Short Title

Marginal note:Short title

1 This Act may be cited as the Canada Deposit Insurance Corporation Act.

Interpretation

Marginal note:Definitions

2 In this Act,

affairs

affaires internes

affairs, with respect to a member institution, means its business and the relationships among the member institution and its affiliates and the shareholders, directors and officers of the member institution and its affiliates; (affaires internes)

affiliate

groupe

affiliate, in respect of a member institution that is

• (a) a bank, means an entity that is affiliated with the bank within the meaning of the Bank Act, or

• (b) other than a bank, means an entity that would be affiliated with the member institution within the meaning of the Bank Act if the member institution were a bank to which that Act applies; (groupe)

appropriate provincial minister

ministre provincial compétent

appropriate provincial minister, in relation to a provincial institution, means the minister of the Crown of the province of incorporation of the institution responsible for the supervision of the provincial institution; (ministre provincial compétent)

bank

banque

bank means a bank listed in Schedule I or II to the Bank Act; (banque)

Board

conseil

Board means the Board of Directors of the Corporation; (conseil)

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); (institution-relais)

by-laws

règlements administratifs

by-laws means the by-laws of the Corporation; (règlements administratifs)

Chairman

Chairman[Repealed, 1996, c. 6, s. 21]

Chairperson

président

Chairperson means the Chairperson of the Board; (président)

Corporation

Société

Corporation means the Canada Deposit Insurance Corporation established by section 3; (Société)

deposit and depositor

dépôt et déposant

deposit and depositor mean respectively a deposit and a depositor as defined in the schedule; (dépôt et déposant)

deposit insurance

assurance-dépôts

deposit insurance means the insurance referred to in paragraph 7(a); (assurance-dépôts)

federal credit union

coopérative de crédit fédérale

federal credit union has the same meaning as in section 2 of the Bank Act; (coopérative de crédit fédérale)

federal institution

institution fédérale

federal institution means a bank, company or association referred to in section 8; (institution fédérale)

federal member institution

institution fédérale membre

federal member institution means a federal institution that is a member institution; (institution fédérale membre)

local cooperative credit society

société coopérative de crédit locale

local cooperative credit society has the same meaning as in section 2 of the Bank Act; (société coopérative de crédit locale)

member institution

institution membre

member institution means a corporation that has deposit insurance under this Act; (institution membre)

Minister

ministre

Minister means the Minister of Finance; (ministre)

policy of deposit insurance or policy

police d’assurance-dépôts ou police

policy of deposit insurance or policy means the instrument evidencing the deposit insurance of a member institution; (police d’assurance-dépôts ou police)

premium year

exercice comptable des primes

premium year means, in relation to the calculation and payment of premiums pursuant to this Act, the period beginning on May 1 in one year and ending on April 30 in the next year; (exercice comptable des primes)

provincial institution

institution provinciale

provincial institution means a company referred to in section 9; (institution provinciale)

provincial member institution

institution provinciale membre

provincial member institution means a provincial institution that is a member institution; (institution provinciale membre)

provincial supervisor

contrôleur provincial

provincial supervisor, in relation to a provincial institution, means the official of the province of incorporation of the provincial institution who supervises the affairs of the provincial institution; (contrôleur provincial)

receiver

séquestre

receiver includes a receiver-manager and a sequestrator; (séquestre)

representation

déclaration

representation means any oral or written statement and includes any advertisement and any mark, sign, trade name or other device; (déclaration)

returned payment

paiement retourné

returned payment means any portion of a payment made by the Corporation under subsection 14(2) or (2.1) that is either returned to the Corporation or that otherwise remains under its control; (paiement retourné)

share

action

share includes

• (a) a conversion or exchange privilege, issued by a member institution, that is convertible at any time into a share,

• (b) an option or a right, issued by a member institution, to acquire a share or a privilege referred to in paragraph (a), and

• (c) a membership share within the meaning of section 2 of the Bank Act; (action)

shareholder

actionnaire

shareholder includes the holder of a membership share of a federal credit union; (actionnaire)

subordinated debt

dette subordonnée

subordinated debt means debt of a member institution that, by the terms of any instrument evidencing the debt, will, in the event of the insolvency or winding-up of the member institution, be subordinate in right of payment to all deposit liabilities of the member institution and all other liabilities of the member institution except those that, by their terms, rank equally with or are subordinate to that debt and includes

• (a) a conversion or exchange privilege that is convertible at any time into subordinated debt, and

• (b) an option or a right to acquire subordinated debt or a privilege referred to in paragraph (a)

issued by a member institution; (dette subordonnée)

Superintendent

surintendant

Superintendent means the Superintendent of Financial Institutions appointed pursuant to subsection 5(1) of the Office of the Superintendent of Financial Institutions Act. (surintendant)

Her Majesty

Marginal note:Binding on Her Majesty

2.1 This Act is binding on Her Majesty in right of Canada or a province.

Powers, Etc., of Minister

Marginal note:Delegation

2.2 The Minister may delegate any of the Minister’s powers, duties and functions under this Act to any Minister of State appointed pursuant to the Ministries and Ministers of State Act to assist the Minister.

Constitution of the Corporation

Marginal note:Corporation established

• 3 (1) There is hereby established a corporation, to be called the Canada Deposit Insurance Corporation.

• Marginal note:Agent of Her Majesty

  (2) The Corporation is, for all purposes of this Act, an agent of Her Majesty in right of Canada.

Marginal note:Head office

• 4 (1) The head office of the Corporation shall be at the city of Ottawa.

• Marginal note:Offices and agents

  (2) The Corporation may establish offices or employ agents in any part of Canada.

Marginal note:Board of Directors

• 5 (1) There shall be a Board of Directors of the Corporation consisting of

  • (a) the person appointed as the Chairperson;

  • (b) the persons who for the time being hold the offices of the Governor of the Bank of Canada, the Deputy Minister of Finance, the Superintendent of Financial Institutions and the Commissioner of the Financial Consumer Agency of Canada;

  • (b.1) a Deputy Superintendent of Financial Institutions, or an officer of the Office of the Superintendent of Financial Institutions, appointed by the Minister; and

  • (c) not more than five other members appointed by the Minister with the approval of the Governor in Council.

• Marginal note:Disqualifications

  (1.1) A person is not eligible to be appointed under paragraph (1)(c) or, having been appointed under that paragraph, to continue as a member of the Board, if the person is

  • (a) employed in any capacity in the federal public administration or holds any office or position for which any salary or other remuneration is payable out of public moneys;

  • (b) a member of the Senate or House of Commons of Canada or a member of a provincial legislature; or

  • (c) a director, officer or employee of a federal institution, a provincial institution or a local cooperative credit society.

• Marginal note:Alternate director

  (2) A director referred to in paragraph (1)(b) may, from time to time with the approval of the Minister, designate in writing an alternate to attend in the director’s absence at any meeting of the Board of Directors, and the alternate shall be deemed to be a member of the Board while so attending a meeting of the Board.

• Marginal note:Vacancy

  (3) A vacancy on the Board does not impair the right of the remaining directors to act.

• Marginal note:Acting chairperson

  (4) Where the office of Chairperson is vacant, the Minister may appoint, for a period not exceeding ninety days, an acting Chairperson who shall, while so acting, be a member of the Board and have all the powers of the Chairperson.

• Marginal note:Expenses of directors

  (5) A director shall be paid by the Corporation reasonable travel and living expenses incurred by the director while absent from his or her ordinary place of residence in the course of his or her duties as a director but no director referred to in paragraph (1)(b) shall receive any other remuneration for his or her services on the Board.

• Marginal note:Remuneration of certain directors

  (5.1) A director referred to in paragraph (1)(c) shall be paid by the Corporation for attendance at meetings of the Board such remuneration as may be fixed by the Governor in Council.

Marginal note:Chairperson

• 6 (1) The Governor in Council shall appoint a person of proven financial ability to be Chairperson of the Board.

• Marginal note:Term of office

  (2) Notwithstanding subsection 105(5) of the Financial Administration Act, the Chairperson shall be appointed to hold office during good behaviour for such term as the Governor in Council deems appropriate but may be reappointed on the expiration of his or her term of office and may be removed at any time by the Governor in Council for cause.

• Marginal note:Disqualification

  (3) No person is eligible to be appointed or to continue as Chairperson who

  • (a) is not a Canadian citizen ordinarily resident in Canada;

  • (b) is a member of the Senate or House of Commons or a member of a provincial legislature; or

  • (c) is a director, officer or employee of a federal institution, a provincial institution or a local cooperative credit society.

  • (d) [Repealed, 2007, c. 6, s. 402]

• Marginal note:Presiding at meetings

  (4) The Chairperson shall preside at all meetings of the Board but where at any meeting the Chairperson is absent, one of the directors present thereat who is chosen so to act by the directors present shall preside and have all the powers of the Chairperson.

• Marginal note:Remuneration of Chairperson

  (5) The Chairperson shall be paid by the Corporation such remuneration as may be fixed by the Governor in Council.

Objects, Powers and Duties

Marginal note:Objects

7 The objects of the Corporation are

• (a) to provide insurance against the loss of part or all of deposits;

• (b) to promote and otherwise contribute to the stability of the financial system in Canada; and

• (c) to pursue the objects set out in paragraphs (a) and (b) for the benefit of persons having deposits with member institutions and in such manner as will minimize the exposure of the Corporation to loss.

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.

Marginal note:Federal institutions

8 For the purposes of this Act, the following are federal institutions:

• (a) a bank;

• (b) a company to which the Trust and Loan Companies Act applies; and

• (c) a retail association within the meaning of regulations made under the Cooperative Credit Associations Act.

Marginal note:Provincial institutions

9 For the purposes of this Act, an incorporated company that carries on, under an Act of the legislature of a province or a constating instrument under provincial jurisdiction, a business substantially similar to the business of a company to which the Trust and Loan Companies Act applies and that is authorized by or under an Act of the legislature of a province to accept deposits from the public is a provincial institution.

Marginal note:Powers of Corporation

• 10 (1) The Corporation may do all things necessary or incidental to the objects of the Corporation and in particular, but without limiting the generality of the foregoing, the Corporation may, in furtherance of its objects,

  • (a) for the purpose of reducing a risk to the Corporation or reducing or averting a threatened loss to the Corporation,

    • (i) acquire assets from a member institution,

    • (ii) make or guarantee loans or advances, with or without security, to a member institution, and

    • (iii) make or guarantee a deposit with a member institution;

  • (a.1) [Repealed, 1996, c. 6, s. 23]

  • (a.2) enter into an agreement with the government of a province, or an agent of the government of a province, respecting any matter relating to the insurance of deposits with provincial institutions in that province;

  • (b) make any investment and enter into any transaction necessary or desirable for the financial management of the Corporation;

  • (c) act as liquidator, receiver or inspector of a member institution or a subsidiary thereof, when duly appointed as such and appoint qualified and competent persons, whether employees of the Corporation or not, to carry out any or all of the functions of the Corporation under the appointment of the Corporation;

  • (d) assume the costs of a winding-up of a member institution when the Corporation is appointed to act as a liquidator in the winding-up, or assume the costs of the receiver when the Corporation is appointed to act as such and charge those costs to the Accumulated Net Earnings of the Corporation;

  • (e) guarantee the payment of the fees of, and the costs incurred by any person as, the liquidator or receiver of a member institution when that person is appointed as such and charge any amounts paid under the terms of the guarantee to the Accumulated Net Earnings of the Corporation;

  • (f) acquire assets of a member institution from a liquidator or receiver thereof;

  • (f.1) acquire, by way of security or otherwise, shares and subordinated debt of a member institution and to hold and dispose of those shares and subordinated debt;

  • (g) make an advance for the purpose of paying a claim, against a member institution for which the Corporation is acting as receiver or liquidator, in respect of any insured deposit and of becoming subrogated as an unsecured creditor for the amount of the advance;

  • (h) make or cause to be made such inspections of a member institution as may be authorized under this Act or a policy of deposit insurance;

  • (i) acquire, hold and alienate real and personal property;

  • (i.1) settle or compromise any claim by or against the Corporation; and

  • (j) do all such other things as may be necessary for the exercising of any power of the Corporation.

• Marginal note:Subsidiary corporations

  (2) For the purposes of facilitating the acquisition, management or disposal of real property or other assets of a member institution that the Corporation may acquire as the result of its operations, the Corporation may, when authorized by order of the Governor in Council,

  • (a) procure the incorporation of a corporation, all the shares of which, on incorporation, would be held by, on behalf of or in trust for the Corporation; or

  • (b) acquire all of the shares of a corporation that, on acquisition, would be held by, on behalf of or in trust for the Corporation.

• Marginal note:Subsidiary not an agent

  (3) A corporation described in paragraph (2)(a) or (b) is deemed not to be an agent of the Corporation or of Her Majesty in right of Canada.

• Marginal note:Conditions applicable to the exercise of certain powers

  (4) The Corporation shall, in exercising its powers under paragraph (1)(b), comply with such directions of general application as the Minister may, in writing, give to the Corporation.

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 47.03, 47.04, 47.06, 47.09, 47.11, 47.15, 47.17, 47.18 and 60.1, subsection 79.2(1) and sections 372, 373, 374, 375, 376, 376.1, 376.2, 377, 377.1, 377.2  379, 382.1, 385, 401.11, 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:Loans to Corporation

• 10.1 (1) At the request of the Corporation, the Minister may, out of the Consolidated Revenue Fund, lend money to the Corporation on such terms and conditions as the Minister may establish.

• Marginal note:Other borrowing

  (2) The Corporation may borrow money otherwise than under subsection (1) and may borrow by any means, including the issuance and sale of bonds, debentures, notes or any other evidence of indebtedness.

• 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

  • (b) such greater amount as may be authorized for the purposes of this subsection by Parliament under an appropriation Act.

• 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 $15,000,000,000; 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, 2008.

• 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 under subsection (3.1) for the current year is less than the amount published under subsection (3.6) for the previous year.

• 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.

• Marginal note:Fees for borrowing

  (4) The Minister may fix a fee to be paid by the Corporation to the Receiver General in respect of any borrowings by the Corporation and the Minister shall notify the Corporation in writing of any such fee.

Marginal note:Powers of directors

• 11 (1) The Board shall administer the affairs of the Corporation in all things and make, or cause to be made, for the Corporation any description of contract that the Corporation may by law enter into.

• Marginal note:By-laws

  (2) The Board may make by-laws,

  • (a) for the administration, management and control of the property and affairs of the Corporation;

  • (b) governing the functions, duties and remuneration of all officers, agents and employees of the Corporation;

  • (b.1) concerning conflicts of interest and post-employment matters relating to conflicts of interest in respect of directors, officers and employees of the Corporation;

  • (c) governing the appointment and activities of any special committees created for the purposes of the Corporation;

  • (d) governing the time and place for the holding of meetings of the directors, and the quorum and procedure in all things at those meetings;

  • (e) [Repealed, 2005, c. 30, s. 100]

  • (f) respecting representations by member institutions and other persons with respect to

    • (i) what constitutes, or does not constitute, a deposit,

    • (ii) what constitutes, or does not constitute, a deposit that is insured by the Corporation, and

    • (iii) who is a member institution;

  • (f.1) for the purpose of facilitating the Corporation’s exercise of its functions either under section 14 or in the event that an order is made under subsection 39.13(1), respecting the information that the Corporation can require from member institutions with respect to their deposit liabilities and the time within and manner in which it is to be provided to the Corporation;

  • (f.2) respecting the capabilities that the Corporation can require member institutions to have to facilitate the Corporation’s exercise of its functions either under section 14 or in the event that an order is made under subsection 39.13(1), including the capability to

    • (i) identify their deposit liabilities, and

    • (ii) temporarily prevent withdrawals of deposit liabilities;

  • (g) prescribing anything that, by virtue of any provision of this Act, is to be prescribed by the by-laws;

  • (h) prescribing the form and manner in which payments under this Act are to be made by the Corporation; and

  • (i) governing the conduct in all other particulars of the affairs of the Corporation.

