2001 Amendments (S-11)

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Table of contents

Part 1 Interpretation and Application (clause 137-138)

The following new definitions to s. 2(1) are proposed:

  • distributing cooperative
  • personal representative
  • member loan
  • security
  • infant

The purpose of these additions isto clarify the language of the CCA, to reduce ambiguity and to harmonize with provincial securities legislation. These changes are required due to amendments to other parts of the Act.

Briefing Book

An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. : 137
CCA Section No. : 2(1) and 2(3)
Topic: Interpretation and Application (Technical Amendments)
Sources of Proposed Law
Canada Business Corporations Act, as amended

Changes From Present Law

(A) Changes are provided to the definition of:

  • distributing cooperative
  • member loan
  • person
  • security
  • personal representative

(B) Includes a provision to ensure that the CCA is interpreted consistently with the definition of "child", as a person who is less than 18 years of age, as proposed by the United Nations Convention on the Rights of the Child. This provision replaces current subsection 2(3).

Purpose of Change 
N/A

Similar Provincial Laws

(A) The purpose of these additions are to clarify the language of the CCA, to reduce ambiguity, and to update the CCA to reflect current business terminology. These changes are required due to amendments to other portions of the Act.

The definition of "distributing cooperative" will be set in the regulations to allow flexibility. This flexibility is necessary given the complexity of differences in provincial securities law terminology to which these definitions should be matched as closely as possible and because the terminology changes over time.

The definition of "personal representative" is similar to that found in the Bank Act.

For the purpose of Part 18.1 (Apportioning Award of Damages), "member loan" is deemed to be a membership share issued at par value and "security" includes a membership share.

The definition of "security" is amended to make reference to 173 of the Act in order to enable members of a cooperative who only hold membership shares to rely on the insider trading civil liability provisions.

(B) This provision was introduced at the suggestion of Mac Harb, M.P. Current subsection 2(3) is being eliminated as a result of the inclusion of new Part 21.1 (Documents in Electronic or Other Form).

Similar Provincial Laws
N/A

Current Wording

2.(1) "distributing cooperative" means a cooperative any of whose issued securities, other than membership shares or member loans, are or were part of a distribution to the public and remain outstanding and are held by more than one person.

"member loan" means a loan required by the cooperative from its members as a condition of membership or to continue membership in the cooperative, and, for the purpose of Parts 8, 16, 17 and 19 and subsection 163(2), a member loan is deemed to be a membership share issued at par value.

"person" means an individual or an entity and includes a legal representative.

"security" includes an investment share, a debt obligation of a cooperative and a certificate evidencing such a share or debt obligation and, for the purposes of Part 19, includes a membership share.

(3) For the purposes of this Act, a document, notice or other information may be sent or otherwise given electronically only if it is sent in accordance with the prescribed requirements and if the by-laws or articles do not provide otherwise.

Proposed Wording
2.(1) "distributing cooperative" means, subject to subsections 4(4) and (5), a distributing cooperative as defined in the regulations.

"member loan" means a loan required by the cooperative from its members as a condition of membership or to continue membership in the cooperative, and, for the purpose of Parts 8, 16, 17, 18.1 and 19 and subsection 163(2), a member loan is deemed to be a membership share issued at par value.

"person" means an individual or an entity, and includes a personal representative.

"security" includes an investment share, a debt obligation of a cooperative and a certificate evidencing such a share or debt obligation and, for the purposes of section 173 and Parts 18.1 and 19, includes a membership share.

"personal representative" means a person who stands in place of and represents another person including, but not limited to, a trustee, an executor, an administrator, a receiver, an agent, a liquidator of a succession, a guardian, a tutor, a curator, a mandatary or an attorney.

(3) For the purposes of this Act, the word "minor" has the same meaning as in the applicable provincial law and, in the absence of any such law, has the same meaning as the word "child" in the United Nations Convention on the Rights of the Child, adopted in the United Nations General Assembly on November 20, 1989.

Bill Clause No. : 138
CCA Section No.: 4(4) and (5)
Topic :Interpretation and Application(Government Administration)
Sources of Proposed Law 
N/A

Changes From Present Law
Update and broaden the Director's individual exemption power in the current s. 4(6) to allow case-by-case exemptions from a cooperative being a "distributing cooperative" and to permit the Director to grant the exemptions where it would not be prejudicial to the public interest.

This change will also add a broad new blanket exemption power to exempt a class or classes of cooperatives from being "distributing cooperatives" where it would not be prejudicial to the public interest.

Purpose of Change This change adds flexibility to the Act and its application by allowing the Director to exempt cooperatives from the requirements associated with being a "distributing cooperative".

Similar Provincial Laws 
Securities Act (Ontario)

Current Wording

4. (4) For the purposes of this Act, securities of a cooperative issued on a conversion of, or in exchange for, other securities are deemed to be securities that are part of a distribution to the public if those other securities were part of a distribution to the public.

(5) Subject to subsection (6), for the purposes of this Act, a security of a body corporate

(a) is part of a distribution to the public if, in respect of the security, there has been a filing of a prospectus, statement of material facts, registration statement, securities exchange take-over bid circular or similar document under the laws of Canada, a province or a jurisdiction outside Canada; or

(b) is deemed to be part of a distribution to the public if the security has been issued and a filing referred to in paragraph (a) would be required if the security were being issued currently.

(6) On the application of a cooperative, the Director may determine that a security of the cooperative is not or was not part of a distribution to the public if the Director is satisfied that the determination would not prejudice any security holder of the cooperative.

Proposed Wording 4. (4) On the application of a cooperative, the Director may determine that the cooperative is not or was not a distributing cooperative if the Director is satisfied that the determination would not be prejudicial to the public interest.

(5) The Director may determine that a class of cooperatives are not or were not distributing cooperatives if the Director is satisfied that the determination would not be prejudicial to the public interest.

Part 2 Incorporation, Structure and Application (clauses 139-144)

Amendments designed to improve the efficient administration of the CCA are included in this Part, including an amendment to clarifying that the Director has the authority to refuse to issue a certificate of incorporation when the articles indicate that the cooperative to be incorporated would not be in compliance with the Act.

Technical amendments are proposed to harmonize the CCA with the proposed amendments to the Canada Business Corporations Act.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. :139
CCA Section No. : 8(1)
Topic: Incorporation, Structure and Organization (Government Administration)

Sources of Proposed Law 
N/A

Changes From Present Law 
Replace the word "federations" with "cooperative entities".

Purpose of Change 
This subsection currently permits a "federation" to incorporate a cooperative as a subsidiary. Section 2 defines a "federation" as a cooperative incorporated under the CCA. The effect of this amendment would be to permit other bodies corporate that meet the definitions of a "cooperative entity", which is broader than the definition of "federation", to incorporate a cooperative as a subsidiary.

Similar Provincial Laws 
N/A

Current Wording 
8. (1) An application for incorporation of a cooperative may be made by a minimum of three persons, or by one or more federations, who intend to be members of the cooperative.

Proposed Wording 
8. (1) An application for incorporation of a cooperative may be made by a minimum of three persons, or by one or more cooperative entities, who intend to be members of the cooperative.

Bill Clause No. :140 and 141
CCA Section No. :new 12(1)(d) and 15(2)
Topic : Incorporation, Structure and Organization(Government Administration)

Sources of Proposed Law 
N/A

Changes From Present Law 
(A) Allow the Director to refuse to issue a certificate of incorporation in certain circumstances.
(B) Clarify in s. 15(2) that the division of members by region is permissible.

Purpose of Change 
(A) The Act does not clearly give the Director the authority to refuse to issue a certificate of incorporation when the articles of incorporation indicate that the cooperative to be incorporated would not be in compliance with the Act. This amendment would give the Director the discretion to refuse to incorporate a cooperative where the documents indicate that the proposed cooperative is not in compliance with the Act.
(B) This amendment is designed to clarify the Act.

Similar Provincial Laws 
N/A

Current Wording 
15. (2) The by-laws of a cooperative may provide for

  1. the representation of members by delegates and, if so,
    1. the designation of the classes of members, if any, who may be represented by delegates,
    2. the procedure for altering classes of members, if applicable, and
    3. the powers, duties, selection, voting rights and procedures for the
    removal of delegates;
  2. the division of members into classes and, if so,
    1. the qualifications for membership in each class,
    2. the conditions precedent to membership in each class,
    3. the method, time and manner of withdrawing from a class or transferring membership from one class to another and any applicable conditions on a transfer, and
    4. (iv) the conditions on which membership in a class ends;

Proposed Wording 
12. (1)(d) a notice that is required to be given under subsection 30(2) or 81(1) indicates that the cooperative, if it came into existence, would be in compliance with the Act.

15.
(2)(a)

  1. the designation of the classes or regional groups of members, if any, who may be represented by delegates,
  2. the procedure for altering classes or regional groups of members, if applicable, and

(2)(b) the division of members into classes or regional groups and, if so,

  1. the qualifications for membership in each class or regional group,
  2. the conditions precedent to membership in each class or regional group,
  3. the method, time and manner of withdrawing from a class or regional group or transferring membership from one class or regional group to another and any applicable conditions on a transfer, and
  4. (iv) the conditions on which membership in a class or regional group ends;

Bill Clause No. : 142
CCA Section No. : 16(b)
Topic : Incorporation, Structure and Organization (Technical Amendments)

Sources of Proposed Law 
N/A

Changes From Present Law 
Amend par. 16(b) to replace the words "legal representatives" with the words "personal representatives".

Purpose of Change 
This technical change clarifies the wording of the Act to reflect the proposed definition of "personal representatives" in subs. 2(1) [see clause 136].

Similar Provincial Laws 
N/A

Current Wording 
16. The articles and by-laws of a cooperative bind it and its members to the same extent as if they ...

(b) contained undertakings by every member and the successors, assigns, mandataries and legal representatives of every member to observe all the provisions of the articles and by-laws.

Proposed Wording 
16.(b) contained undertakings by every member and the successors, assigns and personal representatives of every member to observe all the provisions of the articles and by-laws.

Bill Clause No. : 143
CCA Section No. :19(4)(a)
Topic :Incorporation, Structure and Organization (Technical Amendments)

Sources of Proposed Law 
N/A

Changes From Present Law 
Clarify that par. 19(4)(a) applies to contracts entered into or purported to be entered into with a cooperative prior to its incorporation.

Purpose of Change 
The proposed amendment would clarify the intention of the section, which is to protect third parties who enter into pre-incorporation contracts with as yet unformed cooperatives and would harmonize the provision with proposed amendments to the CBCA.

Similar Provincial Laws 
Business Corporations Act (Saskatchewan)

Current Wording 
19. (4) Whether or not a cooperative has adopted a contract, the court may, on application by a party to the contract,

(a) make an order respecting the nature and extent of the obligations and liability under the contract of the cooperative and the person who purported to enter into the contract by or on behalf of the cooperative; and

Proposed Wording 
19. (4)(a) make an order respecting the nature and extent of the obligations and liability under the contract of the cooperative and the person who entered into or purported to enter into the contract by or on behalf of the cooperative; and

Bill Clause No. :144
CCA Section No. :20(4) and (5)
Topic :Incorporation, Structure and Organization (Government Administration)

Sources of Proposed Law 
N/A

Changes From Present Law
Allow regulations to define what is a combined language form of name.

Purpose of Change 
This amendment would permit the regulations to establish the criteria to be met in order to constitute a combined English and French name.

Similar Provincial Laws 
N/A

Current Wording 
20. (4) The name of a cooperative may be set out in its articles in an English form, a French form, an English form and a French form, or a combined English and French form, so long as the form meets any criteria contained in a regulation made under subsection (5). The cooperative may use and be legally designated by any such form.

(5) The Director may make regulations prescribing the criteria for what constitutes an English form and a French form, and a combined English and French form, of the names of cooperatives.

Proposed Wording 
20. (4) The name of a cooperative may be set out in its articles in an English form, a French form, an English form and a French form, or a combined English and French form, so long as the combined form meets the prescribed criteria. The cooperative may use and be legally designated by any such form.

Part 3 Capacity and Powers (clause 145)

One minor technical amendment to this Part is proposed (s. 28) to reflect the repeal of the financial assistance provisions (see Part 8).

Briefing book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. : 145
CCA Section No. : 28(1)
Topic : Capacity and Powers (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
Amend s 28(1) to remove par. 28(1)(f) and renumber the paragraphs by so that the previous par 28(1)(g) becomes new paragraph 28(1)(f).

Purpose of Change
This a technical change to remove the reference to financial assistance provided under s.160 since s.160 is proposed to be repealed. [see clause 184]

Similar Provincial Laws
N/A

Current Wording
28. (1) No cooperative and no guarantor of an obligation of a cooperative may assert against a person dealing with the cooperative or against a person who acquired rights from the cooperative that...

(f) any financial assistance referred to in section 160 was not authorized; or

(g) a sale, lease or exchange of all or substantially all of the property of the cooperative was not authorized.

Proposed Wording
28. (f) a sale, lease or exchange of all or substantially all of the property of the cooperative was not authorized.

Part 4 Registered Office and Records (clauses 146-148)

An amendment is proposed to permit corporate and accounting records to be kept at a place outside Canada. This amendment is designed to harmonize with proposed amendments to the Canada Business Corporations Act.

A number of technical amendments required as a result of amendments to other parts of the Act are also included.

Briefing book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. : 146
CCA Section No. : 31(3)
Topic : Registered Office and Records (Directors' Residency)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Clarification that records referred in subs. 31(3) may be kept at a place outside Canada as long as they are accessible electronically at the registered office, or any other place in Canada designated by the directors, provided that they do not undermine the provisions of the Income Tax Act, the Excise Tax Act, the Customs Act and all other legislation administered by National Revenue, which requires the maintenance of books and records in Canada.

Purpose of Change
Revenue Canada has expressed concerns about allowing records, particularly accounting records, to be kept outside Canada. The Income Tax Act requires that "records and books of accounts" shall be kept in Canada or such other place as may be designated by the Minister of National Revenue (s. 230(1)).

This proposed provision would make it clear that the CCA requirement is subject to the Income Tax Act, and any other Acts administered by the Minister of National Revenue. Also, a requirement is imposed on the cooperative to make its records available by means of a computer terminal or other technology and to provide technical assistance to facilitate their inspection.

Similar Provincial Laws
Business Corporations Act (Ontario)

Current Wording
31. (3) A cooperative may keep all or any of the records mentioned in paragraphs (1)(a), (b), (c) and (f) and (2)(a) and (b) at a place other than its registered office if the records are available for inspection during regular office hours at the registered office or another office in Canada by means of electronic technology and if to do so would not contravene any other law in Canada. The cooperative must provide technical assistance to persons who wish to use the electronic technology.

Proposed Wording
31. (3) Despite subsection (1), but subject to the Income Tax Act, the Excise Tax Act, the Customs Act and any other Act administered by the Minister of National Revenue , a cooperative may keep all or any of its records mentioned in paragraphs (1)( a ), ( b ), ( c ), ( f ) and ( g ) and (2)( a ) and ( b ) at a place outside Canada , if

(a) The records are available for inspection, by means of a computer terminal or other technology , during regular office hours at the registered office or another office in Canada designated by the directors; and

(b) the cooperative provides the technical assistance to facilitate an inspection referred to in paragraph (a).

Bill Clause No. : 147
CCA Section No. : 32(4)
Topic : Registered Office and Records (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
Amend subs. 32(4) to replace the words "legal representatives" with the words "personal representatives" and expand the list of records that can be examined by adding par. 31(1)(g) to that list.

Purpose of Change
This technical change clarifies the wording of the Act to reflect the proposed definition of "personal representative" in subs. 2(1) [see clause 137] and allow the Director and members, shareholders and creditors of the cooperative or their personal representatives to examine the cooperative's records concerning securities registers under s. 186.

Similar Provincial Laws
N/A

Current Wording
32. (4) Members, creditors and shareholders of the cooperative, their legal representatives and the Director may examine the records referred to in paragraphs 31(1)(a), (b), (c) and (f) during the usual business hours of the cooperative and may take extracts from the records, free of charge, or have copies of them made after payment of a reasonable fee.

Proposed Wording
32. (4) Members, creditors and shareholders of the cooperative, their personal representatives and the Director may examine the records referred to in paragraphs 31(1)( a ), ( b ), ( c ), ( f ) and (g) during the usual business hours of the cooperative and may take extracts from the records, free of charge, or have copies of them made after payment of a reasonable fee.

Bill Clause No. : 148
CCA Section No. : 33(1)
Topic : Registered Office and Records (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
Amend subs. 33(1) to replace the words "legal representatives" with the words "personal representatives".

Purpose of Change
This technical change clarifies the wording of the Act to reflect the proposed definition of "personal representative" in subs. 2(1) [see clause 137].

Similar Provincial Laws
N/A

Current Wording
33. (1) Members, shareholders and creditors of a cooperative and their legal representatives and, where the cooperative is a distributing cooperative, any other person, may request that the cooperative provide them with a list of members or shareholders, no later than ten days after the cooperative receives the affidavit referred to in subsection (2) and after payment of a reasonable fee.

Proposed Wording
33. (1) Members, shareholders and creditors of a cooperative and their personal representatives and, where the cooperative is a distributing cooperative, any other person, may request that the cooperative provide them with a list of members or shareholders, no later than ten days after the cooperative receives the affidavit referred to in subsection (2) and after payment of a reasonable fee.

Part 5 Membership (no amendments)

There are no proposed amendments to this Part.

Part 6 Corporate and Governance (clauses 149-152)

The provisions applicable to meetings of the cooperative would be amended to clarify that members or shareholders may participate electronically in a meeting as long as the cooperative makes available such means of communication. An amendment would also be introduced to clarify that such meetings may also be held entirely by telephonic, electronic or other communication facility (s. 48).

Additional amendments would clarify that a vote at a meeting of the cooperative may be held by electronic means and that any person participating electronically in such a meeting and that is entitled to vote, may exercise their right to vote by electronic means. (s. 65)

A number of amendments repealing the time periods specified and replacing them by time periods prescribed by the Regulations (ss. 51 and 52) are included to allow for greater flexibility to make modifications should the need arise in future.

In addition, the provisions regarding shareholder proposals would be amended to include a minimum share ownership and length of ownership requirements, as proposed in the Canada Business Corporations Act (s. 58).

Briefing book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. :149
CCA Section No. :48(3) and new (3.1)
Topic :Corporate Governance (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
Amend s. 48(3) to replace the word "attend" with "participate in" and to add the words "in accordance with the regulations, if any". The provision is also amended to clarify that members or shareholders may participate electronically in a meeting of the cooperative as long as the cooperative makes available such means of communication.

Provide that a meeting may only be held entirely by electronic means if specifically authorized by the by-laws.

Purpose of Change
New technological developments allow parties situated at different geographical locations to easily communicate with each other. These technologies encourage shareholder/member democracy as they permit more persons to participate in meetings. In recognition of the beneficial aspect of these technologies, the CCA would permit their use subject to the by-laws specifically providing otherwise. However, if the meeting is to be held only by electronic means, members should be given the opportunity to vote on this proposition through the by-law amendment process. This amendment achieves an appropriate balance between the need for member consent and the need for flexibility.

An amendment was introduced at the Senate Committee stage clarifying the language of these provisions.

These proposed amendments harmonize the CCA with the proposed CBCA amendments.

Similar Provincial Laws
N/A

Current Wording
48. (3) Subject to the by-laws, a member or a shareholder may attend a meeting of the cooperative by means of a telephonic, electronic or other communication facility if it permits all participants to communicate adequately with each other during the meeting.

Proposed Wording
48. (3) Unless the by-laws provide otherwise a member or shareholder may participate in a meeting of the cooperative, in accordance with the regulations, if any, by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting, if the cooperative makes available such a communication facility.

(3.1) If the directors of a cooperative, or any other person, call a meeting of the cooperative pursuant to this Act, those directors or that person, as the case may be, may determine that the meeting shall be held, in accordance with the regulations, if any, entirely by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting, if the by-laws so provide.

Bill Clause No. : 150
CCA Section No. : 50(3)
Topic :Corporate Governenace (Unanimous Agreements and Technical Amendments)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
The current subs. 50(3) is repealed and replaced with a provision regarding court orders which would extend the time in which the annual meeting of the cooperative must be held.

Purpose of Change
The current subs. 50(3) would be repealed since a unanimous agreement cannot include a provision dealing with meetings of shareholders.[see clause 174]

Subs. 50(3) would be replaced with a new provision. Presently, there is no provision allowing a cooperative unable to hold the annual meeting within the fifteen month period for reasons beyond its control to postpone the holding of the annual meeting. The proposed amendment would allow a cooperative to apply to the court for an order extending the time in which the annual meeting may be held. Such a provision would contribute to make the legislation flexible.

Similar Provincial Laws
N/A

Current Wording
50. (3) If a unanimous agreement contains a provision that eliminates the need for meetings of shareholders referred to in subsection 115(6), a shareholder may nevertheless at any time call a special meeting of the shareholders.

Proposed Wording
50. (3) Despite subsection (1), the cooperative may apply to the court for an order extending the time for calling an annual meeting.

Bill Clause No. : 151
CCA Section No. : 51(1), (3), (4) and (6)
Topic : Corporate Governance (Shareholder Communications)

Sources of Proposed Law
N/A

Changes From Present Law
Repeal specific time periods set out in s. 51(1), (3), (4) and (6) allow them to be made by regulation.

Purpose of Change
Under the CCA a cooperative may fix a date for determining which members and shareholders are entitled to receive notice of meetings. That date must fall within a period from 21 to 60 days prior to the meeting.

These time periods were based on National Policy Statement No. 41 (NP 41), implemented by the National Securities Administrators in 1987. NP 41 was designed to address complaints by issuers that 21 calendar days was too short a time for proxy material to go through one or more layers of intermediaries and for proxies to be returned to the issuer. Accordingly, NP 41 required issuers to set a record date for shareholder meetings to be 35 to 50 days before the date of the meeting. Subsequently, the maximum time for a record date prior to the meeting was extended to 60 days.

Moving the time periods to the regulations would allow for greater flexibility and would further harmonize with the CBCA.

Similar Provincial Laws
National Policy Statement No. 41

Current Wording
51. (1) The directors may fix in advance a date as the record date for the determination of the members or shareholders who are entitled to receive payment of a dividend or for any other purpose except the right to receive notice of, or to vote at, a meeting, but the record date so fixed must not precede by more than sixty days the particular action to be taken.

(3) For the purpose of determining the shareholders who are entitled to receive notice of a meeting of the shareholders, the directors may fix in advance a date as the record date for that determination, but the record date so fixed must not precede by more than sixty days or by less than twenty-one days the date of the meeting.

(4) For the purposes of determining the shareholders who are entitled to vote at a meeting of shareholders, the directors may fix in advance a date as the record date for that determination, but the record date so fixed must not precede by more than sixty days or by less than twenty-one days the date of the meeting.

(6) If a record date with respect to shareholders is fixed under this section, unless notice of the date is waived by each shareholder whose name is set out in the securities register at the close of business on the day the directors fix the record date, notice of the record date must be given not less than seven days before the record date

Proposed Wording
51. (1) The directors may, within the prescribed period, fix in advance a date as the record date for the determination of the members or shareholders who are entitled to receive payment of a dividend or for any other purpose except the right to receive notice of, or to vote at, a meeting.

