Financial Administration Act (R.S.C., 1985, c. F-11)

Act current to 2017-06-19 and last amended on 2017-06-19. Previous Versions

Marginal note:Disclosure of interest in contract
  •  (1) A director or officer of a Crown corporation who

    • (a) is a party to a material contract or proposed material contract with the corporation, or

    • (b) is a director or officer of, or has a material interest in any person who is a party to, a material contract or proposed material contract with the corporation,

    shall disclose in writing to the corporation or request to have entered in the minutes of a meeting of the board of directors thereof the nature and extent of his interest.

  • Marginal note:Time for disclosure by director

    (2) The disclosure required by subsection (1) shall be made, in the case of a director,

    • (a) at the meeting of the board of directors at which the proposed contract is first considered;

    • (b) if the director was not then interested in the proposed contract, at the first meeting of the board of directors after he becomes so interested;

    • (c) if the director becomes interested after the contract is made, at the first meeting of the board of directors after he becomes so interested; or

    • (d) if the director was interested in the contract before becoming a director, at the first meeting of the board of directors after he becomes a director.

  • Marginal note:Time for disclosure by officer

    (3) The disclosure required by subsection (1) shall be made, in the case of an officer who is not a director,

    • (a) forthwith after he becomes aware that the contract or proposed contract is to be considered or has been considered at a meeting of the board of directors;

    • (b) if the officer becomes interested after the contract is made, forthwith after he becomes so interested; or

    • (c) if the officer was interested in the contract before becoming an officer, forthwith after he becomes an officer.

  • Marginal note:Time for disclosure by director or officer

    (4) If a material contract or proposed material contract is one that, in the ordinary course of the business or activity of the Crown corporation, would not require approval by the board of directors, a director or officer shall disclose in writing to the corporation or request to have entered in the minutes of a meeting of the board of directors the nature and extent of his interest forthwith after the director or officer becomes aware of the contract or proposed contract.

  • Marginal note:Voting

    (5) A director referred to in subsection (1) shall not vote on any resolution to approve the contract unless the contract is

    • (a) an arrangement by way of security for money lent to or obligations undertaken by him for the benefit of the Crown corporation or a subsidiary of the Crown corporation;

    • (b) one relating primarily to his remuneration or benefits as a director, officer, employee or agent of the Crown corporation or a subsidiary of the Crown corporation;

    • (c) one for indemnity or insurance under section 119; or

    • (d) one with an affiliate of the Crown corporation.

  • Marginal note:Continuing disclosure

    (6) For the purposes of this section, a general notice to the board of directors by a director or officer, declaring that he is a director or officer of or has a material interest in a person and is to be regarded as interested in any contract made with that person, is a sufficient declaration of interest in relation to any contract so made.

  • Marginal note:Definition of board of directors

    (7) In this section and section 117, board of directors includes a committee of directors.

  • 1984, c. 31, s. 11.
Marginal note:Avoidance standards

 A material contract between a Crown corporation and one or more of its directors or officers, or between a Crown corporation and another person of which a director or an officer of the Crown corporation is a director or an officer or in which he has a material interest, is neither void nor voidable by reason only of that relationship or by reason only that a director with an interest in the contract is present at or is counted to determine the presence of a quorum at a meeting of the board of directors that authorized the contract, if the director or officer disclosed his interest in accordance with subsection 116(2), (3), (4) or (6), as the case may be, and the contract was approved by the board of directors and it was reasonable and fair to the Crown corporation at the time it was approved.

  • 1984, c. 31, s. 11.
Marginal note:Application to court
  •  (1) Where a director or an officer of a Crown corporation fails to disclose his interest in a material contract in accordance with section 116, a court may, on application of the corporation or on behalf of the Crown, set aside the contract on such terms as it thinks fit.

  • Definition of court

    (2) In this section, court means

    • (a) in the Province of Newfoundland and Labrador, the Trial Division of the Supreme Court of the Province;

    • (a.1) in the Province of Ontario, the Superior Court of Justice;

    • (b) in the Province of Quebec, the Superior Court of the Province;

    • (c) in the Province of New Brunswick, Manitoba, Saskatchewan or Alberta, the Court of Queen’s Bench for the Province;

    • (d) in the Provinces of Nova Scotia, British Columbia and Prince Edward Island, the Supreme Court of the Province; and

    • (e) in Yukon or the Northwest Territories, the Supreme Court, and in Nunavut, the Nunavut Court of Justice.

  • R.S., 1985, c. F-11, s. 118;
  • R.S., 1985, c. 27 (2nd Supp.), s. 10;
  • 1990, c. 17, s. 19;
  • 1992, c. 51, s. 49;
  • 1998, c. 30, ss. 13(F), 15(E);
  • 1999, c. 3, s. 63;
  • 2002, c. 7, s. 172(E);
  • 2015, c. 3, s. 95.

Indemnification

Marginal note:Obligation to indemnify
  •  (1) The Treasury Board shall, in accordance with the regulations, if any, indemnify a present or former director or officer of a Crown corporation or a person who acts or acted at the request of a Minister or a Crown corporation as a director or officer of another corporation, and his or her heirs and legal representatives, against the costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, that are reasonably incurred by him or her in respect of any civil, criminal, administrative or investigative action or proceeding to which he or she is a party by reason of being or having been such a director or officer, if he or she

    • (a) acted honestly and in good faith with a view to the best interests of the Crown corporation or other corporation; and

    • (b) in the case of any criminal or administrative action or proceeding that is enforced by a monetary penalty, believed on reasonable grounds that the director’s or officer’s conduct was lawful.

  • Marginal note:Advance of costs

    (1.1) The Treasury Board shall, in accordance with the regulations, if any, advance moneys to any individual referred to in subsection (1) for the costs, charges and expenses of an action or proceeding referred to in that subsection unless there are reasonable grounds to believe that the individual does not fulfil the conditions set out in paragraph (1)(a) or (b). The individual shall repay the moneys if he or she does not fulfil those conditions.

  • Marginal note:Entitlement to indemnification

    (2) Despite anything in this section, a director or officer referred to in subsection (1) is, and his or her heirs and legal representatives are, entitled to indemnity, in accordance with the regulations, if any, from the Treasury Board in respect of the costs, charges and expenses reasonably incurred by him or her in connection with the defence of any civil, criminal, administrative or investigative action or proceeding to which he or she was made a party by reason of being or having been such a director or officer, if he or she

    • (a) was substantially successful on the merits of the defence of the action or proceeding; and

    • (b) fulfils the conditions set out in paragraphs (1)(a) and (b).

  • Marginal note:Regulations

    (3) The Treasury Board may make regulations

    • (a) respecting indemnification and advances under this section, including terms and conditions governing them;

    • (b) defining, for the purposes of this section, the meaning of any word or expression used in it that is not defined in this Act;

    • (c) prescribing circumstances in which a director or officer is presumed not to have fulfilled the condition set out in paragraph (1)(a); and

    • (d) respecting the determination of the amounts to be paid as indemnification or advances under this section.

  • Marginal note:Payable out of C.R.F.

    (4) Any amount payable in respect of indemnification under this section may be paid out of the Consolidated Revenue Fund.

  • R.S., 1985, c. F-11, s. 119;
  • 1991, c. 24, s. 34;
  • 1999, c. 31, s. 115(F);
  • 2009, c. 2, s. 373.
 
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