• Deposit liabilities

  (2.1) For the purposes of paragraphs (2)(f.1) and (f.2), deposit liabilities include deposits referred to in paragraphs 12(a) to (c) and liabilities referred to in subsections 2(2), (5) and (6) of the schedule.

• Marginal note:Subsection 5(1) of the Statutory Instruments Act

  (2.2) If a by-law requires approval in writing by the Minister under this Act in order to be effective, then, for the purposes of subsection 5(1) of the Statutory Instruments Act, the by-law is deemed to be made on the day on which the Corporation receives that approval.

• Marginal note:Inspection powers

  (3) In carrying out any inspection authorized by this Act or by a policy of deposit insurance, the directors of the Corporation have all the powers conferred on commissioners appointed under Part II of the Inquiries Act for the purpose of obtaining evidence under oath, and the directors may delegate those powers as occasion requires.

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.

Deposit Insurance

Marginal note:Duty to insure

12 The Corporation shall insure each deposit with a member institution except

• (a) a deposit that is not payable in Canada or in Canadian currency;

• (b) a deposit in respect of which Her Majesty in right of Canada would be a preferred claimant; and

• (c) so much of any one deposit as exceeds one hundred thousand dollars.

Marginal note:Definitions

• 12.1 (1) The following definitions apply in this section.

  continuation day

  date de prorogation

  continuation day, in respect of a local cooperative credit society continued as a federal credit union, means the day set out in the federal credit union’s letters patent continuing the local cooperative credit society as a federal credit union. (date de prorogation)

  pre-existing deposit

  dépôt préexistant

  pre-existing deposit means a deposit that was made with a local cooperative credit society before it is continued as a federal credit union and that remains outstanding on the continuation day. (dépôt préexistant)

  transition period

  période transitoire

  transition period, in respect of a pre-existing deposit, means

  • (a) in the case of a pre-existing deposit that is to be repaid on a fixed day, the period that begins on the continuation day and ends on that fixed day; and

  • (b) in the case of any other pre-existing deposit, the period that begins on the continuation day and ends on the day that is 180 days after the continuation day. (période transitoire)

• Marginal note:Duty to insure certain pre-existing deposits

  (2) Despite paragraph 12(c) and subsection 3(1.1) of the schedule, but subject to the other provisions of this Act, if a pre-existing deposit is held by a federal credit union that is a member institution and all or a portion of the pre-existing deposit would have been guaranteed or insured under the law of a province if the local cooperative credit society had not been continued as a federal credit union, the Corporation shall insure the pre-existing deposit during the transition period up to the amount that would have been guaranteed or insured under the law of that province.

• Marginal note:Duty to insure certain pre-existing deposits repayable on a fixed day

  (3) Despite paragraph 2(2)(a) of the schedule, the Corporation shall insure a pre-existing deposit during the transition period if the deposit is held by a federal credit union that is a member institution and

  • (a) is repayable on a fixed day that is more than five years after the deposit was made with the local cooperative credit society that was continued as a federal credit union; and

  • (b) would have been guaranteed or insured under the law of a province if the local cooperative credit society had not been continued as a federal credit union.

• Marginal note:Deemed separate deposit

  (4) During the transition period, a pre-existing deposit, less any withdrawals from the pre-existing deposit, is deemed, for the purposes of deposit insurance with the Corporation, to be a deposit separate from any deposit made on or after the continuation day.

Marginal note:Deposits with amalgamating institutions

• 13 (1) Where a person has deposits with two or more member institutions that amalgamate and continue in operation as one member institution, in this section referred to as the “amalgamated institution”, a deposit of that person with an amalgamating institution on the day on which the amalgamated institution is formed, less any withdrawals from the deposit, shall, for the purpose of deposit insurance with the Corporation, be deemed to be and continue to be separate from any deposit of that person on that day with the other amalgamating institution or institutions that become part of the amalgamated institution.

• Marginal note:Deposits with amalgamated institution

  (2) A deposit made by a person referred to in subsection (1) with an amalgamated institution after the day on which the amalgamated institution is formed shall be insured by the Corporation only to the extent that the aggregate of that person’s deposits with the amalgamated institution, exclusive of the deposit in respect of which the calculation is made, is less than one hundred thousand dollars.

• Marginal note:Exception

  (2.1) A deposit that is insured under subsection 12.1(2) is not to be taken into account when calculating the aggregate of a person’s deposits under subsection (2).

• Marginal note:Where assets acquired

  (3) For the purpose of deposit insurance with the Corporation, if a member institution assumes deposit liabilities of another member institution, those member institutions are deemed to be amalgamating institutions and subsections (1) to (2.1) apply if a person has deposits with both institutions.

• Marginal note:Deemed deposits

  (4) Where a member institution assumes deposit liabilities of another member institution, the deposits in respect of those liabilities are, for the purposes of sections 21, 23 and 25.1, deemed to be deposited with the member institution that assumes them as of the day on which they are assumed.

Marginal note:Obligation regarding insured amount

• 14 (1) As soon as possible after the Corporation is obliged to make payment in respect of a deposit insured by deposit insurance, it shall make available to the person that in its opinion appears to be entitled to be paid in respect of the deposit an amount of money equal to so much of the person’s deposit as is insured by the Corporation.

• Marginal note:How amount to be made available

  (1.1) The amount is to be made available by making a monetary payment to the person or a deposit to the credit of the person at another member institution, whether or not the person has an account at that institution. The Corporation may make the amount available in more than one instalment if, in its opinion, it is appropriate to do so.

• Marginal note:Obligatory payment

  (2) The Corporation shall, in the manner described in subsection (1.1), make payment in respect of any deposit insured by deposit insurance if a winding-up order has been made in respect of the member institution that holds the deposit.

• Marginal note:Discretionary payment

  (2.1) The Corporation may, in the manner described in subsection (1.1), make payment in respect of any deposit insured by deposit insurance if

  • (a) the member institution that holds the deposit is unable, by reason of an order of a court or of any action taken by a supervisory or regulatory body, to make any payment in respect of the deposit;

  • (b) the policy of deposit insurance of the member institution that holds the deposit is terminated or cancelled; or

  • (c) an order is made in respect of the federal member institution under subsection 39.13(1).

• (2.2) [Repealed, 1996, c. 6, s. 26]

• Marginal note:How interest on deposit to be calculated

  (2.3) For the purpose of calculating the payment of the Corporation in respect of any deposit insured by deposit insurance where a winding-up order has been made in respect of the member institution that holds the deposit, the interest accruing and payable in relation to the deposit shall be included only to the date of the commencement of the winding-up.

• Marginal note:Corporation may pay interest

  (2.4) Where the Corporation makes a payment pursuant to subsection (2), the Corporation may pay, in addition to the amount the Corporation is obliged to pay, interest on that amount at a rate determined in accordance with rules prescribed by the by-laws for the period commencing on the date of the commencement of the winding-up in respect of the member institution that holds the deposit and ending on the date of the making of the payment in respect of the deposit, but the aggregate of the payments made under this subsection and subsection (2) in relation to the deposit shall in no case exceed one hundred thousand dollars.

• Marginal note:How interest and deposit to be calculated

  (2.5) For the purpose of calculating the payment of the Corporation in respect of any deposit insured by deposit insurance where the Corporation makes a payment pursuant to subsection (2.1),

  • (a) subject to paragraph (b), the interest accruing and payable in relation to the deposit shall be included only to the date of the payment by the Corporation; or

  • (b) if a proceeding for the winding-up of the member institution that holds the deposit has been commenced before the date of the payment by the Corporation but a winding-up order has not yet been made, the interest accruing and payable in relation to the deposit shall be included only to the date of the commencement of the winding-up.

• Marginal note:Interest on index-linked deposits

  (2.51) The interest referred to in subsection (2.3) or (2.5) in relation to a deposit held by a member institution shall be determined in accordance with rules prescribed by the by-laws if a payment to be made by the member institution in respect of the deposit is to be determined, in whole or in part, by reference in any way to

  • (a) the market price of a security, commodity or financial instrument;

  • (b) the exchange rate between any two currencies;

  • (c) a reference rate determined by reference to any one or more of those prices or rates; or

  • (d) any other kind of variable index or reference point that may be described in rules prescribed by the by-laws.

• Marginal note:Exception

  (2.6) Where a winding-up order is made in respect of a member institution, subsection (2) does not apply to any deposit in respect of which payment was made pursuant to subsection (2.1).

• 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.

• Marginal note:Costs of examination

  (2.8) The costs incurred by the Corporation in carrying out an examination in respect of a member institution under subsection (2.7) shall be paid by the member institution and may be recovered by the Corporation as a debt due and payable to the Corporation.

• Marginal note:Date of computing liability

  (2.9) For the purposes of calculating the payment to be made by the Corporation in respect of any deposit insured by deposit insurance, the amount of the deposit shall be determined, where the Corporation makes a payment pursuant to

  • (a) subsection (2), as of the date of the commencement of the winding-up;

  • (b) subsection (2.1) in the winding-up circumstances described in paragraph (2.5)(b), as of the date of the commencement of the winding-up; or

  • (c) subsection (2.1), otherwise than in the winding-up circumstances described in paragraph (2.5)(b), as of the date on which any of the circumstances described in subsection (2.1) first occurs in respect of the member institution concerned.

• Marginal note:Posting requirement

  (2.91) For the purposes of calculating the payment to be made by the Corporation in respect of any deposit insured by deposit insurance, the deposit, other than accrued interest, must be posted in the member institution’s records in accordance with the member institution’s regular transaction posting process as of the applicable date referred to in subsection (2.9).

• Marginal note:Discharge of liability

  (3) Payment under this section by the Corporation in respect of any deposit insured by deposit insurance discharges the Corporation from all liability to the extent of the amount of the payment made in respect of that deposit, and in no case is the Corporation under any obligation to see to the proper application in any way of the payment so made.

• Marginal note:Subrogation

  (4) Where the Corporation makes a payment under this section in respect of any deposit with a member institution, the Corporation is subrogated, to the extent of the amount of the payment made, to all the rights and interests of the depositor and may maintain an action in respect of those rights and interests in the name of the depositor or in the name of the Corporation.

• Marginal note:Subrogation — returned payment

  (4.01) In the case of a returned payment, at the expiry of one year from the applicable date referred to in subsection (2.9), the Corporation is subrogated, to the extent of the amount of the returned payment, to all the rights and interests of the depositor and may maintain an action in respect of those rights and interests in the name of the depositor or in the name of the Corporation.

• Marginal note:Priority

  (4.1) If the Corporation is subrogated to the rights and interests of a depositor under subsection (4) or (4.01) in respect of any deposit with a member institution that is being wound up, the Corporation ranks,

  • (a) to the extent that the payment was made under subsection (2) or (2.1), including in the case of a returned payment, equally with the depositor in respect of their deposit; and

  • (b) to the extent that the payment includes any interest paid under subsection (2.4), equally with the depositor in respect of interest accruing and payable on their deposit after the date of the making of the winding-up order.

• Marginal note:Assignment

  (5) Where the Corporation deems it advisable, it may withhold payment in respect of any deposit with a member institution until it has received an assignment in writing of all the rights and interests of the depositor in relation to the deposit.

• Marginal note:Time limitation for claims

  (6) No action may be taken against the Corporation in respect of the obligation of the Corporation to make a payment in relation to a deposit held by a member institution that is being wound up unless the action is commenced within ten years after the date of the commencement of the winding-up.

• Marginal note:Interpretation

  (7) In this section, commencement of the winding-up means the time a winding-up is deemed to commence pursuant to section 5 of the Winding-up and Restructuring Act.

Marginal note:Payment to the Bank of Canada

• 14.01 (1) The Corporation shall pay to the Bank of Canada an amount equal to a returned payment within three months after the expiry of a 10-year period from the applicable date referred to in subsection 14(2.9), and payment to the Bank of Canada accordingly discharges the Corporation from all liability in respect of the returned payment.

• Marginal note:Notice

  (2) The Corporation shall mail to each person to whom a returned payment remains payable, at the person’s address in so far as the address is known to the Corporation, a notice that the returned payment remains unpaid and that payment of an amount equal to the returned payment will be paid by the Corporation to the Bank of Canada. The notice must be sent at least six months before the date by which payment is to be made by the Corporation to the Bank of Canada and must also include the mailing address and websites where information can be obtained on how to claim the returned payment from the Corporation before payment is made by the Corporation to the Bank of Canada.

• Marginal note:Provision of information

  (3) The Corporation shall, on making a payment under subsection (1), provide to the Bank of Canada the amount of the returned payment and, in so far as it is known to the Corporation, any information that the Bank of Canada determines is necessary to verify the identity of the depositor who is entitled to the returned payment, including

  • (a) the depositor’s name;

  • (b) the depositor’s address;

  • (c) information relating to the depositor’s pieces of identification; and

  • (d) information relating to another person’s authority to act on behalf of the depositor.

• Marginal note:Payment to claimant

  (4) Subject to section 22 of the Bank of Canada Act, if payment has been made to the Bank of Canada under subsection (1) in respect of any returned payment, and if payment is demanded from the Bank of Canada by the person who, but for that subsection, would be entitled to receive the returned payment, the Bank of Canada is liable to pay an amount equal to the amount so paid to it to the claimant.

• Marginal note:Enforcing liability

  (5) The liability of the Bank of Canada under subsection (4) may be enforced by action or other civil proceeding against the Bank of Canada in any court of competent jurisdiction.

Marginal note:Sale of information to liquidator

• 14.1 (1) The Corporation may sell to the liquidator of a member institution appointed under the Winding-up and Restructuring Act any information that was gathered or produced at the expense of the Corporation, if that expense is not one that may be recovered by the Corporation from the member institution under subsection 14(2.8).

• Marginal note:Payment part of winding-up costs

  (2) Any amount paid by the liquidator for that information is deemed for the purpose of section 94 of the Winding-up and Restructuring Act to be a cost incurred in the winding-up of the member institution.

Marginal note:Premiums recoverable

15 A premium assessed by the Corporation against a member institution for the purposes of this Act constitutes a debt owing to Her Majesty in right of Canada and the amount thereof together with any interest levied by the Corporation as an overdue charge is recoverable by action in any court of competent jurisdiction.

16 [Repealed, R.S., 1985, c. 18 (3rd Supp.), s. 53]

Marginal note:Insurance of federal institutions

• 17 (1) The Corporation shall, in the manner and to the extent provided in this Act and the by-laws, insure the deposits held by a federal institution in respect of which an order approving the commencement and carrying on of business has been made by the Superintendent unless

  • (a) that order prohibits the institution from accepting deposits in Canada;

  • (b) that order authorizes the institution to accept deposits in Canada solely in accordance with subsection 413(3) of the Bank Act, subsection 378.1(2) of the Cooperative Credit Associations Act or subsection 413(2) of the Trust and Loan Companies Act;

  • (c) the institution has been authorized under section 26.03 to accept deposits payable in Canada while no longer being a member institution; or

  • (d) the institution’s policy of deposit insurance has been terminated under section 31 or cancelled under section 33.

• Marginal note:Effect of amendment to order

  (2) If the order approving the commencement and carrying on of business by a federal institution is at any time amended so as to not contain the prohibition or restriction referred to in paragraphs (1)(a) and (b), respectively,

  • (a) on the day on which the amendment takes effect, any authorization under section 26.03 that permits the institution to accept deposits payable in Canada while no longer being a member institution is revoked;

  • (b) on the day on which the amendment takes effect, any existing cancellation of the institution’s policy of deposit insurance under paragraph 33(1)(b) or (c) or subsection 33(2) is revoked; and

  • (c) as of the day on which the amendment takes effect, the Corporation shall insure the deposits held by the institution under subsection (1).