(3) For the purpose of determining the shareholders who are entitled to receive notice of a meeting of the shareholders, the directors may, within the prescribed period, fix in advance a date as the record date for that determination.

(4) For the purposes of determining the shareholders who are entitled to vote at a meeting of shareholders, the directors may, within the prescribed period, fix in advance a date as the record date for that determination.

(6) If a record date with respect to shareholders is fixed under this section, unless notice of the date is waived by each shareholder whose name is set out in the securities register at the close of business on the day the directors fix the record date, notice of the record date must be given within the prescribed period

Bill Clause No. : 152
CCA Section No. : 52(1) and new (1.1)
Topi : Corporate Governance (Shareholder Communications)

Sources of Proposed Law
N/A

Changes From Present Law
Repeal the specific time periods set out in s. 52(1) and allow them to be made by regulation. Add a new provision following s. 52(1) permitting non-distributing cooperatives to send out a notice of meeting less than twenty-one days before the meeting, if specified in the articles or the by-laws.

Purpose of Change
See clause 151.
The proposed change will further harmonize the CCA with the CBCA.

Similar Provincial Laws
National Policy Statement No. 41

Current Wording
52. (1) Notice of the time and place of a meeting of a cooperative must be sent not less than twenty-one days or more than sixty days before the meeting

  1. to each person who is entitled to vote at the meeting;
  2. to each director; and
  3. to the auditor of the cooperative, if any.

Proposed Wording
52. (1) Notice of the time and place of a meeting of a cooperative must be sent within the prescribed period

  1. to each person who is entitled to vote at the meeting;
  2. to each director; and
  3. to the auditor of the cooperative, if any.

(1.1) In the case of a cooperative that is not a distributing cooperative, the notice may be sent within a shorter period if so specified in the articles or the by-laws.

Part 6 Corporate and Governance (clauses 153-158)

The provisions applicable to meetings of the cooperative would be amended to clarify that members or shareholders may participate electronically in a meeting as long as the cooperative makes available such means of communication. An amendment would also be introduced to clarify that such meetings may also be held entirely by telephonic, electronic or other communication facility (s. 48).

Additional amendments would clarify that a vote at a meeting of the cooperative may be held by electronic means and that any person participating electronically in such a meeting and that is entitled to vote, may exercise their right to vote by electronic means. (s. 65)

A number of amendments repealing the time periods specified and replacing them by time periods prescribed by the Regulations (ss. 51 and 52) are included to allow for greater flexibility to make modifications should the need arise in future.

In addition, the provisions regarding shareholder proposals would be amended to include a minimum share ownership and length of ownership requirements, as proposed in the Canada Business Corporations Act (s. 58).

Briefing book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. : 153
CCA Section No. : 58(2) and (4), new (2.1), (2.2), (2.3), (2.4) and (4.1)
Topic :Corporate Governance (Shareholder Communications)

Sources of Proposed Law
U.S. Securities and Exchange Commission Rule 14a-8

Changes From Present Law
Clarification of the proposals made by shareholders and harmonization of the provision with CBCA.

Purpose of Change
These proposed amendments deal with eligibility requirements for persons other than members to submit a proposal. Pursuant to s. 58(2), there are no restrictions on members of the cooperative submitting a proposal to amend the articles of the cooperative. Eligibility requirements (s. 58(2.1)) address the concern raised that individual holders of investment shares who have not manifested a genuine interest and stake in the affairs of the cooperative still have access to this mechanism.

The eligibility requirements for proposals are designed to curtail abuse by requiring that those who put the cooperative to the expense of including a proposal in its notice of meeting have had a continuous minimum level of investment in the cooperative for a specified period of time. The pooling of shareholders' holdings to meet the minimum requirements maintains the right of minor shareholders to submit proposals without imposing a significant economic barrier.

The proposed amendment to s. 58(3) would allow more room to explain proposals than is currently available. The lack of sufficient space may be an issue where proposals deal with complex matters.

These amendments will help ensure the quality and relevance of proposals submitted.

Under current paragraph 58(4)(a), the current deadline for submission is 90 days prior to the anniversary date of the previous year's annual meeting. This limit, coupled with the NP 41 requirement that proxy materials be sent to shareholders at least 33 days before the meeting, leaves the cooperative with little time to respond to a proposal. It also leaves little time for the person who submitted the proposal to work through the court process in the case of a refusal by the cooperative to include a proposal.

Moving the critical deadline back to the "anniversary date of the notice of meeting that was sent to members and shareholders in connection with the previous annual meeting" ensures that the cooperative has sufficient time to deal with the proposal and that the time period is not cut by time limitation rules for sending out proxy material. Allowing the number of days prior to that anniversary date to be prescribed increases flexibility.

The amendment to s. 58(4)(c) and (d) would have the effect of removing the time period reference in the paragraph and replacing it with a time period to be prescribed in the regulations.

The new s. 58(4.1) is intended to operate as a deterrent to shareholders who meet the requirements at the time they submit the proposal, but either sell their shares or fail to maintain their support through the date of the meeting. The same rule would apply to members who make a proposal and prior to the meeting withdraw from membership.

Similar Provincial Laws
N/A

Current Wording
58. (2) The following persons may, in accordance with section 290, make a proposal to amend the articles:

  1. a member;
  2. a director or a shareholder; and
  3. (c) a person who has beneficial ownership of investment shares, if the person who alleges that they have beneficial ownership provides, not less than fourteen days before the earliest day on which notice of the meeting at which the proposal is to be considered may be sent, satisfactory

evidence of that beneficial ownership, if the cooperative so requests.

(3) A proposal submitted for consideration at a meeting must be attached to the notice of the meeting, together with, if requested by the person making the proposal, a statement of not more than two hundred words in support of the proposal and the name and address of the person making the proposal.

(4) A cooperative need not comply with subsection (3) if

  1. the proposal is not submitted to the cooperative at least ninety days before the anniversary date of the previous annual meeting;
  2. it clearly appears that the purpose of the proposal is to enforce a personal claim or redress a personal grievance against the cooperative or its directors, officers, members or
  3. security holders;
  4. not more than two years before the receipt of a request, a person failed to present, at a meeting, a proposal that, at the person's request, had been attached by the cooperative to the notice of the meeting;
  5. substantially the same proposal was attached to a notice of meeting relating to a meeting of the cooperative held not more than two years before the receipt of the proposal and the proposal was defeated;

Proposed Wording
58. (2) Any member or director may, in accordance with section 290, make a proposal to amend the articles.

(2.1) Any other person may, in accordance with section 290, make a proposal to amend the articles if the person

(a) has been, for at least the prescribed period, the registered holder or the beneficial owner of at least the prescribed number of outstanding investment shares of the cooperative; or

(b) has the support of persons who, in the aggregate, and including or not including the person that submits the proposal, have been, for at least the prescribed period, the registered holders, or the beneficial owners of, at least the prescribed number of outstanding investment shares of the cooperative.

(2.2) A proposal submitted by a person described in paragraph (2.1)(a) must be accompanied by the following information:

(a) the name and address of the person and of the person's supporters, if applicable; and

(b) the number of investment shares held or owned by the person and by the person's supporters, if applicable, and the date the investment shares were acquired.

(2.3) The information provided under subsection (2.2) does not form part of the proposal or of the supporting statement referred to in subsection (3) and is not included for the purposes of the prescribed maximum word limit set out in subsection (3).

(2.4) If requested by the cooperative within the prescribed period, a person who submits a proposal must provide proof, within the prescribed period, that the person meets the requirements of subsection (2.1).

(3) A proposal submitted for consideration at a meeting must be attached to the notice of the meeting, together with, if requested by the person making the proposal, a statement in support of the proposal and the name and address of person making the proposal. The statement and the proposal must together not exceed the prescribed maximum number of words

(4)(a) the proposal is not submitted to the cooperative at least the prescribed number of days before the anniversary date of the notice of meeting that was sent to members and shareholders in connection with the previous annual meeting;

(b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal grievance against the cooperative or its directors, officers, members or security holders;

(c) not more than the prescribed period before the receipt of a proposal, a person failed to present, at a meeting, a proposal that, at the person's request, had been attached by the cooperative to the notice of the meeting;

(d) substantially the same proposal was attached to a notice of meeting relating to a meeting of the cooperative held not more than the prescribed period before the receipt of the proposal and the proposal did not receive the prescribed minimum amount of support at the meeting; or

(4.1) If

(a) a person described in subsection (2.1) makes a proposal and fails to continue to hold or own the number of investment shares referred to in that subsection up to and including the day of the meeting, or

(b) a member makes a proposal and, prior to the meeting withdraws from membership in accordance with section 39,

the cooperative is not required to include in the notice of a meeting, or attach to it, any proposal submitted by that person for any meeting held within the prescribed period following the date of the meeting.

Bill Clause No. :154
CCA Section No. : 60(1) and (2)
Topic : Corporate Governance (Shareholder Communications)

Sources of Proposed Law
N/A

Changes From Present Law
Amend s. 60(1) to remove the current ten day time limit for a cooperative to give notice of refusal to include a proposal in its notice of meeting and allow the number of days to be prescribed by regulation.

Purpose of Change
The current 10 day time limit provided in s. 60(1) for a cooperative to give notice of refusal is very restrictive. Increasing this time limit will give the cooperative sufficient time to review the proposal, give reasonable consideration as to its appropriateness, and the time to communicate with the person who made the proposal before deciding whether to refuse the proposal. Allowing the number of days to be prescribed increases flexibility.

An amendment was introduced at the Senate Committee stage, at the request of stakeholders, requiring that the notice of refusal include a written statement of the reasons for refusal in order to ensure that shareholders are properly informed.

Similar Provincial Laws
N/A

Current Wording
60. (1) If a cooperative refuses to include a proposal in a notice of a meeting referred to in section 52, the cooperative, not later than ten days after receiving the proposal, must notify the person submitting the proposal of its intention to omit the proposal from the notice and send the person a statement of the reasons for the refusal.

(2) On the application of a person claiming to be aggrieved by a cooperative's refusal under subsection (1), a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order it thinks fit.

Proposed Wording
60. (1) If a cooperative refuses to include a proposal in a notice of a meeting referred to in section 52, the cooperative must, within the prescribed period after the day on which it receives the proposal or the day on which it receives the proof of ownership under subsection 58(2.4), as the case may be, notify in writing the person submitting the proposal of its intention to omit the proposal from the notice and of the reasons for the refusal.

(2) On the application of a person submitting a proposal who claims to be aggrieved by a cooperative's refusal under subsection (1), a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order it thinks fit.

Bill Clause No. :155
CCA Section No. :new 65(3) & (4)
Topic: Corporate Governance (Shareholder Communications)

Sources of Proposed Law
N/A

Changes From Present Law
(A) Add a new provision specifically providing that any vote referred to in s.65(1) may be held by means of a telephonic, electronic or other communication facility, unless the by-laws provide otherwise, and as long as the cooperative makes available such a means of communication.

(B) Another provision is added to clarify that any person participating electronically in a meeting of the cooperative under new s. 48 (3) or (3.1) and that is entitled to vote, may exercise their right to vote by electronic means.

Purpose of Change
(A) To clarify that voting at a meeting of the cooperative can take place electronically whether members or shareholders are physically present at that meeting or are participating electronically.

(B) New s. 65(4) was added at the Senate Committee stage at the suggestion of the Coalition for CBCA reform.

Similar Provincial Laws
N/A

Current Wording
N/A

Proposed Wording
65. (3) Despite subsection (1), unless the by-laws provide otherwise, any vote referred to in subsection (1) may be held, in accordance with the regulations, if any, entirely by means of a telephonic, electronic or other communication facility, if the cooperative makes available such a communication facility.

(4) Unless the by-laws otherwise provide, a member or shareholder participating in a meeting of the cooperative under subsection 48(3) or (3.1) and entitled to vote at that meeting may vote, in accordance with the regulations, if any, by means of the telephonic, electronic or other communication facility that the cooperative has made available for that purpose.

Bill Clause No. : 156
CCA Section No. : 67
Topic : Corporate Governance (Shareholder Communications)

Sources of Proposed Law
N/A

Changes From Present Law
Amend s. 67 to clarify that an entry in the minutes of a meeting of a declaration by the chairperson that a resolution is adopted or rejected is evidence of this decision, without it being necessary to prove the number of votes for or against the resolution.

Purpose of Change
For clarification and harmonization with the CBCA.

Similar Provincial Laws
N/A

Current Wording
67. An entry in the minutes of a cooperative of a vote taken under section 65 or

a resolution made under section 66 is, in the absence of evidence to the

contrary, proof of the outcome of the vote or resolution.

Proposed Wording
67. Unless a ballot is demanded, an entry in the minutes of a meeting to the effect that the chairperson of the meeting declared a resolution to be carried or defeated is, in the absence of evidence to the contrary, proof of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.

Bill Clause No.: 157
CCA Section No. : 70
Topic :Corporate Governance (Shareholder Communications)

Changes From Present Law
Repeal s. 70.

Purpose of Change
This provision is not required for effective corporate governance and its repeal is designed to harmonize the CCA with the CBCA.

Similar Provincial Laws
N/A

Current Wording
70. (1) A member or a director, or a shareholder who is entitled to vote at a meeting of the cooperative, may call the meeting if it is not called within the time required by the Act, the articles, the by-laws or any unanimous agreement.

(2) A meeting called, held and conducted under this section is for all purposes a meeting duly called, held and concluded.

Proposed Wording
N/A

Bill Clause No. : 158
CCA Section No. : 71
Topic :Corporate Governance (Shareholder Communications)

Sources of Proposed Law
N/A

Changes From Present Law
Amend s. 71(1)(a) to replace "and" with "or" in the English version.
Amend s. 71(1)(b) to remove the words "any unanimous agreement" at the end of the paragraph.

Purpose of Change
The change to s. 71(1)(a) is a technical amendment.

This amendment would align this subsection with the proposed amendments to section 115, which would remove the subsection allowing a unanimous agreement to contain provisions that eliminate the need for annual meetings of shareholders and meetings of directors [see clause 174].

Similar Provincial Laws
N/A

Current Wording
71. (1) A court, on the application of a director or a person who is entitled to vote at a meeting, may order a meeting of a cooperative to be called, held and conducted within the time and in the manner that the court directs, if

(a) it is not feasible to call the meeting within the time and in the manner in which those meetings are to be called;

(b) it is not feasible to conduct the meeting in the manner required by this Act, the by-laws and any unanimous agreement; or

Proposed Wording
71. (a) it is not feasible to call the meeting within the time or in the manner in which those meetings are to be called; or

(b) it is not feasible to conduct the meeting in the manner required by this Act or the by-laws; or

Part 7 Directors and Officers (clauses 159-167)

This Part includes an amendment which reduces the residency requirements applicable to a board of directors from a majority to 25 percent and clarifies that where a cooperative has three directors, at least one must be resident in Canada (s. 78(4)). The provisions regarding a quorum have been adjusted accordingly (s. 97).

An obligation for directors to provide notice of a change of address within fifteen days of the event has been introduced. Once this notice is received, the cooperative would then be obliged to notify the CBCA Director of this change within fifteen days of receiving notice from a director. (s. 91)

The conflict of interest provisions would be amended to provide that a director or officer is not accountable to the cooperative for any profit or gain realized from a transaction in which they have a conflict of interest, so long as certain disclosures are made and the director or officer acted honestly and in good faith (s. 106).

The provisions with respect to directors' wage liability, due diligence defence and unanimous agreements would be clarified and harmonized with the proposed amendments to the Canada Business Corporations Act (s. 102(2), 111 and 115).

This Part also includes amendments which are designed to clarify the language and administration of the Act, as well as some technical changes to French wording.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. : 168
CCA Section No. :103(7)
Topic : Directors and Officers (Unanimous Agreements)

Sources of Proposed Law
N/A

Changes From Present Law
The current subs. 103(7) is repealed.

Purpose of Change
The current subs. 103(7) would be repealed since a unanimous agreement cannot include a provision dealing with disclosure of directors' and officers' interest in a contract or transaction. [see clause 174]

Similar Provincial Laws
N/A

Current Wording
103. (7) The members and shareholders may, by unanimous agreement, modify the procedural requirements of this section and sections 104 to 107.

Proposed Wording
N/A

Bill Clause No. :169
CCA Section No. :104(1)
Topic :Directors and Officers (Unanimous Agreements)

Sources of Proposed Law
N/A

Changes From Present Law
The words "be present for the vote or" in s. 104(1) are deleted.

Purpose of Change
The words "be present for the vote or" from s. 104(1) are being deleted in order to clarify that an interested director may be present at the meeting of directors where the conflict is being considered and may therefore be counted for purposes of constituting a quorum, although such director must abstain from voting on the resolution to approve the transaction. The equivalent provision in the CBCA is being harmonized.

Similar Provincial Laws
N/A

Current Wording
104. (1) A director who is interested in a contract or transaction referred to

in subsection 103(1) may not be present for the vote or vote on any resolution

to approve the contract or transaction.

Proposed Wording
104. (1) A director who is interested in a contract or transaction referred to

in subsection 103(1) may not vote on any resolution to approve the contract or transaction.

Bill Clause No. :170
CCA Section No. :106, new 106.1 and 107
Topic : Directors and Officers (Interested Directors' and Officers' contracts)

Sources of Proposed Law
N/A

Changes From Present Law
Specify that a director or officer is not accountable to the cooperative for any profit or gain realized from an interested director or officer contract or transaction and the contract is not invalid because of the conflict, provided that the director or officer acts honestly and in good faith and the other conditions of the provision are met.

Harmonize the interested director provisions with the CBCA.

Purpose of Change
These changes would bring the CCA in line with other Canadian corporate statutes and the proposed amendments to the CBCA [clause 48, new s. 120(7.1)].

Similar Provincial Laws
Business Corporations Act (Ontario)

Companies Act (British Columbia)

Business Corporations Act (Alberta)

Civil Code (Québec)

Current Wording
106. A contract or transaction for which disclosure must be made under section103 is not invalid, and the director or officer is not accountable to thecooperative, its members or its shareholders for any profit realized from thecontract or transaction, by reason only of the interest of the director orofficer in the contract or transaction, if

(a) disclosure of the interest was made in accordance with this Act; or

(b) disclosure of the interest was not made in accordance with this Act but

(i) disclosure of the interest was made,

(ii) the contract or transaction is approved by a majority of the members of thecooperative or a majority of the members present at a meeting of the members, and

(iii) the contract or transaction was reasonable and fair to the cooperative atthe time it was approved.

107. If a director or officer of a cooperative fails to disclose an interest ina material contract or transaction in accordance with section 103, or otherwisefails to comply with sections 103 to 106, a court may, on the application of thecooperative or a member or shareholder, set aside the contract or transaction onany terms that it thinks fit or order that the director or officer account tothe cooperative, its members or its shareholders for any profit realized fromthe contract or transaction.

Proposed Wording
106. A contract or transaction for which disclosure is required under section 103 is not invalid, and the director or officer is not accountable to the cooperative, its members or its shareholders for any profit realized from the contract or transaction because of the director's or officer's interest in it or because the director was present or was counted to determine whether a quorum existed at the meeting of directors or committee of directors that considered the contract or transaction if

(a) disclosure of the interest was made in accordance with sections 103 to 105;

(b) the directors approved the contract or transaction; and

(c) the contract or transaction was reasonable and fair to the cooperative when it was approved.

106.1 Even if the conditions of section 106 are not met, a director or officer, acting honestly and in good faith, is not accountable to the cooperative, its members or its shareholders for any profit realized from a contract or transaction for which disclosure is required under section 103 and the contract or transaction is not invalid by reason only of the interest of the director or officer in the contract or transaction if

( a ) the contract or transaction is approved or confirmed by special resolution at a meeting of the members;

( b ) disclosure of the interest was made to the members in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and

( c ) the contract or transaction was reasonable and fair to the cooperative when it was approved or confirmed.

107. If a director or officer of a cooperative fails to disclose an interest in a material contract or transaction in accordance with section 103, or otherwise fails to comply with sections 103 to 106.1, a court may, on the application of the cooperative or a member or shareholder, set aside the contract or transaction on any terms that it thinks fit or order that the director or officer account to the cooperative, its members or its shareholders for any profit realized from the contract or transaction.

Bill Clause No.: 171
CCA Section No. :109(3)(g) and (j)
Topic : Directors and Officers (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
(A) Add in s. 109(3)(g) "except as authorized by the directors";

(B) Add new s. 109(3)(j) to preclude delegation of the directors' authority in section 126 [to designate a series of investment shares to be issued and amend the articles] except in the manner and within the limits authorized by the directors.

Purpose of Change
The general thrust of s. 109(3) is to prohibit delegation of matters core to the directors authority and for which liability will arise. These amendments clarify the limits on the power of the full board of directors to delegate their powers.

The proposed amendment to s. 109(3)(g) would allow the delegation of authority relating to commissions.

The proposed amendment to add s.109(3)(j) would ensure that, in keeping with the restraints on delegation, the authority in CCA s. 126 to designate a series of investment shares to be issued and amend the articles would only be exercised by the full board.

Similar Provincial Laws
N/A

Current Wording
109. (3) The directors may delegate to a managing director or a committee composed of at least three directors any powers of the directors, except the power to

…

(g) pay a commission referred to in section 128;

(h) approve a management proxy circular referred to in Part 9;or

(i) issue securities, except in the manner and on the terms authorized by the directors.

Proposed Wording
109 (3) (g) pay a commission referred to in section 128, except as authorized by the directors;

( j ) issue investment shares of a series under section 126 except as authorized by the directors.

Bill Clause No. : 172
CCA Section No. : 111
Topic : Directors and Officers (Directors' Liability)

Sources of Proposed Law

Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Clarification of the due diligence defense.

Purpose of Change
This change clarifies the wording of the due diligence defence and harmonizes it with the proposed amendments to the CBCA.

Similar Provincial Laws
N/A

Current Wording
111. A director is not liable under this Part if the director exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances to prevent the failure to fulfill their duties, including reliance in good faith on financial statements of the cooperative, on the reports of experts and on information presented by officers or professionals

Proposed Wording
111. A director is not liable under this Part if the director exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

( a ) financial statements of the cooperative represented to the director by an officer of the cooperative or in a written report of the auditor of the cooperative fairly to reflect the financial condition of the cooperative; or

b ) a report of a person whose profession lends credibility to a statement made by the professional person.

Bill Clause No. :173
CCA Section No. :113(2) and (5)(a)
Topic : Directors and Officers (Directors' Liability)

Sources of Proposed Law
N/A

Changes From Present Law
Amend s. 113(2) to add the words "charges and expenses" after "costs" and to remove the words "the court determines that".

Amend par 113(5)(a) to add the words "or the competent authority".

Purpose of Change
To harmonize with proposed amendments to the CBCA.

Similar Provincial Laws
N/A

Current Wording
113. (2) A cooperative may advance moneys to a director, officer or other individual for the costs of a proceeding referred to in subsection (1). The individual must repay the moneys if the court determines that the individual did not fulfil the conditions of subsection (3), unless the members and shareholders decide, by separate resolutions, that the individual need not repay the moneys.

