without IMF approval.  Parliament’s 2011 adoption of the Act of Economic Freedom further reinforced this provision.

Under the U.S.-Georgia BIT, the Georgian government guarantees that all money transfers relating to a covered investment by a U.S. investor can be made freely and without delay into and out of Georgia.

Foreign investors have the right to hold foreign currency accounts with authorized local banks.

• Remittance Policies

There are no restrictions, limitations, or delays involving remittances from overseas.  Several Georgian banks participate in the SWIFT and Western Union interbank communication networks.  Businesses report that it takes a maximum of three days for money transferred abroad from Georgia to reach a beneficiary’s account, unless otherwise provided by a customer’s order.  There is no indication that remittance policies will be altered in the future.  At the border, travelers must declare currency and securities in their possession valued at more than GEL 30,000 (around $11,100).

• Sovereign Wealth Funds

Georgia does not have a Sovereign Wealth Fund.

7. State-Owned Enterprises

After the fall of the Soviet Union, the Georgian government privatized most state-owned enterprises (SOEs).  Georgian Railways (GRW), Georgian Oil and Gas Corporation (GOGC), Georgian State Electrosystem (GSE), Electricity System Commercial Operator (ESCO), and Enguri Hydropower plant are the major remaining SOEs.  The energy-related companies largely implement the government’s energy policies and help manage the electricity market.  There are also a number of Legal Entities of Public Law (LEPLs), independent bodies that carry out government functions, such as the Public Service Halls.

State-owned Enterprises (SOE) remain one of the major contributors to the Georgian economy, labor market, and public investment.  The SOEs in Georgia deliver critical services like high-voltage electricity lines, gas import, water supply, and transportation services.  The government drafted its SOE Reform Strategy and is working on the SOE law, in cooperation with the WB and the IMF.  In March 2024, the IMF noted that “steadfast implementation of SOE reform and renewable energy development strategies adopted in late-2022 is needed to raise productivity and limit fiscal risks, and to ensure the state’s ownership policies regarding SOEs are converging with EU principles.”

Despite state ownership, SOEs act under the general terms of the Entrepreneurial Law.  Georgian Railways and GOGC have supervisory boards, while GSE and ESCO do not.  The SOEs’ individual charters describe their procedures and policies.  Georgia encourages its SOEs to adhere to the OECD’s Guidelines on Corporate Governance for SOEs.  The senior management of SOEs report to Supervisory Boards, where they exist (e.g., GRW, GOGC); in other cases, they report to line ministries.

To ensure the transparency and accountability of state business decisions and operations, SOEs have regular outside audits and publish annual reports.  SOEs with more than 50 percent state ownership are obliged to follow the State Procurement Law and make procurements via public tender.  The Partnership Fund, GRW, and GOGC are subject to valuation by international rating agencies.  There is no legal requirement for SOEs to publish annual report or to submit their books for independent audit, but this is done in practice.  In addition, GRW and GOGC are Eurobond issuer companies and therefore are required to publish reports.  SOEs are subject to the same domestic accounting standards and rules.  These standards are comparable to international financial reporting standards.  No SOEs exercise delegated governmental powers.

• Privatization Program

Georgia’s government has privatized most large SOEs.  Successful privatization projects include major assets in energy generation and distribution, telecommunications, water utilities, port facilities, and real estate sectors.  A list of entities available to be privatized can be found at eauction.ge   .  Foreign investors are welcome to participate in privatization programs.  Additional information is also available the American Chamber of Commerce in Georgia website:  www.amcham.ge   .

In 2019, the government offered mining deposits for privatization in addition to other state-owned assets through the 100 Investment Offers for Business   initiative.  Within the initiative, the government selected mineral resource deposits from various regions to sell at e-auctions   .  The mineral deposits included gold and copper-polymetallic, ore, bentonite clay, volcanic slag, peat, diatomite, tuff breccia, zeolite-containing tuff, basalt, marble, limestone, underground fresh water, and carbonated mineral water.  Mining license prices vary and depend on the type of mineral resource and its price.

The National Agency of State Property, a Legal Entity of Public Law under the Ministry of Economy and Sustainable Development, manages the privatization of state property, the transfer of the right of use, and the management of SOEs.  The agency’s website ( http://nasp.gov.ge/   ) contains links to electronic auctions, proposals for investments, and other relevant information.