• Marginal note:Exception

  (3) Subsection (2) does not apply in respect of a federal institution whose policy of deposit insurance has been terminated under section 31 or cancelled under paragraph 33(1)(a).

• Marginal note:Notice to Corporation

  (4) The Superintendent shall notify the Corporation of

  • (a) every application to incorporate a federal institution, or to continue a corporation as a federal institution, in respect of which the Superintendent is likely to make an order approving the commencement and carrying on of business that does not contain the prohibition or restriction referred to in paragraphs (1)(a) and (b), respectively; and

  • (b) every application by a federal institution to have its order approving the commencement and carrying on of business amended so as to not contain the prohibition or restriction referred to in paragraphs (1)(a) and (b), respectively.

Marginal note:Insurance of provincial institutions

17.1 On the application of a provincial institution, the Corporation may insure the deposits held by the institution in the manner and to the extent provided in this Act and the by-laws, if

• (a) the Corporation approves the institution for deposit insurance;

• (b) the institution is authorized by the province of its incorporation to apply for deposit insurance;

• (c) the institution agrees, in carrying on its business, not to exercise powers substantially different from the powers exercisable by a company to which the Trust and Loan Companies Act applies; and

• (d) the Corporation is satisfied that at all times the Corporation will have adequate access to information regarding the institution.

Marginal note:Policy of deposit insurance

17.2 Every member institution is deemed to have obtained a policy of deposit insurance on the day on which it became a member institution.

Marginal note:Form of application for deposit insurance

• 18 (1) An application for deposit insurance shall be in the form, and accompanied by a fee of the amount and type, that may be prescribed by the by-laws.

• (2) [Repealed, R.S., 1985, c. 18 (3rd Supp.), s. 55]

• Marginal note:Contents of policy

  (3) The policy of deposit insurance shall consist of the provisions that may be prescribed by the by-laws.

• Marginal note:Policies deemed to be amended

  (4) If a by-law respecting the content of the policy of deposit insurance is amended, or revoked and replaced, every policy of deposit insurance is deemed to be amended or replaced accordingly.

19 [Repealed, R.S., 1985, c. 18 (3rd Supp.), s. 56]

Marginal note:Deposit Insurance Fund

20 The Corporation shall maintain a fund, to be called the Deposit Insurance Fund, to which shall be credited all premiums received by the Corporation.

Marginal note:Assessment and collection of premiums

• 21 (1) The Corporation shall, for each premium year, assess and collect from each member institution an annual premium in an amount equal to the lesser of

  • (a) the annual premium for that member institution determined under the by-laws, and

  • (b) the maximum annual premium.

• Marginal note:By-laws re premiums

  (2) The Board may make by-laws respecting the determination of annual premiums for member institutions and, without restricting the generality of the foregoing, may make by-laws

  • (a) for the establishment of a system of classifying member institutions in different categories;

  • (b) respecting the criteria or factors to be taken into account or procedures to be followed by the Corporation in determining the category in which a member institution is classified; and

  • (c) fixing the amount of, or providing for the manner of determining the amount of, the annual premium applicable to each category.

• Marginal note:When by-law not effective

  (3) A by-law made under subsection (2) is not effective unless it has been approved in writing by the Minister.

• Marginal note:Maximum annual premium

  (4) In this section, maximum annual premium means, in respect of a member institution, the greater of

  • (a) $5,000, and

  • (b) one third of one per cent, or such smaller proportion of one per cent as may be fixed in respect of the premium year by the Governor in Council, of an amount equal to the sum of so much of the deposits as are considered to be insured by the Corporation and deposited with the member institution as of April 30 in the immediately preceding premium year.

• Marginal note:Calculation of deposits

  (5) For the purposes of this section, a member institution may use any method approved by the Corporation to determine or estimate the aggregate amount of its deposits that are considered to be insured by the Corporation.

Marginal note:Returns

• 22 (1) The premium payable by a member institution shall be based on returns to be certified by the institution and submitted in such form and at such time as the Corporation may require.

• Marginal note:Payable in instalments

  (2) One half of the premium payable by a member institution shall be paid to the Corporation on or before July 15 in the premium year for which the premium is payable and the remainder shall be paid to the Corporation, without interest, on or before December 15 in that premium year.

Marginal note:Calculation of first premium

• 23 (1) The premium payable by a member institution in respect of the premium year in which it becomes a member institution shall be the same proportion of the lesser of

  • (a) the annual premium for that member determined by by-law made under subsection 21(2) based on an amount equal to the sum of so much of the deposits as are considered to be insured by the Corporation and deposited with the member institution as of the end of the month in which it becomes a member institution, and

  • (b) the greater of

    • (i) $5,000, and

    • (ii) one third of one per cent, or such smaller proportion of one per cent as may be fixed in respect of the premium year by the Governor in Council, of an amount equal to the sum of so much of the deposits as are considered to be insured by the Corporation and deposited with the member institution as of the end of the month in which it becomes a member institution,

  as the number of days in which any of the deposits with that member institution are insured by the Corporation in that premium year is of 365.

• Marginal note:Payment of first premium

  (2) Despite subsection 22(2), the premium payable by a member institution under subsection (1) must be paid to the Corporation, without interest, within 30 days after the end of the month in which the member institution becomes a member institution.

Marginal note:Where premiums payable

24 All premiums payable shall be paid to the Corporation at its head office.

Marginal note:No set-off on premium payment

24.1 No member institution shall, without the prior agreement of the Corporation, reduce or extinguish a premium payment, interest or other payment to be made to the Corporation by reason of a set-off or claim by the member institution against the Corporation.

Marginal note:Overdue charges

25 Notwithstanding anything in sections 21 to 23, the Corporation may charge interest at a rate equal to the rate prescribed pursuant to subsection 161(1) of the Income Tax Act plus two per cent on the unpaid amount of any premium instalment not paid on or before the due date of that instalment.

Marginal note:Premium surcharge

• 25.1 (1) Notwithstanding sections 21 to 25, where, in the opinion of the Corporation, a member institution is engaging in such practice as may be prescribed in the by-laws as warranting a premium surcharge, the Corporation, after

  • (a) consultation with the Superintendent or the provincial supervisor, as the case may be, and

  • (b) giving the member institution an opportunity to make written representations,

  may assess and collect from the member institution a premium surcharge in respect of the premium year or any part thereof.

• Marginal note:Amount of premium surcharge

  (2) The amount of the premium surcharge that may be assessed against and collected from a member institution under subsection (1) in respect of any premium year shall be such amount as the Corporation may determine to be fair in the circumstances and in no case shall exceed an amount equal to one sixth of one per cent of so much of each deposit as is considered to be insured by the Corporation and deposited with the member institution as of April 30 in the immediately preceding premium year.

• Marginal note:Application of sections 21 to 25

  (3) The provisions of sections 21 to 25 that are not inconsistent with subsections (1) and (2) apply, with such modifications as the circumstances require, in respect of any premium surcharge assessed under subsection (1).

Marginal note:Non-application to special premium

25.2 Section 21, subsection 22(2), section 23 and subsection 37(5) do not apply to a special premium.

Marginal note:By-laws — special premium

• 25.3 (1) In respect of each order made under subsection 7.1(1) or each direction given under subsection 11.1(1), the Board may make by-laws respecting the recovery from member institutions or any class of member institutions of the loss referred to in section 7.3 or 11.3, as the case may be, including by-laws

  • (a) fixing the special premium payable by member institutions or any class of member institutions or providing for the manner of fixing the special premium;

  • (b) establishing a system of classifying member institutions in different classes;

  • (c) establishing the criteria or factors to be taken into account or procedures to be followed by the Corporation in determining the class in which a member institution is classified; or

  • (d) respecting the time and manner in which a special premium shall be paid.

• Marginal note:When by-law not effective

  (2) A by-law made under subsection (1) is not effective unless it has been approved in writing by the Minister.

Marginal note:Accumulated Net Earnings

• 26 (1) The Corporation shall maintain an account, to be called the Accumulated Net Earnings, to which shall be credited all earnings, including realized profits on the sale of securities, and to which shall be charged all operating expenses, losses and specific provisions for losses in respect of insurance operations and losses on the sale of securities.

• (2) [Repealed, 1996, c. 6, s. 32]

Federal Institutions Without Deposit Insurance

Marginal note:Interpretation

• 26.01 (1) Subject to subsections (2) and (3), for the purposes of sections 26.02 to 26.06, deposit has the meaning that would be given to it by the schedule, for the purposes of deposit insurance, if the schedule were read without reference to subsections 2(2), (5) and (6) of the schedule.

• Marginal note:Exception

  (2) For the purposes of subparagraph 26.03(1)(c)(iii) and paragraph 26.03(1)(d), deposit has the meaning that would be given to it by the schedule, for the purposes of deposit insurance, but does not include deposits not payable in Canada or in Canadian currency.

• Marginal note:Exception

  (3) For the purposes of paragraph 26.03(1)(b) and subsection 26.03(2), deposit has the meaning that would be given to it by the schedule, for the purposes of deposit insurance, if the schedule were read without reference to subsections 2(2), (5) and (6) of the schedule, but does not include deposits prescribed by the by-laws.

• Marginal note:By-laws

  (4) The Board may make by-laws

  • (a) prescribing the deposits referred to in subsection (3); and

  • (b) prescribing terms and conditions with respect to the acceptance of those deposits.

Marginal note:Application

26.02 If a federal member institution intends to accept deposits payable in Canada while no longer being a member institution, it must apply to the Corporation for an authorization to do so. The application must be in a form that is acceptable to the Corporation and must contain the information that the Corporation may require.

Marginal note:Granting of application

• 26.03 (1) Subject to section 26.04, the Corporation may give that authorization if

  • (a) [Repealed, 2001, c. 9, s. 209]

  • (b) the sum of all the deposits held by the federal member institution that are less than $150,000 and payable in Canada is less than one per cent of the sum of all the deposits held by the institution that are payable in Canada;

  • (c) the institution has informed all its depositors, in accordance with any rules that may be prescribed by the by-laws,

    • (i) that the institution has applied to become authorized to accept deposits while no longer being a member institution,

    • (ii) that after the institution receives that authorization, no deposit with the institution will be insured in whole or in part by the Corporation, and

    • (iii) that the institution’s obligation to repay the deposit to the depositor will be assumed by a member institution if an option referred to in subparagraph (d)(i) or (ii) is not exercised;

  • (d) in respect of each deposit that is held by the institution, the institution has

    • (i) obtained from the depositor an acknowledgement in writing that the deposit will no longer be insured in whole or in part by the Corporation after the institution receives authorization to accept deposits without being a member institution,

    • (ii) at the request in writing of the depositor, paid to the depositor the principal amount of the deposit and interest determined in accordance with rules prescribed by the by-laws and has not charged any fee or penalty in connection with the payment, or

    • (iii) obtained from a member institution an agreement in writing to assume the institution’s liability in relation to the deposit on the same terms and conditions; and

  • (e) the institution has paid to the Corporation a fee determined in accordance with rules prescribed by the by-laws.

• Marginal note:Exchange rate

  (2) For the purpose of subsection (1), the rate of exchange that shall be applied on any day in determining the amount in Canadian dollars of a deposit in a currency of a country other than Canada shall be determined in accordance with rules prescribed by the by-laws.

Marginal note:Minister and Superintendent to be informed

• 26.04 (1) Before giving an authorization under subsection 26.03(1), the Corporation must inform the Minister and the Superintendent that it proposes to give the authorization.

• Marginal note:Minister may prevent authorization

  (2) If the Minister is of the opinion that giving the authorization would not be in the public interest, the Minister may, within thirty days after being informed about the proposal to give the authorization, direct the Corporation not to give the authorization.

• Marginal note:Authorization after 30 days

  (3) If the Minister does not issue that direction within those 30 days, the Corporation may then give the authorization under subsection 26.03(1). The giving of the authorization cancels the policy of deposit insurance of the federal member institution to which the authorization is given.

• Marginal note:Amendment of order

  (4) If the Corporation gives the authorization under subsection 26.03(1), the Superintendent must, under paragraph 54(1)(a) of the Bank Act, paragraph 62(1)(a) of the Cooperative Credit Associations Act or paragraph 58(1)(b) of the Trust and Loan Companies Act, as the case may be, amend the federal member institution’s order approving the commencement and carrying on of business accordingly.

Marginal note:Fees by-law

26.05 A by-law prescribing rules for the purpose of paragraph 26.03(1)(e) is not effective unless it has been approved in writing by the Minister.

Marginal note:Deposits not insured

26.06 After a federal member institution has been given authorization under subsection 26.03(1), no deposit with the institution is insured in whole or in part by the Corporation.

Inspection of Member Institutions

Marginal note:Annual inspections

• 27 (1) The Superintendent shall, notwithstanding any other Act of Parliament, examine on behalf of the Corporation the affairs of each federal member institution once in each year and at the times that the Corporation may require for a specified purpose.

• Marginal note:Costs

  (2) Where an examination under subsection (1) is made for a specified purpose, such costs incurred in relation thereto as in the opinion of the Superintendent are extraordinary shall be borne by the Corporation.

Marginal note:Provincial member institutions

28 It is a condition of the policy of deposit insurance of a provincial member institution that

• (a) the Corporation or a person designated by the Corporation may, at least once in each year and at such other times as the Corporation deems appropriate, make or cause to be made such inspections of the affairs of the provincial member institution as the Corporation or that person may deem to be necessary or expedient;

• (b) the Corporation and the person designated by the Corporation have, for the purposes referred to in paragraph (a), a right of access to the records of the member institution; and

• (c) the member institution will cause its officers and auditors to furnish such information and explanations pertaining to its affairs as the Corporation or the person designated by the Corporation may require.

Marginal note:Costs may be charged back

28.1 Where an examination or an inspection is carried out other than once in each year, the Corporation may

• (a) pay the costs of the examination or inspection;

• (b) charge the costs to the member institution in respect of which they were incurred; and

• (c) recover the costs from the member institution as a debt due and payable to the Corporation.

Marginal note:Examination considerations

• 29 (1) The person who conducts an examination under section 27 or an inspection under section 28 in respect of a member institution shall make all examinations or inspections that the person considers necessary to

  • (a) provide, by way of a rating or any other means, an assessment of the safety and soundness of the member institution, including its financial condition;

  • (b) comment on the operations of the member institution; and

  • (c) if the member institution is a provincial institution and the Corporation and the person agree, comment on whether the provisions of the statutes governing the provincial institution are being complied with.

• Marginal note:Reports

  (2) The person shall provide written reports to the Corporation on the matters referred to in paragraphs (1)(a) to (c) in a timely manner.

• Marginal note:Right of Corporation to information

  (3) The Corporation is entitled to all information obtained by or produced by or for the person, whether in the course of conducting an examination or inspection or otherwise, regarding the affairs of the member institution or any of its affiliates or subsidiaries or of any person dealing with the member institution or any of its affiliates or subsidiaries, that relates to the safety and soundness, or the operations, of the member institution.

• Marginal note:Obligation to provide other information

  (4) Without limiting subsection (3), the person shall provide the Corporation with any information that the person considers relevant to any matter referred to in any of paragraphs (1)(a) to (c) or to any report provided under subsection (2).

• Marginal note:Obligation to inform

  (5) The person shall without delay inform the Corporation if, at any time, whether in the course of conducting an examination or inspection or otherwise, there comes to the attention of the person any change in the circumstances of the member institution that might materially affect the position of the Corporation as an insurer.

Marginal note:Review of returns

29.1 If requested to do so by the Corporation, the person who conducts an examination under section 27 or an inspection under section 28 in respect of a member institution shall review, or cause another person to review on the person’s behalf, within the time specified by the Corporation, the correctness of the returns made by the member institution on which its premiums are based and through which its premium classification is in part determined.