(5) An individual referred to in subsection (1) is entitled to indemnity from the cooperative for the costs, charges and expenses referred to in that subsection if the individual

(a) was not judged by the court to have committed any fault or omitted to do anything that the individual ought to have done; and

Proposed Wording
113. (2) A cooperative may advance moneys to a director, officer or other individual for the costs, charges and expenses of a proceeding referred to in subsection (1). The individual must repay the moneys if the individual did not fulfil the conditions of subsection (3), unless the members and shareholders decide, by separate resolutions, that the individual need not repay the moneys.

(a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that the individual ought to have done; and

Bill Clause No. :174
CCA Section No. :115(1), (3), (4), (5) and new (6)
Topic :Directors and Officers (Unanimous Agreements)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Changes would clarify the rules under a unanimous agreement.

Purpose of Change
In subs. 115(1) and (5), reference to the "discretion" of directors would be removed.

A new subs. 115(6) would be added to deal with this issue (see below).

In subs. 115(3), the phrase "Subject to this section but despite subsection 183(2)" would be removed. These reference are not needed.

A cross-reference to s. 183(2) is added to s. 115(4) in order to highlight that a notice pursuant to s. 183(2) is an example of sufficient notice.

The current subs. 115(6) and (7) would be repealed. By definition, a unanimous agreement has to restrict in whole, or in part, the powers of the directors (see subs. 115(1)). Rules and procedures governing meetings are not in the directors' powers. Consequently, they cannot be included in a unanimous agreement.

A new subs. 115(6) would remove the uncertainty regarding the extent to which a member who enters into a unanimous agreement is bound by common law rules regarding the duties of directors. For instance, at common law, directors who owe a fiduciary duty cannot fetter their discretion; they are required to remain free to make their decisions in the best interests of the cooperative. One of the purposes of a unanimous agreement is to permit members to agree in advance how a particular issue will be decided, for example the allocation of patronage returns. This amendment will achieve this purpose.

Subs. 115(8) of the Act is repealed because a unanimous shareholder agreement is a private arrangement among shareholders and disclosure of the existence of this arrangement may discourage the use of federal incorporations.

Similar Provincial Laws
Business Corporations Act (Ontario)

Companies Act (Québec)

Corporations Act (Manitoba)

Corporations Act (Newfoundland)

Business Corporations Act (Saskatchewan)

Current Wording
115. (1) A provision in the articles of the cooperative or in a unanimous agreement that restricts, in whole or in part, the discretion or powers of the directors to manage, or supervise the management of, the business and affairs of the cooperative or vests, in whole or in part, but only in members and subject to subsection 76(1), that discretion and those powers, is valid.

(3) Subject to this section but despite subsection 183(2), any purchaser or transferee of an investment share that is subject to a unanimous agreement is deemed to be party to the unanimous agreement.

(4) If notice is not given to the purchaser or transferee of the existence of aunanimous agreement, the purchaser or transferee may, no later than thirty daysafter they become aware of its existence, rescind the transaction by which theyacquired the investment shares.

(5) To the extent that a provision in the articles of the cooperative, or in a unanimous agreement, restricts the discretion or powers of the directors to manage, or supervise the management of, the business and affairs of the cooperative, members who are given that power to manage or supervise the management of the business and affairs of the cooperative have all the rights, powers, duties and liabilities of directors, whether they arise under this Act or otherwise, including any defences available to the directors, and the directors are relieved of their rights, powers, duties and liabilities, including their liabilities under section 102, to the same extent.

(6) A unanimous agreement may contain provisions respecting the rules and procedures governing meetings under this Act and provisions that eliminate the need for annual meetings of shareholders and meetings of directors.

(7) If there is to be no annual meeting of shareholders because of a provision in a unanimous agreement, the cooperative must send a copy of the documents referred to in section 247 to any shareholder who requests it.

(8) A notice of the initial execution or the termination of a unanimous agreement, in the form that the Director fixes, must be sent to the Director at the same time as the annual return referred to in section 374.

Proposed Wording
115. (1) A provision in the articles of the cooperative or in a unanimous agreement that restricts, in whole or in part, the powers of the directors to manage, or supervise the management of, the business and affairs of the cooperative or vests, in whole or in part, but only in members and subject to subsection 76(1), those powers, is valid.

(3) A purchaser or transferee of an investment share that is subject to a unanimous agreement is deemed to be party to the unanimous agreement.

(4) If notice is not given to the purchaser or transferee of the existence of a unanimous agreement, in the manner referred to in subsection 183(2) or otherwise, the purchaser or transferee may, no later than thirty days after they become aware of its existence, rescind the transaction by which they acquired the investment shares.

(5) To the extent that a provision in the articles of the cooperative, or in a unanimous agreement, restricts the powers of the directors to manage, or supervise the management of, the business and affairs of the cooperative, members who are given that power to manage or supervise the management of the business and affairs of the cooperative have all the rights, powers, duties and liabilities of directors, whether they arise under this Act or otherwise, including any defences available to the directors, and the directors are relieved of their rights, powers, duties and liabilities, including their liabilities under section 102, to the same extent.

(6) Nothing in this section prevents members from fettering their discretion when exercising the powers of directors under a unanimous agreement.

Part 7 Directors and Officers (clauses 168-174)

This Part includes an amendment which reduces the residency requirements applicable to a board of directors from a majority to 25 percent and clarifies that where a cooperative has three directors, at least one must be resident in Canada (s. 78(4)). The provisions regarding a quorum have been adjusted accordingly (s. 97).

An obligation for directors to provide notice of a change of address within fifteen days of the event has been introduced. Once this notice is received, the cooperative would then be obliged to notify the CBCA Director of this change within fifteen days of receiving notice from a director. (s. 91)

The conflict of interest provisions would be amended to provide that a director or officer is not accountable to the cooperative for any profit or gain realized from a transaction in which they have a conflict of interest, so long as certain disclosures are made and the director or officer acted honestly and in good faith (s. 106).

The provisions with respect to directors' wage liability, due diligence defence and unanimous agreements would be clarified and harmonized with the proposed amendments to the Canada Business Corporations Act (s. 102(2), 111 and 115).

This Part also includes amendments which are designed to clarify the language and administration of the Act, as well as some technical changes to French wording.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. : 168
CCA Section No. :103(7)
Topic : Directors and Officers (Unanimous Agreements)

Sources of Proposed Law
N/A

Changes From Present Law
The current subs. 103(7) is repealed.

Purpose of Change
The current subs. 103(7) would be repealed since a unanimous agreement cannot include a provision dealing with disclosure of directors' and officers' interest in a contract or transaction. [see clause 174]

Similar Provincial Laws
N/A

Current Wording
103. (7) The members and shareholders may, by unanimous agreement, modify the procedural requirements of this section and sections 104 to 107.

Proposed Wording
N/A

Bill Clause No. :169
CCA Section No. :104(1)
Topic :Directors and Officers (Unanimous Agreements)

Sources of Proposed Law
N/A

Changes From Present Law
The words "be present for the vote or" in s. 104(1) are deleted.

Purpose of Change
The words "be present for the vote or" from s. 104(1) are being deleted in order to clarify that an interested director may be present at the meeting of directors where the conflict is being considered and may therefore be counted for purposes of constituting a quorum, although such director must abstain from voting on the resolution to approve the transaction. The equivalent provision in the CBCA is being harmonized.

Similar Provincial Laws
N/A

Current Wording
104. (1) A director who is interested in a contract or transaction referred to

in subsection 103(1) may not be present for the vote or vote on any resolution

to approve the contract or transaction.

Proposed Wording
104. (1) A director who is interested in a contract or transaction referred to

in subsection 103(1) may not vote on any resolution to approve the contract or transaction.

Bill Clause No. :170
CCA Section No. :106, new 106.1 and 107
Topic : Directors and Officers (Interested Directors' and Officers' contracts)

Sources of Proposed Law
N/A

Changes From Present Law
Specify that a director or officer is not accountable to the cooperative for any profit or gain realized from an interested director or officer contract or transaction and the contract is not invalid because of the conflict, provided that the director or officer acts honestly and in good faith and the other conditions of the provision are met.

Harmonize the interested director provisions with the CBCA.

Purpose of Change
These changes would bring the CCA in line with other Canadian corporate statutes and the proposed amendments to the CBCA [clause 48, new s. 120(7.1)].

Similar Provincial Laws
Business Corporations Act (Ontario)

Companies Act (British Columbia)

Business Corporations Act (Alberta)

Civil Code (Québec)

Current Wording
106. A contract or transaction for which disclosure must be made under section103 is not invalid, and the director or officer is not accountable to thecooperative, its members or its shareholders for any profit realized from thecontract or transaction, by reason only of the interest of the director orofficer in the contract or transaction, if

(a) disclosure of the interest was made in accordance with this Act; or

(b) disclosure of the interest was not made in accordance with this Act but

(i) disclosure of the interest was made,

(ii) the contract or transaction is approved by a majority of the members of thecooperative or a majority of the members present at a meeting of the members, and

(iii) the contract or transaction was reasonable and fair to the cooperative atthe time it was approved.

107. If a director or officer of a cooperative fails to disclose an interest ina material contract or transaction in accordance with section 103, or otherwisefails to comply with sections 103 to 106, a court may, on the application of thecooperative or a member or shareholder, set aside the contract or transaction onany terms that it thinks fit or order that the director or officer account tothe cooperative, its members or its shareholders for any profit realized fromthe contract or transaction.

Proposed Wording
106. A contract or transaction for which disclosure is required under section 103 is not invalid, and the director or officer is not accountable to the cooperative, its members or its shareholders for any profit realized from the contract or transaction because of the director's or officer's interest in it or because the director was present or was counted to determine whether a quorum existed at the meeting of directors or committee of directors that considered the contract or transaction if

(a) disclosure of the interest was made in accordance with sections 103 to 105;

(b) the directors approved the contract or transaction; and

(c) the contract or transaction was reasonable and fair to the cooperative when it was approved.

106.1 Even if the conditions of section 106 are not met, a director or officer, acting honestly and in good faith, is not accountable to the cooperative, its members or its shareholders for any profit realized from a contract or transaction for which disclosure is required under section 103 and the contract or transaction is not invalid by reason only of the interest of the director or officer in the contract or transaction if

( a ) the contract or transaction is approved or confirmed by special resolution at a meeting of the members;

( b ) disclosure of the interest was made to the members in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and

( c ) the contract or transaction was reasonable and fair to the cooperative when it was approved or confirmed.

107. If a director or officer of a cooperative fails to disclose an interest in a material contract or transaction in accordance with section 103, or otherwise fails to comply with sections 103 to 106.1, a court may, on the application of the cooperative or a member or shareholder, set aside the contract or transaction on any terms that it thinks fit or order that the director or officer account to the cooperative, its members or its shareholders for any profit realized from the contract or transaction.

Bill Clause No.: 171
CCA Section No. :109(3)(g) and (j)
Topic : Directors and Officers (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
(A) Add in s. 109(3)(g) "except as authorized by the directors";

(B) Add new s. 109(3)(j) to preclude delegation of the directors' authority in section 126 [to designate a series of investment shares to be issued and amend the articles] except in the manner and within the limits authorized by the directors.

Purpose of Change
The general thrust of s. 109(3) is to prohibit delegation of matters core to the directors authority and for which liability will arise. These amendments clarify the limits on the power of the full board of directors to delegate their powers.

The proposed amendment to s. 109(3)(g) would allow the delegation of authority relating to commissions.

The proposed amendment to add s.109(3)(j) would ensure that, in keeping with the restraints on delegation, the authority in CCA s. 126 to designate a series of investment shares to be issued and amend the articles would only be exercised by the full board.

Similar Provincial Laws
N/A

Current Wording
109. (3) The directors may delegate to a managing director or a committee composed of at least three directors any powers of the directors, except the power to

…

(g) pay a commission referred to in section 128;

(h) approve a management proxy circular referred to in Part 9;or

(i) issue securities, except in the manner and on the terms authorized by the directors.

Proposed Wording
109 (3) (g) pay a commission referred to in section 128, except as authorized by the directors;

( j ) issue investment shares of a series under section 126 except as authorized by the directors.

Bill Clause No. : 172
CCA Section No. : 111
Topic : Directors and Officers (Directors' Liability)

Sources of Proposed Law

Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Clarification of the due diligence defense.

Purpose of Change
This change clarifies the wording of the due diligence defence and harmonizes it with the proposed amendments to the CBCA.

Similar Provincial Laws
N/A

Current Wording
111. A director is not liable under this Part if the director exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances to prevent the failure to fulfill their duties, including reliance in good faith on financial statements of the cooperative, on the reports of experts and on information presented by officers or professionals

Proposed Wording
111. A director is not liable under this Part if the director exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

( a ) financial statements of the cooperative represented to the director by an officer of the cooperative or in a written report of the auditor of the cooperative fairly to reflect the financial condition of the cooperative; or

b ) a report of a person whose profession lends credibility to a statement made by the professional person.

Bill Clause No. :173
CCA Section No. :113(2) and (5)(a)
Topic : Directors and Officers (Directors' Liability)

Sources of Proposed Law
N/A

Changes From Present Law
Amend s. 113(2) to add the words "charges and expenses" after "costs" and to remove the words "the court determines that".

Amend par 113(5)(a) to add the words "or the competent authority".

Purpose of Change
To harmonize with proposed amendments to the CBCA.

Similar Provincial Laws
N/A

Current Wording
113. (2) A cooperative may advance moneys to a director, officer or other individual for the costs of a proceeding referred to in subsection (1). The individual must repay the moneys if the court determines that the individual did not fulfil the conditions of subsection (3), unless the members and shareholders decide, by separate resolutions, that the individual need not repay the moneys.

(5) An individual referred to in subsection (1) is entitled to indemnity from the cooperative for the costs, charges and expenses referred to in that subsection if the individual

(a) was not judged by the court to have committed any fault or omitted to do anything that the individual ought to have done; and

Proposed Wording
113. (2) A cooperative may advance moneys to a director, officer or other individual for the costs, charges and expenses of a proceeding referred to in subsection (1). The individual must repay the moneys if the individual did not fulfil the conditions of subsection (3), unless the members and shareholders decide, by separate resolutions, that the individual need not repay the moneys.

(a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that the individual ought to have done; and

Bill Clause No. :174
CCA Section No. :115(1), (3), (4), (5) and new (6)
Topic :Directors and Officers (Unanimous Agreements)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Changes would clarify the rules under a unanimous agreement.

Purpose of Change
In subs. 115(1) and (5), reference to the "discretion" of directors would be removed.

A new subs. 115(6) would be added to deal with this issue (see below).

In subs. 115(3), the phrase "Subject to this section but despite subsection 183(2)" would be removed. These reference are not needed.

A cross-reference to s. 183(2) is added to s. 115(4) in order to highlight that a notice pursuant to s. 183(2) is an example of sufficient notice.

The current subs. 115(6) and (7) would be repealed. By definition, a unanimous agreement has to restrict in whole, or in part, the powers of the directors (see subs. 115(1)). Rules and procedures governing meetings are not in the directors' powers. Consequently, they cannot be included in a unanimous agreement.

A new subs. 115(6) would remove the uncertainty regarding the extent to which a member who enters into a unanimous agreement is bound by common law rules regarding the duties of directors. For instance, at common law, directors who owe a fiduciary duty cannot fetter their discretion; they are required to remain free to make their decisions in the best interests of the cooperative. One of the purposes of a unanimous agreement is to permit members to agree in advance how a particular issue will be decided, for example the allocation of patronage returns. This amendment will achieve this purpose.

Subs. 115(8) of the Act is repealed because a unanimous shareholder agreement is a private arrangement among shareholders and disclosure of the existence of this arrangement may discourage the use of federal incorporations.

Similar Provincial Laws
Business Corporations Act (Ontario)

Companies Act (Québec)

Corporations Act (Manitoba)

Corporations Act (Newfoundland)

Business Corporations Act (Saskatchewan)

Current Wording
115. (1) A provision in the articles of the cooperative or in a unanimous agreement that restricts, in whole or in part, the discretion or powers of the directors to manage, or supervise the management of, the business and affairs of the cooperative or vests, in whole or in part, but only in members and subject to subsection 76(1), that discretion and those powers, is valid.

(3) Subject to this section but despite subsection 183(2), any purchaser or transferee of an investment share that is subject to a unanimous agreement is deemed to be party to the unanimous agreement.

(4) If notice is not given to the purchaser or transferee of the existence of aunanimous agreement, the purchaser or transferee may, no later than thirty daysafter they become aware of its existence, rescind the transaction by which theyacquired the investment shares.

(5) To the extent that a provision in the articles of the cooperative, or in a unanimous agreement, restricts the discretion or powers of the directors to manage, or supervise the management of, the business and affairs of the cooperative, members who are given that power to manage or supervise the management of the business and affairs of the cooperative have all the rights, powers, duties and liabilities of directors, whether they arise under this Act or otherwise, including any defences available to the directors, and the directors are relieved of their rights, powers, duties and liabilities, including their liabilities under section 102, to the same extent.

(6) A unanimous agreement may contain provisions respecting the rules and procedures governing meetings under this Act and provisions that eliminate the need for annual meetings of shareholders and meetings of directors.

(7) If there is to be no annual meeting of shareholders because of a provision in a unanimous agreement, the cooperative must send a copy of the documents referred to in section 247 to any shareholder who requests it.

(8) A notice of the initial execution or the termination of a unanimous agreement, in the form that the Director fixes, must be sent to the Director at the same time as the annual return referred to in section 374.

Proposed Wording
115. (1) A provision in the articles of the cooperative or in a unanimous agreement that restricts, in whole or in part, the powers of the directors to manage, or supervise the management of, the business and affairs of the cooperative or vests, in whole or in part, but only in members and subject to subsection 76(1), those powers, is valid.

(3) A purchaser or transferee of an investment share that is subject to a unanimous agreement is deemed to be party to the unanimous agreement.

(4) If notice is not given to the purchaser or transferee of the existence of a unanimous agreement, in the manner referred to in subsection 183(2) or otherwise, the purchaser or transferee may, no later than thirty days after they become aware of its existence, rescind the transaction by which they acquired the investment shares.

(5) To the extent that a provision in the articles of the cooperative, or in a unanimous agreement, restricts the powers of the directors to manage, or supervise the management of, the business and affairs of the cooperative, members who are given that power to manage or supervise the management of the business and affairs of the cooperative have all the rights, powers, duties and liabilities of directors, whether they arise under this Act or otherwise, including any defences available to the directors, and the directors are relieved of their rights, powers, duties and liabilities, including their liabilities under section 102, to the same extent.

(6) Nothing in this section prevents members from fettering their discretion when exercising the powers of directors under a unanimous agreement.

Part 8 Capital Structure (clauses 175-184)

The principal amendment proposed in this Part is the repeal of the current financial assistance provisions (s. 160).

This Part also includes a number of technical amendments which are designed to clarify the wording and administration of the Act. In addition, the French version of certain provisions would be amended to reconcile the wording with the English version.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No.:175
CCA Section No.:123(1)
Topic:Capital Structure (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
Amend subs. 123(1) to replace the words "legal representative" with the words "personal representative".

Purpose of Change
This technical change clarifies the wording of the Act to reflect the proposed definition of "personal representative" in subs. 2(1) [see clause 137].

Similar Provincial Laws
N/A

Current Wording
123. (1) A cooperative has a charge on a membership share or any amount standing to the credit of a member or the legal representative of a member for a debt of that member to the cooperative.

Proposed Wording
123. (1) A cooperative has a charge on a membership share or any amount standing to the credit of a member or the personal representative of a member for a debt of that member to the cooperative.

Bill Clause No.:176
CCA Section No. :126(1)
Topic :Capital Structure (Corporate Finance)

Sources of Proposed Law
N/A

Changes From Present Law
Amend s. 126(1) to add the words "do either or both of the following".

Purpose of Change
This proposed amendment would clarify the wording of the Act and harmonize with proposed amendments to the CBCA.

Similar Provincial Laws
N/A

Current Wording
126. (1) The articles may authorize, subject to any limitations set out in them and subject to subsection (2), the issue of any class of investment shares in one or more series and may

Proposed Wording
126. (1) The articles may authorize, subject to any limitations set out in them and subject to subsection (2), the issue of any class of investment shares in one or more series and may do either or both of the following:

Bill Clause No.:177
CCA Section No. :129(1)
Topic: Capital Structure (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
Amend subs. 129(1) to replace the words "legal representative" with the words "personal representative".

Purpose of Change
This technical change clarifies the wording of the Act to reflect the proposed definition of "personal representative" in subs. 2(1) [see clause 137].

Similar Provincial Laws
N/A

Current Wording
129. (1) Subject to subsection 183(2), the articles may provide that the cooperative has a charge on an investment share registered in the name of a shareholder or the legal representative of a shareholder for a debt of the shareholder to the cooperative, including an amount unpaid as of the date a body corporate was continued under this Act, in respect of an investment share issued by it.

Proposed Wording
129. (1) Subject to subsection 183(2), the articles may provide that the cooperative has a charge on an investment share registered in the name of a shareholder or the personal representative of a shareholder for a debt of the shareholder to the cooperative, including an amount unpaid as of the date a body corporate was continued under this Act, in respect of an investment share issued by it.

Bill Clause No.:178
CCA Section No.:130(1) and 130(1)(d)
Topic :Capital Structure (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
The reference to "distributing cooperative" is updated

Remove the specific references to sections of the Trust and Loan Companies Act (s. 379) and the Insurance Companies Act (s. 411) and allow the appropriate statutes to be prescribed.

Purpose of Change
The proposed amendment in subs. 130(1) reflects the new definition of "distributing cooperative" found in subsection 2(1).

This amendment clarifies the language of the Act. Removing the specific references to the Trust and Loan Companies Act and the Insurance Companies Act and allowing them to be prescribed by regulation allows for easier amendment should the specific section numbers of those acts change and also eases the addition or removal of specified acts as required.

Similar Provincial Laws
N/A

Current Wording
130. (1) Subject to subsection 290(3), a cooperative that has issued investment shares that are or were part of a distribution to the public, remain outstanding and are held by more than one person may, by special resolution of the members and by a separate special resolution of the

shareholders of each class, amend its articles to constrain

(d) the issue, transfer or ownership of any investment share to assist the cooperative to comply with

(i) section 379 of the Trust and Loan Companies Act, or

(ii) section 411 of the Insurance Companies Act; or

Proposed Wording
130. (1) Subject to subsection 290(3), a distributing cooperative that has issued investment shares that remain outstanding and are held by more than one person may, by special resolution of the members and by a separate special resolution of the shareholders of each class, amend its articles to constrain

(d) the issue, transfer or ownership of any investment share to assist the cooperative to comply with any prescribed law; or

Bill Clause No.:179
CCA Section No.:131(1)(b) and 131(2)
Topic: Capital Structure (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
Amend par. 131(1)(b) to replace the current words "section 379 of the Trust and Loan Companies Act, section 411 of the Insurance Companies Act or Part X.3 of the Income Tax Act" with the words "any prescribed law".

