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

Marginal note:Auditor’s right to attend meetings

• 33 (1) The Board’s auditor is entitled to receive notice of and to attend meetings of the board of directors and meetings of the audit committee, at the Board’s expense, and to be heard at those meetings on matters relating to the auditor’s duties.

• Marginal note:Requiring auditor’s attendance

  (2) The Board’s auditor shall attend meetings of the audit committee, if requested to do so by a member of the audit committee, at the Board’s expense, and shall attend meetings of the board of directors, if requested to do so by a director.

Investment Committee

Marginal note:Duties of investment committee

34 The investment committee shall

• (a) perform the duties that are delegated to it by the board of directors;

• (b) approve the engagement of investment managers empowered with discretionary authority to invest the assets of the Board;

• (c) meet with the officers and employees of the Board to discuss the effectiveness of the Board’s investment policies and the achievement of the Board’s objects;

• (d) require management to implement and maintain appropriate procedures to

  • (i) monitor the application of the Board’s investment policies, standards and procedures, and

  • (ii) ensure that the Board’s agents comply with this Act and the Board’s investment policies, standards and procedures; and

• (e) review, evaluate and approve management’s procedures referred to in paragraph (d).

Investments

Marginal note:Investment policies, standards and procedures

35 Subject to the regulations, the board of directors shall establish, and the Board and its subsidiaries shall adhere to, investment policies, standards and procedures that a person of ordinary prudence would exercise in dealing with the property of others.

Marginal note:Duty of investment managers

36 Every investment manager who invests the assets of the Board shall do so in accordance with this Act and the Board’s investment policies, standards and procedures.

37 [Repealed, 2009, c. 31, s. 44]

Financial Management

Financial Year

Marginal note:Financial year

38 The financial year of the Board is the period beginning on April 1 in one calendar year and ending on March 31 in the next calendar year.

Financial Statements

Marginal note:Books and systems

• 39 (1) The Board shall, in respect of itself and each of its subsidiaries, cause

  • (a) books of account and records to be kept;

  • (b) financial and management control and information systems and management practices to be maintained; and

  • (c) a record of the investments held during the financial year to be kept, showing

    • (i) the book value of each investment,

    • (ii) the market value of each investment and such information as will permit the verification of that value, and

    • (iii) such information as will permit the determination of whether the requirements of this Act and the investment policies, standards and procedures have been met.

• Marginal note:Manner in which books, etc., to be kept

  (2) The books, records, systems and practices required by subsection (1) shall be kept and maintained in such manner as will provide reasonable assurance that

  • (a) the Board’s assets and those of its subsidiaries are safeguarded and controlled;

  • (b) the Board’s transactions and those of its subsidiaries are in accordance with this Act and the by-laws, or the by-laws of the subsidiaries, as the case may be; and

  • (c) the Board’s financial, human and physical resources and those of its subsidiaries are managed economically and efficiently and that the Board’s operations and those of its subsidiaries are carried out effectively.

• Marginal note:Internal audit

  (3) The Board shall cause internal audits to be conducted, in respect of itself and each of its subsidiaries, to assess compliance with subsections (1) and (2).

• Marginal note:Annual financial statements

  (4) The Board shall cause financial statements to be prepared annually, in respect of itself and each of its subsidiaries, including, with respect to the financial year to which it relates,

  • (a) a balance sheet as at the end of the financial year;

  • (b) a statement of income for the financial year;

  • (c) a statement of change in net assets for the financial year; and

  • (d) a statement of investment portfolio.

• Marginal note:Contents of statements

  (5) The annual financial statements shall show such information and particulars as in the opinion of the directors are necessary to present fairly, in accordance with generally accepted accounting principles, the primary source of which is the Handbook of the Chartered Professional Accountants of Canada, the Board’s financial position as at the end of the financial year to which it relates.

• Marginal note:Quarterly financial statements

  (6) During each financial year, the Board shall cause quarterly financial statements to be prepared for each three month period of the year. The quarterly statements shall

  • (a) show the same information for the most recent three month period as is required to be set out in the Board’s annual financial statements, except that a balance sheet is not required; and

  • (b) show the same information in respect of the part of the year up to the date of the statements in relation to the corresponding period in the preceding financial year.

• Marginal note:Approval by board of directors

  (7) The board of directors shall approve the annual financial statements of the Board and of each of its subsidiaries and that approval shall be evidenced by the signature of at least one director of the Board.

• Marginal note:Jointly and separately

  (8) The financial statements required to be prepared under this section shall be prepared, as one set of statements, jointly and separately in relation to amounts managed by the Board for the purposes of the base Canada Pension Plan and the additional Canada Pension Plan, as defined in section 91 of the Canada Pension Plan.

Auditor’s Report

Marginal note:Annual auditor’s report

• 40 (1) The Board shall cause an annual auditor’s report to be prepared, in respect of itself and each of its subsidiaries, on

  • (a) the annual financial statements referred to in section 39;

  • (b) any revised financial statement referred to in subsection 41(3); and

  • (c) the record of investments referred to in paragraph 39(1)(c).

