Canada Development Corporation Reorganization Act (S.C. 1985, c. 49)

Short Title

Marginal note:Short title

1 This Act may be cited as the Canada Development Corporation Reorganization Act.

Interpretation

Marginal note:Definitions

• 2 (1) In this Act,

  Corporation

  Corporation means the Canada Development Corporation, a corporation established by the Canada Development Corporation Act and continued under the Canada Business Corporations Act pursuant to this Act; (Société)

  Minister

  Minister means the Minister of Regional Industrial Expansion. (ministre)

• Marginal note:Same meaning

  (2) Except as otherwise provided, words and expressions used in this Act have the same meaning as in the Canada Business Corporations Act.

• Marginal note:Name change

  (3) If the name of the Corporation is changed, the references in this Act to the Corporation shall be read as references to the Corporation by its new name.

Disposal of Crown Securities

Marginal note:Disposal of securities

• 3 (1) The Minister may, with the approval of the Governor in Council, dispose of any securities of the Corporation held by Her Majesty in right of Canada and any securities of any other body corporate acquired by way of purchase or dividend or in any other manner from the Corporation by or on behalf of Her Majesty in right of Canada.

• Marginal note:Incidental matters

  (2) The Minister may do all things and perform all acts necessary for or incidental to disposing of any securities referred to in subsection (1).

Continuation of Corporation

Marginal note:Application for certificate of continuance

• Footnote ^*4 (1) The Minister shall, within four months after the day on which this Act comes into force, submit to the Governor in Council for approval an application for a certificate of continuance of the Corporation under section 181 of the Canada Business Corporations Act.

  • Return to footnote ^*[Note: Act in force on assent December 20, 1985.]

• Marginal note:Submission to Director

  (2) Notwithstanding any other Act of Parliament, the directors of the Corporation shall submit the application referred to in subsection (1) to the Director within two weeks after the approval thereof by the Governor in Council.

• Marginal note:Presumption

  (3) An application submitted to the Director in compliance with this section is, subject to this Act, deemed for all purposes to have been made under subsection 181(1) of the Canada Business Corporations Act.

Marginal note:Mandatory provisions in articles of continuance

• 5 (1) Notwithstanding the Canada Business Corporations Act, the articles of continuance of the Corporation shall contain

  • (a) provisions imposing constraints on the issue, transfer and ownership of securities of the Corporation to prevent any one resident, together with the associates of that resident, if any, from holding or beneficially owning, otherwise than by way of security only, securities to which are attached more than twenty-five per cent of the votes that may ordinarily be cast to elect directors of the Corporation;

  • (b) provisions imposing constraints on the issue, transfer and ownership of securities of the Corporation to prevent any one non-resident, together with the associates of that non-resident, if any, from holding or beneficially owning, otherwise than by way of security only, securities to which are attached more than ten per cent of the votes that may ordinarily be cast to elect directors of the Corporation;

  • (c) provisions imposing constraints on the issue, transfer and ownership of securities of the Corporation to prevent non-residents from holding or beneficially owning, otherwise than by way of security only, in the aggregate securities to which are attached more than twenty-five per cent of the votes that may ordinarily be cast to elect directors of the Corporation;

  • (d) provisions respecting the enforcement of the constraints imposed pursuant to paragraphs (a) to (c); and

  • (e) provisions establishing the classes and number of shares that the Corporation is authorized to issue as

    • (i) twenty million senior preferred shares, without nominal or par value, issuable in one or more series and in respect of which the stated capital at any time shall not exceed two hundred million dollars,

    • (ii) one hundred and thirty million public preferred shares, without nominal or par value, issuable in one or more series and in respect of which the stated capital at any time shall not exceed six hundred and fifty million dollars,

    • (iii) thirty million preferred shares, without nominal or par value, issuable in one or more series and in respect of which the stated capital at any time shall not exceed one hundred and fifty million dollars, and

    • (iv) two hundred million common shares without nominal or par value.

• Marginal note:Enforcement provisions

  (2) Without limiting the generality of paragraph (1)(d), the provisions referred to therein may provide for the filing of declarations, the suspension of voting rights, the forfeiture of dividends or the refusal of registration of securities.

• Marginal note:Idem

  (3) The provisions referred to in paragraph (1)(d) may exempt from the operation of the constraints any subscription for or transfer of securities of the Corporation to which are attached not more than two thousand votes that may ordinarily be cast to elect directors of the Corporation.

• Marginal note:Application of constraint provisions

  (4) No provision imposing constraints that is included in the articles of continuance of the Corporation in compliance with subsection (1) shall be applied so as to affect the ownership by Her Majesty in right of Canada of securities of the Corporation that were held by Her Majesty immediately prior to the day on which a certificate of continuance of the Corporation is issued.