8. Responsible Business Conduct

While the concept of Corporate Social Responsibility (CSR) is a relatively new phenomenon in Georgia, it is growing.  Most large companies engage in charitable projects and public outreach as part of their marketing strategy.  The American Chamber of Commerce in Georgia has a Corporate CSR committee that works with member companies on CSR issues.  The Global Compact, a worldwide group of UN agencies, private businesses, and civil society groups promoting responsible corporate citizenship, is active in Georgia.

The Georgian government undertook an OECD CSR policy review in 2016 based on the OECD Policy Framework for Investment.  The OECD completed a follow-up Investment Policy Review assessment in 2020 and noted Georgia’s significant strides ( http://www.oecd.org/investment/oecd-investment-policy-reviews-georgia-0d33d7b7-en.htm   ).  Georgia participates in the OECD Eurasia Competitiveness Program, which works with countries in the region to unleash their economic and employment potential.  In February 2023, Georgia withdrew from the OECD anti-corruption monitoring network for Eastern Europe and Central Asia.  Georgia is a member of the Task Force for the Implementation of the Environmental Action Program (EAP Task Force), which aims to address the heavy environmental legacy of the Soviet development model.  Additionally, the Support for Improvement in Governance and Management (SIGMA) program, a joint initiative of the EU and the OECD, has assisted Georgia since 2008, to strengthen public governance systems and public administration capacities.  Georgia participates in the OECD Committee on Fiscal Affairs’ Base Erosion and Profit Sharing (BEPS) Project.

Georgia’s civil society and workers associations are active in responding to human rights, labor rights, consumer protection, environmental protection, and other concerns, as well as new laws and regulations that intend to protect or have potential adverse effects on citizens.

Georgia is not a party to the Extractive Industries Transparency Initiative and/or Voluntary Principles on Security and Human Rights despite extractive manganese, gold, and copper ore industries operating in Georgia.  Among the local tools promoting CSR principles and policies in such industries are commercial chambers, the Public Defender’s office, the Business Ombudsman under the Prime Minister’s Office, sectoral trade unions, and Georgia’s Trade Union Confederation.

Georgia has ratified The Montreux Document on Private Military and Security Companies.

• Additional Resources

Department of State

• Country Reports on Human Rights Practices ;
• Trafficking in Persons Report ;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities ;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises ; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report ;
• List of Goods Produced by Child Labor or Forced Labor ;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain .
• Climate Issues

Georgia is committed to reducing its domestic total greenhouse gas emissions by 35% below its 1990 level by 2030.  According to Georgian law on the generation and consumption of energy from renewable sources, Georgia’s renewable energy consumption should reach 35% of its total energy consumption by 2030.  There are currently no sector- or technology-specific renewable energy targets.

Georgia’s 2030 Climate Change Strategy and 2021-2023 Action Plan includes the following:

• By 2030, total greenhouse gas emissions should be lower than 29.25 metric tons of carbon dioxide equivalent; and
• Target reduction of emissions in the energy generation and transmission sector is 15%, industry sector is 5%, and transportation sector is 15% by 2030, compared to business-as-usual.

The Law on Public Private Partnerships was enacted in August 2018 in Georgia and provides a legal framework for cooperation between public and private partners, providing flexibility and exemptions for the energy sector.

Support for renewable energy measures include the following:

• A Feed-In Premium (FiP) support scheme for all renewable energy installations higher than 5MW.  Initially, the policy support scheme only applied to hydropower plants.  An amendment at the beginning of 2021 made the FiP support scheme applicable to all renewable energy projects higher than 5 MW, not just hydropower plants.
• A net-metering mechanism for self-consumption has been implemented in Georgia since 2016.  In summer 2020, the installation limit of the net metering mechanism for micro wind, solar, hydro and/or other renewable energy generators increased from 100 kW to 500 kW.
• Policy support for electric vehicles through tax reliefs and provision of free charging.
• A renewable energy auction scheme was launched in 2023.  In September the government auctioned 300MW, and in December 800MW of capacity across wind, solar, hydro, and other resources, with another 400MW of planned auctions over the coming years.

There is currently no policy support for renewable energy in heating and cooling.  Additional information about renewable energy in Georgia is available at https://www.ren21.net/wp-content/uploads/2019/05/Factsheet_Georgia-HardTalk-2021.pdf .

