Canada Pension Plan Investment Board Act (S.C. 1997, c. 40)

Short Title

Marginal note:Short title

1 This Act may be cited as the Canada Pension Plan Investment Board Act.

Interpretation

Marginal note:Definitions

2 The definitions in this section apply in this Act.

appropriate provincial Minister

appropriate provincial Minister, in respect of a province, means the province’s minister of the Crown who has primary responsibility for that province’s finances. (ministre provincial compétent)

Board

Board means the Canada Pension Plan Investment Board established by section 3. (Office)

by-law

by-law means a by-law of the Board. (Version anglaise seulement)

court

court means

• (a) in the Province of Ontario, the Ontario Court (General Division);

• (b) in the Province of Quebec, the Superior Court of the Province;

• (c) in the Provinces of Nova Scotia and British Columbia, the Supreme Court of the Province;

• (d) in the Provinces of New Brunswick, Manitoba, Saskatchewan and Alberta, the Court of Queen’s Bench for the Province;

• (e) in the Provinces of Prince Edward Island and Newfoundland, the trial division of the Supreme Court of the Province; and

• (f) the Supreme Court of Yukon, the Supreme Court of the Northwest Territories and the Nunavut Court of Justice. (tribunal)

designated security

designated security means

• (a) an obligation

  • (i) that, before April 1, 1998, was held to the credit of the Canada Pension Plan Investment Fund, as established under subsection 109(1) of the Canada Pension Plan,

  • (ii) that, as applied to Canada, is an obligation of the Government of Canada and, as applied to a province, is an obligation of the government of the province or an obligation of any agent of Her Majesty in right of the province that is guaranteed as to principal and interest by that government, and

  • (iii) that complies with the conditions that were set out in section 111 of the Canada Pension Plan as that section read immediately before April 1, 1998; or

• (b) an obligation that

  • (i) on or after April 1, 1998, was purchased by the Minister of Finance under section 110 of the Canada Pension Plan or is purchased by the Board under section 6.1, and

  • (ii) is an obligation of the government of a province or an obligation of any agent of Her Majesty in right of a province that is guaranteed as to principal and interest by that government. (titre désigné)

entity

entity means a body corporate, a trust, a partnership, a fund, an unincorporated association or organization, Her Majesty in right of Canada or of a province or an agency of Her Majesty in right of Canada or of a province and the government of a foreign country or any political subdivision or agency of the government of a foreign country. (entité)

Minister

Minister means the Minister of Finance. (ministre)

participating province

participating province means a province other than

• (a) a territory; and

• (b) a province providing a comprehensive pension plan as defined in subsection 3(1) of the Canada Pension Plan. (province participante)

subsidiary

subsidiary means a corporation that is wholly owned by the Board directly or indirectly through any number of subsidiaries each of which is wholly owned directly or indirectly by the Board. (filiale)

Constitution of the Board

Marginal note:Board established

• 3 (1) There is established a corporation to be known as the Canada Pension Plan Investment Board.

• Marginal note:Not agent of Her Majesty

  (2) The Board is not an agent of Her Majesty.

• Marginal note:Not part of federal public administration

  (3) Directors, officers, employees and agents of the Board are not part of the federal public administration.

• Marginal note:Act not applicable to Board

  (4) The Canada Not-for-profit Corporations Act does not apply to the Board.

Capital and Shares

Marginal note:Capital

• 4 (1) The capital of the Board is $100. The Minister shall pay the capital of the Board out of the Consolidated Revenue Fund.

• Marginal note:Shares

  (2) The capital is divided into 10 shares having a par value of $10 each. The shares shall be issued to the Minister to be held on behalf of Her Majesty in right of Canada.

• Marginal note:Registration

  (3) The shares issued to the Minister shall be registered by the Board in the name of the Minister.

