Jobs and Economic Growth Act (S.C. 2010, c. 12)
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Assented to 2010-07-12
Marginal note:2005, c. 54, s. 39
1990. Subsection 202(4) of the Act is replaced by the following:
Marginal note:Time of disclosure — contract not requiring approval
(4) If the material contract or material transaction, whether entered into or proposed, is one that in the ordinary course of the bank’s business would not require approval by the directors, shareholders or members, as the case may be, the director or officer must disclose to the bank, in writing or by requesting to have it entered in the minutes of a meeting of directors or of a committee of directors, the nature and extent of their interest immediately after they become aware of the contract or transaction.
Marginal note:2005, c. 54, s. 41
1991. Subsection 204(2) of the Act is replaced by the following:
Marginal note:Access to disclosures
(2) The shareholders and members of the bank may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 202(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the bank.
Marginal note:2005, c. 54, ss. 41 and 42(E)
1992. Sections 205 to 207 of the Act are replaced by the following:
Marginal note:Avoidance standards
205. (1) A contract or transaction for which disclosure is required under subsection 202(1) is not invalid and a director or officer is not accountable to the bank or its shareholders or members for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if
(a) the director or officer disclosed their interest in accordance with section 202 and subsection 204(1);
(b) the directors approved the contract or transaction; and
(c) the contract or transaction was reasonable and fair to the bank at the time that it was approved.
Marginal note:Confirmation
(2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the bank or its shareholders or members for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if
(a) the contract or transaction is approved or confirmed by special resolution at
(i) in the case of a bank that is not a federal credit union, a meeting of shareholders, or
(ii) in the case of a federal credit union, at a meeting of its members and, if it has shareholders, at a meeting of its shareholders;
(b) disclosure of the interest was made to the shareholders or, in the case of a federal credit union, to the members and shareholders, if any, in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and
(c) the contract or transaction was reasonable and fair to the bank at the time that it was approved or confirmed.
Marginal note:Court may set aside or require accounting
206. If a director or officer of a bank fails to comply with any of sections 202 to 205, a court, on application of the bank or any of its shareholders or members, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the bank for any profit or gain realized on it.
Liability, Exculpation and Indemnification
Marginal note:Director’s liability
207. (1) Directors of a bank who vote for or consent to a resolution of the directors authorizing the issue of a share contrary to subsection 65(1), the issue of a membership share contrary to subsection 79.1(2) or the issue of subordinated indebtedness contrary to section 80 for a consideration other than money are jointly and severally, or solidarily, liable to the bank to make good any amount by which the consideration received is less than the fair equivalent of the money that the bank would have received if the share, membership share or subordinated indebtedness had been issued for money on the date of the resolution.
Marginal note:Further liability
(2) Directors of a bank who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the bank any amounts so distributed or paid and not otherwise recovered by the bank and any amounts in relation to any loss suffered by the bank:
(a) a redemption or purchase of shares or membership shares contrary to section 71;
(b) a reduction of capital contrary to section 75;
(c) a payment of a dividend or patronage allocation contrary to section 79;
(d) a payment of an indemnity contrary to section 212; or
(e) any transaction contrary to Part XI.
1993. (1) The portion of subsection 208(2) of the Act before paragraph (a) is replaced by the following:
Marginal note:Recovery
(2) A director who is liable under section 207 is entitled to apply to a court for an order compelling a shareholder, member or other person to pay or deliver to the director
(2) Paragraph 208(2)(a) of the English version of the Act is replaced by the following:
(a) any money or property that was paid or distributed to the shareholder, member or other person contrary to section 71, 75, 79 or 212; or
(3) Paragraph 208(3)(a) of the English version of the Act is replaced by the following:
(a) order a shareholder, member or other person to pay or deliver to a director any money or property that was paid or distributed to the shareholder, member or other person contrary to section 71, 75, 79 or 212 or any amount referred to in paragraph (2)(b);
(4) Paragraph 208(3)(b) of the Act is replaced by the following:
(b) order a bank to return or issue shares or membership shares to a person from whom the bank has purchased, redeemed or otherwise acquired shares or membership shares; or
1994. The heading “Amendments” before section 215 of the Act is replaced by the following:
Amendments — Letters Patent
1995. The Act is amended by adding the following after section 216:
Conversion into Federal Credit Union
Marginal note:Conversion into federal credit union
216.01 On the application of a bank that is not a federal credit union, the Minister may, by letters patent, amend the bank’s incorporating instrument to convert the bank into a federal credit union.
Marginal note:Shareholder approval of conversion proposal
216.02 (1) Before a bank makes an application under section 216.01, the directors of the bank must obtain from the shareholders, by special resolution,
(a) approval of a conversion proposal that meets the requirements of the regulations and that has been approved by the Superintendent;
(b) confirmation of any by-law or of any amendment to or repeal of a by-law that is necessary to implement the conversion proposal; and
(c) authorization to make the application.
