Port Authorities Management Regulations (SOR/99-101)

Attendance at Annual Meeting

• 48 (1) The auditor of a port authority is entitled to receive notice of every annual meeting and, at the expense of the port authority, to attend and be heard at the meeting on matters relating to the duties of the auditor.

• (2) If a director of a port authority gives written notice to the auditor or a former auditor of the port authority not less than 10 days before an annual meeting, the auditor or former auditor shall attend the meeting at the expense of the port authority and answer questions relating to the duties of the auditor.

• (3) The director of a port authority who sends the notice referred to in subsection (2) shall send a copy of it concurrently to the port authority.

• (4) An auditor or former auditor does not contravene subsection (2) unless the auditor knowingly fails to comply with the requirements of that subsection.

Examination and Report

• 49 (1) The auditor of a port authority shall make the examination that is in the auditor’s opinion necessary to enable reporting on the annual financial statements required to be presented at the annual meeting, except the financial statements or part of them that relates to the fiscal year referred to in subparagraph 36(a)(ii) of the Act.

• (2) An auditor is not liable for relying reasonably on the report of an auditor of a subsidiary of the port authority the accounts of which are included in whole or in part in the financial statements of the port authority.

• (3) For the purpose of subsection (2), reasonableness is a question of fact.

• (4) Subsection (2) applies whether or not the financial statements of the port authority reported on by the auditor are in consolidated form.

Audit Principles

50 The auditor of a port authority shall prepare the report referred to in paragraph 40(2)(b) in accordance with generally accepted auditing standards as set out in the CPA Canada Handbook, as amended from time to time.

Right to Information

• 51 (1) At the request of the auditor of a port authority, the present or former directors, officers, employees or agents of the port authority shall provide the auditor with the following if they are reasonably able to do so and if when it is, in the auditor’s opinion, necessary to enable the auditor to make the examination and report required by section 49:

  • (a) information and explanations; and

  • (b) access to records, documents, books, accounts and vouchers of the port authority and its subsidiaries.

• (2) At the request of the auditor of a port authority, the directors shall

  • (a) obtain from the present or former directors, officers, employees and agents of its subsidiaries the information and explanations that they are reasonably able to provide and that are, in the auditor’s opinion, necessary to enable the auditor to make the examination and report required by section 49; and

  • (b) give the auditor the information and explanations so obtained.

• (3) A person who in good faith makes an oral or written communication under subsection (1) or (2) is not liable in any civil action arising from having made the communication.

Audit Committee

• 52 (1) A port authority shall have an audit committee whose membership is composed of no fewer than three directors and no member of which is an officer or employee of the port authority or a body corporate controlled by the port authority.

• (2) The audit committee shall review the annual financial statements of the port authority before they are approved by the board of directors.

• (3) The auditor of a port authority is entitled to receive notice of every meeting of the audit committee and, at the expense of the port authority, to attend and be heard at those meetings.

• (4) If requested to do so by a member of the audit committee, the auditor shall attend a meeting of the committee held during the auditor’s term of office.

• (5) The auditor of a port authority or a member of the audit committee may call a meeting of the audit committee.

Errors in Financial Statements

• 53 (1) A director or officer of a port authority shall notify the audit committee and the auditor of any error or misstatement in a financial statement that the auditor or a former auditor has reported on immediately after becoming aware of it.

• (2) If the auditor or a former auditor is notified or becomes aware of an error or misstatement in a financial statement on which the auditor has reported, and in the auditor’s opinion the error or misstatement is material, the auditor shall inform each director accordingly.

• (3) On being informed under subsection (2), the directors shall

  • (a) prepare and issue a revised financial statement;

  • (b) inform the Minister and each of the municipalities and provinces mentioned in the letters patent that have a right to appoint a director; and

  • (c) publish a notice in a major newspaper published or distributed in the municipalities where the port is situated stating that the revised financial statements are available for inspection by the public during normal business hours at the registered office of the port authority.

• (4) A director or officer of a port authority does not contravene subsection (1) or (3) unless the director or officer knowingly fails to comply with the requirements of that subsection.

Privilege

54 An oral or written statement or report made under the Act or these Regulations by the auditor or former auditor of a port authority has qualified privilege.

PART 4Risk Assessment and Insurance

Risk Assessments

• 55 (1) Every port authority and every wholly-owned subsidiary of a port authority shall ensure that, in respect of itself, a risk assessment is conducted by a competent risk assessor and contains an assessment relating to

  • (a) risk, risk management, property value, risk transfer and probable maximum loss;

  • (b) insurance coverage, limits and deductibles; and

  • (c) underwriters.

