Budget 2025 Implementation Act, No. 1 (S.C. 2026, c. 3)

Marginal note:Transitional provision

• 39.011 (1) When the Minister issues letters patent continuing a local cooperative credit society as a federal credit union under subsection 35(1), subject to the regulations, the Minister may, on application and by order, subject to any terms and conditions that the Minister considers appropriate, exempt the resulting federal credit union from the application of one or more provisions of Part XII.2 for a period of up to three years from the day on which its letters patent are issued, if the Minister is of the opinion that the resulting federal credit union has an acceptable plan to bring itself into compliance with Part XII.2 within that period.

• Marginal note:Plan

  (2) The plan referred to in subsection (1) must be approved by the Minister and must set out

  • (a) how the resulting federal credit union would, as soon as reasonably feasible, meet the requirements of any of the provisions referred to in subsection (1); and

  • (b) any alternative requirements that the resulting federal credit union would meet during the period when the plan is in effect.

• Marginal note:Compliance

  (3) During any period in which a provision of Part XII.2 does not apply to a resulting federal credit union, the resulting federal credit union must comply with the plan approved by the Minister under subsection (2).

• Marginal note:Amendment of plan

  (4) The resulting federal credit union may, at any time, seek the Minister’s approval to

  • (a) amend the plan; or

  • (b) extend the period of the exemption to end no later than the third anniversary of the day on which its letters patent are issued.

• Marginal note:Regulations and guidelines

  (5) The Governor in Council may make regulations respecting plans under this section, including regulations limiting the provisions of Part XII.2 that may be the subject of an order under subsection (1), and the Commissioner may make guidelines respecting such plans.

• Marginal note:Definition of resulting federal credit union

  (6) In this section, resulting federal credit union means the federal credit union resulting from the continuance, or the continuance and amalgamation, as the case may be, in respect of an application made under subsection 33(2), (3) or (4).

Marginal note:Simplified amalgamation into federal credit union

• 227.1 (1) A federal credit union may, without complying with sections 224 to 226, amalgamate with one or more local cooperative credit societies that have applied, under subsection 33(3), to be continued as a federal credit union if

  • (a) the total assets of the local cooperative credit societies do not exceed 25% of the assets of the federal credit union;

  • (b) the amalgamation is approved by a resolution of the directors of the federal credit union and by separate special resolutions of the members and shareholders, if any, of each local cooperative credit society;

  • (c) the resolutions provide that

    • (i) the by-laws of the resulting federal credit union, including any by-laws respecting shares, will be the same as those of the federal credit union before the amalgamation, and

    • (ii) the head office of the resulting federal credit union will be in the same province as the head office of the federal credit union before the amalgamation;

  • (d) the amalgamation does not add, change or remove any rights or privileges of any members or shareholders of the federal credit union prior to amalgamation; and

  • (e) a request has not been made under subsection (3).

• Marginal note:Disclosure

  (2) The federal credit union must, in accordance with the regulations, disclose to all its members

  • (a) that the federal credit union has entered into an amalgamation agreement and identify the local cooperative credit societies that are parties to that agreement;

  • (b) that the amalgamation is subject to this section;

  • (c) that the amalgamation is subject to the approval of

    • (i) the members and shareholders, if any, if a request is made under subsection (3),

    • (ii) the members and shareholders, if any, of each local cooperative credit society,

    • (iii) the Minister, and

    • (iv) the applicable provincial regulatory authorities; and

  • (d) any other prescribed information.

• Marginal note:Members’ approval

  (3) The amalgamation is not required to be approved by the members of the federal credit union or its shareholders, if any, unless a request that a meeting be held to vote on the amalgamation is made, within the prescribed time, by at least two members entitled to vote at such a meeting, or at least one per cent of the total number of members entitled to vote at such a meeting, whichever is greater.

• Marginal note:Procedure

  (4) A meeting requested under subsection (3) must be called as nearly as possible in the manner in which meetings are to be called under the by-laws and this Act.

• Marginal note:Regulations — disclosure

  (5) The Governor in Council may make regulations respecting

  • (a) the timing, form and content of the disclosure to be provided to members under subsection (2); and

  • (b) the timing of a meeting request under subsection (3).

• Marginal note:Definition of resulting federal credit union

  (6) In this section, resulting federal credit union means the federal credit union resulting from the issuance of letters patent under subsection 223(1.2).