Marginal note:Additional information
(2) The Minister may require the federal credit union to provide the Minister with any additional information that he or she considers necessary.
Marginal note:Right to vote
216.03 (1) For the purposes of subsection 216.02(1), each share of the bank carries the right to vote in respect of any matter referred to in that subsection whether or not it otherwise carries the right to vote.
Marginal note:Class vote
(2) For the purposes of subsection 216.02(1), the holders of shares of a class or series of shares of the bank are entitled to vote separately as a class or series in respect of any matter referred to in that subsection.
Marginal note:Time of application
216.04 An application under section 216.01 may be made no later than three months after the bank’s conversion proposal has been approved by the shareholders.
Marginal note:Criteria for issuance of letters patent
216.05 In determining whether to issue letters patent to amend a bank’s incorporating instrument to convert it into a federal credit union, the Minister must consider all matters that the Minister considers relevant, including whether
(a) the applicant bank will, on the issuance of the letters patent, be organized and carry on business on a cooperative basis in accordance with section 12.1;
(b) there are no reasonable grounds for believing that the issuance of the letters patent would cause the federal credit union to be in contravention of subsection 485(1), any regulation made under subsection 485(2) or any order made under subsection 485(3);
(c) the bank’s conversion proposal was approved by special resolution of the shareholders;
(d) the conversion of the bank into a federal credit union may reasonably be expected to be achieved under the terms of the conversion proposal;
(e) the conversion is fair and reasonable to the shareholders; and
(f) the conversion is in the best interests of the financial system in Canada, including the best interests of the cooperative financial system in Canada.
Marginal note:Effect of letters patent
216.06 If the Minister issues letters patent to amend a bank’s incorporating instrument to convert it into a federal credit union, then, on the day stated in the letters patent,
(a) the holders of the common shares of the bank are deemed to be the members of the federal credit union;
(b) any common shares of the bank that are not to be converted into shares of the federal credit union according to the bank’s conversion proposal are deemed to be membership shares of the federal credit union to which are attached the rights, privileges and restrictions set out in this Act; and
(c) any common shares of the bank that are to be converted into shares of the federal credit union according to the bank’s conversion proposal are deemed to be shares of the federal credit union to which are attached the rights, privileges and restrictions set out in this Act.
Marginal note:Regulations
216.07 (1) The Governor in Council may make regulations
(a) respecting applications under section 216.01, including their form and the information to be contained in them;
(b) respecting conversion proposals to become a federal credit union, including the information to be contained in them;
(c) respecting the by-laws that must be made or repealed, or the amendments that must be made to by-laws, to give effect to a conversion proposal to become a federal credit union; and
(d) generally, respecting the conversion of a bank into a federal credit union.
Marginal note:Conversion of common shares
(2) Regulations made under paragraph (1)(b) must provide that a conversion proposal must provide that at least one common share held by every holder of common shares is converted into a membership share.
Marginal note:Canada Deposit Insurance Corporation Act
(3) A regulation made under subsection (1) may provide for different provisions respecting a bank that is subject to an order under paragraph 39.13(1)(a) of the Canada Deposit Insurance Corporation Act or is a bridge institution within the meaning of that Act.
Marginal note:Exemption by Superintendent
(4) A regulation made under subsection (1) may provide that the Superintendent may, on any terms and conditions that the Superintendent considers appropriate, exempt a bank from any requirements of that regulation.
Marginal note:Exemption by Minister
(5) The Minister may, on any terms and conditions that the Minister considers appropriate, exempt a bank from any requirement of this Act or the regulations if the bank is applying for the approval of a proposal to convert itself into a federal credit union and
(a) the Minister is of the opinion that the bank is, or is about to be, in financial difficulty and that the exemption would help to facilitate an improvement in the financial condition of the bank; or
(b) is subject to an order under paragraph 39.13(1)(a) of the Canada Deposit Insurance Corporation Act or is a bridge institution within the meaning of that Act.
Conversion into Bank with Common Shares
Marginal note:Conversion into bank with common shares
216.08 On the application of a federal credit union, the Minister may, by letters patent, amend the federal credit union’s incorporating instrument to convert the federal credit union into a bank with common shares.
Marginal note:Approval of conversion proposal
216.09 (1) Before a federal credit union makes an application under section 216.08, the directors of the federal credit union must obtain from the members by special resolution and, if the federal credit union has issued shares, from the shareholders, by separate special resolution,
(a) approval of a conversion proposal that meets the requirements of the regulations and that has been approved by the Superintendent;
(b) confirmation of any by-law or of any amendment to or repeal of a by-law that is necessary to implement the conversion proposal; and
(c) authorization to make the application.