9. Corruption

Georgia has laws, regulations, and penalties to combat corruption.  Georgia criminalizes bribery under the Criminal Code of Georgia.  Chapter XXXIX of the Criminal Code, titled as Official Misconduct, covers many corruption-related offenses committed by public servants including bribery, abuse of official powers, accepting a prohibited gift, forgery of official documentation, etc.  Senior public officials must file financial disclosure forms, which are publicly available online, and Georgian legislation provides for the civil forfeiture of undocumented assets of public officials who are charged with corruption-related offenses.

Penalties for accepting a bribe start at six years in prison and can be extended to 15 years, depending on the circumstances.  Penalties for giving a bribe can include a fine, correctional labor, house arrest, or a prison sentence up to three years.  In aggravated circumstances, when a bribe is given to commit an illegal act, the penalty is from four to seven years.  When bribe-giving is committed by the organized group, the sentence is imprisonment for five to eight years.  Abuse of authority by public servants are criminal acts under Articles 332 of the criminal code and carry a maximum penalty of eight years imprisonment.  The definition of a public official includes foreign public officials and employees of international organizations and courts.  White collar crimes, such as bribery, fall under the investigative jurisdiction of the Prosecutor’s Office.  The laws extend to family members of officials.

Georgia is not a signatory to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.  Georgia has, however, ratified the UN Convention against Corruption.  Georgia cooperates with the Group of States against Corruption (GRECO).

In February 2023, Georgia withdrew from the OECD anti-corruption monitoring network for Eastern Europe and Central Asia.  The OECD and EU called on Georgia to reconsider its decision and rejoin the program to pursue its fight against corruption.

According to the European Commission’s Georgia 2023 Report (2023 Communication on EU Enlargement Policy) : “Georgia has some level of preparation in the fight against corruption and made some progress.  Georgia’s legal framework on anti-corruption is largely approximated to the EU acquis and international norms following substantial legal reforms. In May 2023, Georgia implemented one outstanding GRECO recommendation by widening the scope of the asset declaration regime to cover all prosecutors. An Anti-Corruption Bureau was set up in 2022. The legal framework was amended to strengthen the investigative authority of the Special Investigation Service (SIS) and the Personal Data Protection Service (PDPS). Legislation on the Anti-Corruption Bureau, the SIS and the PDPS was sent to the Venice Commission in September 2023. Further efforts need to be undertaken to tackle high-level corruption and, in particular, to address the challenge of large-scale vested interests and their influence in both the political, judicial and economic spheres. Georgia has not yet developed a new national anti-corruption strategy or action plan.”

Transparency International ranked Georgia 49 out of 180 countries in the 2023 edition    of its Corruption Perception Index.  Georgia was ranked 41st in 2022.

In November 2022, the Georgian parliament adopted anti-corruption legislative amendments that mandated the creation of a new agency, the Anti-Corruption Bureau (ACB), which combined several anti-corruption functions into a single body.  Legislation granted the bureau authority to monitor asset declarations and party financing and to adopt recommendations on whistle-blower protection. The Prime Minister appointed the head of the Bureau for a term of six years.  A December 18, 2023, Venice Commission opinion on the Law on the Fight Against Corruption and the ACB concluded that “bringing various preventive anti-corruption functions together in the ACB falls short of the stated aim of rigorously addressing high-level corruption.”  While the opinion highlighted positive aspects of the ACB, such as its separate structure and high degree of financial independence, it found its institutional design did not provide for a sufficient degree of independence, with the Prime Minister able to appoint and dismiss the ACB head.  The opinion provided several recommendations to further increase the independence and perception of political neutrality of the ACB.  The Prosecutor’s Office and the State Security Service of Georgia continue to conduct all investigations into public corruption.

• Resources to Report Corruption 

Contact at the government agency or agencies that are responsible for combating corruption:

Anti-Corruption Bureau Mr. Rajden Kuprashvili, Director Address: 7, Ingorokva street. Tbilisi Email: [email protected]

Prosecutor’s Office of Georgia Mr. Giorgi Gochashvili, Head of Division of Criminal Prosecution of Corruption Crimes Address: 24, Gorgasali Street, Tbilisi Tel: +995-32-240-52-52 Email: [email protected]

Business Ombudsman’s Office Mr. Otar Danelia, Ombudsman Address: 7, Ingorokva street Hotline: +995 32 2 282828 Email: [email protected]

• 10. Political and Security Environment

The United States established diplomatic relations with Georgia in 1992, following Georgia’s independence from the Soviet Union in 1991.  Since independence, Georgia has made impressive progress fighting corruption, developing modern state institutions, and enhancing global security.  The United States is committed to helping Georgia deepen Euro-Atlantic ties and strengthen its democratic institutions.