Marginal note:Certain reports to be provided to Corporation

29.2 When a report is sent by the Superintendent to the Minister under section 643 of the Bank Act, section 505 of the Trust and Loan Companies Act or section 437 of the Cooperative Credit Associations Act, a copy of the report shall be sent by the Superintendent at the same time to the Corporation.

Marginal note:Reporting defects or breaches

• 30 (1) Where, in the opinion of the Corporation, a member institution

  • (a) [Repealed, 2005, c. 30, s. 106]

  • (b) is in breach of any by-laws of the Corporation applicable thereto, or

  • (c) is in breach of any of the conditions of its policy of deposit insurance,

  the Corporation may send by registered mail or deliver by hand a report of the facts to the chief executive officer or chairperson of the board of directors of the member institution and shall provide a copy of the report to the Minister.

• Marginal note:Presentation of report to directors

  (2) The chief executive officer or chairperson of the board of directors of a member institution to whom a report has been sent or delivered under subsection (1) shall, within 15 days after the receipt of the report, cause

  • (a) the report to be presented to a meeting of the board of directors of the member institution and to be incorporated in the minutes of the meeting; and

  • (b) a certified copy of that portion of the minutes of the meeting that relates to the presentation of the report to be sent by registered mail to the chief executive officer of the Corporation at its head office.

Termination and Cancellation of Insurance

Marginal note:Notice of termination

• 31 (1) Where a report has been sent or delivered under subsection 30(1) and the progress made by the member institution in remedying the breach is not satisfactory to the Corporation, the Corporation shall, by notice,

  • (a) where the member institution is a federal member institution, so inform the institution and the Minister; and

  • (b) where the member institution is a provincial member institution, give the institution not less than thirty days notice of the termination of its policy of deposit insurance.

• Marginal note:Copy to provincial Minister

  (2) Where a notice of termination is given to a provincial member institution under subsection (1), the Corporation shall forthwith send a copy thereof to the appropriate provincial Minister.

• Marginal note:Termination of policy

  (3) The policy of deposit insurance of a provincial member institution shall terminate on the expiration of the period specified in the notice given under subsection (1) unless, before the expiration of that period,

  • (a) the Corporation is satisfied that the member institution is taking the necessary action to remedy the breach to which the notice relates; or

  • (b) the appropriate provincial Minister requests an extension of the period to enable the necessary remedial action to be taken, in which case the termination may be deferred by the Corporation for a further period not exceeding sixty days.

• Marginal note:Where report on federal member institution

  (4) Where a report has been sent or delivered under subsection 30(1) in respect of a federal member institution and the member institution and the Minister have been informed in accordance with subsection (1) by the Corporation that the Corporation is not satisfied with the member institution’s progress in remedying the breach to which the report relates, the Corporation may, unless the Minister advises the Corporation that the Minister is of the opinion that it is not in the public interest to do so, give the member institution not less than thirty days notice of the termination of its policy of deposit insurance.

• Marginal note:Termination of policy

  (5) The policy of deposit insurance of a federal member institution shall terminate on the expiration of the period specified in the notice given under subsection (4) or such later period not exceeding sixty days as the Corporation may determine unless, before the expiration of that period, the Corporation is satisfied that the member institution is taking the necessary action to remedy the breach to which the notice relates.

• Marginal note:Conditions of extension

  (5.1) The Corporation may impose conditions on a federal member institution in connection with any extension of the period referred to in subsection (5) and failure by the federal member institution to comply with any such condition constitutes a termination of the extension.

• Marginal note:Revoking notice

  (6) Where, at any time after a notice of termination has been given to a member institution under subsection 31(1) or (4), the Corporation is satisfied that as the result of any action by the member institution, or any other person, the risk to depositors or to the Corporation has been averted or substantially reduced, the Corporation may revoke its notice of termination.

Marginal note:Acceleration of termination of policy of deposit insurance

• 31.1 (1) Despite any other provision of this Act, if, at any time after a notice of termination has been given to a provincial member institution under subsection 31(1), the Corporation concludes that

  • (a) the financial condition of the provincial member institution has deteriorated since the giving of the notice, and

  • (b) the interests of depositors will be adversely affected by any further delay in terminating the provincial member institution’s policy of deposit insurance,

  the Corporation shall without delay send a notice by registered mail, or deliver a notice by hand, to the provincial member institution and to the appropriate provincial Minister, to the effect that the policy of deposit insurance of the institution will be terminated on the expiration of a period of five days after the receipt of the notice by the institution.

• Marginal note:Revocation

  (2) The Board of Directors of the Corporation or one of its committees established for the purpose may, before the expiry of the period specified in the notice, revoke the notice if, after considering any written representations made by the provincial member institution, it is satisfied that it is appropriate to do so.

• (3) [Repealed, 2007, c. 6, s. 414]

• Marginal note:Revocation

  (4) The Corporation shall revoke a notice sent or delivered under subsection (1) where the appropriate provincial Minister or provincial supervisor, as the case may be, has taken control of the provincial member institution or its assets.

• Marginal note:Termination of policy

  (5) Unless a notice sent or delivered under subsection (1) is revoked under subsection (3) or (4), the policy of deposit insurance of the provincial member institution to which the notice was sent or delivered shall terminate on the expiration of the period specified in the notice.

• Marginal note:Effect of revocation

  (6) The revocation of a notice under subsection (3) or (4) does not revoke a notice given under subsection 31(1).

Marginal note:Termination of policy by provincial member institution

• 32 (1) A provincial member institution may terminate a policy of deposit insurance by giving such notice of termination as may be required by the policy.

• Marginal note:Effect of termination

  (2) Unless the policy of deposit insurance of a provincial member institution otherwise provides, section 34 applies in respect of deposits with the institution on the termination of the policy by the institution.

Marginal note:Cancellation

• 33 (1) Subject to subsection (3), the policy of deposit insurance of a member institution may be cancelled by the Corporation if, in the opinion of the Corporation, the member institution

  • (a) is or is about to become insolvent;

  • (b) has ceased to accept deposits; or

  • (c) has not begun to accept deposits within a period of two years beginning on the day on which it became a member institution.

• Marginal note:Cancellation

  (2) If a member institution intends to cease to accept deposits, it must notify the Corporation and the institution’s policy of deposit insurance may, subject to subsection (3), be cancelled by the Corporation.

• Marginal note:No cancellation in certain cases

  (3) The Corporation shall notify the Minister and the Superintendent of the action it is proposing to take under subsection (1) or (2) and it shall not take the action if it is advised by the Minister that in the opinion of the Minister taking the action would not be in the public interest.

Marginal note:Effect of termination or cancellation

• 34 (1) If the policy of deposit insurance of a member institution is terminated or cancelled by the Corporation, the deposits with the institution on the day the termination or cancellation takes effect, less any withdrawals from those deposits, continue to be insured under the terminated or cancelled policy of deposit insurance for a period of two years or, in the case of a term deposit with a remaining term exceeding two years, to the maturity of the term deposit.

• Marginal note:Non-application of continued coverage

  (2) Subsection (1) does not apply in respect of a deposit with

  • (a) a member institution if the deposit has been assumed by another member institution; or

  • (b) a former member institution that has received authorization to accept deposits payable in Canada without being a member institution and the policy of deposit insurance of which has been cancelled.

• Marginal note:Corporations not member institutions

  (3) A corporation is not considered to be a member institution by reason only that its deposits continue to be insured under subsection (1).

• Marginal note:Continuing obligations

  (4) Termination or cancellation of a policy of deposit insurance does not relieve a former member institution from obligations and liabilities to the Corporation that have accrued before the termination or cancellation.

• Marginal note:Amendment of order

  (5) If the policy of deposit insurance of a federal member institution is cancelled by the Corporation under paragraph 33(1)(b) or (c) or subsection 33(2), the Superintendent must, under paragraph 54(1)(a) of the Bank Act, paragraph 62(1)(a) of the Cooperative Credit Associations Act or paragraph 58(1)(b) of the Trust and Loan Companies Act, as the case may be, amend the federal member institution’s order approving the commencement and carrying on of business to prohibit the institution from accepting deposits in Canada.

Marginal note:Creditor remedies available

• 35 (1) Where in the opinion of the Corporation a member institution is or is about to become insolvent, the Corporation is deemed to be a creditor of the member institution and the Corporation may initiate and take any measures or proceedings that a creditor of the member institution may initiate or take under law to preserve the assets of the member institution or to have it wound up or liquidated.

• Marginal note:No measures to be taken in certain cases

  (1.1) The Corporation shall notify the Minister of the action it is proposing to take under subsection (1) and shall not take the action if it is advised by the Minister that in the opinion of the Minister taking the action would not be in the public interest.

• Marginal note:Presumption

  (2) For the purposes of this section, the Corporation is deemed to be a creditor of a member institution despite the termination or cancellation of the institution’s policy of deposit insurance.

Marginal note:Removal of references to deposit insurance

• 36 (1) If the policy of deposit insurance of a member institution is terminated or cancelled, the member institution shall notify its depositors of that fact and shall remove all references to deposit insurance under this Act from all forms of advertising by the institution.

• Marginal note:Public notice

  (2) The Corporation may, in the manner and through any news media that it considers appropriate, give public notice of the termination or cancellation of the policy of deposit insurance of a member institution if, in the opinion of the Corporation, the public interest requires that such notice be given.

Provincial Insuring Arrangements

Marginal note:Provincial deposit insurance

• 37 (1) If under the law of any province the government of the province or an agent of that government guarantees or insures any of the deposits with a provincial institution operating within the province, the Corporation, subject to section 17.1 and any agreement entered into under subsection (3), may

  • (a) insure some or all of the deposits with the institution; or

  • (b) amend the institution’s policy of deposit insurance, to exclude from the policy any of the deposits with the institution.

• (2) [Repealed, 2007, c. 6, s. 419]

• Marginal note:Agreement with province

  (3) The Corporation may, with the approval of the Governor in Council, enter into an agreement with the government, or an agent of the government, of a province referred to in subsection (1), to provide for reciprocal arrangements relating to the administration or operation of the law of that province and of this Act.

• Marginal note:Regulations

  (4) For the purpose of enabling the Corporation to carry out an insuring arrangement referred to in subsection (1) or provided for in an agreement under subsection (3), the Governor in Council may, by regulation, make provision for any matter or thing arising from the insuring arrangement or agreement.

• Marginal note:Refund of premiums

  (5) Where the Corporation during any premium year ceases to insure any of the deposits held by a member institution that is a provincial institution, by reason of the fact that such deposits are guaranteed or insured pursuant to the law of a province, the Corporation may refund to that provincial institution the proportion of the premium paid by the provincial institution to the Corporation for that premium year in respect of those deposits that bears the same relation to the premium for the full premium year in respect of those deposits that the unexpired part of the premium year bears to the full premium year, but in no case shall a refund be made that will reduce the premium paid by the provincial institution to the Corporation for the premium year to less than five thousand dollars.

• Marginal note:Saving

  (6) Nothing in this section shall be construed as authorizing the Corporation to insure deposits contrary to section 12.

• Definition of deposits

  (7) In this section, deposits includes a part of a deposit.

Marginal note:Agreements for examination of provincial institutions

• 38 (1) Notwithstanding section 28, the Corporation may enter into an agreement with the government, or an agent of the government, of a province referred to in subsection 37(1) to provide for

  • (a) the exchange between the Corporation and that government or agent of information that is obtained by any examination of provincial institutions required by this Act or the law of that province; and

  • (b) special examinations, by representatives of both parties to the agreement and at the request of either party, of any of the provincial institutions that are member institutions operating in that province.

• Marginal note:In lieu of examination

  (2) The Corporation may accept information received from an exchange of information referred to in paragraph (1)(a) in lieu of any examination required by this Act.

Marginal note:Short term loans to insuring agents

39 The Corporation may, with the approval of the Governor in Council and on such terms and conditions as the Governor in Council may prescribe, enter into an agreement with an agent of the government of a province that guarantees or insures deposits with provincial institutions in that province, to extend to that agent short term loans, secured by such security as the Corporation deems adequate, to enable that agent to meet short term requirements for liquid funds arising from its operations.

Restructuring of Federal Member Institutions

Vesting in Corporation and Appointing Corporation as Receiver

Marginal note:Report of Superintendent

• 39.1 (1) Where the Superintendent is of the opinion that

  • (a) a federal member institution has ceased, or is about to cease, to be viable, and

  • (b) the viability of the federal member institution cannot be restored or preserved by the exercise of the Superintendent’s powers under the Bank Act, the Trust and Loan Companies Act or the Cooperative Credit Associations Act,

  the Superintendent, after providing the federal member institution with a reasonable opportunity to make representations, shall, in writing, report thereon to the Corporation.

• Marginal note:Forming opinion

  (2) For the purposes of subsection (1), the Superintendent may take into account all matters the Superintendent considers relevant, but in all cases the Superintendent shall have regard to whether, in the opinion of the Superintendent,

  • (a) the federal member institution is dependent to an excessive extent on loans, advances, guarantees or other financial assistance to sustain its operations;

  • (b) the federal member institution has lost the confidence of depositors and the public;

  • (c) the federal member institution’s regulatory capital, within the meaning assigned to that expression by the Bank Act, the Trust and Loan Companies Act or the Cooperative Credit Associations Act, whichever is applicable, is or is about to become substantially deficient; or

  • (d) the federal member institution has failed to pay any liability that has become due and payable or will not be able to pay its liabilities as they become due and payable.

• Marginal note:Report by Superintendent on winding-up circumstances

  (3) Where the Superintendent is of the opinion that

  • (a) circumstances exist in respect of a federal member institution that would allow the Superintendent to take control of the federal member institution under the Bank Act, the Trust and Loan Companies Act or the Cooperative Credit Associations Act, and

  • (b) if such control were taken, grounds would exist for the making of a winding-up order in respect of the federal member institution,

  the Superintendent, after providing the federal member institution with a reasonable opportunity to make representations, shall, in writing, report thereon to the Corporation.

• Marginal note:Urgency

  (4) Despite subsections (1) and (3), the Superintendent may report to the Corporation orally if he or she is of the opinion that the federal member institution’s circumstances must be considered without delay.

Marginal note:Request of Corporation

39.11 On receipt of a report made by the Superintendent pursuant to section 39.1 and after having taken into account whether

• (a) an agreement for a transaction referred to in section 39.2 is reasonably likely to be expeditiously entered into after the making of the order, and

• (b) any such transaction would be consistent with the objects of the Corporation,

the Corporation may request the Minister to recommend that one or more orders be made under subsection 39.13(1).

Marginal note:Recommendation of Minister

39.12 Where a request referred to in section 39.11 is made by the Corporation, the Minister may, if the Minister is of the opinion that it is in the public interest to do so, recommend to the Governor in Council that one or more orders be made in respect of the federal member institution under subsection 39.13(1).

Marginal note:Order

• 39.13 (1) The Governor in Council may, on the recommendation of the Minister made under section 39.12, by order,

  • (a) vest the shares and subordinated debt of the federal member institution in the Corporation;

  • (b) appoint the Corporation as receiver in respect of the federal member institution; or

  • (c) direct the Minister to incorporate a federal institution designated in the order as a bridge institution and specify the date and time as of which the federal member institution’s deposit liabilities are assumed.

• Marginal note:Condition precedent

  (1.1) The making of an order, under paragraph (1)(b), appointing the Corporation as receiver of the federal member institution is a condition precedent to the making of an order under paragraph (1)(c) in respect of the federal member institution.

• Marginal note:Effects of vesting order

  (2) An order made under paragraph (1)(a)

  • (a) vests the shares and subordinated debt of the federal member institution in the Corporation free from any adverse claim, including any claim that a transfer was wrongful or that a particular adverse person was the owner of or had an interest in the shares or subordinated debt, even though the Corporation knows of the adverse claim;

  • (b) extinguishes any such adverse claim to the extent that the claim is a claim that a person other than the Corporation is the owner of or has an interest in the shares or subordinated debt;

  • (c) does not extinguish any such adverse claim to the extent that the claim is a personal claim against a person other than the Corporation or a person claiming under it; and

  • (d) does not prevent a secured creditor or assignee or successor in interest of the person who was the holder of the shares or subordinated debt immediately before the making of the order from being entitled to receive compensation under section 39.28 or 39.32.

