Budget Implementation Act, 2009 (S.C. 2009, c. 2)

Assented to 2009-03-12

Division 2R.S., c. C-3Canada Deposit Insurance Corporation Act

Amendments to the Act

 Section 2 of the Canada Deposit Insurance Corporation Act is amended by adding the following in alphabetical order:

“bridge institution”

« institution-relais »

“bridge institution” means a federal institution that is designated as a bridge institution by an order made under paragraph 39.13(1)(c);

 The Act is amended by adding the following after section 7:

Marginal note:Power of Governor in Council
  • 7.1 (1) The Governor in Council may, by order, exempt the Corporation from the requirement that it pursue its objects in a manner that will minimize its exposure to loss when it takes any action to address a situation that is specified in the order.

  • Marginal note:Condition precedent

    (2) The Governor in Council may make the order only if the Minister is of the opinion, after consultation with the Board, the Governor of the Bank of Canada and the Superintendent, that the requirement that the Corporation pursue its objects in a manner that will minimize its exposure to loss, in respect of a situation that will be specified in the order, might have an adverse effect on the stability of the financial system in Canada or public confidence in that stability.

  • Marginal note:Repeal

    (3) The Governor in Council may repeal the order only if the Minister is of the opinion that the requirement that the Corporation pursue its objects in a manner that will minimize its exposure to loss, in respect of the situation specified in the order, will no longer have an adverse effect on the stability of the financial system in Canada or public confidence in that stability.

Marginal note:Coming into force
  • 7.2 (1) An order made under subsection 7.1(1) has effect from the time that it is made.

  • Marginal note:Statutory Instruments Act

    (2) The Statutory Instruments Act does not apply to the order.

  • Marginal note:Publication

    (3) The Minister shall cause a notice to be published in the Canada Gazette that the order has been made or repealed as soon as the Minister is of the opinion that the publication of the notice will not have an adverse effect on the stability of the financial system in Canada or public confidence in that stability.

Marginal note:Recovery of loss

7.3 After the publication of a notice in the Canada Gazette that an order was made under subsection 7.1(1), the Corporation shall, in accordance with its by-laws, collect a special premium from member institutions or any class of member institutions in order to recover the loss that the Corporation determines it incurred as a result of pursuing its objects without regard to the requirement that it do so in a manner that minimizes its exposure to loss.

 The Act is amended by adding the following after section 10:

Marginal note:Exemption — shares of member institution
  • 10.01 (1) To enable the Corporation to acquire, hold or dispose of shares under paragraph 10(1)(f.1), the Minister may, by order, exempt any person or share specified in the order from any of the following provisions:

    • (a) sections 372, 373, 374, 375, 376, 376.1, 376.2, 377, 377.1,  379, 385, 401.2 and 401.3 of the Bank Act;

    • (b) sections 407, 407.01, 407.02, 407.03, 407.1, 407.2, 408, 411, 428 and 430 of the Insurance Companies Act; and

    • (c) sections 375, 375.1, 376, 379, 396 and 399 of the Trust and Loan Companies Act.

  • Marginal note:Conditions

    (2) The exemption may be subject to conditions.

  • Marginal note:Duration of exemption

    (3) The exemption ceases to have effect five years after the day on which it comes into force.

  • Marginal note:Extension

    (4) The Minister may, by order, extend the duration of the exemption if general market conditions so warrant.

  • Marginal note:Statutory Instruments Act

    (5) The Statutory Instruments Act does not apply to an order made under this section.

Marginal note:1996, c. 6, s. 24; 1997, c. 15, s. 111(E)
  •  (1) The portion of subsection 10.1(3) of the Act before paragraph (b) is replaced by the following:

    • Marginal note:Total indebtedness

      (3) The total principal indebtedness outstanding at any time in respect of borrowings under subsections (1) and (2) shall not exceed

      • (a) $15,000,000,000 or, if it is greater, the amount determined in accordance with subsections (3.1) to (3.5); or

  • (2) Section 10.1 of the Act is amended by adding the following after subsection (3):

    • Marginal note:Increase

      (3.1) Subject to subsections (3.3) and (3.4), the amount that the total principal indebtedness outstanding at any time in respect of borrowings under subsections (1) and (2) shall not exceed is increased each year to the amount determined by the formula