Marginal note:Joint application to Minister

• 228 (1) Subject to subsection (2), unless an amalgamation agreement is terminated in accordance with subsection 226(5), the applicants must, within three months after the approval of the agreement in accordance with subsection 226(4), the approval of the directors in accordance with subsection 227(1) or (2) or the latest of the approvals referred to in paragraph 227.1(1)(b), jointly apply to the Minister for letters patent of amalgamation continuing the applicants as one bank.

Marginal note:Asset purchase by federal credit union

• 236.1 (1) A federal credit union may acquire all or substantially all of the assets of a local cooperative credit society only if the federal credit union also assumes all or substantially all of the liabilities of the local cooperative credit society.

• Marginal note:Purchase agreement

  (2) An agreement of purchase and sale (referred to in this section as a “purchase agreement”) must set out the terms of, and the means of effecting, the acquisition of assets referred to in subsection (1).

• Marginal note:Consideration

  (3) Despite anything in this Act, the consideration for the acquisition of assets referred to in subsection (1) may be cash or fully paid securities of the federal credit union or in part cash and in part fully paid securities of the federal credit union or any other consideration that is provided for in the purchase agreement.

• Marginal note:Agreement to Superintendent

  (4) A purchase agreement must be sent to the Superintendent before it is submitted to the members or shareholders, as applicable, of the local cooperative credit society for their approval under the laws of the relevant province.

• Marginal note:Application to Minister

  (5) An application for the Minister’s approval of a purchase agreement must be filed with the Superintendent by the federal credit union or the local cooperative credit society and must contain the information, material and evidence that the Superintendent may require.

• Marginal note:Receipt

  (6) If the Superintendent is of the opinion that the application includes all the required information, material and evidence, the Superintendent must certify receipt of the application.

• Marginal note:Approval by Minister

  (7) The Minister may approve a purchase agreement if the Minister is of the opinion that

  • (a) the local cooperative credit society has complied with the applicable requirements set out in regulations made under subsection (12);

  • (b) the purchase agreement has been approved by separate special resolutions of the members and shareholders, if any, of the local cooperative credit society; and

  • (c) the local cooperative credit society has obtained all of the approvals required for the sale under the laws of the relevant province.

• Marginal note:Minister’s decision

  (8) The Minister must make a decision in respect of the application within 45 days of the day on which the Superintendent certifies receipt of it, but the Minister may extend this period for an additional 45 days if the Minister considers it appropriate to do so.

• Marginal note:Effect of approval by Minister

  (9) A purchase agreement has no force or effect until it has been approved by the Minister.

• Marginal note:Transitional relief

  (10) The Minister may, by order, grant to the federal credit union the transitional relief set out under section 39.011 or 231, subject to the same conditions set out in those sections.

• Marginal note:Additional directors

  (11) When a federal credit union enters into a purchase agreement with a local cooperative credit society, the federal credit union may appoint one or more directors of the local cooperative credit society to serve as additional directors for a term expiring not later than the close of the federal credit union’s next annual meeting.

• Marginal note:Regulations

  (12) The Governor in Council may make regulations respecting notice and disclosure requirements in respect of a purchase agreement under this section, including regulations that authorize the Minister to grant exemptions from those requirements.

Marginal note:Federal credit union

• 417.1 (1) Despite section 417, if, on the day before the day on which a local cooperative credit society is continued as a federal credit union under this Act, the local cooperative credit society or its subsidiary is engaging in any of the following activities, the federal credit union may, with the Minister’s approval, engage in that activity:

  • (a) the leasing of motor vehicles in Canada for the purpose of extending credit to a customer or financing a customer’s acquisition of a motor vehicle;

  • (b) providing temporary possession of motor vehicles to customers in Canada for a purpose other than to finance a customer’s acquisition of a motor vehicle.

• Marginal note:Amalgamation

  (2) Despite section 417, if, on the day before the day on which it amalgamates with another federal credit union under this Act, a federal credit union or its subsidiary is engaging in an activity referred to in paragraph (1)(a) or (b), the federal credit union resulting from that amalgamation may, with the Minister’s approval, engage in that activity.

• Marginal note:Past continuation

  (3) A federal credit union may, with the Minister’s approval, engage in an activity referred to in paragraph (1)(a) or (b) if

  • (a) the federal credit union was continued from a local cooperative credit society before the day on which this subsection comes into force; and

  • (b) the local cooperative credit society, or its subsidiary, was engaging in the activity on the day before it was continued.

• Marginal note:Conditions

  (4) The Minister may, in granting an approval under this section, impose any terms and conditions, including limits on where the activity may be engaged in and what types of motor vehicles and how many of those vehicles may be leased, or require any undertaking that the Minister considers appropriate.