• Marginal note:Federal credit union

  (2.1) In addition to subsection (2), if an order made under paragraph (1)(a) is in respect of a federal credit union, the Corporation has the powers, rights and privileges it would have if it were a member of the federal credit union and the federal credit union is exempt from any requirement to have a minimum number of members for so long as the shares are vested in the Corporation.

• Marginal note:Effects of receivership order

  (3) An order made under paragraph (1)(b)

  • (a) constitutes the Corporation as the exclusive receiver of the assets and undertaking of the federal member institution or of such part thereof as may be specified in the order;

  • (b) gives the Corporation, as receiver, in respect of the assets and undertaking of the federal member institution or such part thereof as may be specified in the order, the power to

    • (i) enter the federal member institution and take possession and control of the assets and require any person therein to account for and deliver up to the Corporation possession and control of the assets,

    • (ii) subject to subparagraph (iii), sell or otherwise dispose of the assets and undertaking by private or public sale or in such other manner and on such terms and conditions as the Corporation deems appropriate,

    • (iii) sell or otherwise dispose of any asset that is subject to an agreement creating a security interest to any person who agrees to assume the obligation secured by the security interest,

    • (iv) arrange for the assumption by any person of all or any part of the federal member institution’s liabilities,

    • (v) carry on the business of the federal member institution to the extent that the Corporation deems is necessary or beneficial to the receivership,

    • (vi) sue for, defend, compromise and settle, in the name of the federal member institution, any claim made by or against it,

    • (vii) in the name of the federal member institution, do all acts and execute all receipts and other documents and for that purpose, when necessary, use its seal, and

    • (viii) do all such other things as may be necessary or incidental to the exercise of the Corporation’s rights, powers, privileges and immunities as receiver; and

  • (c) gives the Corporation the right to recover out of the assets of the federal member institution all the costs, charges and expenses properly incurred by the Corporation in the receivership, in priority to all other claims.

• Marginal note:General, re orders

  (4) For greater certainty,

  • (a) shares and subordinated debt of a federal member institution that, immediately before the making of an order under paragraph (1)(a), are vested in a trustee in bankruptcy under the Bankruptcy and Insolvency Act are vested in the Corporation; and

  • (b) an order made under paragraph (1)(b) prevents any person, other than the Corporation, who is the holder of shares or subordinated debt of the federal member institution, and any secured creditor or assignee or successor in interest of such person, from exercising any voting or other rights attached to the shares or subordinated debt or arising from the holder’s status as such in any manner that would or might tend to defeat or interfere with the rights, powers, privileges and immunities of the Corporation as receiver.

• Marginal note:Receiver order dealings

  (5) Where an order is made under paragraph (1)(b),

  • (a) the Corporation, as receiver, may exercise its powers, rights, privileges and immunities without leave, approval or other intervention of a court, but may seek the assistance of a superior court in order to give effect to those powers, rights, privileges and immunities,

  • (b) an asset of the federal member institution that is acquired from the Corporation, as receiver, shall, except to the extent that it is an asset referred to in paragraph (3)(b)(iii), be acquired free of any adverse claim of the federal member institution or any other person, and

  • (c) the Corporation, as receiver, may cause or refrain from causing any obligation of the federal member institution to be performed and may cause the federal member institution to incur an obligation or do so on its behalf,

  and the Corporation shall not, by reason of its appointment as receiver or any action taken by it, be held to have assumed or incurred any obligation of the federal member institution for its own account.

• Marginal note:Non-liability — environmental matters

  (5.1) Without limiting the generality of subsection (5) and despite anything in federal or provincial law, the Corporation, as receiver, is not liable in that capacity for any environmental condition that arose or environmental damage that occurred

  • (a) before the Corporation’s appointment as receiver; or

  • (b) after the Corporation’s appointment as receiver unless it is established that the condition arose or the damage occurred as a result of the Corporation’s gross negligence or wilful misconduct or, in Quebec, the Corporation’s gross or intentional fault.

• Marginal note:Reports, etc., still required

  (5.2) Nothing in subsection (5.1) exempts the Corporation, as receiver, from any duty to report or make disclosure imposed by a law referred to in that subsection.

• Marginal note:Non-liability — certain orders

  (5.3) Without limiting the generality of subsection (5) and despite anything in federal or provincial law but subject to subsection (5.2), if an order is made that has the effect of requiring the Corporation, as receiver, to remedy any environmental condition or environmental damage affecting property involved in the receivership, the Corporation, as receiver, is not liable for failure to comply with the order, and is not liable for any costs that are or would be incurred by any person in carrying out the terms of the order,

  • (a) if, within the time that is specified in the order, or within 10 days after the appointment of the Corporation as receiver if the order is in effect when the Corporation is appointed as receiver, the Corporation, as receiver,

    • (i) complies with the order, or

    • (ii) on notice to the person who issued the order, abandons, disposes of or otherwise releases any interest in any real property, or any right in any immovable, affected by the condition or damage; or

  • (b) if the Corporation, as receiver, had, before the order was made, abandoned, disposed of or otherwise released any interest in any real property, or any right in any immovable, affected by the condition or damage.

• Marginal note:Non-liability — employees

  (5.4) Without limiting the generality of subsection (5) and despite anything in federal or provincial law, the Corporation, as receiver, is not liable in respect of a liability, including one as a successor employer,

  • (a) that is in respect of the employees or former employees of the federal member institution or a predecessor of the federal member institution or in respect of a pension plan for the benefit of those employees or former employees; and

  • (b) that existed before the Corporation is appointed as receiver or that is calculated by reference to a period before the Corporation’s appointment.

• Marginal note:Liability of other successor employers

  (5.5) Subsection (5.4) does not affect the liability of a successor employer other than the Corporation, as receiver.

• Marginal note:Order conclusive

  (6) An order of the Governor in Council under this section is for all purposes final and conclusive and shall not be questioned or reviewed in any court.

Marginal note:Order to exempt or adapt

• 39.131 (1) The Governor in Council may, by order,

  • (a) exempt a federal member institution in respect of which an order directing the incorporation of a bridge institution is made, a bridge institution, a subsidiary of any of those institutions or any other person from the application of any provision of this Act or the regulations or of the following Acts or regulations made under them:

    • (i) the Bank Act,

    • (ii) the Canadian Payments Act,

    • (iii) the Cooperative Credit Associations Act,

    • (iv) the Financial Consumer Agency of Canada Act,

    • (v) the Insurance Companies Act,

    • (vi) the Office of the Superintendent of Financial Institutions Act,

    • (vii) the Trust and Loan Companies Act, and

    • (viii) the Winding-up and Restructuring Act; or

  • (b) provide that any provision of this Act or the regulations or of the Acts referred to in paragraph (a) or regulations made under them applies to a federal member institution in respect of which an order directing the incorporation of a bridge institution is made, a bridge institution, a subsidiary of any of those institutions or any other person but only in the manner and to the extent provided for in the order and adapt that provision for the purpose of that application.

• Marginal note:Scope or conditions

  (2) The exemption may be limited in scope or duration or made subject to conditions.

Marginal note:Coming into force

• 39.132 (1) An order made under subsection 39.131(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 the order to be published in the Canada Gazette as soon as the Minister considers appropriate.

Marginal note:Powers of Corporation

• 39.14 (1) Where an order in respect of a federal member institution is made under

  • (a) paragraph 39.13(1)(a), the powers, duties, functions, rights and privileges of the directors of the federal member institution and those of its officers responsible for its management are suspended, or

  • (b) paragraph 39.13(1)(b), the powers, duties, functions, rights and privileges of the directors of the federal member institution and those of its officers responsible for its management are suspended as regards the assets and undertaking of which the Corporation has been appointed receiver

  and the Corporation may exercise or perform those powers, duties, functions, rights and privileges.

• Marginal note:Suspension of powers, rights, etc.

  (1.1) In addition to subsection (1), if an order made under paragraph 39.13(1)(a) or (b) is in respect of a federal credit union, the powers, rights and privileges of its members are suspended, but nothing in this subsection affects the powers, rights and privileges of the Corporation under subsection 39.13(2.1).

• Marginal note:Persons to assist

  (2) The Corporation may appoint one or more persons to assist it in the management of any federal member institution or in carrying out the Corporation’s functions as receiver and may delegate to those persons any of the powers, duties, functions, rights or privileges of the directors and officers of the federal member institution referred to in paragraph (1)(a) or (b).

• Marginal note:Certain powers, etc., of directors not affected

  (3) Nothing in subsection (1) shall be construed as preventing the directors of the federal member institution from exercising the powers, duties, functions, rights and privileges of directors in respect of the rights of the federal member institution under sections 39.23 to 39.36.

Marginal note:Stay of proceedings

• 39.15 (1) Where an order is made under subsection 39.13(1),

  • (a) no action or other civil proceeding before a judicial or quasi-judicial body and no arbitration may be commenced or continued against the federal member institution or in respect of its assets other than a proceeding under the Winding-up and Restructuring Act commenced by the Corporation or the Attorney General of Canada;

  • (b) no attachment, garnishment, execution or other method of enforcement of a judgment or order against the federal member institution or its assets may take place or continue;

  • (c) no creditor of the federal member institution has any remedy against the federal member institution or its assets;

  • (d) no creditor has any right of set-off against the federal member institution, which, for greater certainty, does not include the consolidation of accounts maintained in the normal course for the purpose of providing clearing and settlement services or the services referred to in paragraph (5)(c);

  • (e) no person may terminate or amend any agreement with the federal member institution or claim an accelerated payment, or forfeiture of the term, under any such agreement with the federal member institution by reason only of

    • (i) the federal member institution’s insolvency,

    • (ii) a default, before the order was made, by the federal member institution in the performance of its obligations under the agreement,

    • (iii) the making of the order, or

    • (iv) the agreement being assigned to or assumed by the bridge institution; and

  • (f) no person may terminate the federal member institution’s membership in an organization by reason only of

    • (i) the default by the federal member institution in the performance of its obligations under the rules of the organization,

    • (ii) the making of the order, or

    • (iii) the federal member institution’s membership being transferred to the bridge institution.

• Marginal note:Agreements overridden

  (2) Where an order is made under subsection 39.13(1), any stipulation in an agreement is of no force or effect if it

  • (a) has the effect of providing for, or permitting, anything that, in substance, is contrary to paragraph (1)(e) or 39.13(3)(b); or

  • (b) provides, in substance, that the federal member institution ceases to have the rights — or, in the case of a bridge institution, does not have the rights — to use or deal with assets that the federal member institution or bridge institution would otherwise have, on

    • (i) the federal member institution’s insolvency,

    • (ii) the default by the federal member institution in the performance of its obligations,

    • (iii) the making of the order, or

    • (iv) the agreement being assigned to or assumed by the bridge institutions.

• Marginal note:Organization’s rules — no force or effect

  (2.1) If an order is made under subsection 39.13(1), any stipulation in the rules of an organization is of no force or effect if it

  • (a) has the effect of providing for or permitting anything that, in substance, is contrary to paragraph (1)(f) or 39.13(3)(b); or

  • (b) provides, in substance, that the federal member institution ceases to have the rights — or, in the case of the bridge institution, does not have the rights — of a member of the organization, that the federal member institution or the bridge institution would otherwise have, on

    • (i) the federal member institution’s insolvency,

    • (ii) the default by the federal member institution in the performance of its obligations,

    • (iii) the making of the order, or

    • (iv) the federal member institution’s membership being transferred to the bridge institution.

• Marginal note:Clearing arrangements

  (3) Subsections (1) and (2) do not apply so as to prevent a member of the Canadian Payments Association from acting or ceasing to act as a clearing agent for a federal member institution in accordance with the Canadian Payments Act and the by-laws and rules of that Association.

• Marginal note:Clearing agent

  (3.1) A member of the Canadian Payments Association that acts as a clearing agent for a federal member institution at the time an order directing the incorporation of a bridge institution is made with respect to the federal member institution shall act as a clearing agent for the bridge institution, if the Corporation undertakes to

  • (a) unconditionally guarantee the federal member institution’s obligations to the clearing agent as clearing agent; or

  • (b) ensure that the federal member institution’s obligations to the clearing agent as clearing agent are assumed by the bridge institution.

• Marginal note:Rights subject to set-off

  (4) A federal member institution in respect of which an order is made under subsection 39.13(1) may not enforce against a person a right to receive an amount against which the person, but for paragraph (1)(d), would have a right of set-off.

• Marginal note:Further supplies and advances

  (5) Nothing in subsection (1) or (2) shall be construed

  • (a) as prohibiting a person from requiring payments to be made in cash for goods, services, use of leased or licensed property or other valuable consideration provided after the making of the order;

  • (b) as requiring the advance to a federal member institution in respect of which an order is made under subsection 39.13(1) of money or credit after the making of the order; or

  • (c) as requiring the provision to a federal member institution in respect of which an order is made under subsection 39.13(1) of any of the following services where to do so would be likely, in the reasonable opinion of the person providing the service, to result in that person advancing money or credit to the federal member institution after the making of the order or to give rise, after the making of the order, to a claim of that person against the federal member institution, namely,

    • (i) cash management services,

    • (ii) services related to the redemption of debt instruments,

    • (iii) services related to the issuance of letters of credit or guarantees,

    • (iv) cheque certification services,

    • (v) currency supply services,

    • (vi) funds transfer services and remittance order services,

    • (vii) securities delivery and settlement services,

    • (viii) charge, credit, debit and payment card services,

    • (ix) automated banking and teller machine services,

    • (x) electronic funds transfer at point of sale services,

    • (xi) consignment cheque services,

    • (xii) other services similar to those referred to in subparagraphs (i) to (xi),

    • (xiii) any service of a kind prescribed by the regulations, and

    • (xiv) a guarantee of liabilities in respect of any of the services referred to in subparagraphs (i) to (xiii).

• Marginal note:Security agreements

  (6) Paragraphs (1)(b) to (e) and subsection (2) do not apply in respect of a remedy under, or a stipulation of, a security agreement creating a security interest in assets of a federal member institution if

  • (a) an obligation secured by the security agreement is to the Bank of Canada or the Corporation; or

  • (b) the Superintendent, on the application of the federal member institution, exempted the security agreement from the application of those paragraphs and that subsection before the making of an order under subsection 39.13(1) and, in the case of an order directing the incorporation of a bridge institution, the Corporation does not undertake to ensure that the obligations secured by the security interest will be assumed by the bridge institution and does not undertake to unconditionally guarantee payment of the obligations secured by the security interest.

• Marginal note:Financial contracts

  (7) Nothing in subsection (1) or (2) prevents the following actions from being taken in accordance with the provisions of an eligible financial contract:

  • (a) the termination of the contract;

  • (b) the netting or setting off or compensation of an amount payable under or in connection with the contract; or

  • (c) any dealing with financial collateral including

    • (i) the sale or foreclosure or, in the Province of Quebec, the surrender of financial collateral, and

    • (ii) the setting off or compensation of financial collateral or the application of the proceeds or value of financial collateral.

• Marginal note:Stay — eligible financial contracts

  (7.01) If an order directing the incorporation of a bridge institution is made, the actions referred to in subsection (7) are not to be taken during the period beginning on the coming into force of the order and ending on the following business day at 5:00 p.m. at the location of the Corporation’s head office, by reason only of

  • (a) the federal member institution’s insolvency;

  • (b) the making of an order appointing the Corporation as receiver in respect of the federal member institution or the making of the order directing the incorporation of the bridge institution; or

  • (c) the eligible financial contract being assigned to or assumed by the bridge institution.

