National Housing Act (R.S.C., 1985, c. N-11)

Act current to 2016-08-15 and last amended on 2016-06-22. Previous Versions

Marginal note:Eligible assets
  •  (1) Only the following assets may be held as covered bond collateral:

    • (a) loans made on the security of residential property that is located in Canada and consists of not more than four residential units; or

    • (b) any prescribed assets.

  • Marginal note:Substitute assets

    (2) Despite subsection (1), covered bond collateral may include securities that are issued by the Government of Canada and any prescribed assets.

  • Marginal note:Maximum ratio

    (3) Unless regulations have been made under paragraph 21.66(g), the value of the assets described in subsection (2) must not exceed 10 per cent of the total value of the loans or other assets held as covered bond collateral.

  • Marginal note:Exceptions

    (4) Despite subsections (1) and (2), the following loans must not be held as covered bond collateral:

    • (a) a loan made on the security of residential property if the loan is insured by the Corporation;

    • (b) a loan made on the security of residential property if the loan is insured and that insurance is protected under the Protection of Residential Mortgage or Hypothecary Insurance Act; and

    • (c) a loan made on the security of residential property if the amount of the loan, together with the amount then outstanding of any mortgage or hypothecary loan having an equal or prior claim against the property, exceeds 80 per cent of the value of the property at the time of the loan.

  • 2012, c. 19, ss. 356, 366.
Marginal note:Confidentiality
  •  (1) Subject to any other provision of this Part or Part I, any information that is collected by the Corporation under this Part is confidential and must be treated accordingly.

  • Marginal note:Use of information

    (2) Information that is collected by the Corporation under this Part must be used by the Corporation only for the purpose for which it is collected.

  • 2012, c. 19, s. 356.
Marginal note:Suspension
  •  (1) The Corporation may suspend the right of a registered issuer to issue further covered bonds under a registered program.

  • Marginal note:Notice

    (2) In the case where the Corporation decides to suspend that right, it must provide the registered issuer with a written notice of and the reasons for the intended suspension, no later than 30 days before the day on which the suspension is to take effect.

  • Marginal note:Copies to regulator

    (3) The Corporation must provide a copy of the notice and reasons to,

    • (a) in the case of a federal financial institution as defined in section 2 of the Bank Act, the Superintendent of Financial Institutions appointed under subsection 5(1) of the Office of the Superintendent of Financial Institutions Act; and

    • (b) in the case of a cooperative credit society incorporated and regulated by or under an Act of the legislature of a province, the body that regulates that society.

  • Marginal note:Revoking suspension

    (4) The Corporation may revoke a suspension and, in that case, must provide the registered issuer with written notice of the revocation of the suspension.

  • 2012, c. 19, s. 356.

Bankruptcy and Insolvency Protection

Marginal note:Covered bonds

 Nothing in any law of Canada or a province relating to bankruptcy or insolvency, or any order of a court made in relation to a reorganization, arrangement or receivership involving bankruptcy or insolvency, prevents or prohibits the following actions from being taken in accordance with the provisions of contracts relating to covered bonds that are issued under a registered program:

  • (a) the making of any payments, including a payment to a registered issuer;

  • (b) the netting or setting off or compensation of obligations;

  • (c) any dealing with covered bond collateral, including

    • (i) the sale or foreclosure or, in Quebec, the surrender of covered bond collateral, and

    • (ii) the setting off or compensation of covered bond collateral or the application of the proceeds or value of covered bond collateral; and

  • (d) the termination of those contracts.

  • 2012, c. 19, s. 356.
Marginal note:Transfer not voidable and not subject to remedies

 Despite anything in any law of Canada or a province relating to bankruptcy or insolvency, or any order of a court made in relation to a reorganization, arrangement or receivership involving bankruptcy or insolvency, the transfer of loans or other assets to a guarantor entity — to be held as covered bond collateral — by a registered issuer, any of its affiliates or any prescribed entity

  • (a) is effective against every person;

  • (b) is not voidable or, in Quebec, annullable;

  • (c) is not subject to any other remedies available to creditors of the registered issuer; and

  • (d) does not constitute a fraudulent conveyance, unjust preference or other reviewable transaction.

  • 2012, c. 19, s. 356.
Marginal note:Non-application

 Sections 21.63 and 21.64 do not apply to contracts relating to covered bonds that are issued under a registered program, nor to the transfer of loans or other assets to a guarantor entity to be held as covered bond collateral for those covered bonds, if those covered bonds are issued by a registered issuer during the period in which its right to issue covered bonds has been suspended under section 21.62.

  • 2012, c. 19, s. 356.

Regulations

Marginal note:Regulations

 The Minister of Finance may make regulations for carrying out the purposes and provisions of this Part, including regulations

  • (a) excluding, from the definition covered bond, certain debt obligations;

  • (b) excluding, from the definition covered bond collateral, certain payments from the guarantor entity to the registered issuer;

  • (c) establishing requirements that an institution, or a program under which covered bonds are to be issued, must meet to be registered in the registry;

  • (d) respecting applications made under section 21.52 or 21.54;

  • (e) respecting cost recovery for the purposes of section 21.59;

  • (f) establishing additional requirements with respect to the loans referred to in paragraph 21.6(1)(a);

  • (g) respecting the circumstances in which guarantor entities may hold the assets described in subsection 21.6(2) and, according to each circumstance, the maximum ratio of the value of those assets relative to the total value of the loans or other assets being held as covered bond collateral; and

  • (h) prescribing anything that is to be prescribed under this Part.

  • 2012, c. 19, s. 356.

PART IIHousing for Rental Purposes

Marginal note:Contractual guarantee of return from rental housing project
  •  (1) The Corporation may enter into contracts with builders of rental housing projects to guarantee in each contract a financial return from a rental housing project after its completion in an amount to be determined by the Corporation for a total period of not more than thirty years.

  • Marginal note:Undertaking to enter into contract

    (2) The Corporation may give to a builder an undertaking that the Corporation will enter into a contract with the builder under subsection (1) if the builder builds a rental housing project.

  • Marginal note:Terms and conditions

    (3) The Corporation may determine the terms and conditions on which it enters into a contract in respect of a rental housing project under subsection (1), including, without limiting the generality of the foregoing,

    • (a) fees with respect to any guarantee referred to in subsection (1);

    • (b) conditions with respect to the operation or occupancy of the project;

    • (c) restrictions on the disposal, leasing or charging of the project or any part of it or interest in it;

    • (d) limits on the amount of the financial return that may be made from the project; and

    • (e) provisions giving the Corporation the right to direct the use of any amount received in excess of any limits referred to in paragraph (d).

  • Marginal note:Consent to assign

    (4) A contract referred to in subsection (1) is personal to the builder of the rental housing project to which the contract relates and may be assigned to a subsequent owner of the rental housing project only with the written consent of the Corporation.

  • R.S., 1985, c. N-11, s. 22;
  • 1992, c. 32, s. 29;
  • 1999, c. 27, s. 4.
 
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