• Marginal note:Securities held or beneficially owned jointly

  (5) For the purposes of this section, where a security of the Corporation is held or beneficially owned jointly and one or more of the joint holders or beneficial owners is a non-resident, the security is deemed to be held or beneficially owned by a non-resident.

• Marginal note:Associates

  (6) For the purposes of this section, a person is an associate of a resident or non-resident if

  • (a) one is a corporation of which the other is an officer or director;

  • (b) one is a corporation that is controlled directly or indirectly by the other;

  • (c) one is a partnership of which the other is a partner;

  • (d) both are corporations and one is directly or indirectly controlled by the same government in Canada, foreign government, individual or corporation that directly or indirectly controls the other;

  • (e) both are members of a voting trust that relates to securities of the Corporation;

  • (f) one is a corporation and the other is an associate, within the meaning of paragraphs (a) to (e), of one or more other persons and, together with those other persons, owns more than fifty per cent of the voting shares of that corporation;

  • (g) both are associates within the meaning of paragraphs (a) to (f) of the same resident or non-resident; or

  • (h) both are parties to an agreement or arrangement, a purpose of which, in the opinion of the Board of Directors of the Corporation, is to require the parties to act in concert with respect to their interests in the Corporation.

• Marginal note:Exceptions

  (7) Notwithstanding subsection (6), for the purposes of this section,

  • (a) where a person who is a resident and who, but for this paragraph, would be an associate of a resident or non-resident submits to the Corporation a declaration stating that no securities of the Corporation held by him or to be held by him to which are attached votes that may ordinarily be cast to elect directors of the Corporation is or will be, to his knowledge, held in the right of, or for the use or benefit of, himself or any resident or non-resident of whom, but for this paragraph, he would be an associate, that person and that resident or non-resident are not associates so long as any such securities held by the person who made the declaration are not held contrary to the statements made in the declaration;

  • (b) two corporations are not associates by virtue of paragraph (6)(g) by reason only that under paragraph (6)(a) each is an associate of the same resident or non-resident; and

  • (c) where it appears from the central securities register of the Corporation that a person holds or beneficially owns, otherwise than by way of security only, securities to which are attached not more than two thousand votes that may ordinarily be cast to elect directors of the Corporation, that person is not an associate of any other person and no other person is an associate of that person.

• Marginal note:Application

  (8) Paragraphs (7)(a) and (c) do not apply to Her Majesty in right of Canada or a province or any agent of, or corporation owned or controlled by, Her Majesty in either such right.

• Marginal note:Reference to Her Majesty

  (9) A reference in this section to a “person” includes a reference to Her Majesty in right of Canada or a province and any agent of Her Majesty in either such right.

• Marginal note:Definitions

  (10) In this section,

  corporation

  corporation includes a body corporate, association, partnership or other organization; (société)

  non-resident

  non-resident means

  • (a) an individual, other than a Canadian citizen, who is not ordinarily resident in Canada,

  • (b) a corporation incorporated, formed or otherwise organized outside Canada,

  • (c) the government of a foreign state or any political subdivision thereof, or a person empowered to perform a function or duty on behalf of such a government,

  • (d) a corporation that is controlled directly or indirectly by non-residents as defined in any of paragraphs (a) to (c),

  • (e) a trust

    • (i) established by a non-resident as defined in any of paragraphs (b) to (d), other than a trust for the administration of a pension fund for the benefit of individuals a majority of whom are residents, or

    • (ii) in which non-residents as defined in any of paragraphs (a) to (d) have more than fifty per cent of the beneficial interest, or

  • (f) a corporation that is controlled directly or indirectly by a trust described in paragraph (e); (non-résident)

  resident

  resident means an individual, corporation, government or trust that is not a non-resident and includes Her Majesty in right of Canada or a province and any agent of Her Majesty in either such right. (résident)

Marginal note:Permitted provisions in articles of continuance

6 Notwithstanding the Canada Business Corporations Act, the articles of continuance of the Corporation may, whether or not a special resolution has been passed, contain

• (a) a provision establishing a new name for the Corporation;

• (b) provisions authorizing the directors of the Corporation to fix the number of shares in, and to determine the designation, rights, privileges, restrictions and conditions attaching to shares of, each series of senior preferred shares, public preferred shares or preferred shares designated on or after the day on which a certificate of continuance of the Corporation is issued; and

• (c) such provisions as are required to make the articles conform to the Canada Business Corporations Act.