Russia occupies the Georgian territories of Abkhazia and South Ossetia – nearly 20 percent of Georgia’s territory – and the central government in Tbilisi does not have effective control over these areas.  The United States supports Georgia’s sovereignty and territorial integrity within its internationally recognized borders and does not recognize the Abkhazia and South Ossetia regions of Georgia as independent.  Only Russia and a small number of other countries recognize them as independent states.  Tensions still exist both inside the occupied territories and near the administrative boundary lines (ABLs).  Several attacks, criminal incidents, and kidnappings have occurred near the ABLs as well, including the killing of a Georgian citizen by Russian Border Guards in November 2023.  While none of the activity has been anti-American in nature, there is a high risk of travelers finding themselves in precarious circumstances.  In addition, unexploded ordnance from previous conflicts poses a danger near the South Ossetia ABL.  However, other parts of Georgia, including Tbilisi, are not directly affected.

Per Georgian law, it is illegal to undertake any type of economic activity in Abkhazia or South Ossetia if such activities require permits, licenses, or registration in accordance with Georgian legislation.  Laws also ban mineral exploration, money transfers, and international transit via Abkhazia or South Ossetia.

While violent street protests are generally uncommon, there have been some recent episodes of politically-motivated violence and civil disturbance.  In July 2021 far-right groups violently rioted throughout Tbilisi against a planned Tbilisi Pride parade, destroying the offices of two NGOs and attacking over 50 journalists and individuals thought to be members of the LGBTQI+ community.  In July 2023, violent counter-protesters disrupted a planned Pride event before the event occurred.  Generally, police have fulfilled their duty to maintain order even in cases of unannounced protests.  However, in some instances the police have allowed a permissive environment for far-right violence.

In February 2023, the government announced that it would support passage of a “foreign agent” law that would require NGOs and media organizations with foreign funding to register with the Georgian government, declare themselves as “foreign agents,” and submit additional financial information to the authorities.  The United States, EU, and other local and international actors noted that the legislation would stigmatize civil society and derail Georgia’s EU integration.  After large protests, Parliament rejected the bill.  The ruling party resubmitted a revised version of the draft law in April 2024.  Both submissions of the bill have resulted in large-scale demonstrations, which resulted in some violent clashes between demonstrators and law enforcement.

Domestic politics remains highly polarized.

• 11. Labor Policies and Practices

According to the 2023 EU Business Climate Report , which surveyed over 200 European companies doing business in Georgia, rising labor and energy costs and workforce qualifications were some of the biggest challenges for European businesses.  TBC Capital, a Georgian think tank affiliated with one of Georgia’s largest banks, in its  report  published in February 2024 said that labor inflows were “still expected from relatively lower-income neighboring countries” to work in areas such as construction, agriculture, and accommodation/food service.  It reported that skilled labor availability in the engineering field remained underdeveloped.  The official unemployment rate was 15.3 percent by the end of 2023 (Georgia’s National Statistics Agency changed its methodology of calculating unemployment in 2020, and subsistence farmers are no longer categorized as employed.  The change considerably increased the official unemployment rate.)  Some investment agreements between the Georgian government and private parties have included mandates for the contracting of local labor for positions below the management or executive level.

Georgia’s Labor Code defines the minimum age for employment (16), standard work hours (40 per week), and annual leave (24 calendar days).  The law allows for other wage and hour issues to be agreed between the employer and employee.  The law defines the grounds for termination and severance pay for an employee at the time of termination, including the payment term.  An employer is obliged to give compensation of not less than one month’s salary to an employee within thirty (30) days.  Additionally, an employer is obliged to give the dismissed employee a written description of the grounds for termination within seven days after an employee’s request.  The Labor Code also prescribes rules for paying overtime labor (over 40 hours), which must be paid at an increased hourly rate.