      A + (A × B)

      where

      A 
      is the amount that the total principal indebtedness outstanding at any time in respect of borrowings under subsections (1) and (2) shall not exceed on January 1 of the current year; and
      B 
      is the rate determined by the formula set out in subsection (3.2).
    • Marginal note:Rate

      (3.2) The rate referred to in the description of B in subsection (3.1) is determined by the formula

      (C – D) / D

      where

      C 
      is the total amount of deposits insured by the Corporation on April 30 of the current year; and
      D 
      is the total amount of deposits insured by the Corporation on April 30 of the previous year.
    • Marginal note:Rounding

      (3.3) The amount determined under subsection (3.1) shall be rounded to the nearest billion dollars or, if the amount is equidistant from two consecutive multiples of one billion dollars, it shall be rounded to the higher of those two multiples.

    • Marginal note:No change

      (3.4) The amount that the total principal indebtedness outstanding at any time in respect of borrowings under subsections (1) and (2) shall not exceed does not change if the amount determined for D in subsection (3.2) is greater than the amount determined for C in that subsection.

    • Marginal note:Date effective

      (3.5) The new amount that the total principal indebtedness outstanding at any time in respect of borrowings under subsections (1) and (2) shall not exceed comes into effect on December 31 of the current year.

    • Marginal note:Publication

      (3.6) The Corporation shall publish the new amount that the total principal indebtedness outstanding at any time in respect of borrowings under subsections (1) and (2) shall not exceed in its annual report following the day on which the new amount comes into effect.

 The Act is amended by adding the following after section 11:

Marginal note:Minister’s direction
  • 11.1 (1) The Minister may, after consultation with the Board, the Governor of the Bank of Canada and the Superintendent, give a written direction to the Corporation if the Minister is of the opinion that not giving the direction might have an adverse effect on the stability of the financial system in Canada or public confidence in that stability.

  • Marginal note:Compliance without regard to minimizing loss

    (2) The Corporation shall comply with the direction without regard to the requirement referred to in paragraph 7(c) that it pursue its objects in a manner that will minimize its exposure to loss.

  • Marginal note:Implementation

    (3) The Corporation’s directors shall ensure that the direction is implemented in a prompt and efficient manner and, if in so doing they act in accordance with section 115 of the Financial Administration Act, they are not accountable for any consequences arising from the implementation of the direction.

  • Marginal note:Notification of implementation

    (4) After implementing the direction, the Corporation shall notify the Minister without delay that the direction has been implemented.

  • Marginal note:Best interests

    (5) The Corporation’s compliance with a direction is deemed to be in its best interests.

Marginal note:Statutory Instruments Act
  • 11.2 (1) The Statutory Instruments Act does not apply to a direction given under subsection 11.1(1).

  • Marginal note:Publication

    (2) The Minister shall cause a notice to be published in the Canada Gazette that a direction was given under subsection 11.1(1) as soon as the Minister is of the opinion that the publication of the notice will not have an adverse effect on the stability of the financial system in Canada or public confidence in that stability.

Marginal note:Recovery of loss

11.3 After the publication of a notice in the Canada Gazette that a direction was given under subsection 11.1(1), the Corporation shall, in accordance with its by-laws, collect a special premium from member institutions or any class of member institutions in order to recover the loss that the Corporation determines it incurred as a result of complying with the direction.

Marginal note:R.S., c. 18 (3rd Supp.), s. 52(1)

 Subsection 14(2.7) of the Act is replaced by the following:

  • Marginal note:Preparatory examination

    (2.7) If the Corporation believes that it would be in the best interests of both the depositors with the member institution and the Corporation that preparations be made to make a payment under this Act in respect of a deposit held by a member institution, the Corporation may make or cause to be made by any person designated by the Corporation, an examination of the books, records and accounts of the member institution relating to its deposit liabilities. For the purposes of the examination, the Corporation and the person designated by it have a right of access to those books, records and accounts and are entitled to require the member institution’s directors, officers, auditors and any receiver or liquidator of the member institution to furnish any information and explanations regarding the deposits held by the member institution that the Corporation or person may require.

 
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