• Marginal note:Contents

  (2) A report under subsection (1) shall be addressed to the Board and shall

  • (a) include separate statements indicating whether, in the auditor’s opinion,

    • (i) the financial statements are presented fairly in accordance with generally accepted accounting principles applied on a basis consistent with that of the preceding year,

    • (ii) the Board’s transactions and those of its subsidiaries that have come to the auditor’s notice in the course of the auditor’s examination for the report were in accordance with this Act and the by-laws, and the by-laws of the subsidiaries, as the case may be, and

    • (iii) the record of investments kept in accordance with paragraph 39(1)(c) fairly presents the information required by that paragraph; and

  • (b) call attention to any other matter falling within the scope of the auditor’s examination for the report that, in the auditor’s opinion, should be brought to the attention of the Board.

• Marginal note:Examination

  (3) An auditor preparing a report under subsection (1) shall make such examination as the auditor considers necessary for the purpose.

• Marginal note:Auditing standards

  (4) An auditor’s examination shall be conducted in accordance with generally accepted auditing standards, the primary source of which is the Handbook of the Chartered Professional Accountants of Canada.

• Marginal note:Reliance on internal audit

  (5) In conducting an audit under this Act, an auditor shall rely on any internal audit conducted under subsection 39(3), to the extent that the auditor considers that reliance to be practicable.

Marginal note:Notice of errors and omissions

• 41 (1) A director or officer of the Board shall without delay notify the Board’s auditor and the audit committee of any error or omission of which the director or officer becomes aware in a financial statement that the auditor or a former auditor has reported on or in a report prepared by the auditor or a former auditor under section 40.

• Marginal note:Duty of auditor

  (2) Where the Board’s auditor, or a former auditor of the Board, is notified or becomes aware of any error or omission in a financial statement that the auditor or former auditor has reported on or in a report prepared by the auditor or former auditor under section 40, the auditor or former auditor shall without delay notify each director of the Board of the error or omission if the auditor or former auditor is of the opinion that the error or omission is material.

• Marginal note:Correction

  (3) Where the directors receive a notification under subsection (2) of an error or omission in a financial statement or a report, the Board shall prepare a revised financial statement or the auditor or former auditor shall issue a correction to the report, as the case may be, and a copy of it shall be given to the Minister and the appropriate provincial Ministers.

Auditor

Marginal note:Appointment of auditor

• 42 (1) The auditor of the Board shall be appointed annually by the board of directors, and may be removed at any time by the board of directors.

• Marginal note:Re-appointment

  (2) On the expiration of the appointment of the auditor of the Board, the auditor is eligible for re-appointment.

• Marginal note:Continuation in office

  (3) Notwithstanding subsection (1), if an auditor of the Board is not appointed to take office on the expiration of the appointment of an incumbent auditor, the incumbent auditor continues in office until a successor is appointed.

Definition of firm of accountants

• 43 (1) In this section, firm of accountants means a partnership, the members of which are accountants engaged in the practice of accounting, or a body corporate that is incorporated by or under an Act of the legislature of a province and engaged in the practice of accounting.

• Marginal note:Qualification of auditor

  (2) A natural person or firm of accountants is qualified to be the auditor of the Board if

  • (a) in the case of a natural person, the person is an accountant who

    • (i) is a member in good standing of an institute or association of accountants incorporated by or under an Act of the legislature of a province,

    • (ii) has at least five years experience at a senior level in performing audits of a financial institution,

    • (iii) is ordinarily resident in Canada, and

    • (iv) is independent of the Board, each of its subsidiaries, and the directors and officers of the Board and those of each of its subsidiaries; and

  • (b) in the case of a firm of accountants, the member or officer of the firm jointly designated by the firm and the Board to conduct the audit of the Board on behalf of the firm meets the qualifications described in paragraph (a).

• Marginal note:Independence

  (3) For the purposes of this section,

  • (a) independence is a question of fact; and

  • (b) a person is deemed not to be independent if that person or any of that person’s business partners

    • (i) is a business partner, director, officer or employee of the Board or of any of its subsidiaries, or a business partner of any director, officer or employee of the Board or of any of its subsidiaries, or

    • (ii) has been a liquidator, trustee in bankruptcy, receiver or receiver and manager of any of the Board’s subsidiaries within the two years before the natural person’s or the firm of accountants’ proposed appointment, as the case may be, as the Board’s auditor.

• Marginal note:Joint designation

  (4) Within 15 days after appointing a firm of accountants as its auditor, the Board and the firm shall jointly designate a member or officer of the firm who has the qualifications described in paragraph (2)(a) to conduct the audit of the Board on behalf of the firm.

• Marginal note:Resignation

  (5) An auditor of the Board who becomes disqualified under this section shall resign without delay after becoming aware of the disqualification.

• Marginal note:When resignation becomes effective

  (6) A resignation of an auditor of the Board becomes effective at the time the Board receives a written resignation from the auditor or at the time specified in the resignation, whichever is later.

• Marginal note:Statement of auditor

  (7) Where the Board’s auditor resigns or receives a notice or otherwise learns of a meeting of the board of directors at which another auditor is to be appointed in place of the auditor and the auditor objects to being replaced, the auditor shall submit to the Board a written statement giving the reasons for the resignation or the reasons why the auditor objects to being replaced.

• Marginal note:Statement to be sent to Ministers

  (8) Where the Board receives a written statement referred to in subsection (7) that relates to a resignation of its auditor as a result of a disagreement with the directors or officers of the Board or that relates to a replacement or proposed replacement of the auditor, the Board shall without delay send a copy of the statement to the Minister and to the appropriate provincial Ministers of the participating provinces.