• (2) The risk assessment shall be completed

  • (a) not later than six months after the day on which the port authority is continued, deemed to be incorporated or incorporated under the Act; and

  • (b) at least every five years after the most recent risk assessment.

• (3) The board of directors of every port authority and of each of the wholly-owned subsidiaries of a port authority shall

  • (a) review each risk assessment report within 30 days after it is received by the port authority or the subsidiary; and

  • (b) approve the insurance coverage annually.

• (4) In conducting a risk assessment, a risk assessor may, if acting reasonably and in good faith, rely on risk assessments conducted in respect of the property, liabilities and activities referred to in subsection 56(1).

Property and Liability Insurance

• 56 (1) Every port authority and every wholly-owned subsidiary of a port authority shall ensure that insurance is maintained in accordance with subsection (2) in respect of

  • (a) the property that the port authority or subsidiary manages, holds, owns or occupies; and

  • (b) liability for the activities in which the port authority or subsidiary engages and for the activities that take place in the port.

• (2) The insurance shall

  • (a) name the port authority or the wholly-owned subsidiary as the insured party or an additional insured;

  • (b) name Her Majesty in right of Canada as an additional insured;

  • (c) cover the risks and have limits and deductibles that

    • (i) a prudent person in the position of owner of the property or a prudent person engaging in the activities referred to in paragraph (1)(b) would obtain or would require to be obtained, and

    • (ii) take into account the most recent risk assessment conducted under section 55; and

  • (d) be maintained with an underwriter that a prudent person in the position of owner of the property or a prudent person engaging in the activities referred to in paragraph (1)(b) would choose or require to be chosen, taking into account the most recent risk assessment conducted under section 55.

Directors and Officers Liability Insurance

• 57 (1) Every port authority shall purchase and maintain insurance in accordance with subsection (3) for the benefit of itself and Her Majesty in right of Canada against liabilities incurred by it in respect of an indemnity given under subsection 25(1) or an advance given under subsection 28(1).

• (2) Every port authority and every wholly-owned subsidiary of a port authority shall ensure that insurance is purchased and maintained in accordance with subsection (3) for the benefit of both of them and Her Majesty in right of Canada against liabilities incurred by the subsidiary in respect of an indemnity or advance given by the subsidiary to

  • (a) a former or current director or officer of the subsidiary for liabilities incurred by the director or officer because of being or having been a director or officer of the subsidiary; or

  • (b) a person who, at the request of the subsidiary, has acted or is acting as a director or officer of another entity or has acted or is acting in a capacity similar to that of a director or officer of another entity for liabilities incurred by the person because of so acting.

• (3) The insurance shall

  • (a) cover the risks and have limits and deductibles that

    • (i) would be obtained by a prudent person in the position of the port authority or subsidiary, and

    • (ii) take into account the most recent risk assessment conducted under section 55; and

  • (b) be maintained with an underwriter that a prudent person in the position of the port authority or subsidiary would choose, taking into account the most recent risk assessment conducted under section 55.

• 58 (1) A port authority may purchase and maintain insurance for the benefit of

  • (a) its former and current directors and officers against any liability incurred by them because of having been or being a director or officer of the port authority;

  • (b) the former and current directors and officers of its wholly-owned subsidiaries against any liability incurred by them because of having been or being a director or officer of the subsidiary; and

  • (c) any person who, at the request of the port authority, has acted or is acting as a director or officer of another entity or has acted or is acting in a capacity similar to that of a director or officer of another entity for any liability incurred by the person because of so acting.

• (2) The insurance shall cover only situations in which a person mentioned in subsection (1) acted honestly and in good faith with a view to the best interests of the port authority or the subsidiary, as the case may be.

PART 5Crown Indemnity

• 59 (1) A port authority shall indemnify Her Majesty in right of Canada for any action, claim or demand brought against, discharged or satisfied by Her Majesty, or any liability, obligation, loss, damage, cost or expense incurred, discharged or satisfied by Her Majesty because the port authority acted, or in consequence of the port authority acting, as agent of Her Majesty, including, without limiting the generality of the foregoing, an action, claim, demand, liability, obligation, loss, damage, cost or expense arising

  • (a) by or through the acts or omissions of the employees, agents, contractors, tenants or invitees of the port authority or those of any other person; or

  • (b) in respect of a judgment or decision that Her Majesty satisfies, in whole or in part, under subsection 23(1) of the Act.