• Marginal note:Exception

  (7.02) Subsection (7.01) does not apply in respect of an eligible financial contract between the federal member institution and a clearing house, as defined in section 2 of the Payment Clearing and Settlement Act, that provides clearing and settlement services for a clearing and settlement system designated under section 4 of that Act or between the federal member institution and a securities and derivatives clearing house as defined in subsection 13.1(3) of that Act.

• Marginal note:Definition of business day

  (7.03) For the purpose of subsection (7.01), business day means a day other than a Saturday, a Sunday or any other day on which the clearing and settlement systems operated by the Canadian Payments Association are closed.

• Marginal note:Corporation’s undertaking — eligible financial contracts

  (7.1) If an order directing the incorporation of a bridge institution is made and the Corporation undertakes to unconditionally guarantee the payment of any amount due or that may become due by the federal member institution, in accordance with the provisions of the eligible financial contract, or to ensure that all obligations of the federal member institution arising from the eligible financial contract will be assumed by the bridge institution, the actions referred to in subsection (7) are not to be taken by reason only of

  • (a) the federal member institution’s insolvency;

  • (b) the making of an order appointing the Corporation as receiver in respect of the federal member institution or the making of the order directing the incorporation of the bridge institution; or

  • (c) the eligible financial contract being assigned to or assumed by the bridge institution.

• Marginal note:Agreements overridden

  (7.11) Any stipulation in an eligible financial contract is of no force or effect if it

  • (a) has the effect of providing for or permitting anything that, in substance, is contrary to subsection (7.01) or (7.1); or

  • (b) provides, in substance, that, by reason of the occurrence of any circumstance described in any of paragraphs (7.01)(a) to (c) and (7.1)(a) to (c), the federal member institution ceases to have the rights — or, in the case of a bridge institution, does not have the rights — to use or deal with assets that the federal member institution or bridge institution would otherwise have.

• Marginal note:Assignment of eligible financial contracts

  (7.2) The Corporation may assign to a bridge institution eligible financial contracts — including any claim under such contracts — that are between a federal member institution and an entity or any of the following entities provided that the Corporation assigns all of those eligible financial contracts to the bridge institution:

  • (a) another entity that is controlled — directly or indirectly — by the entity;

  • (b) another entity that controls — directly or indirectly — the entity; or

  • (c) another entity that is controlled — directly or indirectly — by the entity referred to in paragraph (b).

• Marginal note:Assignment to bridge institution

  (7.3) If the eligible financial contracts are assigned to a bridge institution,

  • (a) the undertaking referred to in subsection (7.1) that is provided applies to all the eligible financial contracts that are assigned; and

  • (b) the federal member institution’s interest or, in Quebec, right in property that secures its obligations under an eligible financial contract that is assigned is transferred to the bridge institution.

• Marginal note:Regulations

  (8) The Governor in Council may make regulations prescribing

  • (a) kinds of services for the purposes of subparagraph (5)(c)(xiii); and

  • (b) kinds of agreements for the purposes of the definition eligible financial contract in subsection (9).

• Marginal note:Definitions

  (9) The following definitions apply in this section.

  eligible financial contract

  contrat financier admissible

  eligible financial contract means an agreement of a prescribed kind. (contrat financier admissible)

  financial collateral

  garantie financière

  financial collateral has the same meaning as in subsection 13(2) of the Payment Clearing and Settlement Act. (garantie financière)

  title transfer credit support agreement

  accord de transfert de titres pour obtention de crédit

  title transfer credit support agreement means an agreement under which title to property has been provided for the purpose of securing the payment or performance of an obligation in respect of an eligible financial contract. (accord de transfert de titres pour obtention de crédit)

Marginal note:Stay of proceedings — bridge institution

• 39.151 (1) Any action or other civil proceeding before a judicial or quasi-judicial body and any arbitration, to which a bridge institution may become a party by virtue of acquiring an asset or assuming a liability of the federal member institution shall be stayed for a period of 90 days from the day on which the bridge institution acquires the asset or assumes the liability.

• Marginal note:Waiver

  (2) The bridge institution may waive the stay referred to in subsection (1).

Marginal note:Assignments — bridge institution

• 39.152 (1) Subject to subsection (2), if an agreement with a federal member institution is assigned to or assumed by a bridge institution

  • (a) a person is prohibited from terminating or amending the agreement, or claiming an accelerated payment or forfeiture of the term under the agreement, by reason only of

    • (i) the federal member institution’s insolvency;

    • (ii) a non-monetary default by the federal member institution in the performance of its obligations under the agreement;

    • (iii) a monetary default by the federal member institution under the agreement that is remedied by the bridge institution within 60 days following the assignment or assumption of the agreement;

    • (iv) the making of an order under subsection 39.13(1), or

    • (v) the agreement being assigned to or assumed by a bridge institution; and

  • (b) any stipulation in the agreement that has the effect of providing for or permitting anything that, in substance, is contrary to any of subparagraphs (a)(i) to (v) or provides, in substance, that the bridge institution does not have the rights to use or deal with assets that the bridge institution would otherwise have by reason of the occurrence of any circumstance described in those subparagraphs, is of no force or effect.

• Marginal note:Exception

  (2) Subparagraphs (1)(a)(ii) and (iii) do not apply to an eligible financial contract as defined in subsection 39.15(9).

• Marginal note:Membership in an organization

  (3) If a bridge institution becomes a member of an organization in place of a federal member institution, it is prohibited for the organization to terminate the bridge institution’s membership by reason only of

  • (a) the federal member institution’s insolvency;

  • (b) the making of an order under subsection 39.13(1);

  • (c) a default by the federal member institution in the performance of its obligations under the rules of the organization; or

  • (d) the federal member institution’s membership being transferred to the bridge institution.

Marginal note:Exemption

39.16 The Governor in Council may, in an order made under subsection 39.13(1), provide that subsection 39.15(1) or (2) or any portion thereof does not apply in respect of the federal member institution.

Marginal note:Leave of court

• 39.17 (1) A superior court may, on any terms that it considers proper, grant leave to a person to do anything that the person would otherwise be prevented from doing by section 39.15 or lift, or reduce the length of, a stay under section 39.151 if the court is satisfied

  • (a) that the person is likely to be materially prejudiced if leave is not granted; or

  • (b) that it is equitable on other grounds to grant leave.

• Marginal note:Corporation to be made party

  (2) The Corporation must be joined as a respondent in any application under subsection (1) and is entitled to such notice of the application as the court considers proper.

• Marginal note:Orders of national effect

  (3) An order of a superior court of a province under subsection (1) may, if the order so provides, have effect in all or a part of Canada outside the province.

Marginal note:Termination

• 39.18 (1) Sections 39.14 and 39.15 cease to apply in respect of a federal member institution

  • (a) on the date specified in a notice described in subsection 39.2(3) in respect of the federal member institution; or

  • (b) on the date that a winding-up order is made in respect of the federal member institution.

• Marginal note:Exception

  (2) Subsection (1) does not apply to subsections 39.15(7.01), (7.02), (7.11) and (7.2) and, only for the purpose of interpreting those subsections, to subsections 39.15(7), (7.03) and (9).

Marginal note:Part VII of Bank Act, etc., inapplicable

• 39.19 (1) The following enactments do not apply in respect of shares of a federal member institution that are vested in the Corporation by an order made under paragraph 39.13(1)(a):

  • (a) section 12.1, paragraph 28(1)(a.1), section 35.1, paragraphs 40(f) and (g), sections 40.1, 47.03, 47.04, 47.06, 47.11, 47.12, 47.15, 47.17 and 47.18, subsection 53(2), paragraph 54(1)(b), section 60.1, subsections 79.2(1) and (2) and sections 159.1, 372, 373, 374, 375, 376, 376.1, 376.2, 377, 377.1, 377.2, 379, 382.1, 385, 401.11, 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 and 396 and subsection 399(2) of the Trust and Loan Companies Act.

• Marginal note:Public holding requirement re parent

  (2) An exemption from the application of section 385 of the Bank Act, section 411 of the Insurance Companies Act or section 379 of the Trust and Loan Companies Act that is granted under section 388 of the Bank Act, section 414 of the Insurance Companies Act or section 382 of the Trust and Loan Companies Act continues in force notwithstanding that the entity that controls the bank, insurance company, trust company or loan company is a federal member institution the shares of which are vested in the Corporation by an order made under paragraph 39.13(1)(a).

• Marginal note:Termination

  (3) Subsections (1) and (2) cease to apply in respect of a federal member institution on the date specified in a notice described in subsection 39.2(3) in respect of the federal member institution.

Marginal note:Provisions do not apply

• 39.191 (1) Section 12.1, paragraph 28(1)(a.1), section 35.1, paragraphs 40(f) and (g), section 40.1, 47.11, 47.12, 47.15 and 47.18, subsection 53(2), paragraph 54(1)(b) and section 159.1 of the Bank Act do not apply if the Corporation is appointed as receiver of a federal member institution that is a federal credit union by an order made under paragraph 39.13(1)(b).

• Marginal note:Termination

  (2) Subsection (1) ceases to apply in respect of a federal member institution on the date specified in a notice described in subsection 39.2(3) in respect of the federal member institution.

Restructuring Transactions

Marginal note:Restructuring transactions

• 39.2 (1) Where an order has been made under paragraph 39.13(1)(a), the Corporation may, in addition to and not in lieu of any other of its rights and powers, carry out, or cause the federal member institution to carry out,

  • (a) a transaction or series of transactions that involves the sale of all or part of the shares or subordinated debt of the federal member institution;

  • (b) a transaction that involves the amalgamation of the federal member institution;

  • (c) a transaction or series of transactions that involves the sale or other disposition by the federal member institution of all or part of its assets or the assumption of all or part of its liabilities, or both; or

  • (d) any other transaction or series of transactions the purpose of which is to restructure a substantial part of the business of the federal member institution.

• Marginal note:Transactions for disposition of assets, etc., or restructuring

  (2) Where an order has been made under paragraph 39.13(1)(b), the Corporation, as receiver, may, in addition to any other of its rights and powers, carry out

  • (a) a transaction or series of transactions that involves the sale or other disposition by the Corporation as receiver of all or part of the assets of the federal member institution or the assumption by another person of all or part of its liabilities, or both; or

  • (b) any other transaction or series of transactions the purpose of which is to restructure a substantial part of the business of the federal member institution.

• Marginal note:Completion of transaction

  (3) Where the Corporation considers that a transaction or series of transactions referred to in subsection (1) or (2) has been substantially completed, it shall cause a notice to that effect, specifying the date on which the transaction or series of transactions was, in the opinion of the Corporation, substantially completed, to be published in the Canada Gazette.

• Marginal note:Negative pledges inapplicable

  (4) No restriction on the right of the federal member institution to amalgamate, to sell or otherwise dispose of any of its assets or to provide for the assumption of any of its liabilities, other than a restriction provided for in an Act of Parliament, applies so as to prevent the Corporation, the federal member institution or any other person from carrying out a transaction described in subsection (1) or (2).

• Marginal note:Approval by Minister

  (5) A transaction referred to in subsection (1) or (2) has no force or effect until it is approved by the Minister, unless it is between the Corporation, as receiver for a federal member institution, and a bridge institution.

• Marginal note:Novation

  (6) Any person who assumes a liability of the federal member institution under a transaction referred to in subsection (1) or (2) becomes liable — instead of the federal member institution — to discharge the liability, on approval of the transaction by the Minister or as soon as the person assumes the liability if the transaction does not require the Minister’s approval.

• Marginal note:Exception

  (7) Subsection (6) does not apply to the bridge institution’s assumption of any portion of the federal member institution’s liability that is not insured by the Corporation.

• Marginal note:Novation — trust

  (8) A trust company within the meaning of subsection 57(2) of the Trust and Loan Companies Act that is designated as a bridge institution may become a trustee in substitution for the federal member institution without formality or the consent of any beneficiary of the trust.

Marginal note:Terms and conditions of transactions

• 39.201 (1) If the Corporation as receiver for a federal member institution carries out a transaction with a bridge institution, the Corporation shall establish the terms and conditions of the transaction, including

  • (a) which assets the bridge institution shall acquire and the consideration to be paid for the assets acquired; and

  • (b) which liabilities the bridge institution shall assume and the consideration to be paid for the liabilities assumed.

• Marginal note:Reasonable consideration

  (2) The consideration referred to in paragraph (1)(a) shall be reasonable in the circumstances.

• Marginal note:Compensation

  (3) Nothing in subsections (1) and (2) prevents the federal member institution from seeking compensation under subsections 39.24(2) and (3) and sections 39.25 to 39.361.

Marginal note:Deposit liabilities assumed

• 39.202 (1) A bridge institution shall assume a federal member institution’s deposit liabilities that are both insured by the Corporation and posted in the federal member institution’s records as of the date and time specified in the order referred to in paragraph 39.13(1)(c).

• Marginal note:Interest

  (1.1) Any interest accrued on the deposit liabilities referred to in subsection (1) is assumed by the bridge institution.

• Marginal note:Deeming deposits or withdrawals not entered

  (1.2) Any deposit or withdrawal that is made on or before that date and time but is not posted in the records of the federal member institution as of that date and time, and any deposit or withdrawal made after that date and time, are deemed to be deposited with or withdrawn from, as the case may be, the bridge institution.

• Marginal note:Interest

  (1.3) Any interest accruing on the deposits referred to in subsection (1.2) is owed by the bridge institution.

• Marginal note:Subrogation

  (2) If the bridge institution assumes any portion of a federal member institution’s liability that is not insured by the Corporation, the bridge institution is subrogated to all the rights and interests of the creditor against the federal member institution in relation to the entire liability and may maintain an action in respect of those rights and interests in its own name or in the name of the creditor.

• Marginal note:Creditor’s rights and interests

  (3) As soon as the bridge institution receives an amount equal to the liabilities that are not insured by the Corporation that it assumed, the rights and interests in respect of the balance remaining revert to the creditor.

Marginal note:Liquidator bound

• 39.203 (1) The liquidator of a federal member institution appointed under the Winding-up and Restructuring Act is bound by the terms and conditions of any transaction that involves the sale or other disposition of the federal member institution’s assets or the assumption by a bridge institution of any portion of the federal member institution’s liabilities and shall carry out those transactions or cause them to be carried out.

• Marginal note:Expenses

  (2) All costs, charges and expenses properly incurred by the liquidator in complying with the terms and conditions of any transaction referred to in subsection (1), including the liquidator’s remuneration, are payable by the bridge institution.

Marginal note:Right transferable

39.21 If the assets that are sold under a transaction described in section 39.2 or by a bank designated as a bridge institution include any outstanding security under section 426 or 427 of the Bank Act, the buyer of the assets may hold the security for the life of the loan to which the security relates and all the provisions of that Act relating to the security and its enforcement continue to apply to the buyer as though the buyer were a bank.

Marginal note:Winding-up

• 39.22 (1) The Corporation shall apply for a winding-up order in respect of a federal member institution under the Winding-up and Restructuring Act if, in the opinion of the Corporation, a transaction or series of transactions referred to in section 39.2 is not substantially completed on or before the date that is

  • (a) sixty days after the making of the order under subsection 39.13(1); or

  • (b) the expiration of any extension of that period.

• Marginal note:Deeming

  (2) For the purposes of the Winding-up and Restructuring Act, the Corporation is deemed to be a creditor of the federal member institution.

• Marginal note:Extension

  (3) The Governor in Council may, on the recommendation of the Minister, grant one or more extensions of the period set out in subsection (1) for a further period of not more than thirty days but the last extension must expire not later than one hundred and eighty days after the making of the order under subsection 39.13(1).