Amend the French version of subs. 131(2) to replace "porter atteinte aux intérêts" with "se montrer injuste à l'égard" and to replace "ou passer outre à ces mêmes intérêts", with "soit en leur portant préjudice soit en ne tenant pas compte de leurs intérêts."

Purpose of Change
See explanation: clause 178

This technical change clarifies the wording of the Act and harmonizes with the CBCA.

Similar Provincial Laws
N/A

Current Wording
131. (1) A cooperative that has constraints on the issue, transfer or ownership of any class of investment shares may, in accordance with any regulations, sell any of the investment shares that are owned, or that the directors determine may be owned, contrary to those constraints, as if it owned the investment shares, for the purposes of

…

(b) complying with section 379 of the Trust and Loan Companies Act, section 411 of the Insurance Companies Act or Part X.3 of the Income Tax Act.

(2) Les administrateurs doivent choisir les parts de placement à vendre en vertu du paragraphe (1) de bonne foi et de manière à ne pas porter atteinte aux intérêts des autres détenteurs de parts de placement de la catégorie ou passer outre à ces mêmes intérêts.

Proposed Wording
131.(1) (b) complying with any prescribed law.

(2) Les administrateurs doivent choisir les parts de placement à vendre en vertu du paragraphe (1) de bonne foi et de manière à ne pas se montrer injuste à l'égard des autres détenteurs de parts de placement de la catégorie soit en leur portant préjudice soit en ne tenant pas compte de leurs intérêts.

Bill Clause No.:180
CCA Section No.:137
Topic:Capital Structure (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
Amend s. 137 to remove the words "the articles of a cooperative are deemed to state that" and to remove the reference to s. 160 in s. 137(c).

Purpose of Change

This technical change would clarify the wording and application of the Act.

The reference to s. 160 is removed in s.137(c) because section 160 is being repealed.

Similar Provincial Laws
N/A

Current Wording
137. Unless the articles, the by-laws or a unanimous agreement provide otherwise, the articles of a cooperative are deemed to state that the directors may, subject to subsection 126(2), without the authorization of the members or shareholders,

…

(c) subject to section 160, give guarantees;

Proposed Wording
137. Unless the articles, the by-laws or a unanimous agreement provide otherwise, the directors may, subject to subsection 126(2), without the authorization of the members or shareholders,

(c) give guarantees;

Bill Clause No.:181
CCA Section No.: new 138(3)(a)(iii) and 138(6)
Topic:Capital Structure (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
Grammatical changes to s.138(3)(a)(i) and (ii) of the French version.

Add a new s. 138(3)(a)(iii).

Remove reference to s. 160(1)(d), from s. 138(6).

Purpose of Change
Clarification and consistency.

New s. 138(3)(a)(iii) would add flexibility in the adjustment of the stated capital account in respect of arm's length transactions.

The reference to s. 160(1)(d) is removed because the section is being repealed.

Similar Provincial Laws
N/A

Current Wording
138. (3) Malgré le paragraphe (2), peut, sous réserve du paragraphe (4), verser aux comptes capital déclaré afférents à la catégorie ou à la série de parts de placement émises, la totalité ou une partie de la contrepartie qu'elle a reçue dans l'échange, la coopérative qui émet des parts :

a) soit en échange, selon le cas :

(i) de biens d'une personne avec laquelle elle a, au moment de l'échange, un lien de dépendance au sens de la Loi de l'impÔt sur le revenu,

(ii) d'actions ou de parts de placement ou de droits ou d'intérêts dans une entité avec laquelle elle a, soit au moment de l'échange, soit immédiatement après l'échange et en raison de celui-ci, un tel lien;

(6) For greater certainty, if a cooperative issues membership shares with a par value, the cooperative is deemed, for the purposes of subsection 147(2), sections 151 and 154 and paragraphs 160(1)(d) and 299(2)(d), to have a stated capital account for its membership shares that includes each amount that has been received by the cooperative for the membership shares.

Proposed Wording
138. (3)a) (i) de biens d'une personne avec laquelle elle avait, au moment de l'échange, un lien de dépendance au sens de la Loi de l'impÔt sur le revenu,

(ii) d'actions ou de parts de placement d'une entité ou de droits ou d'intérêts dans celle-ci, lorsque la coopérative avait avec celle-ci, soit au moment de l'échange, soit en raison de celui-ci, un tel lien;

(iii) property of a person who, immediately before the exchange, dealt with the cooperative at arm's length within the meaning of that expression in the Income Tax Act, if the person, the cooperative and all the holders of shares in the class or series of shares so issued consent to the exchange; or

(6) For greater certainty, if a cooperative issues membership shares with a par value, the cooperative is deemed, for the purposes of subsection 147(2), sections 151 and 154 and paragraph 299(2)(d), to have a stated capital account for its membership shares that includes each amount that has been received by the cooperative for the membership shares.

Bill Clause No.:182
CCA Section No.:139(4)
Topic:Capital Structure (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
Remove reference to s. 160(1)(d) from s. 134(4).

Purpose of Change
The reference to s. 160(1)(d) is removed because this section is being repealed.

Similar Provincial Laws
N/A

Current Wording
139. (4) For the purposes of subsection 147(2), sections 151 and 154 and paragraphs 160(1)(d) and 299(2)(d), when a cooperative is continued under this Act, its stated capital account is deemed to include the amount that would have been included if the cooperative had been incorporated under this Act.

Proposed Wording
139. (4) For the purposes of subsection 147(2), sections 151 and 154 and paragraph 299(2)(d), when a cooperative is continued under this Act, its stated capital account is deemed to include the amount that would have been included if the cooperative had been incorporated under this Act.

Bill Clause No.:183
CCA Section No.:147(2)
Topic: Capital Structure (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
Amend the French version of s. 147(2) to harmonize it with proposed amendments to s. 34(2) of the CBCA, by adding the words " faire aucun paiement en vue d' ".

Purpose of Change
This technical change clarifies the wording and application of the Act.

Similar Provincial Laws
N/A

Current Wording
147. (2) La coopérative ne peut acquérir des parts de placement s'il existe des motifs raisonnables de croire que :

Proposed Wording
147. (2) La coopérative ne peut faire aucun paiement en vue d'acquérir des parts de placement s'il existe des motifs raisonnables de croire que :

Bill Clause No.:184
CCA Section No.:160
Topic: Capital Structure (Financial Assistance)

Sources of Proposed Law
N/A

Changes From Present Law
Repeal s. 160.

Purpose of Change
The CCA restricts the provision of loans, guarantees and other kinds of financial assistance to any member, shareholder, director, officer or employee of a cooperative if there are "reasonable grounds for believing that" either the cooperative is or would become insolvent or the cooperative's assets are or would be less than all of its liabilities and stated capital.

This wording causes legal and accounting practitioners considerable difficulty in providing clients with unqualified opinions. In 1988, the Canadian Institute of Chartered Accountants issued an opinion that accounting practitioners should not provide an opinion on matters related to solvency. As a result, the solvency test and the potential liability that can arise from not meeting it can impede legitimate financial transactions that directors would otherwise be willing to consider and that may be supportive of the competitiveness and long-term viability of CCA cooperatives.

Directors approving financial assistance transactions are subject to statutory fiduciary duties to act in the best interests of the cooperative, and they can be sued for failure to do so. This provides adequate safeguards.

Similar Provincial Laws
N/A

Current Wording
160. (1) Subject to subsection (2) and any additional restrictions set out in the articles, a cooperative or any of its affiliates may not, directly or indirectly, give financial assistance by means of a loan, guarantee or otherwise

(a) to any member, shareholder, director, officer or employee of the cooperative or of an affiliate or to an associate of any such person for any purpose, or

(b) to any person for the purpose of or in connection with a purchase of a share issued or to be issued by a cooperative or affiliate,

if there are reasonable grounds for believing that

(c) the cooperative is or, after giving the financial assistance, would be unable to pay its

liabilities as they become due, or

(d) the realizable value of the cooperative's assets, excluding the amount of any financial assistance in the form of a loan and in the form of assets pledged or encumbered to secure a guarantee, after giving the financial assistance, would be less than the aggregate of the cooperative's liabilities and stated capital of all classes.

(2) A cooperative may give financial assistance by means of a loan, guarantee or otherwise

(a) to any person in the ordinary course of business if the lending of money is part of the ordinary business of the cooperative;

(b) to any person on account of expenditures incurred or to be incurred on behalf of the cooperative;

(c) to a subsidiary of the cooperative;

(d) to employees of the cooperative or of any of its affiliates

(i) to enable or assist them to purchase or erect living accommodation for their own occupation, or

(ii) in accordance with a plan for the purchase of shares of the cooperative or any of its affiliates to be held by a trustee; and

(e) to members, or members of members, if the financial assistance is available to all members on similar terms.

(3) A contract made by a cooperative in contravention of this section may be enforced by the cooperative or by a lender for value in good faith without notice of the contravention.

Proposed Wording
N/A

Part 9 Proxies (clauses 175-190)

The definition of “intermediary” would be amended to reconcile it with the definition in current provincial securities legislation and the definition in the proposed amendments to the Canada Business Corporations Act.

The proxy solicitation rules would be amended to allow proxies to be solicited where 15 or fewer shareholders are solicited and to provide that a person may solicit proxies without sending a proxy circular if the solicitation is conveyed by public broadcast, speech or publication (s. 166).

A number of consequential amendments are also included as are several minor technical amendments, including amendments to the French version of the Act.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No.: 185
CCA Section No.: 163(1)
Topic: Proxies (Shareholder Communications)

Sources of Proposed Law
Securities Exchange Act of 1934 (U.S.)

Changes From Present Law

  1. Amend the definition of “intermediary” to align it more closely with the definition currently found in NP 41.
  2. Amend the definition of “solicit” or “solicitation” in subsection 163(1) of the Act to exempt a communication made for the purpose of obtaining the number of investment shares for a proposal under the new subsection 58(2.1) and delete paragraph (j) of the current definition.

Delete s. 163(1)(b) (vii). The former s. 163(1)(b)(viii) is renumbered as (vii).

Purpose of Change

  1. This amendment would harmonize the CCA with proposed changes to the CBCA and current securities legislation.
  2. The proposed amendment would allow shareholders to communicate with each other freely in order to permit them to pool their holdings to meet the minimum requirement to submit a shareholder proposal. Paragraph (j) is being deleted because it is being replaced by new s. 166(4.1), in harmony with similar exceptions proposed in respect of the CBCA [see clause 188].

This provision is substantially replaced by new s. 166 (4.1), which covers the same exception in respect of solicitation of proxies by public broadcast, other than by or on behalf of management of the cooperative. It was never the intention to allow management to solicit proxies by public broadcast.

Similar Provincial Laws
National Policy Statement No. 41

Current Wording
163. (1) “intermediary” means a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction and includes

  1. a securities depositary;
  2. a financial institution;
  3. in respect of a clearing agency, a securities dealer, trust company, bank or other person, including another clearing agency, on whose behalf the clearing agency or its nominees hold securities of an issuer;
  4. a trustee or administrator of a self-administered retirement savings plan, retirement income fund, education savings plan or other similar self-administered savings or investment plan registered under the Income Tax Act;
  5. a nominee of a person referred to in any of paragraphs (a) to (d); and
  6. a person who carries out functions similar to those carried out by individuals or entities referred to in any of paragraphs (a) to (d) and that holds a security registered in its name, or in the name of its nominee, on behalf of another person who is not the registered holder of the security.

“solicit” or “solicitation” includes

  1. a request for a proxy whether or not accompanied by or included in a form of proxy,
  2. a request to execute or not to execute a form of proxy or to revoke a proxy,
  3. the sending of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and
  4. the sending of a form of proxy to a shareholder under section 165, but does not include
  5. the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder,
  6. the performance of administrative acts or professional services on behalf of a person soliciting a proxy,
  7. the sending by an intermediary of the documents referred to in section 169,
  8. a solicitation by a person in respect of shares of which they are the beneficial owner,
  9. a public announcement by a shareholder of how the shareholder intends to vote and the reasons for that decision,
  10. anything that would be a solicitation under this definition but is conveyed by public broadcast, speech or publication, if a proxy circular in final form is sent to the cooperative and is filed with the Director, or
  11. a communication, other than a solicitation by or on behalf of the management of the cooperative, that is made to shareholders, in any circumstances that may be prescribed.

Proposed Wording
163(1) “intermediary” means a person who holds a security on behalf of another person who is not the registered holder of the security, and includes

  1. a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction;
  2. a securities depositary;
  3. a financial institution;
  4. in respect of a clearing agency, a securities dealer, trust company, bank or other person, including another clearing agency, on whose behalf the clearing agency or its nominees hold securities of an issuer;
  5. a trustee or administrator of a self-administered retirement savings plan, retirement income fund, education savings plan or other similar self-administered savings or investment plan registered under the Income Tax Act;
  6. a nominee of a person referred to in any of paragraphs (a) to (e); and
  7. a person who carries out functions similar to those carried out by individuals or entities referred to in any of paragraphs (a) to (e) and that holds a security registered in its name, or in the name of its nominee, on behalf of another person who is not the registered holder of the security.

“solicit” or “solicitation”

  1. includes
    1. a request for a proxy whether or not accompanied by or included in a form of proxy,
    2. a request to execute or not to execute a form of proxy or to revoke a proxy,
    3. the sending of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and
    4. the sending of a form of proxy to a shareholder under section 165; but
  2. does not include
    1. the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder,
    2. the performance of administrative acts or professional services on behalf of a person soliciting a proxy,
    3. the sending by an intermediary of the documents referred to in section 169,
    4. a solicitation by a person in respect of investment shares of which they are the beneficial owner,
    5. a public announcement, as prescribed, by a shareholder of how the shareholder intends to vote and the reasons for that decision,
    6. a communication for the purposes of obtaining the number of investment shares required for a proposal under subsection 58(2.1), or
    7. a communication, other than a solicitation by or on behalf of the management of the cooperative, that is made to shareholders, in any circumstances that may be prescribed.

Bill Clause No.: 186
CCA Section No.: 164(2) and (4)(a)
Topic:Proxies (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
Amend subs. 164(2) and par. 164(4)(a) to replace the words “legal representative” with the words “personal representative”.

Purpose of Change
This technical change clarifies the wording of the Act to reflect the the proposed definition of “personal representative” in subs. 2(1) [see clause 137].

Similar Provincial Laws
N/A

Current Wording
164. (2) For a proxy to be valid, it must be executed by the shareholder or by their legal representative authorized in writing.

(4) A shareholder may revoke a proxy

  1. by depositing a document in writing executed by the shareholder or by their legal representative authorized in writing
    1. at the registered office of the cooperative at any time up to and including the last business day before the day of the meeting or adjournment at which the proxy is to be used, or
    2. with the chairperson of the meeting on the day of the meeting or adjournment; or

Proposed Wording
164. (2) For a proxy to be valid, it must be executed by the shareholder or by their personal representative authorized in writing.

(4) A shareholder may revoke a proxy

  1. by depositing a document in writing executed by the shareholder or by their personal representative authorized in writing

Bill Clause No.: 187
CCA Section No.: 165(2)(b)
Topic: Proxies(Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
The words “fewer then fifty” have been replaced with “fifty or fewer”.

Purpose of Change
This provision was amended at the Senate Committee stage to change the threshold from “fewer than fifty” to “fifty or fewer” to ensure consistency with provincial securities legislation.

Similar Provincial Laws
N/A

Current Wording
165. (2) The management of a cooperative is not required to send a form of proxy under subsection (1) if

  1. it is not a distributing cooperative; and
  2. it has fewer than fifty shareholders entitled to vote at a meeting, two or more joint holders being counted as one shareholder.

Proposed Wording
(b) it has fifty or fewer shareholders entitled to vote at a meeting, two or more joint holders being counted as one shareholder.

Bill Clause No.: 188
CCA Section No .:166(4) and new (4.1)
Topic: Proxies (Shareholder Communications)

Sources of Proposed Law
N/A

Changes From Present Law
Replace current s. 166(4) with a new provision allowing proxies to be solicited where 15 or fewer shareholders are solicited.

Provide that a person, other than management of the cooperative, may solicit proxies without sending a proxy circular if the solicitation is, in the prescribed circumstances, conveyed by public broadcast, speech or publication.

Purpose of Change
The exception allowing the solicitation of proxies provided that a preliminary proxy circular is filed was based on the premise that the Corporations Directorate would be reviewing these documents and that this information would be available on the public file. In fact, there is no requirement in the legislation for the filing of a preliminary proxy circular and such documents are not reviewed in any event. This exception is therefore unnecessary. The new exception is designed to harmonize with provincial securities rules.

This section replaces paragraph (j) of the current definition of “solicit” and “solicitation”. That exception is too broad in that it would permit management of a cooperative to solicit proxies by way of public broadcast. This was never the intention. The new provision is modelled on the SEC rules and comparable provisions being proposed in respect of the CBCA.

Similar Provincial Laws
N/A

Current Wording
166. (4) A person may, despite subsection (1), commence a solicitation if they have filed a preliminary proxy circular with the cooperative and the Director, as long as the form of proxy is not sent before the proxy circular in final form is sent.

Proposed Wording
166. (4) Despite subsection (1), a person may solicit proxies, other than by or on behalf of the management of the cooperative, without sending a dissident's proxy circular, if the total number of shareholders whose proxies are solicited is fifteen or fewer, two or more joint holders being counted as one shareholder.

(4.1) Despite subsection (1), a person may solicit proxies, other than by or on behalf of the management of the cooperative, without sending a dissident's proxy circular, if the solicitation is, in the prescribed circumstances, conveyed by public broadcast, speech or publication.

Bill Clause No.: 189
CCA Section No.: 167(1)
Topic: Proxies (Government Administration)

Sources of Proposed Law
N/A

Changes From Present Law

  1. In the French version of the subsection, replace the word “dispense” with the words “peut dispenser”, so that it is consistent with the English version.
  2. Amend s. 167(1) to provide that the exemption may have retrospective effect.

Purpose of Change

A technical change to the French wording.

(B) Clarification and harmonization with the CBCA.

Similar Provincial Laws
N/A

Current Wording
167. (1) Le directeur dispense, selon les modalités qu'il estime utiles, même rétroactivement, tout intéressé qui en fait la demande, des conditions imposées par l'article 165 ou le paragraphe 166(1).

167. (1) On the application of any interested person, the Director may, even retrospectively, exempt, on any terms that the Director thinks fit, the person from any of the requirements of section 165 or subsection 166(1).

Proposed Wording
167. (1) Le directeur peut dispenser, selon les modalités qu'il estime utiles, tout intéressé qui en fait la demande, des conditions imposées par l'article 165 ou le paragraphe 166(1). La dispense peut avoir un effet rétroactif.

167. (1) On the application of any interested person, the Director may exempt, on any terms that the Director thinks fit, the person from any of the requirements of section 165 or subsection 166(1), which exemption may have retrospective effect.

Bill Clause No.: 190
CCA Section No.: 169(2) and (5)
Thème: Procurations (Communications aux détenteurs de parts de placement

Sources of Proposed Law
N/A

Changes From Present Law
Amend s. 169(2) to eliminate the prohibition against an intermediary appointing a proxyholder to vote shares registered in his name or in the name of his nominee and clarify that the voting instructions from the beneficial owner must be written.

Amend s. 169(5) to clarify that the beneficial owner must provide the intermediary with appropriate documentation to support a request under that provision.

Purpose of Change
The current legislation would preclude an intermediary from appointing a proxyholder to vote securities without first obtaining voting instructions from the beneficial owner of the shares. This drafting does not accord with how the industry currently operates. Where there are multiple layers of ownership, only the last intermediary in the chain actually knows the identity of the beneficial owner of the shares - therefore only that intermediary is in a position to obtain voting instructions from the beneficial owner. The objective of s. 169(2) is to prevent securities being voted by anyone other than the beneficial owner without first obtaining the voting instructions from the beneficial owner. The legislation goes too far by also precluding intermediaries from appointing proxyholders. This problem is being corrected. The voting instructions must be written in order to ensure that an intermediary is not able to act on the basis of verbal instructions from the beneficial owner of the share.

The amendment to s. 169(5) is desirable from an evidentiary point of view.

These changes are also being proposed in respect of the CBCA.

Similar Provincial Laws
N/A

Current Wording
169. (2) An intermediary may not vote or appoint a proxyholder to vote shares registered in the name of the intermediary or in the name of a nominee of the intermediary that the intermediary does not beneficially own unless the intermediary receives voting instructions from the beneficial owner.

(5) If requested by a beneficial owner, an intermediary must appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.

Proposed Wording
169. (2) An intermediary, or a proxyholder appointed by an intermediary, may not vote shares that the intermediary does not beneficially own and that are registered in the name of the intermediary or in the name of a nominee of the intermediary unless the intermediary or proxyholder, as the case may be, receives written voting instructions from the beneficial owner.

(5) If a beneficial owner so requests and provides an intermediary with appropriate documentation, the intermediary must appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.

Part 10 Insider Trading (clauses 191-192)

The civil liability provisions relating to insider trading would be overhauled to harmonize with provincial securities legislation and with proposed amendments to the Canada Business Corporations Act. In particular, the amendments would expand the definition of "security" for insider trading purposes in order to help deter insider trading by allowing civil actions to be brought based on that broader definition. The definition of "insider" would also be expanded to cover most instances where insider trading might be expected to occur. Finally, new provisions are incorporated, imposing civil liability on persons who communicate undisclosed confidential information. (s. 173).

A number of minor technical amendments to both the English and French versions are also included, as well certain amendments which are designed to facilitate the efficient operation and administration of the statute.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No.:191
CCA Section No. :171(1) to (4)
Topic : Insider Trading

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Narrow the definition of "insider" in s. 171 for the purpose of the speculative trading prohibitions.

Amend the definition of "officer" to cover officers of other entities and delete paragraph (b) of the definition.

(C) Broaden the definition of "business combination".

(D) Modify s. 171(2)(a).

Repeal subsection 171(4).

Purpose of Change
The definition of "insider" in s. 171 would only apply to the speculative trading provisions of the Act. The policy rationale for maintaining the speculative trading prohibitions is the corporate governance concern over possible conflicts of interest if speculative trades by insiders are allowed. Therefore, for the purpose of the speculative trading prohibitions, only those insiders who can influence the cooperative's decisions and who can be in a conflict of interest position should be included as insiders. This change narrows the application of the speculative trading prohibitions to those persons with the ability to make decisions and the subsequent possibility of that person using their power to promote their personal interests over the cooperative's interests. The repeal of subs. 171(3) is a consequential amendment.

The amendment to the definition of "officer" in s. 171 is necessary because the individuals named may not necessarily work for a CCA cooperative. The term "entity" is appropriate because of the interrelationship of the various parties named in the definition of "insider" in s. 173. The reference to five highest paid employees of the corporation would be deleted because the amount of remuneration received by an employee has not relationship to whether the employee is a decision-maker or has access to confidential information with respect to their employer (eg., A retail broker at an investment dealer does not necessarily have access to confidential information with respect to the investment dealer employer).