• (2) Subsection (1) applies if the action, claim, demand, liability, obligation, loss, damage, cost or expense arises

  • (a) from the port authority’s exercise of, or its failure to exercise, any power or right under the Act, the regulations under the Act or its letters patent; or

  • (b) by operation of law or otherwise, in respect of the operation of the port, including the management, using, occupying, leasing or licensing of federal real property.

• (3) Subsection (1) does not apply if the action, claim, demand, liability, obligation, loss, damage, cost or expense is in respect of

  • (a) the administration, by the Minister, of the Act or the letters patent; or

  • (b) an agreement or contract between Her Majesty and the port authority, except as provided in the agreement or contract.

• (4) The Minister shall provide to the port authority notice of any action, claim, demand, liability, obligation, loss, damage, cost or expense for which the port authority is to indemnify Her Majesty and

  • (a) in the case of federal real property, the port authority shall undertake and defend any legal proceedings with respect to that property, as required by paragraph 45(1)(c) of the Act; and

  • (b) in any other case, the Minister shall provide to the port authority an opportunity, in consultation with the Minister and subject to the terms and conditions that the Minister may specify, to assume control of any negotiations, settlement or defence and to discharge or satisfy the action, claim, demand, liability, obligation, loss, damage, cost or expense.

PART 5.1Amalgamation

• 59.1 (1) The Governor in Council may, by issuing a certificate of intent to amalgamate, require two or more port authorities to amalgamate and continue as one port authority in accordance with the certificate and may, at any time after the period set out in subsection (2), amalgamate the port authorities by issuing a certificate of amalgamation.

• (2) A notice of the certificate of intent to amalgamate shall be published in at least one major newspaper that is published or distributed in the municipalities where the ports managed by a port authority specified in the certificate are situated. The notice shall state that interested persons may, in accordance with the notice, make written representations to the Minister within 30 days after the day on which the notice is published.

59.2 A port authority specified in a certificate of intent to amalgamate may, for the purposes of the amalgamation, disclose personal information about its employees to any other port authority specified in the certificate.

• 59.3 (1) The Governor in Council may revoke a certificate of intent to amalgamate by issuing a certificate of revocation of intent to amalgamate at any time before the certificate of amalgamation is issued.

• (2) A notice of the certificate of revocation of intent to amalgamate shall be published in at least one major newspaper that is published or distributed in the municipalities where the ports managed by a port authority specified in the certificate of intent to amalgamate are situated. If possible, the notice shall be published in the same newspapers as the notice of the certificate of intent to amalgamate.

• (3) The revocation takes effect on the date set out in the certificate of revocation of intent to amalgamate.

59.4 A certificate of intent to amalgamate and, if applicable, a certificate of revocation of intent to amalgamate shall be sent to each port authority specified in the certificate.

59.5 A certificate of amalgamation shall specify the day on which the amalgamation takes effect and contain the letters patent of the amalgamated port authority, which include the information set out in subsection 8(2) of the Act.

59.6 Any certificate issued under this Part shall be published in the Canada Gazette.

59.7 On the day on which an amalgamation takes effect

• (a) every director of an amalgamating port authority who remains in office continues as a director of the amalgamated port authority for the balance of their term or until they cease to hold office in accordance with subsection 19(1) of the Act;

• (b) the navigable waters within the jurisdiction of each amalgamating port authority continue to be within the jurisdiction of the amalgamated port authority;

• (c) the property, rights and interests of each amalgamating port authority continue to be the property, rights and interests of the amalgamated port authority;

• (d) the management of any federal real property or federal immovable that the Minister has given to an amalgamating port authority under subsection 44(2) of the Act continues to be given to the amalgamated port authority;

• (e) the real property or immovables occupied by each amalgamating port authority continue to be occupied by the amalgamated port authority;

• (f) the amalgamated port authority continues to be liable for the obligations of each amalgamating port authority;

• (g) an existing cause of action, claim or liability to prosecution is unaffected;

• (h) a civil, criminal or administrative action or proceeding pending by or against an amalgamating port authority may be continued to be prosecuted by or against the amalgamated port authority;

• (i) a conviction against, or ruling, order or judgment in favour of or against, an amalgamating port authority may be enforced by or against the amalgamated port authority;

• (j) every fee fixed by an amalgamating port authority continues in force until the expiry date specified in the provision that fixes the fee or until the amalgamated port authority repeals that provision or replaces the fee; and

• (k) the letters patent contained in the certificate of amalgamation are the letters patent of the amalgamated port authority.