Objects and Powers

Marginal note:Objects

5 The objects of the Board are

• (a) to assist the Canada Pension Plan in meeting its obligations to contributors and beneficiaries under the Canada Pension Plan;

• (b) to manage any amounts transferred to it under sections 108.1 and 108.3 of the Canada Pension Plan, and its right, title or interest in any designated securities, in the best interests of the contributors and beneficiaries under that Act; and

• (c) to invest its assets with a view to achieving a maximum rate of return, without undue risk of loss, having regard to the factors that may affect the funding of the Canada Pension Plan and the ability of the Canada Pension Plan to meet its financial obligations on any given business day.

Marginal note:Powers of Board

• 6 (1) The Board has the capacity and, subject to this Act, the rights, powers and privileges of a natural person.

• Marginal note:No inconsistent business or activity

  (2) The Board and its subsidiaries shall not, directly or indirectly, carry on any business or activity or exercise any power that is inconsistent with the Board’s objects, or that the Board is restricted by this Act from carrying on or exercising, and shall not, directly or indirectly, exercise any of its powers in a manner contrary to this Act.

• Marginal note:No invalidity

  (3) No act of the Board, including a transfer of property, is invalid by reason only that the Board was without the capacity or power to so act.

Designated Securities

Marginal note:Replacement security

• 6.1 (1) On the maturity of a designated security of a province that was issued before January 1, 1998, the Board shall purchase another security issued by that province if the Board is requested to do so, in writing, by the appropriate provincial Minister of that province at least 30 days before the date of maturity.

• Marginal note:Principal amount

  (2) The principal amount of the replacement security shall be not more than the principal outstanding under the maturing designated security.

• Marginal note:Term to maturity

  (3) The replacement security shall be for a term of 20 years.

• Marginal note:Interest

  (4) The replacement security shall bear interest at a rate fixed by the Board, in accordance with any agreement entered into between the Board and the Minister. The rate shall be substantially the same as the interest rate that the province would be required to pay if it were to borrow the same amount for the same term through the issuance of a security on the public capital market.

• Marginal note:Features of replacement security

  (5) The replacement security shall be issued to or payable to the Board and shall be expressed to be not negotiable and not transferable or assignable.

• Marginal note:Redemption at request of province

  (6) The Board shall redeem a designated security in whole or in part before maturity if

  • (a) the Board is requested to do so, in writing, by the appropriate provincial Minister of a province at least 30 days before the proposed redemption date; and

  • (b) the appropriate provincial Minister has agreed to pay on the proposed redemption date

    • (i) any payments of principal or interest due on or before the proposed redemption date but not yet paid,

    • (ii) interest on the principal amount being redeemed accrued to the proposed redemption date, and

    • (iii) an amount equal to the present value of the remaining instalments of principal being redeemed and interest on that principal.

• Marginal note:Calculation of present value

  (7) For the purposes of subparagraph (6)(b)(iii), the present value shall be calculated by discounting the instalments of principal being redeemed and interest on that principal using an interest rate fixed by the Board, in accordance with any agreement entered into between the Board and the Minister of Finance. In fixing that rate, the Board shall choose a rate that

  • (a) if the designated security to be redeemed was issued before January 1, 1998, is substantially the same as the rate that the Government of Canada would be required to pay if it were to borrow the principal amount being redeemed for a term equal to the remaining term of that designated security through the issuance of a security on the public capital market; or

  • (b) if the designated security to be redeemed was issued on or after January 1, 1998, is substantially the same as the rate that the province would be required to pay if it were to borrow the principal amount being redeemed for a term equal to the remaining term of that designated security through the issuance of a security on the public capital market.

• Marginal note:Consolidation of securities

  (8) At the request of the provincial treasurer or other similar officer of a province, the Board may accept in the place of any series of designated securities of that province acquired during any consecutive period of not more than twelve months, on payment of any interest then accrued on the securities, another security of that province that is in an amount equal to the aggregate amount then outstanding of the designated securities of that series, and that bears interest at a rate determined by the Board.

• Marginal note:Obligation guaranteed by the provincial government

  (9) Any security purchased by the Board under this section must be an obligation of the government of a province or an obligation of an agent of Her Majesty in right of a province that is guaranteed as to principal and interest by that government.