Marginal note:Additional information
(2) The Minister may require the federal credit union to provide the Minister with any additional information that he or she considers necessary.
Marginal note:Right to vote
216.1 (1) For the purposes of subsection 216.09(1), each share of the federal credit union carries the right to vote in respect of any matter referred to in that subsection whether or not it otherwise carries the right to vote.
Marginal note:Class vote
(2) For the purposes of subsection 216.09(1), the holders of shares of a class or series of shares of the federal credit union are entitled to vote separately as a class or series in respect of any matter referred to in that subsection.
Marginal note:Time of application
216.11 An application under section 216.08 may be made no later than three months after the bank’s conversion proposal has been approved by the members and shareholders, if any.
Marginal note:Criteria for issuance of letters patent
216.12 In determining whether to issue letters patent converting a federal credit union into a bank with common shares, the Minister must consider all matters that the Minister considers relevant, including whether
(a) there are no reasonable grounds for believing that the issuance of the letters patent would cause the bank with common shares to be in contravention of subsection 485(1), any regulation made under subsection 485(2) or any order made under subsection 485(3);
(b) the federal credit union’s conversion proposal was approved by special resolution of the members and a separate special resolution of the shareholders, if any;
(c) the conversion of the federal credit union into a bank with common shares may reasonably be expected to be achieved under the terms of the conversion proposal;
(d) the conversion is fair and reasonable to the members and shareholders, if any; and
(e) the conversion is in the best interests of the financial system in Canada, including the best interests of the cooperative financial system in Canada.
Marginal note:Effect of letters patent
216.13 If the Minister issues letters patent to amend a federal credit union’s incorporating instrument to convert it into a bank with common shares, then, on the day stated in the letters patent, members of the federal credit union become, in accordance with the conversion proposal, holders of common shares of the bank to which are attached the rights, privileges and restrictions set out in this Act.
Marginal note:Regulations
216.14 (1) The Governor in Council may make regulations
(a) respecting applications under section 216.08, including their form and the information to be contained in them;
(b) respecting conversion proposals to become a bank with common shares, including the information to be contained in them;
(c) respecting the by-laws that must be made or repealed, or the amendments that must be made to by-laws, to give effect to a conversion proposal to become a bank with common shares;
(d) respecting, for the purposes of a proposal to become a bank with common shares, the value of the converting federal credit union and of its membership shares and shares, if any, and authorizing the Superintendent to specify a day on which those values must be estimated;
(e) concerning the fair and equitable treatment of members and shareholders, if any, under a federal credit union’s conversion proposal to become a bank with common shares;
(f) concerning the conversion of membership shares and shares, if any, of a federal credit union into common shares or other shares;
(g) authorizing the Superintendent to
(i) require a federal credit union that proposes to become a bank with common shares to hold one or more information sessions for its members and shareholders, if any, and to take other measures to assist its members and shareholders, if any, in forming a reasoned judgment on the proposal, and
(ii) set the rules under which the information sessions must be held;
(h) respecting restrictions on any fee, compensation or other consideration that may be paid, in respect of the conversion of a federal credit union into a bank with common shares, to any director, officer or employee of the federal credit union or to any entity with which a director, officer or employee of the federal credit union is associated;
(i) prohibiting, except for those issued as a result of the implementation of a conversion proposal, the issuance or provision during the period set out in the regulations of shares, share options or rights to acquire shares, of a bank that has been converted from a federal credit union into a bank with common shares to
(i) any director, officer or employee of the bank, or
(ii) any person who was a director, officer or employee of the federal credit union during the year preceding the effective date of conversion of the federal credit union; and
(j) generally, respecting the conversion of a federal credit union into a bank with common shares.
Marginal note:Canada Deposit Insurance Corporation Act
(2) A regulation made under subsection (1) may provide for different provisions respecting a federal credit union that is subject to an order under paragraph 39.13(1)(a) of the Canada Deposit Insurance Corporation Act or is a bridge institution within the meaning of that Act.
Marginal note:Exemption by Superintendent
(3) A regulation made under subsection (1) may provide that the Superintendent may, on any terms and conditions that the Superintendent considers appropriate, exempt a federal credit union from any requirements of that regulation.
Marginal note:Exemption by Minister
(4) The Minister may, on any terms and conditions that the Minister considers appropriate, exempt a federal credit union from any requirement of this Act or the regulations if the federal credit union is applying for the approval of a proposal to convert itself into a bank with common shares and
(a) the Minister is of the opinion that the federal credit union is, or is about to be, in financial difficulty and that the exemption would help to facilitate an improvement in the financial condition of the federal credit union; or
(b) the federal credit union is subject to an order under paragraph 39.13(1)(a) of the Canada Deposit Insurance Corporation Act or is a bridge institution within the meaning of that Act.
Amendments — By-laws
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