Port Authorities Management Regulations (SOR/99-101)

37 Information required by sections 35 and 36 may be presented in any one of the categories of income or expenses that is appropriate, broken down among them or presented in a footnote or endnote to the statements.

• 38 (1) For the purposes of subsection 37(3) of the Act, a port authority and a wholly-owned subsidiary of a port authority shall each specify in its annual financial statements

  • (a) the name, title and total remuneration of every director and every chief executive officer who held office with it in that fiscal year; and

  • (b) the name, title and total remuneration of every officer and every employee of it who held office or was employed in that fiscal year if the remuneration exceeded the threshold prescribed in section 39.

• (2) The port authority and the wholly-owned subsidiary shall each show in its annual financial statements a breakdown into the following amounts of remuneration in respect of each person referred to in subsection (1):

  • (a) salaries and fees;

  • (b) allowances; and

  • (c) other benefits.

• (3) Information required by this section may be presented in any one of the categories of expenses that is appropriate or in a footnote or endnote to the statements.

Remuneration Threshold

• 39 (1) For the purposes of paragraph 37(3)(c) of the Act, the remuneration threshold applicable to officers and employees of a port authority or of a wholly-owned subsidiary of a port authority is $150,000. Beginning on January 1, 2000, the remuneration threshold is adjusted on January 1 of each year by the change in the consumer price index between the previous two years.

• (2) The consumer price index for any year is the annual average all-items consumer price index for Canada (not seasonally adjusted) published by Statistics Canada in respect of that year.

Approval of Annual Financial Statements

• 40 (1) The board of directors of a port authority shall approve the annual financial statements referred to in paragraph 36(a) of the Act and the approval shall be evidenced by the signature of one or more directors.

• (2) A port authority shall not issue, publish or circulate copies of the annual financial statements unless they are

  • (a) approved and signed in accordance with subsection (1); and

  • (b) accompanied by the report of the auditor of the port authority.

Audits

Qualification of Auditor

• 41 (1) Subject to subsection (5), an auditor of a port authority shall be independent of the port authority, any body corporate controlled by the port authority and their directors and officers.

• (2) For the purposes of this section,

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

  • (b) a person is not independent if the person or the person’s business partner

    • (i) is a business partner, director, officer or employee of the port authority or a body corporate controlled by the port authority, or a business partner of a director, officer or employee of any of them,

    • (ii) has the beneficial ownership of, or directly or indirectly controls, a material interest in a borrowing of the port authority or a share or borrowing of a body corporate controlled by the port authority, or

    • (iii) has been a receiver, receiver-manager, liquidator or trustee in bankruptcy of the port authority or a body corporate controlled by the port authority within two years before the day on which the appointment as auditor would take effect.

• (3) An auditor who becomes disqualified under this section shall, subject to subsection (5), resign without delay on becoming aware of the disqualification.

• (4) An interested person may apply to a court for an order declaring an auditor to be disqualified under this section and the office of auditor to be vacant.

• (5) An interested person may apply to a court for an order exempting an auditor from disqualification under this section and the court may, if it is satisfied that an exemption would not unfairly prejudice the port authority, make an exemption order on any terms that it thinks fit, which order may have retroactive effect.

Appointment of Auditor

• 42 (1) The board of directors of a port authority shall

  • (a) at its first meeting, appoint an auditor to hold office until the close of the first annual meeting; and

  • (b) before the first and each subsequent annual meeting, appoint an auditor to hold office from the close of that annual meeting until the close of the next following annual meeting.

• (2) Despite paragraph (1)(b), if an auditor is not appointed before an annual meeting, the incumbent auditor continues in office until a successor is appointed.

• (3) The port authority shall announce at the annual meeting the name of the auditor appointed to hold office beginning at the close of the meeting.

Remuneration of Auditor

43 The remuneration of the auditor of a port authority shall be fixed by the board of directors.

Vacancy in Office of Auditor

• 44 (1) If a vacancy occurs in the office of auditor of a port authority, the board of directors shall without delay appoint an auditor to fill the vacancy for the remainder of the term of the predecessor.