Management

Board of Directors

Marginal note:Board of directors

7 The Board shall be managed by a board of directors of 12 directors, including the Chairperson.

Marginal note:Principal duties

• 8 (1) Subject to this Act, the board of directors shall manage or supervise the management of the business and affairs of the Board.

• Marginal note:Specific duties

  (2) Without limiting the generality of subsection (1), the board of directors shall

  • (a) establish written investment policies, standards and procedures in accordance with section 35;

  • (b) establish procedures for the identification of potential conflicts of interest and procedures to resolve those conflicts;

  • (c) establish a code of conduct for officers and employees of the Board; and

  • (d) designate a committee of the board of directors to monitor application of the conflict of interest procedures and the code of conduct.

Marginal note:Power to delegate

• 9 (1) Subject to subsection (2) and the by-laws, the board of directors may delegate to the Chairperson, to a committee of the board of directors or to any officer of the Board any of the powers or duties of the board of directors.

• Marginal note:Limits on power

  (2) The board of directors may not delegate the power to

  • (a) adopt, amend or repeal by-laws;

  • (b) establish the Board’s investment policies, standards and procedures;

  • (c) fill a vacancy in a committee of directors or in the office of auditor of the Board;

  • (d) appoint officers to the Board or fix their remuneration; or

  • (e) approve the annual financial statements of the Board and any other financial statements issued by the Board.

Directors

Marginal note:Appointment of directors

• 10 (1) Each director shall be appointed by the Governor in Council, on the recommendation of the Minister, to hold office during good behaviour for such term, not exceeding three years, as will ensure, as far as possible, the expiration in any one year of the terms of office of not more than one half of the directors.

• Marginal note:Committee to advise Minister

  (2) The Minister may establish a committee to advise the Minister on the appointment of directors. The committee shall consist of a representative designated by the Minister and a representative of each participating province designated by the appropriate provincial Minister for that province.

• Marginal note:Consultation with participating provinces

  (3) The Minister shall consult with the appropriate provincial Ministers of the participating provinces before making any recommendation to the Governor in Council with respect to the appointment of directors and before making an appointment under subsection (8).

• Marginal note:Appointment factors

  (4) Before making a recommendation to the Governor in Council with respect to the appointment of directors and before making an appointment under subsection (8), the Minister shall

  • (a) have regard to the desirability of having on the board of directors

    • (i) directors who are representative of the various regions of Canada, and

    • (ii) a sufficient number of directors with proven financial ability or relevant work experience to enable the Board to effectively achieve its objects; and

  • (b) endeavour to ensure that no more than three of the 12 directors reside outside Canada.

• Marginal note:Reappointment

  (5) A director is eligible for reappointment for one or more additional terms of office.

• Marginal note:Removal

  (6) The Governor in Council may remove a director for cause.

• Marginal note:Continuation in office

  (7) If no person is appointed to take office as a director on the expiration of the term of an incumbent director, the incumbent director continues in office until a successor is appointed.

• Marginal note:Vacancy

  (8) Where a person ceases to be a director during the term for which the person was appointed, the Minister shall appoint a qualified person to hold office as a director for the remainder of the term.

• Marginal note:Disqualified persons

  (9) The following persons are disqualified from being directors:

  • (a) a person who is less than 18 years of age;

  • (b) a person who is of unsound mind and has been so found by a court in Canada or elsewhere;

  • (c) a person who has the status of a bankrupt;

  • (d) a person who is not a natural person;

  • (e) a person who is an agent or employee of Her Majesty in right of Canada or in right of a province;

  • (f) a person who is a member of the Senate or House of Commons of Canada or a member of a provincial legislature; and

  • (g) a person who is an agent or employee of the government of a foreign country or any political subdivision of a foreign country.

  • (h) [Repealed, 2013, c. 40, s. 277]

• Marginal note:Remuneration and benefits of directors

  (10) A director is entitled to receive from the Board such remuneration and benefits as may be fixed by the by-laws, which remuneration and benefits shall be fixed having regard to the remuneration and benefits received by persons having similar responsibilities and engaged in similar activities.