Marginal note:Prohibited provisions in articles of continuance

• Footnote ^*7 (1) Notwithstanding the Canada Business Corporations Act, the articles of continuance of the Corporation shall not contain any provision that changes the attributes of the authorized or outstanding shares of the Corporation as those attributes exist on the day on which this Act comes into force, unless

  • (a) the provision is required to make the articles conform to the Canada Business Corporations Act or to paragraph 5(1)(e); or

  • (b) the provision is approved by the shareholders in the manner that would be required under section 261 of that Act if that section applied to the continuance.

    • Return to footnote ^*[Note: Act in force on assent December 20, 1985.]

• Marginal note:Presumption

  (2) A provision approved as described in paragraph (1)(b) shall be deemed to be an amendment referred to in subsection 261(2) of the Canada Business Corporations Act.

Marginal note:Amendment not precluded

• 8 (1) Subject to subsection (2), nothing in sections 5 to 7 shall be construed to prevent or in any way restrict the Corporation or its shareholders or directors from amending its articles under and in accordance with the Canada Business Corporations Act after the Corporation is continued under that Act.

• Marginal note:Restriction

  (2) Notwithstanding the Canada Business Corporations Act, the Corporation and its shareholders and directors shall not amend any provision included in the articles of continuance in compliance with any of paragraphs 5(1)(a) to (c) or make any articles or by-laws inconsistent with any such provision.

Transitional and Repeal Provisions

Marginal note:Number of directors

• 9 (1) Notwithstanding the Canada Business Corporations Act, the Board of Directors of the Corporation shall consist of such number of directors, being not less than eighteen or more than twenty-one, as may be fixed from time to time by the Board.

• Marginal note:Expiry

  Footnote ^*(2) Subsection (1) expires on the later of

  • (a) the day that is two years after the day on which this Act comes into force, and

  • (b) the day on which the number of votes that may ordinarily be cast by or on behalf of Her Majesty in right of Canada to elect directors of the Corporation is reduced to less than ten per cent of the total number of such votes.

    • Return to footnote ^*[Note: Act in force on assent December 20, 1985.]

Marginal note:Option to appoint directors

• 10 (1) Notwithstanding the Canada Business Corporations Act, the Minister may, with the approval of the Governor in Council, annually appoint not more than five directors of the Corporation in lieu of voting the securities of the Corporation held by Her Majesty in right of Canada on any resolution electing directors.

• Marginal note:When made

  (2) An appointment under subsection (1) shall be made by notice in writing to the Corporation at least thirty days before the date of the notice of the annual meeting.

• Marginal note:Notification of Minister

  (3) The Corporation shall notify the Minister of the date referred to in subsection (2) at least forty-five days before the date.

• Marginal note:Appointment of replacement

  (4) Where a director appointed pursuant to this section dies, resigns or becomes incapable of carrying out his duties, the Minister may, with the approval of the Governor in Council, appoint a person to replace that director.

• Marginal note:Term of office

  (5) A director appointed pursuant to subsection (1) assumes office at the first annual meeting following his appointment and ceases to hold office, unless reappointed for a further term, at the time the directors elected at the next annual meeting assume office.

• Marginal note:Limitation

  Footnote ^*(6) No director may be appointed pursuant to this section after the later of

  • (a) the day that is two years after the day on which this Act comes into force, and

  • (b) the day on which the number of votes that may ordinarily be cast by or on behalf of Her Majesty in right of Canada to elect directors of the Corporation is reduced to less than ten per cent of the total number of such votes.

    • Return to footnote ^*[Note: Act in force on assent December 20, 1985.]

Marginal note:Insurance, trust and loan funds

• 11 (1) The shares of the Corporation are an authorized investment for the funds of a corporation to which the Canadian and British Insurance Companies Act, the Foreign Insurance Companies Act, the Loan Companies Act or the Trust Companies Act applies.

• Marginal note:Expiry

  (2) Subsection (1) expires on April 30, 1989.

Marginal note:Application

Footnote ^*12 Sections 9 to 11 apply in respect of the Corporation on and after the day on which a certificate of continuance of the Corporation is issued.

• Return to footnote ^*[Note: Certificate of continuance issued May 1, 1986, see Canada Gazette Part I, Volume 120, page 2411.]

13 [Amendment]

Marginal note:1970-71-72, c. 49

• Footnote ^*14 (1) The Canada Development Corporation Act is repealed on the day on which a certificate of continuance of the Corporation is issued.

• Marginal note:Director to give notice

  (2) The Director is not required to comply with subsection 181(5) of the Canada Business Corporations Act in respect of the Corporation, but he shall, when he issues the certificate of continuance of the Corporation, cause a notice to be published in the Canada Gazette setting out the day on which the certificate is issued and a statement to the effect that the Canada Development Corporation Act is repealed on that day.

  • Return to footnote ^*[Note: Certificate of continuance issued May 1, 1986, see Canada Gazette Part I, Volume 120, page 2411.]