• (a) engaging in any financial service activity that a bank is permitted to engage in under any of paragraphs 409(2)(a) to (d) or any other activity that a bank is permitted to engage in under section 410 or 411 or that a federal credit union is permitted to engage in under section 417.1;

• (g) assets purchased or sold under a sale agreement that is approved by the Minister under section 236 or a purchase agreement that is approved by the Minister under section 236.1;

• (a.2) the provisions contained in a plan approved by the Minister under subsection 39.011(2) of the Bank Act;

PART 1Measures in Relation to Foreign States

• Marginal note:Consultation with Minister of Finance

  (2.1) The Minister of Finance must be consulted before an order or regulation is made under subsection (1) if any of the following persons would be identified in the order or regulation:

  • (a) a foreign entity that is identified by the Financial Stability Board as a global systemically important bank;

  • (b) a foreign institution, as defined in section 2 of the Bank Act, that carries on business in Canada;

  • (c) a foreign payment service provider, as defined in section 2 of the Retail Payment Activities Act, that directs retail payment activities, as defined in that section, at persons that are in Canada;

  • (d) a central bank of a foreign state;

  • (e) a foreign entity that operates a stock exchange or a clearing and settlement system.

Marginal note:Minister of Foreign Affairs

• 6 (1) Subject to subsection (2), the Minister of Foreign Affairs is responsible for the administration and enforcement of this Act other than Part 2.

PART 2Obligations Specific to Financial Institutions

Definitions

Marginal note:Definitions

13 The following definitions apply in this Part.

federal financial institution

federal financial institution means a financial institution, as defined in section 3 of the Office of the Superintendent of Financial Institutions Act. (institution financière fédérale)

foreign property

foreign property means any property that is situated in Canada and that is owned — or is held or controlled, directly or indirectly — by a person, including a foreign state, that is identified in an order or regulation made under subsection 4(1). (bien étranger)

Regulations and Orders

Marginal note:Requirement to provide information

• 14 (1) On the recommendation of the Minister of Finance made after that Minister has consulted with the Minister of Foreign Affairs, the Governor in Council may make regulations requiring that a federal financial institution provide the Minister of Finance with information on

  • (a) any foreign property that is in the federal financial institution’s possession or control; and

  • (b) any profits that the federal financial institution realizes from such foreign property.

• Marginal note:Rules

  (2) The regulations may include rules respecting

  • (a) the manner of determining the amount of any profits;

  • (b) the non-application of the regulations to any foreign property or profits;

  • (c) the time within which and the manner in which information must be provided; and

  • (d) any other matter related to the administration of the regulations.

Marginal note:Direction to pay

• 15 (1) The Minister of Finance may make an order directing a specified federal financial institution to pay to the Receiver General any profits realized from foreign property that is in the federal financial institution’s possession or control, in the amount that is specified in the order or determined in the manner set out in the order.

• Marginal note:Rules

  (2) The order may include rules respecting

  • (a) the time within which and the manner in which the profits must be paid; and

  • (b) any other matter related to the administration of the order.

• Marginal note:Debt to His Majesty

  (3) An amount payable under the order and any costs incurred by or on behalf of His Majesty in right of Canada in relation to recovering the amount are the liability of the federal financial institution that is required to pay the amount and constitute a debt due to His Majesty in right of Canada that may be recovered in any court of competent jurisdiction.

• Marginal note:Statutory Instruments Act

  (4) The order is not a statutory instrument for the purposes of the Statutory Instruments Act.

Administration and Enforcement

Marginal note:Minister of Finance

16 The Minister of Finance is responsible for the administration and enforcement of this Part.

Marginal note:Sharing of information

17 The Minister of Foreign Affairs, any Minister designated under subsection 6(2) or (3), the Superintendent of Financial Institutions and the Director of the Canadian Security Intelligence Service may assist the Minister of Finance in matters relating to the making, administration or enforcement of regulations referred to in subsection 14(1) or an order referred to in subsection 15(1) and, for that purpose, those persons and the Minister of Finance may collect information from and disclose information to each other.

Marginal note:Disclosure to RCMP or FINTRAC

18 The Minister of Finance may disclose to the Royal Canadian Mounted Police or the Financial Transactions and Reports Analysis Centre of Canada any information that is relevant to the making, administration or enforcement of regulations referred to in subsection 14(1) or an order referred to in subsection 15(1).

Marginal note:RCMP

19 At the request of the Minister of Finance, the Commissioner of the Royal Canadian Mounted Police may, for the purposes of this Part, disclose to the Minister of Finance any information received from a federal financial institution under an order or regulation made under Part 1.