Compensation

Marginal note:Definitions

39.23 In sections 39.24 to 39.37,

assessor

évaluateur

assessor means a person who is appointed as assessor under section 39.29; (évaluateur)

dissenting offerees

pollicités opposants

dissenting offerees means the persons

• (a) who, immediately before the shares and subordinated debt of a federal member institution are vested in the Corporation by an order made under paragraph 39.13(1)(a), together held at least 10 per cent of the shares of a given class, or at least 10 per cent of the principal amount of the subordinated debt of a given class, of the federal member institution, or the assignees or successors in interest of those persons, and

• (b) who notify the Corporation within thirty days after the date of the notice of the Corporation under section 39.24 of their objection to the offer or to the fact that no offer is being made. (pollicités opposants)

Marginal note:Offer of compensation

• 39.24 (1) Where an order has been made under paragraph 39.13(1)(a), the Corporation shall, within forty-five days after the date specified in a notice described in subsection 39.2(3) or the making of a winding-up order, give each person who, immediately before the making of the order under paragraph 39.13(1)(a), was the holder of shares or subordinated debt of the federal member institution, or the assignee or successor in interest of that person,

  • (a) a notice containing an offer of compensation in an amount or with a value estimated by the Corporation to be equal to the compensation to which that person would be entitled under paragraph 39.32(1)(a); or

  • (b) a notice stating that no offer of compensation is being made because the amount estimated by the Corporation to be equal to the compensation to which that person would be entitled under paragraph 39.32(1)(a) is zero.

• Marginal note:Offer of compensation — federal member institution

  (2) Where an order has been made under paragraph 39.13(1)(b), the Corporation shall, within forty-five days after the date specified in a notice described in subsection 39.2(3) or the making of a winding-up order, give the federal member institution

  • (a) a notice containing an offer of compensation in an amount or with a value estimated by the Corporation to be equal to the compensation to which the federal member institution would be entitled under paragraph 39.32(2)(a); or

  • (b) a notice stating that no offer of compensation is being made because the amount estimated by the Corporation to be equal to the compensation to which the federal member institution would be entitled under paragraph 39.32(2)(a) is zero.

• Marginal note:Period

  (2.1) The period referred to in subsection (2) is 180 days if an order directing the incorporation of a bridge institution is made in respect of a federal member institution that is the subject of an order made under paragraph 39.13(1)(b).

• Marginal note:Compensation may be cash or other compensation

  (3) The compensation offered under paragraph (1)(a) or (2)(a) may be wholly or partly in cash or wholly or partly in such other form as the Corporation considers appropriate.

39.241 [Repealed, 1996, c. 6, s. 41]

Marginal note:Contents of notice

• 39.25 (1) A notice under subsection 39.24(1) must be accompanied by the prescribed information and state

  • (a) that an order has been made vesting the shares and subordinated debt of the federal member institution in the Corporation;

  • (b) that each person who held, or is the assignee or successor in interest of a person who held, shares or subordinated debt of the federal member institution has thirty days from the date of the notice to accept or object to the offer or the fact that no offer is being made and to notify the Corporation of that acceptance or objection;

  • (c) that, if the offer or the fact that no offer is being made is objected to by the persons, or the assignees or successors in interest of the persons, who together held at least 10 per cent of the shares of a given class, or at least 10 per cent of the principal amount of the subordinated debt of a given class, the compensation to be paid to those persons will be determined by an assessor; and

  • (d) that a person who does not notify the Corporation of his or her objection within that period will receive the offered compensation or no compensation, if no compensation is being offered, but will have no right to contest its amount or value or the fact that no compensation is being offered.

• Marginal note:Contents of notice

  (2) A notice under subsection 39.24(2) must be accompanied by the prescribed information and state

  • (a) that the federal member institution has ninety days from the date of the notice to accept or object to the offer or the fact that no offer is being made and to notify the Corporation of that acceptance or objection;

  • (b) that, if the offer or the fact that no offer is being made is objected to by the federal member institution, the compensation to be paid will be determined by an assessor; and

  • (c) that, if the federal member institution does not notify the Corporation of its objection within that period, it will receive the offered compensation or no compensation, if no compensation is being offered, as the case may be, and will have no right to contest the amount or value of offered compensation or the fact that no compensation is being offered.

• Marginal note:Contents of notice

  (3) A notice under subsection 39.24(1) may state that a transaction or series of transactions referred to in subsection 39.2(1) has been substantially completed and that the shares or subordinated debt are re-vested on the persons who held those shares or that debt immediately before the making of the order vesting those shares or that debt in the Corporation or, where, after the making of the order, the rights of those persons in respect of those shares or that subordinated debt have been assigned to or have devolved on other persons, those other persons.

• Marginal note:Effects of notice

  (4) A notice referred to in subsection (3) vests the shares or subordinated debt of the federal member institution on the date of the notice in the persons who held those shares or that debt immediately before the making of the order vesting those shares or that debt in the Corporation or, where, after the making of the order, the rights of those persons in respect of those shares or that subordinated debt have been assigned to or have devolved on other persons, those other persons.

• Marginal note:Notice to Corporation

  (5) A notice of a person’s or a federal member institution’s acceptance of or objection to an offer or to the fact that no offer is being made must be sent or delivered to the Corporation in accordance with the regulations.

Marginal note:Publication of notice

39.26 A notice under subsection 39.24(1) shall be published twice in the Canada Gazette and in a newspaper in general circulation at or near the place where the head office or principal place of business of the federal member institution is located.

Marginal note:Securities in registered form

• 39.27 (1) A notice under subsection 39.24(1) shall be given to persons who, immediately before the making of the order under paragraph 39.13(1)(a), were registered as the holders of shares or subordinated debt by sending or delivering it to them in accordance with the regulations.

• Marginal note:Securities in bearer or order form

  (2) A notice under subsection 39.24(1) shall be given to persons who, immediately before the making of the order under paragraph 39.13(1)(a), were the holders of shares or subordinated debt in bearer or order form by publishing it in accordance with section 39.26.

Marginal note:Acceptance, etc., of offer

• 39.28 (1) An offeree is entitled to receive the offered compensation from the Corporation if the offeree, within thirty days after the date of the notice under subsection 39.24(1),

  • (a) notifies the Corporation of his or her acceptance of the offer;

  • (b) does not notify the Corporation of his or her acceptance of or objection to the offer; or

  • (c) notifies the Corporation of his or her objection to the offer but there are no dissenting offerees in respect of the offer.

• Marginal note:Acceptance, etc., of offer

  (2) A federal member institution is entitled to receive the offered compensation from the Corporation if the federal member institution, within ninety days after the date of the notice under subsection 39.24(2), notifies the Corporation of its acceptance of the offer.

Marginal note:Appointment of assessor where offerees dissent

39.29 The Governor in Council shall, within sixty days after the date of a notice under subsection 39.24(1) or within one hundred and twenty days after the date of a notice under subsection 39.24(2), appoint as assessor a judge who is in receipt of a salary under the Judges Act, if, in the case of a notice under

• (a) subsection 39.24(1), there are dissenting offerees in respect of the offer or the fact that no offer was made; or

• (b) subsection 39.24(2), the federal member institution notifies the Corporation that it objects to the offer or the fact that no offer was made.

Marginal note:Notice to dissenters

39.3 The Corporation shall, in accordance with the regulations, send or deliver to each of the dissenting offerees or the federal member institution, as the case may require, a notice of

• (a) the appointment of the assessor;

• (b) the right of each of the dissenting offerees or the federal member institution to appear before and be heard by the assessor in person or by counsel; and

• (c) the fact that each of the dissenting offerees or the federal member institution will be bound by the assessor’s determination as to the amount of compensation to be paid to

  • (i) the dissenting offeree for the shares or subordinated debt of the class in respect of which there are dissenting offerees, or

  • (ii) the federal member institution,

  as the case may be.

Marginal note:Determination by assessor

• 39.31 (1) The assessor shall determine the amount of compensation to be paid to the dissenting offerees for the shares or subordinated debt of the class in respect of which there are dissenting offerees or to the federal member institution, as the case may be.

• Marginal note:Factors to consider

  (2) The assessor shall take into account such matters as the assessor considers relevant, and in all cases the assessor shall deduct the benefit derived from any special financial assistance provided directly or indirectly to the federal member institution by the Corporation or the Bank of Canada and the value immediately after re-vesting, as determined by the assessor, of any shares or subordinated debt re-vested in the dissenting offerees.

• Marginal note:Amount of compensation

  (3) The amount of compensation to be paid to dissenting offerees is

  • (a) where the assessor determines that the Corporation has carried out or caused the federal member institution to carry out a transaction or series of transactions that involves the sale of all or part of the shares or subordinated debt of the federal member institution, or an amalgamation of the federal member institution, the amount that is equal to the portion of the consideration received under the transaction or transactions that is attributable to the value under the transaction or transactions of the shares or subordinated debt held by the dissenting offerees immediately before the making of an order under subsection 39.13(1);

  • (b) where the assessor determines that the consideration obtained for the shares or subordinated debt or for the assets of the federal member institution that were sold or otherwise disposed of in a transaction or series of transactions referred to in subsection 39.2(1) was unreasonable in the circumstances, the amount equal to the value that the shares or subordinated debt that were held by the dissenting offerees immediately before the making of an order under subsection 39.13(1) would have had on the completion of the sale or other disposition had such consideration been reasonable, as determined by the assessor; or

  • (c) in any other case, zero.

• Marginal note:Amount of compensation

  (4) The amount of compensation to be paid to a federal member institution is

  • (a) where the assessor determines that the consideration obtained for the assets of the federal member institution that were sold or otherwise disposed of in a transaction or series of transactions referred to in subsection 39.2(2) was unreasonable in the circumstances, the amount by which the value of the consideration if it had been reasonable, as determined by the assessor, would have exceeded the value of the consideration obtained; and

  • (b) in any other case, zero.

Marginal note:Compensation

• 39.32 (1) In a case referred to in subsection 39.31(3), each of the dissenting offerees is entitled to payment from the Corporation of

  • (a) the amount of compensation for the shares or subordinated debt of the class in respect of which there are dissenting offerees that were held by that dissenting offeree immediately before the making of the order under subsection 39.13(1);

  • (b) if the assessor determines that it is just and reasonable that interest be paid, interest on the amount payable under paragraph (a) from the day on which the order was made under paragraph 39.13(1)(a) at the rate that is determined by the assessor to be just and reasonable; and

  • (c) if the assessor determines that it is just and reasonable that costs in the proceeding before the assessor to make the determination referred to in section 39.31 be awarded to the dissenting offeree and against the Corporation, an amount that the assessor determines to be just and reasonable to award in respect of those costs.

• Marginal note:Compensation

  (2) In a case referred to in subsection 39.31(4), the federal member institution is entitled to payment from the Corporation of

  • (a) the amount of compensation;

  • (b) if the assessor determines that it is just and reasonable that interest be paid, interest on the amount payable under paragraph (a) from the day on which the order was made under paragraph 39.13(1)(b) at the rate determined by the assessor to be just and reasonable; and

  • (c) if the assessor determines that it is just and reasonable that costs in the proceeding before the assessor to make the determination referred to in section 39.31 be awarded to the federal member institution and against the Corporation, an amount that the assessor determines to be just and reasonable to award in respect of those costs.

Marginal note:Costs of Corporation

39.33 If the assessor determines that it is just and reasonable that costs in the proceeding before the assessor to make the determination referred to in section 39.31 be awarded to the Corporation and against some or all of the dissenting offerees or against the federal member institution, the amount that the assessor determines to be just and reasonable to award in respect of those costs constitutes a debt payable by those dissenting offerees or the federal member institution to the Corporation and may be recovered as such in any court of competent jurisdiction.

Marginal note:Determinations binding

• 39.34 (1) The determinations of an assessor under sections 39.31, 39.32 and 39.33 are final and conclusive and, except for judicial review under the Federal Courts Act, are not subject to appeal to or review by any court.

• Marginal note:Rights before assessor in lieu of other rights

  (2) The rights of an offeree or a federal member institution under sections 39.24 to 39.33 are in lieu of any other right of action that the offeree or federal member institution or any person claiming through the offeree or federal member institution might otherwise have against the Corporation.

Marginal note:Payment of compensation

• 39.35 (1) The Corporation shall make the payment or delivery required by section 39.28 or 39.32 to the person who in the opinion of the Corporation appears to be entitled to it.

• Marginal note:Time for payment

  (2) The Corporation shall make the payment or delivery required by section 39.28 within sixty days after the date of the notice referred to in subsection 39.24(1).

• Marginal note:Time for payment

  (3) The Corporation shall make the payment required by section 39.32 within thirty days after the expiration of the period for making an application for judicial review of the determination of the assessor under the Federal Courts Act or, if such an application is made, within thirty days after the application is finally disposed of.

• Marginal note:Discharge of liability

  (4) Payment or delivery under this section by the Corporation in respect of any share or subordinated debt discharges the Corporation from all liability in respect of the share or subordinated debt and in no case is the Corporation under any obligation to see to the proper application in any way of any such payment.

Marginal note:Sittings and hearings

• 39.36 (1) An assessor may, for the purpose of making determinations under sections 39.31, 39.32 and 39.33, sit at any place or places and shall arrange for the sittings and hearings that may be required.

• Marginal note:Powers of assessor

  (2) The assessor has all the powers of a person appointed as a commissioner under Part II of the Inquiries Act for the purpose of obtaining evidence under oath.

• Marginal note:Persons to assist

  (3) An assessor may appoint one or more appraisers to assist the assessor in making a determination under section 39.31.

• Marginal note:Payment of appraisers

  (4) Fees and disbursements payable to an appraiser may be included by the assessor in an amount awarded in respect of costs under section 39.32 or 39.33.

Marginal note:Review by court may be requested

• 39.361 (1) Notwithstanding subsection 39.34(2), at any time within 180 days after the date of a notice under subsection 39.24(2), the federal member institution or, subject to subsection (2), any creditor or holder of shares or subordinated debt of the federal member institution may, on notice to the Corporation, apply to a superior court to have the court review the allocation of the consideration for the sale or other disposition of all or part of the assets of the federal member institution or the assumption of all or part of its liabilities.

• Marginal note:Restriction

  (2) A reference in subsection (1) to

  • (a) a creditor means a creditor who is owed at least $1,000 by the federal member institution, other than by way of subordinated debt; and

  • (b) a holder of shares or subordinated debt means a holder who, whether alone or together with other applicants, holds not less than 10 per cent of the shares or subordinated debt of a given class of the federal member institution.

• Marginal note:Court powers

  (3) Where, on an application under subsection (1), the court finds that the Corporation has not allocated or caused the allocation of the consideration for the sale or other disposition of all or part of the assets of the federal member institution or the assumption of all or part of its liabilities, or both, among the creditors or, where applicable, the holders of shares or subordinated debt of the federal member institution, in the order in which it would have been allocated by a liquidator of the federal member institution, the court may make such order as the court deems necessary to require the Corporation to rectify the allocation.

Marginal note:Regulations

39.37 The Governor in Council may make regulations

• (a) prescribing information that must accompany a notice under section 39.24; and

• (b) respecting the sending or delivery of notices under sections 39.25, 39.27 and 39.3.

Creation and Operation of Bridge Institutions

Marginal note:Incorporation

• 39.371 (1) The Minister shall, without delay after an order is made under paragraph 39.13(1)(c), issue letters patent incorporating a federal institution.

• Marginal note:Incorporating Act

  (2) The letters patent are issued under whichever of the following Acts regulates the federal member institution that is the subject of the Superintendent’s report under subsection 39.1(1) or (3):

  • (a) the Bank Act;

  • (b) the Cooperative Credit Associations Act; or

  • (c) the Trust and Loan Companies Act.

• Marginal note:Order to commence and carry on business

  (3) The Superintendent shall, without delay after the letters patent are issued, make an order approving the commencement and carrying on of business by the federal institution referred to in subsection (1).

