Budget Implementation Act, 2018, No. 2 (S.C. 2018, c. 27)
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Assented to 2018-12-13
PART 4Various Measures (continued)
DIVISION 3Financial Sector (continued)
SUBDIVISION AFinancial Institutions (continued)
1991, c. 46Bank Act
138 Subsection 464(1) of the Bank Act is amended by adding the following in alphabetical order:
- business growth fund
business growth fund means Canadian Business Growth Fund (GP) Inc., a corporation incorporated under the Canada Business Corporations Act. (fonds de croissance des entreprises)
139 The Act is amended by adding the following after section 465:
Marginal note:Limit — business growth fund
465.1 (1) The aggregate value of all ownership interests in the business growth fund and the entities that the business growth fund controls that a bank and its subsidiaries hold must not exceed $200,000,000.
Marginal note:Application
(2) For the purposes of subsection (1), the value of an ownership interest is determined by the amount paid for it at the time of its issuance.
140 (1) Subsection 466(1) of the Act is replaced by the following:
Marginal note:Restriction on control and substantial investments
466 (1) Subject to subsections (2) to (4.4), no bank shall acquire control of, or hold, acquire or increase a substantial investment in, any entity other than a permitted entity.
(2) Section 466 of the Act is amended by adding the following after subsection (4):
Marginal note:Business growth fund
(4.1) Subject to section 465.1, subsections (4.2) to (4.4) and Part XI, a bank may hold, acquire or increase a substantial investment in the business growth fund or any entity that the business growth fund controls.
Marginal note:For greater certainty
(4.2) For greater certainty, a bank is prohibited from acquiring control of the business growth fund or any entity that the business growth fund controls.
Marginal note:Prohibition — entity
(4.3) A bank is prohibited from holding or acquiring a substantial investment in the business growth fund or any entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds or acquires shares of, or other ownership interests in, any of the following entities, or in any entity that controls any of the following entities:
(a) an entity referred to in any of paragraphs 468(1)(a) to (j);
(b) an entity that is primarily engaged in the leasing of motor vehicles in Canada for the purpose of extending credit to a customer or financing a customer’s acquisition of a motor vehicle;
(c) an entity that is primarily engaged in providing temporary possession of personal property, including motor vehicles, to customers in Canada for a purpose other than to finance the customer’s acquisition of the property;
(d) an entity that acts as an insurance broker or agent in Canada; or
(e) an entity that is engaged in any prescribed activity.
Marginal note:Prohibition — capital and loans
(4.4) A bank is prohibited from holding or acquiring a substantial investment in the business growth fund or any entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds shares of, or other ownership interests in, an entity or holds a loan made to an entity and, in respect of that entity and its affiliates, the aggregate value of the following exceeds $100,000,000:
(a) all ownership interests that are held by the bank, the bank’s subsidiaries, the business growth fund or the entities that the business growth fund controls, the value of those ownership interests as determined by the amount paid for them at the time each was first acquired by any of those entities; and
(b) the outstanding principal of all loans held by the business growth fund or the entities that the business growth fund controls.
141 Subsection 507(1) of the Act is amended by adding the following in alphabetical order:
- business growth fund
business growth fund means Canadian Business Growth Fund (GP) Inc., a corporation incorporated under the Canada Business Corporations Act. (fonds de croissance des entreprises)
142 The Act is amended by adding the following after section 510:
Marginal note:Limit — business growth fund
510.01 (1) The aggregate value of all ownership interests in the business growth fund and the entities that the business growth fund controls that a foreign bank and the entities associated with it hold must not exceed $200,000,000.
Marginal note:Application
(2) For the purposes of subsection (1), the value of an ownership interest is determined by the amount paid for it at the time of its issuance.
Marginal note:Business growth fund
510.02 (1) Subject to section 510.01 and subsections (2) to (4), a foreign bank or an entity associated with a foreign bank may hold or acquire a substantial investment in the business growth fund or a Canadian entity that the business growth fund controls.
Marginal note:For greater certainty
(2) For greater certainty, a foreign bank or an entity associated with a foreign bank is prohibited from acquiring control of the business growth fund or any Canadian entity that the business growth fund controls.