• (2) If a vacancy occurs in the office of auditor and the board of directors does not appoint an auditor, a court may, on the application of an interested person, appoint and fix the remuneration of an auditor, who holds office until an auditor is appointed by the board of directors.

Removal of Auditor

45 The board of directors of a port authority may remove from office an auditor other than an auditor appointed by the Minister under subsection 43(2) of the Act or by a court.

Ceasing to Hold Office

• 46 (1) An auditor of a port authority ceases to hold office when

  • (a) the auditor dies or resigns;

  • (b) the auditor is removed; or

  • (c) the auditor ceases to hold office under section 42.

• (2) The resignation of an auditor becomes effective on the day on which a written resignation is received by the port authority or on the day specified in the resignation, whichever is later.

• 47 (1) An auditor is entitled to submit a written statement to the port authority giving the reasons for resignation or the reasons for opposing a proposed action or resolution when the auditor

  • (a) resigns;

  • (b) receives a notice or otherwise learns of a meeting of the board of directors called for the purpose of removing the auditor; or

  • (c) receives a notice or otherwise learns of a meeting of the board of directors at which another person is to be appointed to fill the office of auditor, whether because of the resignation or removal of the incumbent auditor or because the term of office has expired or is about to expire.

• (2) The port authority shall, in respect of the auditor’s written statement, as soon as possible after it is submitted,

  • (a) send a copy to the Minister and to its directors and chief executive officer and the proposed replacement auditor; and

  • (b) publish a notice in a major newspaper published or distributed in the municipalities where the port is situated setting out that the statement is available to the public at its registered office.

• (3) No person shall accept an appointment or consent to be appointed as the auditor of a port authority if the person is replacing an auditor who has resigned or been removed or whose term of office has expired or is about to expire until the person has requested and received from that auditor a written statement of the circumstances and the reasons, in the auditor’s opinion, for the replacement.

• (4) Despite subsection (3), a person otherwise qualified may accept an appointment or consent to be appointed as the auditor of a port authority if, within 15 days after making a request referred to in that subsection, the person does not receive a reply.

• (5) Unless subsection (4) applies, the appointment as auditor of a port authority of a person who has not complied with subsection (3) is null and void.

Attendance at Annual Meeting

• 48 (1) The auditor of a port authority is entitled to receive notice of every annual meeting and, at the expense of the port authority, to attend and be heard at the meeting on matters relating to the duties of the auditor.

• (2) If a director of a port authority gives written notice to the auditor or a former auditor of the port authority not less than 10 days before an annual meeting, the auditor or former auditor shall attend the meeting at the expense of the port authority and answer questions relating to the duties of the auditor.

• (3) The director of a port authority who sends the notice referred to in subsection (2) shall send a copy of it concurrently to the port authority.

• (4) An auditor or former auditor does not contravene subsection (2) unless the auditor knowingly fails to comply with the requirements of that subsection.

Examination and Report

• 49 (1) The auditor of a port authority shall make the examination that is in the auditor’s opinion necessary to enable reporting on the annual financial statements required to be presented at the annual meeting, except the financial statements or part of them that relates to the fiscal year referred to in subparagraph 36(a)(ii) of the Act.

• (2) An auditor is not liable for relying reasonably on the report of an auditor of a subsidiary of the port authority the accounts of which are included in whole or in part in the financial statements of the port authority.

• (3) For the purpose of subsection (2), reasonableness is a question of fact.

• (4) Subsection (2) applies whether or not the financial statements of the port authority reported on by the auditor are in consolidated form.

Audit Principles

50 The auditor of a port authority shall prepare the report referred to in paragraph 40(2)(b) in accordance with generally accepted auditing standards as set out in the CPA Canada Handbook, as amended from time to time.

Right to Information

• 51 (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

• 52 (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

• 53 (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.