• Marginal note:Content of Superintendent’s order — limitation

  (4) The Superintendent’s order shall not prohibit the federal institution, during the period that it is designated as a bridge institution, from accepting deposits in Canada and shall not make the federal institution, during that period, subject to subsection 413(3) of the Bank Act, subsection 378.1(2) of the Cooperative Credit Associations Act or subsection 413(2) of the Trust and Loan Companies Act.

Marginal note:Duration

• 39.3711 (1) Subject to section 39.3715, the federal institution referred to in subsection 39.371(1) is designated as a bridge institution for a period of two years.

• Marginal note:Extensions

  (2) The Governor in Council may, by order, on the recommendation of the Minister, grant up to three extensions — of one year each — of the period referred to in subsection (1).

Marginal note:Bridge institution not an agent

39.3712 A bridge institution is not an agent of the Corporation or Her Majesty in right of Canada.

Marginal note:Financial assistance

39.3713 The Corporation shall provide the financial assistance that a bridge institution needs in order to discharge its obligations, except for its obligations to the Corporation, as they become due.

Marginal note:Shares held by Corporation

39.3714 The Corporation may hold shares in a bridge institution only if the Corporation is the sole shareholder.

Marginal note:Termination of designation

39.3715 A federal institution’s designation as a bridge institution terminates if

• (a) the Corporation is no longer the sole shareholder; or

• (b) the federal institution is amalgamated with a body corporate that is not a bridge institution.

Marginal note:Mandatory dissolution of bridge institution

39.3716 If a bridge institution’s designation has not terminated under section 39.3715, the federal institution’s board of directors shall take all necessary steps to dissolve the federal institution if

• (a) all or substantially all of the federal institution’s assets have been sold or otherwise disposed of; and

• (b) all or substantially all of its liabilities have been assumed or discharged.

Marginal note:Winding-up of federal member institution

• 39.3717 (1) If the Corporation considers that substantially all of the transfers of assets and liabilities of a federal member institution to a bridge institution have been substantially completed, the Corporation shall apply for a winding-up order under the Winding-up and Restructuring Act in respect of the federal member institution.

• Marginal note:Creditor

  (2) For the purposes of the Winding-up and Restructuring Act, the Corporation is deemed to be a creditor of the federal member institution.

• Marginal note:Exception

  (3) If the Superintendent has taken control of the federal member institution or its assets and has requested the Attorney General of Canada to apply for a winding-up order or informs the Corporation that he or she intends to request that the Attorney General of Canada apply for that order, the Corporation is not required to apply for a winding-up order.

Marginal note:Power of the Corporation

• 39.3718 (1) The Corporation may hold any federal institution’s shares that the Corporation acquires in the course of a sale or other disposition of its shares of the bridge institution or that a bridge institution acquires in the course of a sale or other disposition of its assets.

• Marginal note:Maximum period

  (2) The Corporation may hold the shares for a period of no more than five years from the day on which they are acquired and may dispose of them.

• Marginal note:Extension

  (3) The Minister may, by order, extend the period referred to in subsection (2) if general market conditions so warrant.

• Marginal note:Provisions inapplicable

  (4) The following provisions do not apply with respect to the shares referred to in subsection (1):

  • (a) sections 401.2 and 401.3 of the Bank Act;

  • (b) sections 428 and 430 of the Insurance Companies Act; and

  • (c) sections 396 and 399 of the Trust and Loan Companies Act.

Marginal note:Remuneration and benefits

39.3719 An employee or officer of the Corporation shall not receive remuneration or benefits from a bridge institution for being a director or officer of that institution.

Marginal note:Non-liability with respect to employees

• 39.372 (1) If a bridge institution becomes the employer of employees of a federal member institution, the bridge institution is not liable in respect of a liability, including one as a successor employer,

  • (a) that is in respect of the employees or former employees of the federal member institution or a predecessor of the federal member institution or in respect of a pension plan for the benefit of those employees or former employees; and

  • (b) that exists before the bridge institution becomes the employer or that is calculated by reference to a period before the bridge institution becomes the employer.

• Marginal note:Liability of other successor employers

  (2) Subsection (1) does not affect the liability of a successor employer other than the bridge institution.

Marginal note:Corporation’s directions

• 39.3721 (1) The Corporation may give directions to the board of directors of a bridge institution.

• Marginal note:Notification of implementation

  (2) After implementing a direction, the board of directors of the bridge institution shall notify the Corporation without delay that the direction has been implemented.

Marginal note:By-laws — Corporation

• 39.3722 (1) The Corporation may give directions to the board of directors of a bridge institution to make, amend or repeal any by-law.

• Marginal note:By-laws — board of directors

  (2) The board of directors of a bridge institution may, with the approval of the Corporation, make, amend or repeal any by-law.

• Meaning of by-law

  (3) For the purposes of subsections (1) and (2), by-law means a by-law of the bridge institution.

Marginal note:Regulation to exempt or adapt

• 39.3723 (1) The Governor in Council may, by regulation,

  • (a) exempt federal member institutions in respect of which an order directing the incorporation of a bridge institution is made, bridge institutions or subsidiaries of any of those institutions, or any class of those institutions or class of their subsidiaries, or any other person from the application of any provision of this Act or the regulations or of the following Acts or regulations made under them:

    • (i) the Bank Act,

    • (ii) the Canadian Payments Act,

    • (iii) the Cooperative Credit Associations Act,

    • (iv) the Financial Consumer Agency of Canada Act,

    • (v) the Insurance Companies Act,

    • (vi) the Office of the Superintendent of Financial Institutions Act,

    • (vii) the Trust and Loan Companies Act, and

    • (viii) the Winding-up and Restructuring Act; or

  • (b) provide that any provision of this Act or the regulations or of the Acts referred to in paragraph (a) or regulations made under them applies to federal member institutions in respect of which an order directing the incorporation of a bridge institution is made, bridge institutions or subsidiaries of any of those institutions, or any class of those institutions or class of their subsidiaries, or any other person but only in the manner and to the extent provided for in the regulation and adapt that provision for the purpose of that application.

• Marginal note:Scope or conditions

  (2) The exemption may be limited in scope or duration or subject to conditions.

Restructuring of Provincial Member Institutions

Marginal note:Federal-provincial agreements

• 39.38 (1) The Minister may, with the approval of the Governor in Council, enter into an agreement with an appropriate provincial minister providing for the application of any of sections 39.1 to 39.37 to provincial member institutions incorporated under the laws of that province.

• Marginal note:Orders

  (2) Where an agreement has been entered into with an appropriate provincial minister, the Governor in Council may make orders, which may not be inconsistent with the agreement, providing for the application of any of sections 39.1 to 39.37 to provincial member institutions incorporated under the laws of that province and adapting any of the provisions of those sections in their application to those provincial member institutions.

Financial

Marginal note:Financial year

40 The financial year of the Corporation shall end on December 31 in each year unless the Governor in Council otherwise directs.

Marginal note:Deposit accounts

41 The Corporation may maintain in its own name one or more accounts

• (a) with the Bank of Canada;

• (b) with any member institution; and

• (c) with the approval of the Minister, with any financial institution outside Canada.

42 [Repealed, 1996, c. 6, s. 42]

Marginal note:Auditor

43 The Auditor General of Canada is the auditor of the Corporation.

Staff

Marginal note:Employment of staff

• 44 (1) The Corporation may, notwithstanding any other Act, employ such officers, agents and employees as are necessary for the purposes of the Corporation and, subject to section 45, the officers, agents and employees of the Corporation shall be deemed not to be employed in the federal public administration.

• Marginal note:Oath of fidelity and secrecy

  (2) Each officer, agent or employee of the Corporation shall, before entering on his or her duties with the Corporation, take an oath of fidelity and secrecy in the form prescribed by the by-laws.

• Marginal note:Use of departmental facilities

  (3) In carrying out its functions under this Act, the Corporation may, with the approval of the Minister, make use of the personnel, facilities and services of the Office of the Superintendent of Financial Institutions and the Department of Finance to any extent not incompatible, in the opinion of the Minister, with the administration of that Office or Department.

Marginal note:Public Service Superannuation Act

• 45 (1) The officers and employees of the Corporation shall be deemed to be employed in the public service for the purposes of the Public Service Superannuation Act and the Corporation shall be deemed to be a Public Service corporation for the purposes of section 37 of that Act.

• Marginal note:Application of other Acts

  (2) For the purposes of the Government Employees Compensation Act and any regulation made pursuant to section 9 of the Aeronautics Act, the Chairperson and employees of the Corporation shall be deemed to be employees in the federal public administration.

• Marginal note:Superannuation

  (3) The Public Service Superannuation Act does not apply to the Chairperson, unless the Governor in Council otherwise directs, or to the director of the Corporation who holds the office of Governor of the Bank of Canada.

No Liability

Marginal note:No liability for acts in good faith

• 45.1 (1) The Corporation, its directors, officers and employees and any persons acting on the behalf of the Corporation are not liable to any member institution, depositor with, or creditor or shareholder of, any member institution, or to any other person, for any damages, payment, compensation or indemnity that any such member institution, depositor, creditor, shareholder or other person may suffer or claim by reason of anything done or omitted to be done, in good faith, in the exercise, execution or performance of any powers, duties and functions that by this Act are intended to be exercised, executed or performed.

• Marginal note:Obligation remains

  (2) Nothing in subsection (1) shall be construed to relieve the Corporation from the obligation to make payment in respect of a deposit insured under this Act.

Marginal note:Directors and officers of bridge institution

45.11 Directors and officers of a bridge institution are not liable for any damages, payment, compensation or indemnity that any person may suffer or claim by reason of anything done or omitted to be done, in good faith, in the exercise, execution or performance of any powers, duties and functions as directors or officers of the bridge institution.

Confidentiality

Marginal note:Confidentiality

• 45.2 (1) All information regarding the affairs of a federal institution, provincial institution or local cooperative credit society, or of any person dealing with one, that is obtained or produced by or for the Corporation is confidential and shall be treated accordingly.

• Marginal note:Information from the Superintendent

  (2) The Corporation may, if it is satisfied that the information will be treated as confidential by the recipient and after consultation with the Superintendent, disclose any information obtained from the Superintendent regarding the affairs of a federal member institution

  • (a) to any government agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision;

  • (b) to any other agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision; or

  • (c) to any deposit insurer or any compensation association for purposes related to its operation.

Marginal note:Disclosures prohibited — bridge institution

• 45.3 (1) Subject to subsection 12(1) of the Privacy Act, any information with respect to the affairs of a federal institution designated as a bridge institution or of any person dealing with it is confidential, shall be treated accordingly and shall not be disclosed.

• Marginal note:Duration of prohibition

  (2) The prohibition applies only during the period that the federal institution is designated as a bridge institution.

• Marginal note:Exception — entity or person

  (3) The prohibition does not apply if the information is disclosed

  • (a) to any government agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision;

  • (b) to any other agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision;

  • (c) to the Financial Transactions and Reports Analysis Centre of Canada established by section 41 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, for the purpose of complying with that Act;

  • (d) to the Corporation for the purposes of fulfilling its functions under this Act or as a shareholder of the federal institution designated as a bridge institution;

  • (e) to the Minister of Finance, the Deputy Minister of Finance or any officer of the Department of Finance authorized in writing by the Deputy Minister of Finance;

  • (f) to the Governor of the Bank of Canada or any officer of the Bank of Canada authorized in writing by the Governor of the Bank of Canada, for the purposes of policy analysis related to the regulation of financial institutions;

  • (g) to the Canada Revenue Agency solely for the purpose of the Income Tax Act or the Excise Tax Act; or

  • (h) to any other entity or person that is prescribed by regulation, in any circumstance or condition prescribed by regulation.

• Marginal note:Other exceptions

  (4) The prohibition does not apply if the information is disclosed

  • (a) in the normal conduct of the business of the federal institution designated as a bridge institution;

  • (b) for the purposes of selling the shares or assets of the federal institution designated as a bridge institution;

  • (c) for the purpose of any legal proceedings;

  • (d) for the purpose of preparing the Corporation’s annual report and its corporate plan or if the information is disclosed in those documents;

  • (e) in any circumstance that is prescribed by regulation; or

  • (f) in any other circumstance that the board of directors of the federal institution designated as a bridge institution considers necessary.

• Marginal note:Regulations

  (5) The Governor in Council may make regulations

  • (a) specifying the circumstances in which the prohibition does not apply; or

  • (b) specifying, for the purpose of paragraph (3)(h), the entity to which or person to whom information may be disclosed and the circumstances and conditions under which the information may be disclosed to that entity or person.

Winding-up

Marginal note:Insolvency and winding-up

46 No statute relating to the insolvency or winding-up of any corporation applies to the Corporation and in no case shall the affairs of the Corporation be wound up unless Parliament so provides.

Enforcement Provisions

Marginal note:False statements

47 A person is guilty of an offence if the person prepares, signs, approves or concurs in any account, statement, return, report or other document required to be submitted to the Corporation under this Act, the by-laws or an application to become a member institution or a policy of deposit insurance that

• (a) contains any false or deceptive information; or

• (b) fails to present fairly information required to be submitted to the Corporation.

Marginal note:Failure to make report known

48 A person who, being a chief executive officer or chairperson of the board of directors of a member institution, fails or neglects to present, as required by section 30, a report of the Corporation made under that section is guilty of an offence and, if the directors fail or neglect to incorporate that report in the minutes of a meeting of the directors as required by that section, each director present at that meeting who directed, authorized, assented to, acquiesced in or participated in the failure or neglect, is guilty of an offence.

Marginal note:Failure to provide information, etc.

49 Every member institution that fails or neglects

• (a) within the time limited for so doing, to provide the Corporation with any account, statement, return, report or other document respecting the affairs of the member institution that is required to be submitted to the Corporation pursuant to this Act, the by-laws or the policy of deposit insurance of the member institution, or

• (b) to respond, within a reasonable time, to a request for information or explanations respecting the member institution made by or on behalf of the Corporation pursuant to this Act, the by-laws or the policy of deposit insurance of the member institution

is guilty of an offence.

Marginal note:General offence

50 Every member institution that, or other person who, without reasonable cause, contravenes

• (a) a provision of this Act, other than section 47, 48 or 49, or

• (b) the by-laws

is guilty of an offence.

Marginal note:Punishment

50.1 Every member institution or other person who commits an offence under this Act is liable on summary conviction

• (a) in the case of a natural person, to a fine not exceeding $100,000 or to imprisonment for a term not exceeding twelve months, or to both; or

• (b) in any other case, to a fine not exceeding $500,000.

Marginal note:Court may order compliance

51 Where a member institution or other person has been convicted of an offence under this Act, the court may, in addition to any fine or term of imprisonment that may be imposed, order the member institution or person to rectify the contravention of this Act, the by-laws or the policy of deposit insurance in respect of which the member institution or person was convicted.

Marginal note:Additional monetary punishment

• 52 (1) Where a member institution or other person has been convicted of an offence under this Act, the court may, where it is satisfied that as a result of the commission of the offence the convicted member institution or person acquired a monetary benefit or that a monetary benefit accrued to the benefit of the member institution or person, order the convicted member institution or person to pay, notwithstanding the maximum amount of any fine that may otherwise be imposed under this Act, an additional fine in an amount equal to the court’s estimation of the amount of the monetary benefit.

• Marginal note:Restraining or compliance order

  (2) If a member institution or other person does not comply with any provision of this Act, the by-laws or the policy of deposit insurance that applies in respect of the member institution or person, the Corporation may apply to a superior court for an order directing the member institution or person to comply with or restraining the member institution or person from acting in breach of the provision and, on the application, the court may so order and make any further order it thinks fit.

Marginal note:Appeals

53 Any decision or order of a court that tries an issue under this Act may be appealed to the court having jurisdiction to hear appeals from that trial court.

Marginal note:Recovery and application of fines

54 All fines payable under this Act are recoverable and enforceable, with costs, at the suit of Her Majesty in right of Canada, instituted by the Attorney General of Canada and, when recovered, belong to Her Majesty in right of Canada.