(C) The definition of "business combination" now applies only to amalgamations and acquisitions of all or substantially all of the property of one body corporate by another. Provincial securities laws cover other forms of business combinations which fundamentally change the corporate structure. This amendment is designed to harmonize with provincial securities legislation. The definition would be moved to subs. 171(1) because applies to the Part. Accordingly, the current definition, which is found in s. 171(4), would be repealed.

(D) The amendments to s. 171(2)(a) are required because of the change in the current definition of "insider" in s. 171(1). Proposed paragraph 171(2)(a) would, in effect combine these existing provisions and move the numbers to the regulation for flexibility purposes. The latter is consistent with what is being done throughout the Bill.

The language of s. 171(2)(a) matches with that which is proposed in s. 174(1)(e) of the CCA.

(E) Subs. 171(4) concerning persons who are deemed to be insiders of the cooperative is not necessary anymore since the definition of "insider" covers people that should be covered by the insider trading provisions. This amendment will harmonize the CCA with provincial securities legislation.

Similar Provincial Laws
N/A

Current Wording
171.(1) The definitions in this subsection apply in this Part.

"business combination" means an acquisition of all or substantially all the property of one entity by another or an amalgamation of two or more entities.

"insider" means

  1. a director or officer of a distributing cooperative;
  2. a member who controls more than ten per cent of the voting rights that may be exercised to elect or appoint a director of a distributing cooperative;
  3. a person who beneficially owns more than ten per cent of the shares of a distributing cooperative or who exercises control or direction over more than ten per cent of the votes attached to shares of a distributing cooperative, excluding shares owned by a securities underwriter under an underwriting agreement while those shares are in the course of a distribution to the public;
  4. a distributing cooperative that acquires shares, except for the purpose of redemption;and
  5. a distributing cooperative that acquires or sells shares issued by any of its affiliates.

"officer" means

  1. the chairperson of the board of directors, president, vice-president, secretary, treasurer, comptroller, general counsel, general manager, managing director or any other individual who performs functions for an entity similar to those normally performed by an individual occupying any of those offices; and
  2. each of the five highest paid employees of a distributing cooperative, including any individual mentioned in paragraph (a).

(2) For the purposes of this Part,

  1. a director or an officer of an entity, or an individual acting in a similar capacity, that is an
  2. insider of a distributing cooperative is deemed to be an insider of the distributing cooperative

(4) For the purposes of this Part, a director or an officer of an entity, or an individual acting in a similar capacity, or a member or a holder of a share of the entity who is a person referred to in paragraph (b) or (c) of the definition "insider" in subsection (1) is deemed to have been an insider of the distributing cooperative for the previous six months or for any shorter period during which the person was a director, an officer, such an individual or such a member or holder of the entity if(a) the entity becomes an insider of the distributing cooperative or enters into a business combination with a distributing cooperative; or(b) the distributing cooperative becomes an insider of the entity or enters into a business combination with an entity.

Proposed Wording
171. (1)
"business combination" means an acquisition of all or substantially all the property of one entity by another, or an amalgamation of two or more entities, or any similar reorganization between or among two or more entities.

"insider" means, except in section 173,

  1. a director or officer of a distributing cooperative;
  2. a director or officer of a subsidiary of a distributing cooperative;
  3. a director or officer of an entity that enters into a business combination with a distributing cooperative; and
  4. a person employed or retained by a distributing cooperative.

"officer" means the chairperson of the board of directors, president, vice-president, secretary, treasurer, comptroller, general counsel, general manager, managing director, or any other individual who performs functions for an entity similar to those normally performed by an individual occupying any of those offices.

(2) For the purposes of this Part,

  1. a director or an officer of an entity that beneficially owns directly or indirectly, shares of a distributing cooperative, or that exercises control or direction over shares of the distributing cooperative, or that has a combination of any such ownership, control and direction, carrying more than the prescribed percentage of voting rights attached to all of the outstanding shares of the distributing cooperative not including shares held by the entity as underwriter while those shares are in the course of a distribution to the public is deemed to be an insider of the distributing cooperative;
  2. (3) Pour l'application de la présente partie, la vente de parts de membre à des membres ou le versement d'un prêt de membre à une coopérative ne constitue pas un appel public à l'épargne.

Bill Clause No.: 192
CCA Section No.: 172
Topic: Insider Trading

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Replace the word "share" with the word "security" in s. 172.

Purpose of Change
The speculative trading prohibitions relate to the sale of a "share" and puts and calls in respect of a "share" of the cooperative or any of its affiliates. The CCA defines a "share" as a voting share. However, there is a similar potential for conflict of interest with respect to securities other than voting shares. Thus, the proposal to include in the trading prohibitions securities such as debt obligations issued by the cooperative.

This change would promote harmonization with provincial rules and would more fully encompass those types of transactions that could give rise to a conflict of interest.

Similar Provincial Laws
N/A

Current Wording
172.

  1. No insider shall knowingly sell, directly or indirectly, a share of the distributing cooperative or any of its affiliates if the insider selling the share does not own or has not fully paid for the share to be sold.
  2. No insider shall knowingly, directly or indirectly, buy a put or sell a call in respect of a share of the cooperative or any of its affiliates.
  3. Despite subsection (1), an insider may sell a share that the insider does not own if the insider owns another share convertible into the share sold or an option or right to acquire the share sold and, no later than ten days after the sale, the insider
    1. exercises the conversion privilege, option or right and delivers the share so acquired to the purchaser; or
    2. transfers the convertible share, option or right to the purchaser.

Proposed Wording
172.

  1. No insider shall knowingly sell, directly or indirectly, a security of a distributing cooperative or any of its affiliates if the insider selling the security does not own or has not fully paid for the security to be sold.
  2. No insider shall knowingly, directly or indirectly, buy a put or sell a call in respect of a security of the cooperative or any of its affiliates.
  3. Despite subsection (1), an insider may sell a security that the insider does not own if the insider owns another security convertible into the security sold or an option or right to acquire the security sold and, no later than ten days after the sale, the insider
    1. exercises the conversion privilege, option or right and delivers the security so acquired to the purchaser; or
    2. transfers the convertible security, option or right to the purchaser.

Part 10 Insider Trading (clause 193)

The civil liability provisions relating to insider trading would be overhauled to harmonize with provincial securities legislation and with proposed amendments to the Canada Business Corporations Act. In particular, the amendments would expand the definition of "security" for insider trading purposes in order to help deter insider trading by allowing civil actions to be brought based on that broader definition. The definition of "insider" would also be expanded to cover most instances where insider trading might be expected to occur. Finally, new provisions are incorporated, imposing civil liability on persons who communicate undisclosed confidential information. (s. 173).

A number of minor technical amendments to both the English and French versions are also included, as well certain amendments which are designed to facilitate the efficient operation and administration of the statute.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No.: 193
CCA Section No.: 173(1)
Topic: Insider Trading

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Broaden, in s. 173, the definition of "insider" to harmonize it with provincial securities legislation.

Purpose of Change
The current CCA definition already covers a wide spectrum of insiders. However, recent amendments to provincial securities laws have introduced other categories of insiders, further widening the net for liability purposes.

Revising the CCA to encompass all insiders covered under provincial securities would promote greater harmonization, facilitate enforcement, and cover most instances where insider trading might be expected to occur.

Similar Provincial Laws
Securities Act (Ontario)
Securities Act (Quebec)

Current Wording
173. (1) In this section, "insider", with respect to a cooperative, means

  1. the cooperative;
  2. an affiliate of the cooperative;
  3. a director or an officer of the cooperative;
  4. a member who controls more than ten per cent of the voting rights that may be exercised to elect or appoint a director of the cooperative;
  5. a person who beneficially owns more than ten per cent of the shares of the cooperative or who exercises control or direction over more than ten per cent of the votes attached to the shares of the cooperative;
  6. a person employed or retained by the cooperative; and
  7. an individual who receives specific confidential information from a person described in this subsection or in subsection (2), including from an individual described in this paragraph, and who has knowledge that the information is given by such a person.

Proposed Wording
173. (1) In this section, "insider", with respect to a cooperative, means

  1. the cooperative;
  2. an affiliate of the cooperative;
  3. director or an officer of the cooperative or of any persons described in paragraphs (b), (e) or (g);
  4. a member who controls more than ten per cent of the voting rights that may be exercised to elect or appoint a director of the cooperative;
  5. a person who beneficially owns, directly or indirectly, shares of the cooperative or who exercises control or direction over shares of the cooperative, or a combination of any such ownership, control and direction, carrying more than the prescribed percentage of the voting rights attached to all of the outstanding shares of the cooperative other than shares held by the person as underwriter while those shares are in the course of a distribution to the public;
  6. a person, other than a person described in paragraph (g), employed or retained by the cooperative or by a person described in paragraph (g);
  7. a person who engages in or proposes to engage in any business or professional activity with or on behalf of the cooperative;
  8. a person who received, while they were a person described in any of paragraphs (a) to (g) material confidential information concerning the cooperative;
  9. a person who receives material confidential information from a person described in this subsection or in subsection (2) or (2.1), including from a person described in this paragraph, and who knows or who ought reasonably to have known that the person giving the information is a person described in this subsection or in subsection (2) or (2.1), including a person described in this paragraph; and
  10. a prescribed person.

Bill Clause No.: 193
CCA Section No.: 173(2), new (2.1), (3)
Topic: Insider Trading

Sources of Proposed Law
Proposed amendment to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Add a definition of "security" to include puts, calls, options and other securities whose market price varies materially with the market price of the securities of the cooperative. Current s. 173(2) is replaced by a revised 173(2) and a new s. 173(2.1) deeming offerors and their insiders to be insiders of the cooperative.

Purpose of Change
Section 2(1) of the CCA defines "Security" as "an investment share, a debt obligation of a cooperative and a certificate evidencing such a share or debt obligation and for the purposes of Part 19, includes a membership share." Section 173(3) of the CCA, the provision which imposes insider trading civil liability, refers to "a transaction in a security of the cooperative, or any of its affiliates...".

Provincial securities laws have a much wider definition of "security" for purposes of insider trading. The definition in these statutes include a variety of instruments representing investments based on the underlying shares of the company (puts, calls, options, etc.).

This amendment would adopt this broader definition of "security" for insider trading purposes, in order to deter insiders from circumventing the statute by trading in derivatives or other instruments whose value is linked to the market price of the securities of the cooperative.

This provision would be similar to that found in provincial securities acts and would help to harmonize Canadian legislation with respect to insider trading.

The deemed insider provisions set out in s. 173(2) and new (2.1) are designed to broaden the scope of the civil liability regime to harmonize with provincial securities legislation.

Similar Provincial Laws
Securities Act (Ontario)
Securities Act (Quebec)
Securities Act (British Columbia)

Current Wording
173. (2) For the purposes of this section, a director or an officer of an entity, or an individual acting in a similar capacity, is deemed to have been an insider of a cooperative for six months, or any shorter period during which the individual was a director or an officer of the entity, or acted in a similar capacity, before

  1. the entity becomes an insider of a cooperative or enters into a business combination with a cooperative; or
  2. the cooperative becomes an insider of the entity.

(3) An insider who, in connection with a transaction in a security of the cooperative or any of its affiliates, makes use of any specific confidential information for their own benefit or advantage that, if generally known, might reasonably be expected to affect materially the value of the security

  1. is liable to compensate any person for any direct loss suffered by them as a result of the transaction, unless the information was known or in the exercise of reasonable diligence should have been known to them; and
  2. is accountable to the cooperative for any direct benefit or advantage received or receivable by the insider as a result of the transaction.

Proposed Wording
173. (2) For the purposes of this section, a person who proposes to make a take-over bid (as defined in the regulations) for securities of a cooperative, or to enter into a business combination with a cooperative, is an insider of the cooperative with respect to material confidential information obtained from the cooperative and is an insider of the cooperative for the purposes of subsection (6).

(2.1) An insider of a person referred to in subsection (2), and an affiliate or associate of such a person, is an insider of the cooperative referred to in that subsection. Paragraphs (1)(b) to (j) apply in determining whether a person is such an insider except that references to "cooperative" in those paragraphs are to be read as references to "person described in subsection (2)".

(3) For the purposes of this section, the following are deemed to be a security of the cooperative:

  1. (a) a put, call or option or other right or obligation to purchase or sell a security of the cooperative; and
  2. (b) a security of another entity whose market price varies materially with the market price of the securities of the cooperative.

Bill Clause No.:193
CCA Section No.: 173(4) and new (5)
Topic: Insider Trading

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Amend subs. 173(4) to harmonize it with comparable provisions in provincial securities legislation. In particular by:

  1. deleting the term "specific" from the determination of what constitutes insider information;
  2. deleting the "makes use of" requirement and the words "for his own benefit or advantage"; and
  3. providing for defences comparable to those currently available under provincial securities legislation.

Move the provision regarding accountability of the insider to the corporation (s. 173(3)(b)) to a new subsection 173(5). Provide that an insider shall have a defence if he/she can establish that he/she reasonably believed that the information had been generally disclosed.

Purpose of Change
These amendments are designed to clarify the provisions and to harmonize them with the civil liability provisions currently found in provincial securities legislation. In particular,

  1. Subsection 173(3) provides that an insider may be liable if he/she traded on the basis of specific confidential information that, if generally known, might reasonably be expected to affect materially the value of the security. "Specific" is not a defined term nor is it a common term to which a clear interpretation can be attached. It is usually interpreted as the probability of an event's occurrence. Therefore, the information must relate to an event that is at such an advanced stage that it is likely to occur. The civil liability provisions are therefore currently restricted to instances where the information is reliable, precise and relating specifically to the cooperative. This bars from consideration confidential information that is general in nature and not sufficiently mature.
  2. Subsection 173(3) provides that an insider who, in connection with a transaction in the securities of a cooperative, makes use of any specific confidential material information is liable to compensate any aggrieved person and is accountable to the cooperative for any benefit or advantage received. The fact that the insider "makes use of" material confidential information is a required element of the cause of action and therefore must be proved by the plaintiff in a civil action against an insider. This is widely considered an insurmountable evidentiary obstacle. This requirement also allows an insider to avoid liability by showing that, although he/she had knowledge of confidential material information and traded, the trade was not based on this information and the information was not a factor in what he did.
    The words "for his own benefit or advantage" found in subs. 173(3) are essentially part of the element of "making use" of the information and would also be removed.
  3. (C) Pursuant to the proposed changes, a plaintiff would only have to demonstrate that the plaintiff purchased or sold securities from or to an insider who had knowledge of confidential information that, if generally known, might be reasonably be expected to affect materially the value of any of the securities of the cooperative. The insider would then be able to avoid liability if he/she is able to establish that either he/she reasonably believed that the information had been generally disclosed (i.e., that it was not confidential information), or that the information was known or ought reasonably to have been known, by that person or that the purchase or sale of the securities took place in the prescribed circumstances. The latter provision is intended to provide flexibility to the defences harmonized with provincial defences.

Similar Provincial Laws
Securities Act (Ontario)

Securities Act (British Columbia)

Current Wording
173.(4) An action to enforce a right created by subsection (3) may be commenced only within two years after discovery of the facts that gave rise to the cause of action.

Proposed Wording
173. (4) An insider who purchases or sells a security of the cooperative with knowledge of confidential information that, if generally known, might reasonably be expected to affect materially the value of any of the securities of the cooperative is liable to compensate the seller of the security or the purchaser of the security, as the case may be, for any damages suffered by the seller or purchaser as a result of the purchase or sale, unless the insider establishes that

  1. the insider reasonably believed that the information had been generally disclosed;
  2. the information was known, or ought reasonably to have been known, by the seller or purchaser; or
  3. the purchase or sale of the security took place in the prescribed circumstances.

(5) The insider is accountable to the cooperative for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (4) unless the insider establishes the circumstances in paragraph 4(a).

Bill Clause No.: 193
CCA Section No.:new 173(6) and (7)
Topic: Insider Trading

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law

  1. Amend s. 173 by adding a new subsection (s. 173(6)) to impose civil liability on insiders who communicate confidential information with respect to the cooperative that has not been generally disclosed, subject to specified defences.
  2. Amend s. 173 by adding a new subsection (s. 173(7)) to provide that an insider is accountable to the cooperative for any benefit or advantage received or receivable by the insider as a result of the disclosure of information, subject to specified defences.

Purpose of Change
Unlike provincial securities legislation, the CCA does not currently impose civil liability on an insider (the tipper) who communicates to another person undisclosed confidential information with respect to the cooperative. The concern is that, even if the tippee did not trade, he/she may inform others. These other people could in turn, inform more people and the chain of tippees would grow longer. As this happens it becomes more and more likely that a trade will occur and it becomes more and more difficult to prove that the person who traded knew the information was confidential and originated from an insider. Furthermore, this type of activity creates rumours that may affect trading in the security. If there is unusual trading in a security prior to the public announcement of information, confidence in capital markets is eroded regardless of whether the trading was based on rumour or actual knowledge of inside information.

Provincial legislators have recognized the need to constrain confidential information within authorized business circles. As a result, the provincial securities acts now specifically prohibit the wrongful communication of material confidential information, subject to certain defences. They also contain civil liability provisions which enable a person who suffers damages as a result of a trade made following receipt of the information to claim compensation against all the insiders in the chain of tippees, subject to certain defences. This amendment provides for a

comparable civil liability provision. The defences are substantially similar to those provided by provincial securities legislation. For example, the ordinary course of business defence, is a

Similar Provincial Laws
Securities Act (Ontario)
Securities Act (Quebec)
Securities Act (British Columbia)

Current Wording
N/A

Proposed Wording
173. (6) An insider who discloses to another person confidential information with respect to the cooperative that has not been generally disclosed and that, if generally known, might reasonably be expected to affect materially the value of any of the securities of the cooperative is liable to compensate for damages any person who subsequently sells securities of the cooperative to, or purchases securities of the cooperative from, any person that received the information, unless the insider establishes

  1. that the insider reasonably believed that the information had been generally disclosed;
  2. that the information was known, or ought reasonably to have been known, to the person who alleges to have suffered the damages;
  3. that the disclosure of the information was necessary in the course of the business of the insider, except if the insider is a person described in subsection (2) or (2.1); or
  4. if the insider is a person described in subsection (2) or (2.1), that the disclosure of the information was necessary to effect the take-over bid or the business combination, as the case may be.

(7) The insider is accountable to the cooperative for any benefit or advantage received or receivable by the insider as a result of a disclosure of the information as described in subsection (6) unless the insider establishes the circumstances in paragraph (6)(a), (c) or (d).

Bill Clause No.: 193
CCA Section No.: new 173(8), (9) and (10)
Topic: Insider Trading

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Amend s. 173 to adopt a specific measure of damages for distributing cooperatives.

Purpose of Change
Paragraph 173(3)(a) of the CCA provides that an insider who improperly trades "is liable to compensate any person for any direct loss suffered by that person as a result of the transaction." In light of the difficulty of assessing damages with respect to impersonal trades in the securities of distributing corporations/cooperatives, some provincial securities acts include provisions to help guide the courts in their assessment of damages. These provincial provisions provide discretion to the court to consider such other measures as may be relevant under the circumstances.

The amendment would accord with provincial securities law, which use an "average market price" test for the securities of distributing cooperatives. With respect to the securities of non-distributing cooperatives, where generally no market for securities exists, the court would assess damages in accordance with any measure it considers appropriate in the circumstances.

It should be noted that the measure of damages provision would only apply to damages assessed under the civil liability provisions (e.g., subs. 173(4) and (6)) and not to the "compensation to the cooperative" provisions (e.g., subs. 173(5) and (7)). This is because the cooperative is not entitled to damages but rather to the disgorgement of the benefits received or receivable by the insider.

These changes would further harmonize the CCA with provincial securities laws

Similar Provincial Laws
Securities Act (Ontario)
Securities Act (British Columbia)

Current Wording
N/A

Proposed Wording
173.(8) The court may assess damages under subsection (4) or (6) in accordance with any measure of damages that it considers relevant in the circumstances. However, in assessing damages in a situation involving a security of a distributing cooperative, the court must consider the following:

  1. if the plaintiff is a purchaser, the price paid by the plaintiff for the security less the average market price of the security over the twenty trading days immediately following general disclosure of the information; and
  2. if the plaintiff is a seller, the average market price of the security over the twenty trading days immediately following general disclosure of the information, less the price that the plaintiff received for the security.

(9) If more than one insider is liable under subsection (4) or (6) with respect to the same transaction or series of transactions, their liability is joint and several, or solidary

(10) An action to enforce a right created by subsections (4) to (7) may be commenced only within two years after discovery of the facts that gave rise to the cause of action.

Part 11 Compulsory Acquisition (clauses 194-196)

This Part includes a number of technical amendments made to harmonize the Act with the proposed amendments to the Canada Business Corporations Act.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. : 194
CCA Section No.: 174
Topic: Compulsory Acquisition (Technical Amendments)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Definitions of "offeree cooperative" and "take-over bid" are amended.

Purpose of Change
These changes reflect the new definition of distributing cooperative (see clause 137).

Similar Provincial Laws
N/A

Current Wording
174. "offeree cooperative" means a cooperative whose shares are the object of a take-over bid.

"take-over bid" means an offer made by an offeror to shareholders at approximately the same time to acquire all of the shares of a class of issued shares and includes an offer made by a cooperative to repurchase all of the shares of a class of its shares.

Proposed Wording
174. "offeree cooperative" means distributing cooperative whose shares are the object of a take-over bid.

"take-over bid" means an offer made by an offeror to shareholders of a distributing cooperative at approximately the same time to acquire all of the shares of a class of issued shares and includes an offer made by a distributing cooperative to repurchase all of the shares of a class of its shares.

Bill Clause No.: 195
CCA Section No.: 175(8) and 175(9)(c)(ii)
Topic: Compulsory Acquisition (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
Amend subs. 175(8) to add the words "of its shares".

Amend subpar. 175(9)(c)(ii) to replace the word "consideration" with "things".

Purpose of Change
The amendment to subs. 175(8) is being made for clarification purposes.

The amendment to subpar. 175(9)(c)(ii) is a technical change designed to clarify the wording of the Act.

Similar Provincial Laws
N/A

Current Wording
175. (8) A cooperative that is an offeror making a take-over bid to repurchase all of the shares of a class is deemed to hold in trust for the dissenting shareholders the amounts that it would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to accept the take-over bid under subparagraph (4)(b)(i), and the cooperative must deposit the amounts in a separate account in a body corporate any of whose deposits are insured by the

Canada Deposit Insurance Corporation or guaranteed by the Quebec Deposit Insurance Board or by any other similar entity created by the law of another province, and must place any thing received in lieu of money in the custody of such a body corporate.

(9) Within thirty days after the offeror sends a notice under subsection (2), the offeree cooperative must

…

(c) if the payments required by subsection (6) are made and the money or things are deposited as required by subsection (7) or (8), send to each dissenting shareholder who has not sent share certificates as required by paragraph (4)(a) a notice stating that

…

(ii) the offeree cooperative or some designated person holds in trust for the dissenting shareholder the money or other consideration to which that shareholder is entitled as payment for or in exchange for the shares, and

Proposed Wording
175. (8) A cooperative that is an offeror making a take-over bid to repurchase all of the shares of a class of its shares is deemed to hold in trust for the dissenting shareholders the amounts that it would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to accept the take-over bid under subparagraph (4)(b)(i), and the cooperative must deposit the amounts in a separate account in a body corporate any of whose deposits are insured by the Canada Deposit Insurance Corporation or guaranteed by the Quebec Deposit Insurance Board or by any other similar entity created by the law of another province, and must place any thing received in lieu of money in the custody of such a body corporate.