Marginal note:Prohibition — entity
(3) A foreign bank or an entity associated with a foreign bank is prohibited from holding or acquiring a substantial investment in the business growth fund or any Canadian entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds or acquires shares of, or other ownership interests in, any of the following entities, or in any entity that controls any of the following entities:
(a) an entity referred to in any of paragraphs 468(1)(a) to (j);
(b) an entity that is primarily engaged in the leasing of motor vehicles in Canada for the purpose of extending credit to a customer or financing a customer’s acquisition of a motor vehicle;
(c) an entity that is primarily engaged in providing temporary possession of personal property, including motor vehicles, to customers in Canada for a purpose other than to finance the customer’s acquisition of the property;
(d) an entity that acts as an insurance broker or agent in Canada; or
(e) an entity that is engaged in any prescribed activity.
Marginal note:Prohibition — capital and loans
(4) A foreign bank or an entity associated with a foreign bank is prohibited from holding or acquiring a substantial investment in the business growth fund or any Canadian entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds shares of, or other ownership interests in, an entity or holds a loan made to an entity and, in respect of that entity and its affiliates, the aggregate value of the following exceeds $100,000,000:
(a) all ownership interests that are held by the foreign bank, the entities associated with the foreign bank, the business growth fund or the entities that the business growth fund controls, the value of those ownership interests as determined by the amount paid for them at the time each was first acquired by any of those entities; and
(b) the outstanding principal of all loans held by the business growth fund or the entities that the business growth fund controls.
143 The Act is amended by adding the following after section 927:
Marginal note:Limit — business growth fund
927.1 (1) The aggregate value of all ownership interests in the business growth fund and the entities that the business growth fund controls that a bank holding company and its subsidiaries hold must not exceed $200,000,000.
Marginal note:Application
(2) For the purposes of subsection (1), the value of an ownership interest is determined by the amount paid for it at the time of its issuance.
144 (1) Subsection 928(1) of the Act is replaced by the following:
Marginal note:Restriction on control and substantial investments
928 (1) Subject to subsections (2) to (3.4), no bank holding company shall acquire control of, or hold, acquire or increase a substantial investment in, any entity other than a permitted entity.
(2) Section 928 of the Act is amended by adding the following after subsection (3):
Marginal note:Business growth fund
(3.1) Subject to section 927.1 and subsections (3.2) to (3.4), a bank holding company may hold, acquire or increase a substantial investment in the business growth fund or any entity that the business growth fund controls.
Marginal note:For greater certainty
(3.2) For greater certainty, a bank holding company is prohibited from acquiring control of the business growth fund or any entity that the business growth fund controls.
Marginal note:Prohibition — entity
(3.3) A bank holding company is prohibited from holding or acquiring a substantial investment in the business growth fund or any entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls hold or acquires shares of, or other ownership interests in, any of the following entities, or in any entity that controls any of the following entities:
(a) an entity referred to in any of paragraphs 930(1)(a) to (j);
(b) an entity that is primarily engaged in the leasing of motor vehicles in Canada for the purpose of extending credit to a customer or financing a customer’s acquisition of a motor vehicle;
(c) an entity that is primarily engaged in providing temporary possession of personal property, including motor vehicles, to customers in Canada for a purpose other than to finance the customer’s acquisition of the property;
(d) an entity that acts as an insurance broker or agent in Canada; or
(e) an entity that is engaged in any prescribed activity.
Marginal note:Prohibition — capital and loans
(3.4) A bank holding company is prohibited from holding or acquiring a substantial investment in the business growth fund or any entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds shares of, or other ownership interests in, an entity or holds a loan made to an entity and, in respect of that entity and its affiliates, the aggregate value of the following exceeds $100,000,000:
(a) all ownership interests that are held by the bank holding company, the bank holding company’s subsidiaries, the business growth fund or the entities that the business growth fund controls, the value of those ownership interests as determined by the amount paid for them at the time each was first acquired by any of those entities; and
(b) the outstanding principal of all loans held by the business growth fund or the entities that the business growth fund controls.
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