The Labor Code specifies essential terms for labor contracts, including the start date and the duration of labor relations, working hours and holiday time, location of workplace, position and type of work, amount of salary and its payment, overtime work and its payment, the duration of paid and unpaid vacation and leave, and rules for granting leave.  The code states that the duration of a business day for an underage person (ages 16 to 18) should not exceed 36 hours per week.  Regulations prohibit interference in union activities and discrimination of an employee due to union membership.  The Labor Code amendments mandate the government to reestablish a labor inspectorate to ensure adherence to labor safety standards.  In 2018, Parliament passed the Occupational Safety, and Health Law, giving the government power to make unannounced inspections, in some circumstances, at companies operating among “hard, harmful, hazardous, and increased danger” occupations.  Subsequent amendments that passed in September 2020 and came into force January 1, 2021, allowed unannounced inspections across all sectors of the economy.

Employees are entitled to up to 183 days (six months) of paid maternity leave, which can last up to 24 months when combined with unpaid leave.  The state subsidizes leave taken for pregnancy, childbirth, childcare, and adoption of a newborn.  An employer and employee may agree on additional compensation.  The Labor Code permits non-competition clauses in contracts; this provision may remain in force even after the termination of employment.

The government adopted a new law in 2018 establishing an accumulative pension scheme, which came into effect as of January 1, 2019.  The pension is mandatory for legally employed persons under 40, while for the self-employed and those above the age of 40 enrollment in the program is voluntary.  Each employee, employer, and the government must each contribute two percent of the employee’s gross income to an individual retirement account.  As for the self-employed, they will make a deposit of four percent of their income, and the state will match another two per cent.  Employees pay a flat 20 percent income tax.  The state social security system provides a modest pension and maternity benefits.  The minimum monthly state pension is GEL 315 (about USD 117).  The average monthly salary across the economy by the end of 2023 was GEL 2,045 (around USD 760).

The law generally provides for the right of most workers, including government employees, to form and join independent unions, to legally strike, and to bargain collectively.  Employers are not obliged, however, to engage in collective bargaining, even if a trade union or a group of employees wishes to do so.  While strikes are not limited in length, the law limits lockouts to 90 days.  A court may determine the legality of a strike, and violators of strike rules can face up to two years in prison.  Although the law prohibits employers from discriminating against union members or union-organizing activities in general terms, it does not explicitly require reinstatement of workers dismissed for union activity.  Certain categories of workers related to “human life and health,” as defined by the government, were not allowed to strike.  The International Labor Organization noted the government’s list of such services included some it did not believe constituted essential services directly related to human life and health.  Workers generally exercised their right to strike in accordance with the law.

Georgia has ratified some ILO conventions, including the Forced Labor Convention of 1930, the Paid Holiday Convention of 1936, the Anti-Discrimination (Employment and Occupation) Convention of 1951, the Human Resources Development Convention of 1975, the Right to Organize and Collective Bargaining Convention of 1949, the Equal Remuneration Convention of 1951, the Abolition of Forced Labor Convention of 1957, the Employment Policy Convention of 1964, and the Minimum Age Convention of 1973.

Information on labor related issues is also available in the State Department’s annual reports: Human Right Report: http://georgia.usembassy.gov/officialreports/hrr.html .  Child Labor Report: http://www.dol.gov/ilab/reports/child-labor/georgia.htm   .

• 12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs 

Since 1993, the Overseas Private Investment Corporation (OPIC), predecessor of the U.S. International Development Finance Corporation (DFC), has committed over $780 million in financing, political risk insurance and technical assistance across for more than 70 projects in Georgia.  First OPIC and now DFC investments in Georgia have been made in the following areas:  small business support, infrastructure, franchising, education, manufacturing, tourism, agriculture, and healthcare.  Georgia is an Upper Middle-Income Country (UMIC) as defined by the World Bank classification.  DFC can consider projects in UMICs subject to satisfaction of certain eligibility criteria, including Georgia.  Additional information about DFC’s products and eligibility criteria can be found at https://www.dfc.gov/what-we-offer/our-products .

• 13. Foreign Direct Investment Statistics

Source: National Statistics Office, Preliminary data for 2023. https://www.geostat.ge/  

• 14. Contact for More Information

United States Embassy, Political/Economic Section 29 Georgian-American Friendship Avenue, Tbilisi Email: [email protected] +995-32-2-27-7000

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