(9)(c)(ii) the offeree cooperative or some designated person holds in trust for the dissenting shareholder the money or other things to which that shareholder is entitled as payment for or in exchange for the shares, and

Bill Clause No.: 196
CCA Section No. : 176(1)
Topic: Compulsory Acquisition (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law
This change clarifies the time period within which shareholders, who wish to exercise their right to compel the acquisition of their shares by the offeror following a take-over bid, must require the offeror to acquire those shares.

Purpose of Change
This amendment to subs. 176(1), which was introduced at the Senate Committee stage, is being made for clarification purposes.

Similar Provincial Laws
N/A

Current Wording
176. (1) If a shareholder holding shares of a distributing cooperative does not receive a notice under this Part, the shareholder may, within ninety days after the date of the end of the take-over bid or, if the shareholder did not receive an offer pursuant to the take-over bid, within ninety days after learning of the takeover bid, require the offeror to acquire those investment shares.

Proposed Wording
176.

  1. If a shareholder holding shares of a distributing cooperative does not receive a notice under this Part, the shareholder may
    1. within ninety days after the date of the end of the take-over bid, or
    2. if the shareholder did not receive an offer pursuant to the take-over bid, within ninety days after the later of
      1. the date of the end of the take-over bid, and
      2. the date on which the shareholder learned of the take-over bid,
    require the offeror to acquire those shares.

Part 12 Security Certificates, Registers and Transfers (clauses 197-198)

This Part includes some minor technical amendments designed to clarify wording and to harmonize with the proposed amendments to the Canada Business Corporations Act.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. :197
CCA Section No. : 182(1)
Topic : Security Certificates, Registers and Transfers (Technical Amendments)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Amend s. 182(1) by removing the word "manually", adding the words" at least", and replacing the word "person" for the word "individual".

Amend the wording in par.182(1)(a) and (b).

Purpose of Change
The proposed amendments would harmonize the CCA provisions with the proposed amendments to the CBCA

Similar Provincial Laws
Business Corporation Act (Alberta)

Current Wording
182. (1) A security certificate must be signed manually by one of the following individuals, or a facsimile of the signature must be reproduced on the certificate:

  1. at least one director or officer;
  2. an individual on behalf of a director, transfer agent or branch transfer agent of the cooperative; or
  3. a trustee who certifies it in accordance with a trust indenture.

Proposed Wording
182. (1) A security certificate must be signed by at least one of the following persons, or a facsimile of the signature must be reproduced on the certificate:

  1. a director, or an individual on their behalf, or an officer;
  2. a transfer agent or branch transfer agent of the cooperative, or an individual on their behalf; or
  3. a trustee who certifies it in accordance with a trust indenture.

Bill Clause No. : 198
CCA Section No. :183(2), (3) and (4) and 183(5)(b)
Topic:Security Certificates, Registers and Transfers (Technical Amendments)

Sources of Proposed Law
N/A

Changes From Present Law

  1. The word "agreement" is added to s. 183(2) and (3).
  2. The reference to "distributing cooperative" is updated in s. 183(4).
  3. Remove the specific references to sections of statutes in par. 183(5)(b) and allow the appropriate statutes to be prescribed.

Purpose of Change

  1. To make use of the word "agreement" consistent throughout the provision and to harmonize with the CBCA amendments.
  2. This change reflects the new definition of "distributing cooperative (see clause 137).
  3. Consistent with a similar amendment made to the CBCA (see CBCA s. 49(10)(b)).

Similar Provincial Laws
N/A

Current Wording
183. (2) No restriction, charge or endorsement described in subsection (3) is effective against a transferee of a security, issued by a cooperative or by a body corporate before it is continued under this Act, who has no actual knowledge of the restriction, charge or endorsement unless it or a reference to it is noted conspicuously on the security certificate.

(3) The restrictions, charges and endorsements referred to in subsection (2) are

  1. a restriction on transfer other than a constraint under section 130;
  2. a charge in favour of the cooperative;
  3. a unanimous agreement; and
  4. an endorsement under subsection 302(10).

(4) If the issued investment shares of a cooperative are or were part of a distribution to the public, remain outstanding and are held by more than one person, the cooperative must not restrict the transfer or ownership of its investment shares of any class or series except by way of a constraint under section 130.

(5) A reference to a constraint on the issue, transfer or ownership of any class or series of investment shares must be noted conspicuously on every security certificate evidencing such a share that is issued after the share becomes subject to the constraint under this Act, if the constraint is one

…

(b) to comply with section 379 of the Trust and Loan Companies Act, section 411 of the Insurance Companies Act or Part X.3 of the Income Tax Act.

Proposed Wording
183. (2) No restriction, charge, agreement or endorsement described in subsection (3) is effective against a transferee of a security, issued by a cooperative or by a body corporate before it is continued under this Act, who has no actual knowledge of the restriction, charge, agreement or endorsement unless it or a reference to it is noted conspicuously on the security certificate.

(3) The restrictions, charges, agreements and endorsements referred to in subsection (2) are

  1. a restriction on transfer other than a constraint under section 130;
  2. a charge in favour of the cooperative;
  3. a unanimous agreement; and
  4. an endorsement under subsection 302(10).

(4) If the issued investment shares of a distributing cooperative remain outstanding and are held by more than one person, the cooperative must not restrict the transfer or ownership of its investment shares of any class or series except by way of a constraint under section 130.

(5) (b) to comply with any prescribed law.

Part 13 Financial Disclosure (clauses 199-203)

A number of consequential amendments required as a result of amendments to other parts of the Act are made in this Part. In addition, several minor technical amendments and amendments to the French version are included.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. 199
CCA Section No. None
Topic Financial Disclosure (Technical Amendments)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Amend the French heading before by replacing "Présentation de renseignements financiers" with "Présentation de renseignements d'ordre financier"

Purpose of Change
This technical change clarifies the French wording of the Act.

Similar Provincial Laws

Current Wording
Présentation de renseignements financiers

Proposed Wording
Présentation de renseignements d'ordre financier

Bill Clause No. 200
CCA Section No. 249(2)
Topic Financial Disclosure (Technical Amendments)

Sources of Proposed Law

Changes From Present Law
Amend subs. 249(2) to replace the words "legal representatives" with the words "personal representatives".

Purpose of Change
This technical change clarifies the wording of the Act to reflect the the proposed definition of "personal representative" in subs. 2(1) [see clause 137].

Similar Provincial Laws

Current Wording
249. (2) The members and shareholders of a cooperative and their agents, mandataries and legal representatives may on request examine the statements referred to in subsection (1) during the usual business hours of the cooperative and may take extracts from them free of charge.

Proposed Wording
249. (2) The members and shareholders of a cooperative and their personal representatives may on request examine the statements referred to in subsection (1) during the usual business hours of the cooperative and may take extracts from them free of charge.

Bill Clause No. 201
CCA Section No. 252(1)
Topic Financial Disclosure (Shareholder Communications)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Clarify s. 252(1) by replacing the phrase "after the last date when the last preceding annual meeting should have been held" with "but no later than six months after the end of the cooperative's preceding financial year."

Purpose of Change
This amendment, which harmonizes the CCA with the CBCA, is designed to ensure that cooperatives submit their reports to the Director in a timely and regular fashion.

Similar Provincial Laws

Current Wording
252. (1) If any of the securities that were part of a public distribution are outstanding and are held by more than one person, a distributing cooperative must, not less than twenty-one days before each annual meeting of members, or without delay after a resolution referred to in paragraph 251(c) is signed, and in any event not later than fifteen months after the last preceding annual meeting of members was held or the resolution referred to in paragraph 251(c) in lieu of that meeting was signed, send a copy of the documents referred to in section 247 to the Director.

Proposed Wording
252. (1) A distributing cooperative, any of the issued securities of which remain outstanding and are held by more than one person, must send a copy of the documents referred to in section 247 to the Director

  1. not less than twenty-one days before each annual meeting of members or, without delay after a resolution referred to in paragraph 251(c) is signed; and
  2. in any event within fifteen months after the last preceding annual meeting of shareholders was held or the resolution referred to in paragraph 251(c) was signed, but no later than six months after the end of the cooperative's preceding financial year.

Bill Clause No. 202
CCA Section No. 255(1)
Topic Financial Disclosure (Technical Amendments)

Sources of Proposed Law

Changes From Present Law
Amend subs. 255(1) to replace the words "required to comply with section 252" with "distributing cooperative".

Purpose of Change
This change reflects the new definition of "distributing cooperative" (see clause 137).

Similar Provincial Laws

Current Wording
255. (1) A cooperative that is not required to comply with section 252 may resolve not to appoint an auditor by

Proposed Wording
255. (1) A cooperative that is not a distributing cooperative may resolve not to appoint an auditor by

Bill Clause No. 203
CCA Section No. 260(5)
Topic Financial Disclosure (Technical Amendments)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Amend the French version of subs. 260(5) to add reference to causes of the auditor's removal.

Purpose of Change
Technical change makes the French and English version equivalent and harmonizes with the CBCA.

Similar Provincial Laws

Current Wording
260. (5) Lorsque la coopérative se propose de changer de vérificateur, il est nécessaire qu'elle soumette une déclaration portant les motifs de ce changement et que le nouveau vérificateur ait le droit de soumettre une déclaration commentant ces motifs.

Proposed Wording
260. (5) Lorsque la coopérative se propose de remplacer le vérificateur, pour cause de révocation ou d'expiration de son mandat, elle doit soumettre une déclaration motivée et le nouveau vérificateur a le droit de soumettre une déclaration commentant ces motifs.

Part 14 Trust Indentures (clause 204)

One minor technical change to the wording of the French version of the Act is included in this Part.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. 204
CCA Section No. 267(1)
Topic Trust Indentures (Technical Amendments)

Sources of Proposed Law

Changes From Present Law
Amend the French version of subs. 267(1) to replace the words "souscription publique" with "d'appel public à l'épargne".

Purpose of Change
This technical change updates the French wording of the Act and harmonizes with the CBCA.

Similar Provincial Laws

Current Wording
267. (1) La présente partie s'applique à tout acte de fiducie prévoyant une émission de titres de créance par souscription publique.

Proposed Wording
267. (1) La présente partie s'applique à tout acte de fiducie prévoyant une émission de titres de créance par voie d'appel public à l'épargne.

Part 15 Receivers and Receivers-Managers (no amendments)

There are no proposed amendments to this Part.

Part 16 Fundamental Changes (clauses 205-208)

A number of minor technical amendments as well as amendments designed to clarify and facilitate the efficient operation and administration of the statute are included in this Part.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. 205
CCA Section No. 289(1)(j)
Topic Fundamental Changes (Government Administration)

Sources of Proposed Law

Changes From Present Law
The words "if its stated capital" have been added.

Purpose of Change
This amendment is required in order to harmonize the language with the equivalent provision in the current CBCA s. 173(1)(f).

Similar Provincial Laws

Current Wording
289. (1) Subject to subsections (3) and 130(2) and sections 134, 290 and 291, the articles of a cooperative may be amended by a special resolution to

…

(j) reduce or increase its stated capital which, for the purposes of the amendment, is deemed to be set out in the articles;

Proposed Wording
289. (1)(j) reduce or increase its stated capital, if its stated capital is set out in the articles;

Bill Clause No. 206
CCA Section No. 290(1)
Topic Fundamental Changes (Government Administration)

Sources of Proposed Law

Changes From Present Law
Addition of "or (2.1)" after "58(2)".

Purpose of Change
For clarification purposes. S. 290(1) refers only to s. 58(2). However, the Bill divides that subsection into s. (2) and (2.1).

Similar Provincial Laws

Current Wording
290. (1) Subject to subsection (2), a person referred to in subsection 58(2) may make a proposal to amend the articles and section 58 applies, with any modifications that the circumstances require, to any meeting of the cooperative at which the proposal is to be considered.

Proposed Wording
290. (1) Subject to subsection (2), a person referred to in subsection 58(2) or (2.1) may make a proposal to amend the articles and section 58 applies, with any modifications that the circumstances require, to any meeting of the cooperative at which the proposal is to be considered.

Bill Clause No. 207
CCA Section No. 294(1)
Topic Fundamental Changes (Government Administration)

Sources of Proposed Law

Changes From Present Law
Clarify provision regarding restatement of articles.

Purpose of Change
Allows unilingual articles to be restated in bilingual format or vice-versa, or French language articles to be restated in English, or vice-versa, without the need for the articles to be amended at the same time.

Similar Provincial Laws

Current Wording
294. (1) The directors may at any time, and must when reasonably so directed by the Director, restate the articles of incorporation as amended.

Proposed Wording
294. (1) The directors may at any time, and must when reasonably so directed by the Director, restate the articles of incorporation.

Bill Clause No. 208
CCA Section No. 298(1)(b)(ii) and298(2)(b)(ii)
Topic Fundamental Changes (Technical Amendments)

Sources of Proposed Law

Changes From Present Law
Amend s. 298(1)(b)(ii) to replace the word "amalgamated" with "amalgamating holding".
Amend s. 298(2)(b)(ii) to add the word "cooperative" after "subsidiary".

Purpose of Change
These technical changes clarify the wording of the Act and harmonize with the CBCA.

Similar Provincial Laws

Current Wording
298. (1) A cooperative that is a holding cooperative may amalgamate with one or more of its wholly owned subsidiary cooperatives. The cooperative and subsidiaries continue as one cooperative without complying with sections 295 to 297 if

…

(b) the resolutions provide that

…

(ii) except as may be prescribed, the articles of amalgamation be the same as the articles of incorporation of the amalgamated cooperative, and

(2) Two or more wholly owned subsidiary cooperatives of a holding entity may amalgamate and continue as one cooperative without complying with sections 295 to 297 if

…

(b) the resolutions provide that

…

ii) except as may be prescribed, the articles of amalgamation be the same as the articles of incorporation of the amalgamating subsidiary whose shares are not cancelled, and

Proposed Wording
298. (1)(b)(ii) except as may be prescribed, the articles of amalgamation be the same as the articles of the amalgamating holding cooperative, and

(2)(b)(ii) except as may be prescribed, the articles of amalgamation be the same as the articles of the amalgamating subsidiary cooperative whose shares are not cancelled, and

Part 17 Liquidation and Dissolution (clauses 209-216)

This Part includes a number of amendments designed to update and improve the efficient administration of the CCA. In that regard, the revival procedure is being modified to clarify that a revival of a cooperative is retroactive (s. 308(6)). The dissolution powers of the Director would be expanded to provide the Director with the power to immediately dissolve a cooperative which fails to pay the incorporation fee (s. 311(3.1). In addition, the Director would be able to dissolve directorless cooperatives (s. 311(1)(d)).

A number of consequential amendments required as a result of amendments to other parts of the Act are also included in this Part. In addition, several minor technical amendments and amendments to the French version are made.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. 209
CCA Section No. 307(1) and (2)
Topic Liquidation and Dissolution (Technical Amendments)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Sections 308 and 311 would be applicable to an insolvent cooperative.

Purpose of Change
By making s. 308 and 311 applicable to insolvent cooperatives, the proposed amendment would permit the Director to dissolve insolvent cooperatives. In most cases, these cooperatives are either insolvent with no assets (proceedings under the Bankruptcy and Insolvency Act (BIA) have been completed, leaving a "shell" cooperative") or insolvent without sufficient assets to warrant an BIA proceeding. If the Director dissolves an insolvent cooperative where the trustee in bankruptcy has not yet been discharged, it would be possible for the trustee to apply to the Director to have the cooperative revived.

Similar Provincial Laws

Current Wording
307. (1) This Part, other than sections 311 to 313, does not apply to a cooperative that is insolvent within the meaning of the Bankruptcy and Insolvency Act or that is a bankrupt within the meaning of that Act.

(2) Any proceedings taken under this Part to dissolve or to liquidate and dissolve a cooperative are stayed if the cooperative is at any time found, in a proceeding under the Bankruptcy and Insolvency Act, to be insolvent within the meaning of that Act.

Proposed Wording
307. (1) This Part, other than sections 308 and 311, does not apply to a cooperative that is an insolvent person or a bankrupt as those terms are defined in subsection 2(1) of the Bankruptcy and Insolvency Act.:

(2) Any proceedings taken under this Part to dissolve or to liquidate and dissolve a cooperative are stayed if the cooperative is at any time found, in a proceeding under the Bankruptcy and Insolvency Act, to be an insolvent person as defined in that Act.

Bill Clause No. 210
CCA Section No. 308(6) and (7)
Topic Liquidation and Dissolution (Government Administration)

Sources of Proposed Law

Changes From Present Law
(A) Clarification of the revival provisions in the Act are made to s. 308(6).

(B) The words "other than those with its affiliates" have been deleted in s. 308(7).

(C) A definition of "interested person" is added.

Purpose of Change
(A) The proposed amendments would clarify the current wording in the CCA and harmonize that wording with proposed amendments to the CBCA.

(B) The current provision deems legal actions between a revived corporation and its affiliates taken between the time of dissolution and revival as invalid and ineffective. This was not the intended effect and an amendment correcting the problem has been made.

(C) Subs. (1) authorizes "any interested person" to apply to the CBCA Director for revival of a cooperative which has been dissolved. The expression "interested person" is not defined, leaving it to the courts to develop the law. This amendment, which was introduced at the Senate Committee stage, would add certainty to the law by specifying who are the interested persons, and is consistent with a similar amendment in the CBCA.

Similar Provincial Laws
Business Corporations Act, (Ontario);
Company Act, (British Columbia);
Companies Act, ( Northwest Territories); and
Business Corporations Act, (Alberta).

Current Wording
308. (6) In the same manner and to the same extent as if it had not been dissolved, but subject to any reasonable terms that may be imposed by the Director and to the rights acquired by any person after its dissolution, the revived cooperative is

(a) restored to its previous position in law, including the restoration of all its property whether acquired before its dissolution or after its dissolution and before its revival, and any rights and privileges whether arising before its dissolution or after its dissolution and before its revival; and

(7) Any legal action respecting the affairs of a revived cooperative, other than those with its affiliates, taken between the time of its dissolution and its revival is valid and effective.

Proposed Wording
308. (6) In the same manner and to the same extent as if it had not been dissolved, but subject to any reasonable terms that may be imposed by the Director, to the rights acquired by any person after its dissolution and to any changes to the internal affairs of the cooperative after its dissolution, the revived cooperative is

(a) restored to its previous position in law, including the restoration of any rights and privileges whether arising before its dissolution or after its dissolution and before its revival; and

(7) Any legal action respecting the affairs of a revived cooperative taken between the time of its dissolution and its revival is valid and effective.

(8) In this section, "interested person" includes

(a) a member, a shareholder, a director, an officer, an employee and a creditor of the dissolved cooperative;

(b) a person who has a contractual relationship with the dissolved cooperative; and

(c) a trustee in bankruptcy for the dissolved cooperative.

Bill Clause No. 211
CCA Section No. 311(1)(d) and new (3.1)
Topic Liquidation and Dissolution (Government Administration)

Sources of Proposed Law

Changes From Present Law
(A) Provide that the Director may dissolve a cooperative that does not have any directors or is in the situation described in subsection 85(6).

(B) Add a new subsection to provide that the Director may dissolve a cooperative who fails to pay the initial incorporation fee without having to wait one year.

Purpose of Change
(A) This section will provide an administrative means of quickly dissolving directorless cooperatives. Currently, under the CCA the earliest that the Director can start dissolution proceedings against a cooperative is one year after the cooperative is in default of paying a required fee. If a cooperative pays fees and does not have any directors (which is contrary to the Act), the Director only has the ability to dissolve the cooperative pursuant to a court order.

(B) Under the CCA, the Director can only start dissolution proceedings against that cooperative when the cooperative has been in default of paying a required fee for a period of one year. The proposed amendment would permit the Director to dissolve a cooperative that fails to pay its incorporation fees without having to wait one year.

Similar Provincial Laws

Current Wording
311. (1) Subject to subsections (2) and (3), the Director may dissolve a cooperative by issuing a certificate of dissolution under this section if the cooperative

…

(d) if the cooperative is in the situation described in subsection 85(6).

Proposed Wording
311. (d) does not have any directors or is in the situation described in subsection 85(6).

(3.1) Despite anything in this section, the Director may dissolve a cooperative by issuing a certificate of dissolution if the fee for the issuance of a certificate of incorporation is not paid.

Bill Clause No. 212
CCA Section No. 312(1)(a)
Topic Liquidation and Dissolution (Unanimous Agreements)

Sources of Proposed Law

Changes From Present Law
Remove from par 312(1)(a) the phrase "except if a unanimous agreement contains a provision that eliminates the need for a meeting of shareholders referred to in subsection 115(6)".

Purpose of Change
The reference to a unanimous agreement would be removed since a unanimous agreement cannot include a provision dealing with meetings of shareholders. [see clause 174]

Similar Provincial Laws 

Current Wording
312. (1) Any interested person may apply to a court for an order dissolving a cooperative if the cooperative has

(a) except if a unanimous agreement contains a provision that eliminates the need for meetings of shareholders referred to in subsection 115(6), failed for two or more consecutive years to comply with the requirements of this Act with respect to the holding of annual meetings;

Proposed Wording
312. (1)(a) failed for two or more consecutive years to comply with the requirements of this Act with respect to the holding of annual meetings;

Bill Clause No. 213
CCA Section No. 313(1)(b)
Topic Liquidation and Dissolution (Technical Amendments)

Sources of Proposed Law

Changes From Present Law
Amend the French version of par. 313(1)(b) to replace "qu'elle porte préjudice aux" with "abuse des" and replace "qu'elle porte atteinte à leurs intérêts ou y passe outre" with "ou se montre injuste à leur égard en leur portant préjudice ou en ne tenant pas compte de leurs intérêts".

Purpose of Change
These technical changes clarify the French wording of the Act and harmonize it with the CBCA.

Similar Provincial Laws

Current Wording
313. (1) A court may order the liquidation and dissolution of a cooperative or any of its affiliates on the application of a member or a shareholder if the court is satisfied

…

(b) il constate qu'elle porte préjudice aux droits des membres, détenteurs de parts de placement, détenteurs de valeurs mobilières, créanciers, administrateurs ou dirigeants, qu'elle porte atteinte à leurs intérêts ou y passe outre :

Proposed Wording
313. (1)(b) il constate qu'elle abuse des droits des membres, détenteurs de parts de placement, détenteurs de valeurs mobilières, créanciers, administrateurs ou dirigeants, ou se montre injuste à leur égard en leur portant préjudice ou en ne tenant pas compte de leurs intérêts :

Bill Clause No. 214
CCA Section No. new 321(2)(a) and (b)
Topic Liquidation and Dissolution (Directors' Liability)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Clarification of the due diligence defence applicable to liquidators.

