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Financial Administration Act (R.S.C., 1985, c. F-11)

Act current to 2019-07-01 and last amended on 2019-04-01. Previous Versions

PART XCrown Corporations (continued)

DIVISION ICorporate Affairs (continued)

Restricted Transactions (continued)

Marginal note:Transactions requiring Governor in Council authorization

  •  (1) Subject to section 90, no parent Crown corporation or wholly-owned subsidiary of a parent Crown corporation shall, unless authorized by the Governor in Council,

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

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

    • (c) acquire all or substantially all of the assets of another corporation;

    • (d) sell or otherwise dispose of any shares of a wholly-owned subsidiary of the corporation; or

    • (e) procure the dissolution or amalgamation of a wholly-owned subsidiary of the corporation.

  • Marginal note:Idem

    (2) Subject to section 90 and subsection (3), no corporation, or corporations, in a related group shall, unless authorized by the Governor in Council, sell or otherwise dispose of any of the assets of the corporation or corporations used in any major business or activity of the corporation or corporations, if the assets to be sold or otherwise disposed of constitute all or substantially all of the total assets of the group used in that major business or activity.

  • Marginal note:Idem

    (3) Subject to section 90, no wholly-owned subsidiary shall, unless authorized by the Governor in Council,

    • (a) sell or otherwise dispose of any shares of the subsidiary; or

    • (b) sell or otherwise dispose of all or substantially all of the assets of the subsidiary.

  • Marginal note:Idem

    (4) Subject to section 90, no person shall, unless authorized by the Governor in Council, apply for articles in respect of a parent Crown corporation.

  • Marginal note:Inclusion in corporate plan

    (5) Where a parent Crown corporation sets out the details of a proposed transaction in a corporate plan submitted pursuant to section 122, the Governor in Council, in addition to approving the plan under that section, may authorize a person to undertake the transaction for the purposes of this section.

  • Marginal note:Power to execute transaction required

    (6) No person shall be authorized under this section to undertake a transaction unless the Governor in Council is satisfied that the person is otherwise empowered to undertake the transaction.

  • Marginal note:Terms and conditions

    (7) The Governor in Council may, in any authorization under this section, specify such terms and conditions as the Governor in Council deems appropriate and may make the authorization either one of general application or in respect of any specified transaction or transactions.

  • R.S., 1985, c. F-11, s. 91
  • 1991, c. 24, ss. 25, 50(F)

Marginal note:Exceptions

  •  (1) Sections 90 and 91 do not apply in respect of

    • (a) the acquisition of shares or assets by way of security only, or the sale or other disposal of shares or assets held by way of security only;

    • (b) the acquisition or the sale or other disposal of shares or assets in the ordinary course of a business of providing financial assistance;

    • (c) the acquisition or the sale or other disposal of shares or assets, if the acquisition, sale or disposal involves only

      • (i) a parent Crown corporation and one or more wholly-owned subsidiaries of the corporation, or

      • (ii) two or more wholly-owned subsidiaries

      and is made as part of a bona fide reorganization of the parent Crown corporation or wholly-owned subsidiaries;

    • (d) the acquisition of shares by way of the exercise of any conversion or exchange privilege, option or right to acquire shares, if that privilege, option or right was acquired in accordance with section 90 or 91, as the case may be;

    • (e) the acquisition of shares of a parent Crown corporation by the corporation; or

    • (f) the acquisition of shares of a wholly-owned subsidiary by the subsidiary, the parent Crown corporation that wholly owns the subsidiary or any other wholly-owned subsidiary of that parent Crown corporation.

  • Marginal note:Exception

    (1.1) Paragraphs 90(1)(b) and 91(1)(b) do not apply in respect of the nomination or appointment of a person to the board of directors or membership of a corporation, except where

    • (a) a majority of the directors or members are nominated or appointed by or on behalf of the Crown or by directors or members who were nominated or appointed by or on behalf of the Crown; or

    • (b) the Crown would otherwise obtain control of the corporation.

  • Marginal note:Regulations

    (2) The Governor in Council may make regulations exempting a specified parent Crown corporation or wholly-owned subsidiary or a parent Crown corporation or wholly-owned subsidiary of a specified class from the application of section 91, either generally or in respect of any transaction of a specified class.

  • R.S., 1985, c. F-11, s. 92
  • 1991, c. 24, s. 26

Marginal note:Notification

  •  (1) Where a person undertakes a transaction referred to in section 90 or 91, that person shall notify the prescribed person in accordance with the regulations.

  • Marginal note:Regulations

    (2) For the purposes of subsection (1), the Governor in Council may make regulations prescribing the person to be notified and the time within which and manner in which that person is to be notified.

  • 1984, c. 31, s. 11

Marginal note:Dissolution

  •  (1) Notwithstanding section 90, where a parent Crown corporation is not named in Schedule III within a period of sixty days after its incorporation or acquisition, the directors and shareholders of the corporation shall forthwith after the expiration of that period take all steps necessary to dissolve the corporation.

  • Marginal note:Dissolution or sale

    (2) Notwithstanding section 91, the Governor in Council may direct that

    • (a) any wholly-owned subsidiary incorporated contrary to section 91 be dissolved or otherwise disposed of,

    • (b) any shares of a corporation acquired contrary to section 91 be sold or otherwise disposed of,

    • (c) any change effected by articles contrary to section 91 be reversed, or

    • (d) any assets acquired contrary to section 91 be sold or otherwise disposed of,

    and the directors and shareholders of the corporation in respect of which the direction is given shall forthwith take all steps necessary to comply with the direction.

  • R.S., 1985, c. F-11, s. 94
  • 1991, c. 24, s. 27

Marginal note:No inconsistent business or activity

  •  (1) No parent Crown corporation or wholly-owned subsidiary of a parent Crown corporation shall carry on any business or activity that is not consistent with the objects or purposes for which the parent Crown corporation is incorporated, or the restrictions on the businesses or activities that it may carry on, as set out in its charter.

  • Marginal note:Savings

    (2) Subsection (1) shall not be construed as prohibiting or restricting a parent Crown corporation or wholly-owned subsidiary from continuing to carry on any business or activity that it carried on immediately before September 1, 1984.

  • 1984, c. 31, s. 11

Crown Agency Status

Marginal note:Exercise of powers

 An agent corporation may exercise its powers only as an agent of the Crown.

  • 1984, c. 31, s. 11

Marginal note:Name in contracts

 An agent corporation may enter into contracts in the name of the Crown or in the name of the corporation.

  • 1984, c. 31, s. 11

Marginal note:Legal proceedings

 Actions, suits or other legal proceedings in respect of any right or obligation acquired or incurred by an agent corporation, whether in the name of the Crown or in the name of the corporation, may be brought or taken by or against the corporation in the name of the corporation in any court that would have jurisdiction if the corporation were not an agent of the Crown.

  • 1984, c. 31, s. 11
 
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