Port Authorities Management Regulations (SOR/99-101)

Regulations are current to 2019-06-20 and last amended on 2016-03-29. Previous Versions

PART 3Financial Matters (continued)

Audits (continued)

Right to Information

  •  (1) At the request of the auditor of a port authority, the present or former directors, officers, employees or agents of the port authority shall provide the auditor with the following if they are reasonably able to do so and if when it is, in the auditor’s opinion, necessary to enable the auditor to make the examination and report required by section 49:

    • (a) information and explanations; and

    • (b) access to records, documents, books, accounts and vouchers of the port authority and its subsidiaries.

  • (2) At the request of the auditor of a port authority, the directors shall

    • (a) obtain from the present or former directors, officers, employees and agents of its subsidiaries the information and explanations that they are reasonably able to provide and that are, in the auditor’s opinion, necessary to enable the auditor to make the examination and report required by section 49; and

    • (b) give the auditor the information and explanations so obtained.

  • (3) A person who in good faith makes an oral or written communication under subsection (1) or (2) is not liable in any civil action arising from having made the communication.

Audit Committee

  •  (1) A port authority shall have an audit committee whose membership is composed of no fewer than three directors and no member of which is an officer or employee of the port authority or a body corporate controlled by the port authority.

  • (2) The audit committee shall review the annual financial statements of the port authority before they are approved by the board of directors.

  • (3) The auditor of a port authority is entitled to receive notice of every meeting of the audit committee and, at the expense of the port authority, to attend and be heard at those meetings.

  • (4) If requested to do so by a member of the audit committee, the auditor shall attend a meeting of the committee held during the auditor’s term of office.

  • (5) The auditor of a port authority or a member of the audit committee may call a meeting of the audit committee.

Errors in Financial Statements

  •  (1) A director or officer of a port authority shall notify the audit committee and the auditor of any error or misstatement in a financial statement that the auditor or a former auditor has reported on immediately after becoming aware of it.

  • (2) If the auditor or a former auditor is notified or becomes aware of an error or misstatement in a financial statement on which the auditor has reported, and in the auditor’s opinion the error or misstatement is material, the auditor shall inform each director accordingly.

  • (3) On being informed under subsection (2), the directors shall

    • (a) prepare and issue a revised financial statement;

    • (b) inform the Minister and each of the municipalities and provinces mentioned in the letters patent that have a right to appoint a director; and

    • (c) publish a notice in a major newspaper published or distributed in the municipalities where the port is situated stating that the revised financial statements are available for inspection by the public during normal business hours at the registered office of the port authority.

  • (4) A director or officer of a port authority does not contravene subsection (1) or (3) unless the director or officer knowingly fails to comply with the requirements of that subsection.

Privilege

 An oral or written statement or report made under the Act or these Regulations by the auditor or former auditor of a port authority has qualified privilege.

PART 4Risk Assessment and Insurance

Risk Assessments

  •  (1) Every port authority and every wholly-owned subsidiary of a port authority shall ensure that, in respect of itself, a risk assessment is conducted by a competent risk assessor and contains an assessment relating to

    • (a) risk, risk management, property value, risk transfer and probable maximum loss;

    • (b) insurance coverage, limits and deductibles; and

    • (c) underwriters.

  • (2) The risk assessment shall be completed

    • (a) not later than six months after the day on which the port authority is continued, deemed to be incorporated or incorporated under the Act; and

    • (b) at least every five years after the most recent risk assessment.

  • (3) The board of directors of every port authority and of each of the wholly-owned subsidiaries of a port authority shall

    • (a) review each risk assessment report within 30 days after it is received by the port authority or the subsidiary; and

    • (b) approve the insurance coverage annually.

  • (4) In conducting a risk assessment, a risk assessor may, if acting reasonably and in good faith, rely on risk assessments conducted in respect of the property, liabilities and activities referred to in subsection 56(1).

Property and Liability Insurance

  •  (1) Every port authority and every wholly-owned subsidiary of a port authority shall ensure that insurance is maintained in accordance with subsection (2) in respect of

    • (a) the property that the port authority or subsidiary manages, holds, owns or occupies; and

    • (b) liability for the activities in which the port authority or subsidiary engages and for the activities that take place in the port.

  • (2) The insurance shall

    • (a) name the port authority or the wholly-owned subsidiary as the insured party or an additional insured;

    • (b) name Her Majesty in right of Canada as an additional insured;

    • (c) cover the risks and have limits and deductibles that

      • (i) a prudent person in the position of owner of the property or a prudent person engaging in the activities referred to in paragraph (1)(b) would obtain or would require to be obtained, and

      • (ii) take into account the most recent risk assessment conducted under section 55; and

    • (d) be maintained with an underwriter that a prudent person in the position of owner of the property or a prudent person engaging in the activities referred to in paragraph (1)(b) would choose or require to be chosen, taking into account the most recent risk assessment conducted under section 55.

Directors and Officers Liability Insurance

  •  (1) Every port authority shall purchase and maintain insurance in accordance with subsection (3) for the benefit of itself and Her Majesty in right of Canada against liabilities incurred by it in respect of an indemnity given under subsection 25(1) or an advance given under subsection 28(1).

  • (2) Every port authority and every wholly-owned subsidiary of a port authority shall ensure that insurance is purchased and maintained in accordance with subsection (3) for the benefit of both of them and Her Majesty in right of Canada against liabilities incurred by the subsidiary in respect of an indemnity or advance given by the subsidiary to

    • (a) a former or current director or officer of the subsidiary for liabilities incurred by the director or officer because of being or having been a director or officer of the subsidiary; or

    • (b) a person who, at the request of the subsidiary, has acted or is acting as a director or officer of another entity or has acted or is acting in a capacity similar to that of a director or officer of another entity for liabilities incurred by the person because of so acting.

  • (3) The insurance shall

    • (a) cover the risks and have limits and deductibles that

      • (i) would be obtained by a prudent person in the position of the port authority or subsidiary, and

      • (ii) take into account the most recent risk assessment conducted under section 55; and

    • (b) be maintained with an underwriter that a prudent person in the position of the port authority or subsidiary would choose, taking into account the most recent risk assessment conducted under section 55.

  •  (1) A port authority may purchase and maintain insurance for the benefit of

    • (a) its former and current directors and officers against any liability incurred by them because of having been or being a director or officer of the port authority;

    • (b) the former and current directors and officers of its wholly-owned subsidiaries against any liability incurred by them because of having been or being a director or officer of the subsidiary; and

    • (c) any person who, at the request of the port authority, has acted or is acting as a director or officer of another entity or has acted or is acting in a capacity similar to that of a director or officer of another entity for any liability incurred by the person because of so acting.

  • (2) The insurance shall cover only situations in which a person mentioned in subsection (1) acted honestly and in good faith with a view to the best interests of the port authority or the subsidiary, as the case may be.

 
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