Purpose of Change
This change clarifies the wording of the due diligence defence and harmonizes it with the proposed amendments to the CBCA.

Similar Provincial Laws

Current Wording
321. (2) A liquidator is not liable under this Part if the liquidator exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances to prevent the failure to fulfil their duties, including reliance in good faith on financial statements of the cooperative, on the reports of experts and on information presented by officers or professionals.

Proposed Wording
321. (2) A liquidator is not liable under this Part if the liquidator exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

(a) financial statements of the cooperative represented to the liquidator by an officer of the cooperative or in a written report of the auditor of the cooperative fairly to reflect the financial condition of the cooperative; or

b) a report of a person whose profession lends credibility to a statement made by the professional person.

Bill Clause No. 215
CCA Section No. 326(1)
Topic Liquidation and Dissolution (Technical Amendments)

Sources of Proposed Law

Changes From Present Law
Amend subs. 326(1) to replace the words "legal representatives" with the words "personal representatives".

Purpose of Change
This technical change clarifies the wording of the Act to reflect the the proposed definition of "personal representative" in subs. 2(1) [see clause 137].

Similar Provincial Laws

Current Wording
326. (1) In this section, "member" and "shareholder" include their heirs and legal representatives.

Proposed Wording
326. (1) In this section, "member" and "shareholder" include their heirs and personal representatives.

Bill Clause No. 216
CCA Section No. 328(3)
Topic Liquidation and Dissolution (Technical Amendments)

Sources of Proposed Law

Changes From Present Law
Repeal subs. 328(3).

Purpose of Change
This provision raises a number of legal concerns associated with conflicting title to the property. Therefore, the Department of Justice has advised that the provision be repealed.

Similar Provincial Laws

Current Wording
328. (3) A vesting of land under subsection (1) is not effective against a purchaser for value of the land if the vesting occurred more than twenty years before the document evidencing the purchase is registered in the proper registry office.

Proposed Wording
N/A

Part 18 Investigations (clause 217)

This part includes a technical amendment to the French version of the Act to clarify the wording and to reconcile it with the English version.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. 217
CCA Section No. 329(2)(d)
Topic Investigations (Technical Amendments)

Sources of Proposed Law

Changes From Present Law
Amend the French version of par. 329(2)(d) to replace "porte préjudice aux" with "abuse des" and replace " porte atteinte à leurs intérêts ou y passe outre" with "ou se montre injuste à leur égard soit en leur portant préjudice ou soit en ne tenant pas compte de leurs intérêts;".

Purpose of Change
These technical changes clarify the French wording of the Act and harmonize it with the CBCA.

Similar Provincial Laws 

Current Wording
329. (2) The court may order an investigation to be made of the cooperative and any of its affiliates if, on an application under subsection (1), it appears to the court that the application is neither frivolous nor vexatious and that

…

(d) que la coopérative ou toute autre personne morale de son groupe, soit par la façon don't elle conduit ou a conduit ses affaires tant commerciales qu'internes, soit par la façon don't ses administrateurs exercent ou ont exercé leurs pouvoirs, porte préjudice aux droits des membres ou des détenteurs de valeurs mobilières, porte atteinte à leurs intérêts ou y passe outre;

Proposed Wording
329. (2)(d) que la coopérative ou toute autre personne morale de son groupe, soit par la façon dont elle conduit ou a conduit ses affaires tant commerciales qu'internes, soit par la façon dont ses administrateurs exercent ou ont exercé leurs pouvoirs, abuse des droits des membres ou des détenteurs de valeurs mobilières ou se montre injuste à leur égard soit en leur portant préjudice soit en ne tenant pas compte de leurs intérêts;

Part 18.1 Apportioning Award of Damages (clause 218)

These amendments would provide that every defendant and third party found responsible for a financial loss arising out of an error, omission or misstatement in financial information that is required under the Act or the regulations would be liable to the plaintiff only for the portion of the damages corresponding to the defendant's and third party's degree of responsibility. Allocation of responsibility among the parties is provided for in the event one or more defendants/third parties are insolvent or unavailable. The joint and several liability regime would continue to apply to the Crown, charitable organizations, unsecured trade creditors and individual plaintiffs whose investment in the cooperative is worth less than a prescribed amount (clause 214).

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. 218
CCA Section No. 337.1 Definitions
Topic Apportioning Award of Damages

Sources of Proposed Law
Reports of the Standing Senate Committee on Banking, Trade and Commerce on Modified Proportionate Liability, dated March and September 1998

Changes From Present Law
New regime

Purpose of Change
The definition of "financial interest" would include a "security" as defined in s. 2 of the CCA in addition to other instruments traditionally regarded as financial interests. The definition is not exclusive.

"Financial loss" - The modified liability regime is applicable only to claims for economic (i.e., financial) loss arising out of an error, omission or misstatement in respect of financial information that is required under the Act or the Regulations. Neither personal injury claims nor claims involving professionals and other professional services will be affected.

Definition of "third party" - The definition is necessary in the English version in order to clarify that the modified proportionate liability regime applies even if there is only one defendant, provided that other parties are subsequently joined to the action. The regime should be applicable to defendants and any subsequent party that is joined in proceedings before a court. It is not necessary to include a comparable definition of the term "mise en cause" in the French version because the term "mise en cause" is broad enough to cover defendants and third parties.

Similar Provincial Laws
None

Current Wording
N/A

Proposed Wording
337.1 The definitions in this section apply in this Part:

"financial interest", with respect to a cooperative, includes

(a) a security;

(b) a title to or an interest in capital, assets, property, profits, earnings or royalties;

(c) an option or other interest in, or a subscription to, a security;

(d) an agreement under which the interest of the purchaser is valued for purposes of conversion or surrender by reference to the value of a proportionate interest in a specified portfolio of assets;

(e) an agreement providing that money received will be repaid or treated as a subscription for shares, units or interests at the option of any person or the cooperative;

(f) a profit-sharing agreement or certificate;

(g) a lease, claim or royalty in oil, natural gas or mining, or an interest in the lease, claim or royalty;

(h) an income or annuity contract that is not issued by an insurance company governed by an Act of Parliament or a law of a province;

(i) an investment contract; and

(j) anything that is prescribed to be a financial interest.

"financial loss" means a financial loss arising out of an error, omission or misstatement in financial information concerning a cooperative that is required under this Act or the regulations.

"third party" includes any subsequent party that is joined in proceedings before a court.

Bill Clause No. 218
CCA Section No. 337.2(1)
Topic Apportioning Award of Damages

Sources of Proposed Law
Reports of Standing Senate Committee on Banking, Trade and Commerce on Modified Proportionate Liability, dated March and September 1998.

Changes From Present Law
To provide for a regime of modified proportionate liability applicable to all claims for economic (financial) loss arising by reason of any error, omission or misstatement in financial information required under the CCA. The regime applies after a court has found more than one defendant and/or third party responsible for a financial loss (see s. 337.1 - definition of "financial loss").

Purpose of Change
Currently, each defendant is jointly and severally liable for damages arising from any error, omission or misstatement in financial information issued by a CCA cooperative. Pursuant to the proposed amendments, each defendant and third party would be liable only for the portion of a plaintiff's loss that corresponds to the degree of responsibility of that defendant and third party, subject to certain exceptions (see ss. 337.4 and 337.5). For example, if a defendant and/or third party is 10 percent liable for a loss of $100,000, they would be liable for $10,000. The court would establish the amount of the loss and the degree of responsibility.

Similar Provincial Laws
None

Current Wording
N/A

Proposed Wording
337.2 (1) This Part applies to the apportionment of damages awarded to a plaintiff for financial loss after a court has found more than one defendant or third party responsible for the financial loss.

Bill Clause No. 218
CCA Section No. 337.2(2)
Topic Apportioning Award of Damages

Sources of Proposed Law
Reports of Standing Senate Committee on Banking, Trade and Commerce on Modified Proportionate Liability, dated March and September, 1998.

Changes From Present Law
New regime

Purpose of Change
To ensure that certain classes of claimants, namely, the government, charitable organizations and unsecured trade creditors are unaffected by the implementation of the proposed modified proportionate liability regime, with the result that such claimants would continue to be governed by the rules respecting joint and several liability.

The effect of the exclusion applicable to government is that joint and several liability will continue to apply to all claims brought by the government as plaintiff, except where the plaintiff is a Crown agent or Crown corporation where a substantial part of its activities involves making investments in securities or other financial instruments. This approach is designed to ensure that the regime will not have the effect of shifting the risk to the Canadian taxpayer (i.e., as a result of moving from a joint and several liability regime to a modified proportionate liability regime in which a plaintiff will generally not recover all its losses), except where the government entity is operating as an investor. Such entities will be subject to the modified proportionate liability regime and therefore will be on a "level playing field" with all other sophisticated market players.

Unsecured trade creditors and charitable organizations are excluded from the regime because these plaintiffs would normally not be expected to scrutinize the affairs of CCA cooperatives in the same manner as large investors, and therefore merit the stronger protection provided by a joint and several liability regime.

Similar Provincial Laws
None

Current Wording
N/A

Proposed Wording
337.2 (2) This Part does not apply to an award of damages to any of the following plaintiffs:

a) Her Majesty in right of Canada or of a province;

(b) an agent of Her Majesty in right of Canada or of a province or a federal or provincial Crown corporation or government agency, unless a substantial part of its activities involves trading, including making investments in, securities or other financial instruments;

(c) a charitable organization, private foundation or public foundation within the meaning of subsection 149.1(1) of the Income Tax Act; or

(d) an unsecured creditor in respect of goods or services that the creditor provided to a cooperative.

Bill Clause No. 218
CCA Section No. 337.3(1) - (4)
Topic Apportioning Award of Damages

Sources of Proposed Law
Reports of the Standing Senate Committee on Banking, Trade and Commerce on Modified Proportionate Liability, dated March and September 1998;
US Securities and Exchange Act of 1934, s. 21(D)g)

Changes From Present Law
New regime

Purpose of Change
Each defendant/third party would be liable for the portion of a plaintiff's loss that corresponds to the degree of responsibility of that defendant/third party, subject to reallocation of any uncollectable amount.

This provision attempts to reallocate the amount owed by an insolvent or unavailable defendant/third party amongst all of the remaining parties. It divides the risk of insolvency between the plaintiffs and the defendants/third parties and enables plaintiffs to recover more than they would without the reallocation. Because the amount reallocated to a defendant/third party is based upon their respective percentage of fault, marginal defendants/third parties are protected from liability for the total loss.

In order for the re-allocation to occur, the plaintiff would have to bring a motion to the courts, within 1 year of the judgment becoming enforceable, requesting that this re-allocation be effected by the court.

Example:

Defendant X is liable for 50 percent of the damage, defendant Y is responsible for 30 percent, and defendant Z is responsible for 20 percent.

If Y is insolvent, X will be responsible for his/her 50 percent plus 50 percent of Y's 30 percent, for a total of 65 percent of the total liability. Defendant Z would be responsible for his/her 20 percent plus 20 percent of Y's 30 percent, for a total of 26 percent of the total liability. The remaining amount of defendant Y's liability (9 percent of the total) will be borne by the plaintiff.

A key feature of the reallocation regime is a 50 percent cap on reallocated liability. Under the cap, the reallocation which takes place as a result of the existence of an insolvent or unavailable defendant/third party is limited to 50 percent of the solvent or available defendant's/third party's original proportionate liability. In the above case, this cap did not affect either party. It is triggered only when there are multiple defendants/third parties, a large defendant is insolvent and other defendants/third parties are responsible for only a small portion of the fault. The intent of the cap is to make sure that a defendant/third party that is only 5 percent responsible for the fault is not held liable for the entire negligence of another person who is 95 percent responsible for the fault and who happens to go bankrupt.

Similar Provincial Laws
none

Current Wording
N/A

Proposed Wording
337.3 (1) Subject to this section and sections 337.4 to 337.6, every defendant or third party who has been found responsible for a financial loss is liable to the plaintiff only for the portion of the damages that corresponds to their degree of responsibility for the loss.

(2) If any part of the damages awarded against a responsible defendant or third party is uncollectable, the court may, on the application of the plaintiff, reallocate that amount to the other responsible defendants or third parties, if the application is made within one year after the date that the judgment was made enforceable.

(3) The amount that may be reallocated to each of the other responsible defendants or third parties under subsection (2) is calculated by multiplying the uncollectable amount by the percentage that corresponds to the degree of responsibility of that defendant or third party for the total financial loss.

(4) The maximum amount determined under subsection (3), in respect of any responsible defendant or third party, may not be more than fifty per cent of the amount originally awarded against that responsible defendant or third party.

Bill Clause No. 218
CCA Section No. 337.4
Topic Apportioning Award of Damages

Sources of Proposed Law
Reports of the Standing Senate Committee on Banking, Trade and Commerce on Modified Proportionate Liability, dated March and September 1998;
U.S. Securities and Exchange Act of 1934, s. 21(D)g)

Changes From Present Law
New regime

Purpose of Change
This provision preserves the status quo in cases of fraud or dishonesty. Plaintiffs who are victims of fraud or dishonesty will continue to be compensated fully for their loss.

Similar Provincial Laws
none

Current Wording
N/A

Proposed Wording
337.4 (1) The plaintiff may recover the whole amount of the damages awarded by the court from any defendant or third party who has been held responsible for a financial loss if it was established that the defendant or third party acted fraudulently or dishonestly.

(2) The defendant or third party referred to in subsection (1) is entitled to claim contribution from any other defendant or third party who is held responsible for the loss.

Bill Clause No. 218
CCA Section No. 337.5
Topic Apportioning Award of Damages

Sources of Proposed Law
Reports of the Standing Senate Committee on Banking, Trade and Commerce on Modified Proportionate Liability, dated March and September 1998.

Changes From Present Law
New regime

Purpose of Change
This section provides that joint and several liability is applicable to individual plaintiffs and personal bodies corporate (see s. 337.5(2)) who have a financial interest in the cooperative of less than the prescribed amount. Personal bodies corporate are included in order to provide personal investment vehicles with the same benefit as individuals.

This approach is aimed at providing full compensation to plaintiffs who are least able to absorb the loss. While large creditors or investors normally take the possibility of loss into consideration before making an investment decision and should therefore assume the risk associated with the insolvency of one or more of the defendants/third parties, small investors may not necessarily be aware of the risks.

Similar Provincial Laws
None

Current Wording
N/A

Proposed Wording
337.5 (1) Defendants and third parties referred to in subsection 337.2(1) are jointly and severally, or solidarily, liable for the damages awarded to a plaintiff who is an individual or a personal body corporate and who

(a) had a financial interest in a cooperative on the day that an error, omission or misstatement in financial information concerning the cooperative occurred, or acquired a financial interest in the period between the day that the error, omission or misstatement occurred and the day, as determined by the court, that it was generally disclosed; and

(b) has established that the value of the plaintiff's total financial interest in the cooperative was not more than the prescribed amount at the close of business on the day that the error, omission or misstatement occurred or at the close of business on any day that the plaintiff acquired a financial interest in the period referred to in paragraph (a).

(2) In subsection (1), "personal body corporate" means a body corporate that is not actively engaged in any financial, commercial or industrial business and that is controlled by an individual or a group of individuals, each member of which is connected by blood relationship, adoption or marriage or by cohabiting with another member in a conjugal relationship.

(3) Subsection (1) does not apply when the plaintiff brings the action as a member of a partnership or other association or as a trustee in bankruptcy, liquidator or receiver of a body corporate.

Bill Clause No. 218
CCA Section No. 337.6
Topic Apportioning Award of Damages

Sources of Proposed Law
Reports of the Standing Committee on Banking Trade and Commerce on Modified Proportionate Liability, dated March and September 1998.

Changes From Present Law
New regime

Purpose of Change
The application of the threshold could in some cases bring unnecessary hardship to individuals who fall on the "wrong side of the line" by denying joint and several liability protection to those who need it. The courts would, therefore, be permitted to apply the rule of joint and several liability where it is just and reasonable to so.

Section 337.6(2) permits the Governor in Council to establish factors that the court must take into account in making its determination. Such factors would be required to be published in Part I of the Canada Gazette.

Similar Provincial Laws
None

Current Wording
N/A

Proposed Wording
337.6 (1) If the value of the plaintiff's total financial interest referred to in subsection 337.5(1) is greater than the prescribed amount, a court may nevertheless determine that the defendants and third parties are jointly and severally, or solidarily, liable if the court considers that it is just and reasonable to do so.

(2) The Governor in Council may establish factors that the court shall take into account in deciding whether to hold the defendants and third parties jointly and severally, or solidarily liable.

(3) The Statutory Instruments Act does not apply to the factors referred to in subsection (2), but the factors shall be published in Part I of the Canada Gazette

Bill Clause No. 218
CCA Section No. 337.7, 337.8 and 337.9
Topic Apportioning Award of Damages

Sources of Proposed Law
Reports of Standing Senate Committee on Banking, Trade and Commerce on Modified Proportionate Liability, dated March and September 1998.

Changes From Present Law
New regime

Purpose of Change
It is necessary to establish the value of the financial interest in order to determine whether it falls above or below the threshold prescribed pursuant to paragraph 337.5(1)c) and section 337.7 provides a mechanism for doing so.

Subsection 337.7(2) provides the court with the discretion to adjust the value of the security that has been determined under subsection (1) when the court considers it reasonable to do so. The rationale for this provision is to cover off those situations where the closing price, the highest and lowest prices, or relevant bid prices, as the case may be, do not reflect the true value of the security. For example, this could occur where a security is thinly traded.

Section 337.8(1) provides that for financial interests subject to resale restrictions or in respect of which there is no organized market, the court will determine the value. The Governor in Council will establish factors that the court may take into account.

Pursuant to section 337.9, the plaintiff may, at any time before or during the course of the proceedings, bring a motion to determine the value of the plaintiff's financial interest. This provision was included in order to avoid a situation where the plaintiff goes through the entire proceeding only to find out that it will be subject to modified proportionate liability.

Similar Provincial Laws
Securities Act (Ontario) General Regulation
Securities Act (Ontario)

Current Wording
N/A

Proposed Wording
337.7 (1) When, in order to establish the value of the total financial interest referred to in subsection 337.5(1), it is necessary to determine the value of a security that is traded on an organized market, the value of the security is, on the day specified in subsection (3),

(a) the closing price of that class of security;

(b) if no closing price is given, the average of the highest and lowest prices of that class of security; or

(c) if the security was not traded, the average of the bid and ask prices of that class of security.

(2) The court may adjust the value of a security that has been determined under subsection (1) when the court considers it reasonable to do so.

(3) The value of the security is to be determined as of the day that the error, omission or misstatement occurred. If the security was acquired in the period between that day and the day, as determined by the court, that the error, omission or misstatement was generally disclosed, the value is to be determined as of the day that it was acquired.

(4) In this section, "organized market" means a recognized exchange for a class of securities or a market that regularly publishes the price of that class of securities in a publication that is generally available to the public.

337.8 (1) The court shall determine the value of all or any part of a financial interest that is subject to resale restrictions or for which there is no organized market.

(2) The Governor in Council may establish factors that the court may take into account in determining value under subsection (1).

(3) The Statutory Instruments Act does not apply to the factors referred in subsection (2), but the factors shall be published in Part I of the Canada Gazette.

337.9 The plaintiff may, by application made at any time before or during the course of the proceedings, request the court to determine the value of the plaintiff's financial interest for the purpose of subsection 337.5(1).

Part 19 Remedies, Offences and Punishment (clauses 219-222)

The section dealing with appeals from the Director's decision would be amended to clarify the right of appeal of a person who feels aggrieved by a decision made by the Director. In addition, the list of appealable decisions would be expanded (s. 345).

A number of consequential amendments required as a result of amendments to other parts of the Act are included in this Part. In addition, several minor technical amendments, amendments to the French version and amendments designed to clarify and facilitate the efficient operation and administration of the statute are included.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No.219
CCA Section No.338
Topic: Remedies, Offences and Punishment (Technical Amendments)

Sources of Proposed Law

Changes From Present Law
The definition of "complainant" in section 338 of the Act is amended by adding the word "or" at the end of paragraph (c) and by repealing paragraph (d). Former paragraph (e) now becomes new paragraph (d).

Purpose of Change
This amendment corrects the definition and harmonizes it with the CBCA.

Similar Provincial Laws

Current Wording
338. "complainant" means

…

(d) a creditor of a cooperative; or

Proposed Wording
338. (c) a director or an officer, or a former director or officer, of a cooperative or any of its affiliates; or

(d) any other person who, in the opinion of the court, is a proper person to make an application under this Part.

Bill Clause No.220
CCA Section No.339(2)(a)
Topic Remedies, Offences and Punishment (Technical Amendments)

Sources of Proposed Law

Changes From Present Law
Amend paragraph 339(2)(a) by adding at the end of the paragraph the words "not less than fourteen days before bringing the application, or as otherwise ordered by the court;"

Purpose of Change
Under the current version of paragraph 339(2)(a), the court will not grant leave to commence a derivative action without first being satisfied that "reasonable notice" was given to the directors of the cooperative. This adds an element of uncertainty to the proceedings. The amendment would add clarity and certainty. For this reason, some discretion is given to the courts to order a shorter notice period if necessary.

Similar Provincial Laws
Business Corporations Act (Ontario)

Current Wording
339. (2) No person may bring an action and no person may intervene in an action brought under subsection (1) unless the court is satisfied that

(a) if the directors of the cooperative or its subsidiary do not bring, diligently prosecute, defend or discontinue the action, the complainant has given reasonable notice to the directors of the cooperative or its subsidiary of the complainant's intention to apply to the court under subsection (1);

Proposed Wording
339. (2)(a) if the directors of the cooperative or its subsidiary do not bring, diligently prosecute, defend or discontinue the action, the complainant has given notice to the directors of the cooperative or its subsidiary of the complainant's intention to apply to the court under subsection (1) not less than fourteen days before bringing the application, or as otherwise ordered by the court;

Bill Clause No. 221
CCA Section No. 340(2)
Topic Remedies, Offences and Punishment (Technical Amendments)

Sources of Proposed Law

Changes From Present Law
Amend the French version of subs. 340(2) to replace "porte préjudice aux" with "abuse des" and replace "porte atteinte à leurs intérêts ou y passe outre" with "ou se montre injuste à leur égard en leur portant préjudice ou en ne tenant pas compte de leurs intérêts;".

Purpose of Change
These technical changes clarify the French wording of the Act and harmonizes with the CBCA.

Similar Provincial Laws

Current Wording
340. (2) Le tribunal, saisi d'une demande visée au paragraphe (1), peut, par ordonnance, redresser la situation provoquée par la coopérative qui, à son avis, porte préjudice aux droits des membres ou autres détenteurs de valeurs mobilières, créanciers, administrateurs ou dirigeants de la coopérative, ou porte atteinte à leurs intérêts ou y passe outre :

Proposed Wording
340.(2) Le tribunal, saisi d'une demande visée au paragraphe (1), peut, par ordonnance, redresser la situation provoquée par la coopérative qui, à son avis, abuse des droits des membres ou autres détenteurs de valeurs mobilières, créanciers, administrateurs ou dirigeants de la coopérative, ou se montre injuste à leur égard en leur portant préjudice ou en ne tenant pas compte de leurs intérêts :

Bill Clause No. 222
CCA Section No. 345(c), (d), new (d.1) and (d.2)
Topic Remedies, Offences and Punishment (Government Administration)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Expands the right of appeal of a person who feels aggrieved by a decision made by the Director.

Purpose of Change
The general purpose of these changes is to ensure that justice is served by clarifying the decisions that may be appealed.

s. 345(c): Currently, only the decision to refuse an exemption is appealable. However, the Director may impose terms as a condition for the exemption, to protect interested parties. These terms may be considered to be onerous, or not onerous enough, depending on the point of view. Someone may think that the exemption should not be granted on any terms.

s. 345(d): Allows a right of appeal concerning decisions made in respect of (amended) section 375 (clause 214), which allows the Director to issue certificates attesting to the existence of a cooperative at a particular date.

s. 345(d.1) and (d.2): Adds new decisions which may be appealed under this section.

Similar Provincial Laws

Current Wording
345. A person who feels aggrieved by a decision of the Director referred to in any of paragraphs (a) to (f) may apply to a court for an order, including an order requiring the Director to change the decision:

…

(c) to refuse to grant an exemption that may be granted under this Act and the regulations;

(d) to refuse to issue a certificate of discontinuance;

Proposed Wording
345. (c) to grant, or to refuse to grant, an exemption that may be granted under this Act and the regulations;

(d) to refuse to issue a certificate of discontinuance or a certificate attesting that as of a certain date the cooperative exists under section 375;

(d.1) to correct, or to refuse to correct, articles, a notice, a certificate or other document under section 376.1;

(d.2) to cancel, or to refuse to cancel, the articles and related certificate under section 376.2;

Part 20 Non-Profit Housing Cooperatives (no amendments)

No amendments to this Part are proposed.

Part 21 Worker Cooperatives (no amendments)

No amendments to this Part are proposed.

Part 21.1 Documents in Electronic or Other Form (clause 223)

These amendments would help to ensure that communications between the cooperative and stakeholders are as facilitative as possible. Although the CCA permits cooperatives to communicate electronically with government, it allows only paper-based communications with members, shareholders and other stakeholders. This restricts cooperatives from using modern and emerging technologies to reduce costs and speed up information flows to many of the parties with whom they communicate.

The amendments would facilitate and encourage cooperatives (and other parties with whom cooperatives interact) to employ new and emerging communications technologies. A cooperative or an individual may continue to request and send information in paper-based form. The regime is structured in terms of general principles that would permit cooperatives and others to employ new and emerging communications technologies as they are developed.

This regime is based on and emulates the electronic communications regime created for the Canada Business Corporations Act.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. 223
CCA Section No. 361.1: Definition of "electronic document"
Topic:Documents in Electronic or Other Form

Sources of Proposed Law
Bill C-6: Personal Information Protection and Electronic Documents Act.

Changes From Present Law
New

Purpose of Change
The definition of electronic document is central to Part 21.1 since it encompasses all of the different types of documents, notices and information referred to throughout the CCA. Mirroring the policy underlying all of Part 21.1, the definition of electronic document is intended to be enabling, technology-neutral, and expansive. It is enabling and flexible in that the parties will be able to choose the technology that best suits their purpose. It is technology-neutral in that it does not impose particular technologies on the parties subject to the CCA. It is expansive since it is intended to encompass future technological developments. The use of the term "electronic" is not intended to be read in a literal manner and is not intended to exclude optical, digital and other technologies.

The regime emulates the electronic communications regime created for the CBCA.

Similar Provincial Laws
None

Current Wording
N/A

Proposed Wording
361.1 The definitions in this section apply in this Part.

"electronic document" means, except in section 361.6, any form of representation of information or of concepts fixed in any medium in or by electronic, optical or other similar means and that can be read or perceived by a person or by any means.

Bill Clause No. 223
CCA Section No. 361.1: Definition of "information system"
Topic: Documents in Electronic or Other Form

Sources of Proposed Law
Commonwealth of Australia: Electronic Transactions Act 1999, No. 162, 1999.

Changes From Present Law
New

Purpose of Change
One of the conditions for an informed consent is that the recipient must designate an information system for receiving information by electronic means. In practice, this means that the party indicates the electronic address at which they will access this information. This provision clarifies that this term encompasses all types of technologies that may be used to create and deliver information.

Similar Provincial Laws 

Current Wording
N/A

Proposed Wording
361.1 The definitions in this section apply in this Part.

"information system" means a system used to generate, send, receive, store, or otherwise process an electronic document.

Bill Clause No. 223
CCA Section No. 361.2: Application
Topic: Documents in Electronic or Other Form

Sources of Proposed Law
None

Changes From Present Law
New

Purpose of Change
The Corporations Directorate utilises specific technologies. The general use of electronic documents may expose it to a variety of formats and mediums that may not be compatible with its technologies and which they may not have the capacity to handle. As such, this provision clarifies that Part 21.1 will not apply to any information sent to or issued by the CCA Director.

Moreover, a number of policy considerations dictate that certain activities continue to be accomplished on paper. This provision will allow these to be identified in the regulations. For example, Part 21.1 will not apply to the provisions pertaining to the share certificates (s. 177-185).

Similar Provincial Laws
None

Current Wording
N/A

Proposed Wording
361.2 This Part does not apply to a notice, document or other information sent to or issued by the Director pursuant to this Act or to any prescribed notice, document or other information.

Bill Clause No. 223
CCA Section No. 361.3: (1) Use not mandatory (2) Consent and other requirements (3) Revocation of consent
Topic: Documents in Electronic or Other Form

Sources of Proposed Law
Bill C-6: Personal Information Protection and Electronic Documents Act;
Uniform Law Conference of Canada: Uniform Electronic Commerce Act;
Ontario Securities Commission, National Policy 11-201 - Delivery of Documents by Electronic Means;
Securities and Exchange Commission: Use of Electronic Media for Delivery Purposes, Release No. 32-7233;
Commonwealth of Australia: Electronic Transactions Act 1999, No. 162, 1999.

Changes From Present Law
New

Purpose of Change
This Part is being enacted so as to permit parties to communicate with each other through efficient and economical means available to them. However, this Part is structured such that the paper-based and technology-based regime will co-exist. This provision ensures that no individual will be compelled to utilize electronic documents. Individuals can continue to operate in the paper-based environment.

The most significant safeguard included in this Part is the provision dealing with consent. No information may be provided via electronic means of communication unless the consent of the recipient is obtained. The requirements for revoking consent will be detailed in the Regulations.

Similar Provincial Laws
Saskatchewan: Bill 11: An Act respecting Electronic Information and Documents

Current Wording
N/A

Proposed Wording
361.3 (1) Nothing in this Act or the regulations requires a person to create or provide an electronic document.

(2) Despite anything in this Part, a requirement under this Act or the regulations to provide a person with a notice, document or other information is not satisfied by the provision of an electronic document unless

(a) the addressee has consented, in the manner prescribed, and has designated an information system for the receipt of the electronic document; and

(b) the electronic document is provided to the designated information system, unless otherwise prescribed.

(3) An addressee may revoke the consent referred to in paragraph (2)(a) in the manner prescribed.

Bill Clause No. 223
CCA Section No. 361.4 Creation and Provision of Information
Topic: Documents in Electronic and Other Form

Sources of Proposed Law
Bill C-6: Personal Information Protection and Electronic Documents Act;
Uniform Law Conference of Canada: Uniform Electronic Commerce Act;
Securities and Exchange Commission: Use of Electronic Media for Delivery Purposes, Release No. 33-7233;
Ontario Securities Commission, National Policy 11-201 - Delivery of Documents by Electronic Means;
Commonwealth of Australia: Electronic Transactions Act 1999, No. 162, 1999.

Changes From Present Law
New

Purpose of Change
This is the general provision that enables parties to create and provide information through technological means. Provided that their by-laws or articles do not impose limitations, cooperatives will be able to use the technologies that they choose. The consent provision in 361.3 will ensure that this freedom to use any technologies is not imposed on the recipients of the information.

Similar Provincial Laws
Saskatchewan: Bill 11: An Act respecting Electronic Information and Documents

Current Wording
N/A

Proposed Wording
361.4 A requirement under this Act or the regulations that a notice, document or other information be created or provided, is satisfied by the creation or provision of an electronic document if

(a) the by-laws or the articles of the cooperative do not provide otherwise; and

(b) the regulations, if any, have been complied with.

Bill Clause No. 223
CCA Section No. 361.5: (1)Creation of information in writing; (2) Provision of information in writing; (3) Copies; (4) Registered Mai
Topic: Documents in Electronic and Other Form

Sources of Proposed Law
Bill C-6: Personal Information Protection and Electronic Documents Act;
Uniform Law Conference of Canada: Uniform Electronic Commerce Act;
Securities and Exchange Commission: Use of Electronic Media for Delivery Purposes, Release No. 33-7233;
Ontario Securities Commission, National Policy 11-201 - Delivery of Documents by Electronic Means;
Commonwealth of Australia: Electronic Transactions Act 1999, No. 162, 1999.

Changes From Present Law
New

Purpose of Change
Certain sections of the CCA explicitly require that documents be in writing. The policy underlying this requirement is to provide for a durable record of the information. This policy is achieved in the technological environment by requiring that an electronic document be accessible for future use.

In a number of sections, the CCA explicitly requires that documents be provided to the intended recipient in written form. The policy underlying such a requirement is that the recipient receive the document in a manner that gives him or her some control over the document. This policy is achieved in the technological environment by requiring that the electronic document in question is not only accessible for future use but also that the recipient be capable of retaining it.

Certain provisions of the CCA require that copies be provided. In a paper-based environment, this would imply that the person would have to provide the required number of copies. However, in the technological environment, an electronic document may easily be copied a number of times or provided to a number of recipients simultaneously. Therefore, sending one copy of an electronic document that can be copied numerous times will achieve the same result.

The CCA requires that certain information be sent by registered mail. In the paper-based environment this is accomplished through the postal or other mail delivery system. However, in the technological environment, there is no universally-accepted system for sending registered mail. Therefore, the regulations will stipulate the requirements that must be fulfilled in order to have registered mail effectively delivered electronically.

Similar Provincial Laws
Saskatchewan: Bill 11: An Act respecting Electronic Information and Documents

Current Wording
N/A

Proposed Wording
361.5 (1) A requirement under this Act or the regulations that a notice, document or other information be created in writing is satisfied by the creation of an electronic document if, in addition to the conditions in section 361.4,

(a) the information in the electronic document is accessible so as to be usable for subsequent reference; and

(b) the regulations pertaining to this subsection, if any, have been complied with.

(2) A requirement under this Act or the regulations that a notice, document or other information be provided in writing is satisfied by the provision of an electronic document if, in addition to the conditions set out in section 361.4,

(a) the information in the electronic document is accessible by the addressee and capable of being retained by the addressee, so as to be usable for subsequent reference; and

(b) the regulations pertaining to this subsection, if any, have been complied with.

(3) A requirement under this Act or the regulations for one or more copies of a document to be provided to a single addressee at the same time is satisfied by the provision of a single version of the electronic document.

(4) A requirement under this Act or the regulations to provide a document by registered mail is not satisfied by the sending of an electronic document unless prescribed.

Bill Clause No. 223
CCA Section No. 361.6: Statutory Declaration and Affidavits
Topic: Documents in Electronic and Other Form

Sources of Proposed Law
Bill C-6: Personal Information Protection and Electronic Documents Act

Changes From Present Law
New

Purpose of Change
In a number of sections, the CCA requires that parties provide an affidavit or a statutory declaration. In the paper-based regime, these are governed by the rules enacted in the Canada Evidence Act. Bill C-6 (Personal Information Protection and Electronic Documents Act) provides a detailed regime for the electronic creation of these types of documents. Moreover, the regime enacted in Bill C-6 is applicable to the Canada Evidence Act, which governs the admissibility of these types of documents in court proceedings. For these reasons, the regime created in Bill C-6 will be applicable to affidavits and statutory declarations required under the CCA.

Similar Provincial Laws
None

Current Wording
N/A

Proposed Wording
361.6 (1) A statutory declaration or an affidavit required under this Act or the regulations may be created or provided in an electronic document if

(a) the person who makes the statutory declaration or affidavit signs it with his or her secure electronic signature;

(b) the authorized person before whom the statutory declaration or affidavit is made signs it with his or her secure electronic signature; and

(c) the requirements of sections 361.3 to 361.5 are complied with.

(2) For the purposes of this section, "electronic document" and "secure electronic signature" have the same meaning as in subsection 31(1) of the Personal Information Protection and Electronic Documents Act.

(3) For the purpose of complying with paragraph (1)(c), the references to an "electronic document" in sections 361.3 to 361.5 are to be read as references to an "electronic document" as defined in subsection 31(1) of the Personal Information Protection and Electronic Documents Act.

Bill Clause No. 223
CCA Section No. 361.7 : Signatures

Topic
Documents in Electronic and Other Form

Sources of Proposed Law
Bill C-6: Personal Information Protection and Electronic Documents Act;
Uniform Law Conference of Canada: Uniform Electronic Commerce Act.

Changes From Present Law
New

Changes From Present Law
New

Purpose of Change
A number of provisions of the CCA require that documents be signed or executed. Enacted when documents were solely in paper format, such requirements may be an impediment to the use of technological means for creating or sending documents. The proposed amendment effectively allows for the use of technological means to communicate information by permitting signatures through these means.

Generally, signatures are personal to the signatory, evidence that the person intended to be associated with the document that they have signed and identify the person signing. These premises are maintained in the technological context. First, in a technological environment, a signature will not have to "look like" a handwritten signature, provided it is distinguishable from other signatures. Second, in a technological environment, a signature will not necessarily be attached to an electronic document in the same manner that an ink signature is placed onto paper. The person's signature may be "associated" with the document by mathematical logic or otherwise. Third, in a technological environment, the "physical appearance" of the signature may not permit the immediate identification of the signatory, provided that verification of the signature is subsequently possible.

Similar Provincial Laws
Saskatchewan: Bill 11: An Act respecting Electronic Information and Documents

Current Wording
N/A

Proposed Wording
361.7 A requirement under this Act or the regulations for a signature or for a document to be executed, except with respect to a statutory declaration or an affidavit, is satisfied if, in relation to an electronic document, the prescribed requirements pertaining to this section, if any, are met and if the signature results from the application by a person of a technology or a process that permits the following to be proven:

(a) the signature resulting from the use by a person of the technology or process is unique to the person;

(b) the technology or process is used by a person to incorporate, attach or associate the person's signature to the electronic document; and

(c) the technology or process can be used to identify the person using the technology or process.

Part 22 General (clauses 224-228)

The correction provisions would be expanded to enable cooperatives or other interested persons to request a correction to articles, certificates or other documents. The Director would be permitted to correct the document provided no members, shareholders or creditors of the cooperative are prejudiced. A new provision is included enabling the Director or any interested party to apply to the court for a correction order in the event the applicant is of the view that a correction would be prejudicial to a member, shareholder or creditor (s. 376.1). Similarly, a new cancellation provision would allow the Director to cancel the articles and related certificate of a cooperative (s. 376.2).

The number of people authorized to sign forms would be expanded to those with authority and knowledge of the cooperative (367(3)).

The execution of a document by several persons in several documents of like form would be permitted (s. 367(4)).

The regulation making power would be broadened to reflect amendments made elsewhere in the statute (s. 372(1)).

A new provision would be added requiring that the requisite fee must be paid before the Director performs the service requested (s. 372.1).

The Director would be permitted to refuse to issue a certificate of existence if the Director has knowledge that the cooperative has not sent a document required to be sent under the Act or has not paid a required fee (s. 375(2)).

A number of consequential amendments required as a result of amendments to other parts of the Act are also included in this Part, as are several minor technical amendments, amendments to the French version and amendments designed to clarify and facilitate the efficient operation and administration of the statute.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. 224
CCA Section No. 362(4)
Topic: General (Technical Amendments)

Sources of Proposed Law

Changes From Present Law
Amend the French version of subs. 364(4) to replace "la société" with "elle" [la coopérative].

Purpose of Change
This technical change clarifies the French wording of the Act.

Similar Provincial Laws

Current Wording
362. (4) La coopérative n'est pas tenue d'envoyer les avis ou documents visés au paragraphe (1) qui lui sont retournés deux fois de suite, sauf si la société est avisée par écrit de la nouvelle adresse du membre ou du détenteur de parts de placement introuvable.

Proposed Wording
362. (4) La coopérative n'est pas tenue d'envoyer les avis ou documents visés au paragraphe (1) qui lui sont retournés deux fois de suite, sauf si elle est avisée par écrit de la nouvelle adresse du membre ou du détenteur de parts de placement introuvable.

Bill Clause No. 225
CCA Section No. 364
Topic: General (Unanimous Agreements)

Sources of Proposed Law

Changes From Present Law
Removes from section 364 the phrase "subject to a unanimous agreement,".

Purpose of Change
The reference to a unanimous agreement would be removed since a unanimous agreement cannot include a provision dealing with waiver of notice [see clause 174].

Similar Provincial Laws

Current Wording
364. When a notice or document is required by this Act or the regulations to be sent, the sending of the notice or document may, subject to a unanimous agreement, be waived or the time for the notice or document may be waived or abridged at any time with the consent in writing of the person who is entitled to it.

Proposed Wording
364. When a notice or document is required by this Act or the regulations to be sent, the sending of the notice or document may be waived or the time for the notice or document may be waived or abridged at any time with the consent in writing of the person who is entitled to it.

Bill Clause No. 226
CCA Section No. new 367(3) and (4)
Topic: General (Technical Amendments)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Add new subsections 367(3) and (4) to expand the number of people authorized to sign forms to those with authority and knowledge of the cooperative and provide for execution of a document by several persons in several documents of like form.

Purpose of Change
Currently, most administrative forms must be signed by a director or an authorized officer and not by a solicitor or other person acting on behalf of a director or officer. The proposed amendment would permit individuals who have the relevant knowledge of the cooperative, and who are authorized to do so by the directors, to sign the notice of registered office or of change of address of registered office, the notice of directors or change of directors and the annual return. The extended authorization is limited to these forms because they are forms in the nature of "information", the filing of which does not affect the status of the cooperative, as would the filing of articles of amendment.

Currently, there is no provision which expressly states that a document that is required to be executed by more than one person will be considered properly executed even if the required signatories each sign a separate copy. A provision is added that expressly states this would only be a codification of the common law principle of "counterparts". This addition would clarify the existence of this concept under the CCA and provide administrative flexibility to CCA cooperatives.

Similar Provincial Laws

Current Wording
N/A

Proposed Wording
367. (3) The notices referred to in subsections 30(2) and (4), 81(1) and 91(1), and the annual return referred to in subsection 374(1), may be signed by any individual who has the relevant knowledge of the cooperative and who is authorized to do so by the directors, or, in the case of the notice referred to in subsection 81(1), the incorporators.

(4) Any articles, notice, resolution, requisition, statement or other document required or permitted to be executed or signed by more than one individual for the purposes of this Act may be executed or signed in several documents of like form, each of which is executed or signed by one or more of the individuals. The documents, when duly executed or signed by all individuals required or permitted, as the case may be, to do so, shall be deemed to constitute one document for the purposes of this Act.

Bill Clause No. 227
CCA Section No. 372
Topic: General (Government Administration)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Clarification of the Governor in Council's authority to make regulations.

Purpose of Change
s. 372(1)(d.1): In accordance with clause 150(1), this amendment clarifies that the Governor in Council has the authority to make regulations regarding the minimum number of shares required for a person to be eligible to submit a proposal, including the time and manner of determining a value or percentage of the outstanding shares of the cooperative.

s. 372(1)(d.2): In accordance with clause 150(3), this amendment clarifies that the Governor in Council has the authority to make regulations regarding the minimum amount of support required in relation to the number of times the shareholder has submitted substantially the same proposal and to prescribe the period of time during which the re-submissions may be considered.

s. 372(1)(g): Authorizes the Governor in Council to make regulations regarding the electronic transmission of documents, thereby increasing flexibility by allowing the requirements to adapt as technology changes. This amendment is ancillary to amendments proposed at the Senate Committee stage for enacting an electronic communications regime.

s. 372(1)(h): Authorizes the Governor in Council to make regulations that allow meetings held by telephonic, electronic or other communicative means to satisfy the statutory requirements for participation at meetings.

s. 372(1)(i): Authorizes the Governor in Council to make regulations for voting at a meeting of shareholders by means of a telephonic, electronic or other means of communication, for the purposes of new s. 65(3).

s. 372(2) and (3): Clarifies that it is permissible for the Governor in Council to reference outside documents. Also clarifies that the material incorporated into regulations by reference does not become a "regulation" for the purposes of the Statutory Instruments Act.

Similar Provincial Laws

Current Wording
372. (1) The Governor in Council may make regulations

…

(d) respecting the payment of any prescribed fees, including the time when and the manner in which the fees are to be paid, the additional fees that may be charged for the late payment of fees and the circumstances in which any fees previously paid may be refunded in whole or in part;

Proposed Wording
372. (1) (d) respecting the payment of any fees, including the time when and the manner in which the fees are to be paid, the additional fees that may be charged for the late payment of fees and the circumstances in which any fees previously paid may be refunded in whole or in part;

(d.1) prescribing, for the purposes of subsection 58(2.1), a manner of determining the number of investment shares required for a person to be eligible to make a proposal, including the time and manner of determining a value or percentage of the outstanding investment shares;

(d.2) prescribing, for the purposes of paragraph 58(4)(d), the minimum amount of support required in relation to the number of times the person has submitted substantially the same proposal within the prescribed period;

(g) prescribing any matter necessary for the purposes of the application of Part 21.1, including the time and circumstances when an electronic document is to be considered to have been provided or received and the place it is considered to have been provided or received;

(h) prescribing the manner of, and conditions for, participating in a meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting; and

(i) prescribing, for the purposes of subsection 65(3), the manner of, and conditions for, voting at a meeting of a cooperative by means of a telephonic, electronic or other communication facility.

(2) The regulations may incorporate any material by reference, regardless of its source and either as it exists on a particular date or as amended from time to time.

(3) Material does not become a regulation for the purposes of the Statutory Instruments Act because it is incorporated by reference.

Bill Clause No. 228
CCA Section No. new 372.1
Topic: General (Government Administration)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Add new section 372.1 to require that fees be paid before the Director takes the action in respect to which the fee is payable.

Purpose of Change
The CCA amendments will allow the Director to fix many fees in accordance with the Department of Industry Act (DIA) and the CCA. There may be a potential problem arising out of setting fees under the DIA. The distinction between fees for mandatory actions required to be taken by the Director pursuant to the Act (denoted by words such as "must" and "shall") and fees for discretionary or service oriented actions creates a potential problem stemming from the ability to enforce payment of fees in an efficient manner. It appears that the Crown cannot withhold the provision of services on the sole basis of non-payment of fees. Therefore, where mandatory duties are prescribed by the Act and the DIA is used as the fee making authority, the service mandated by the Act must be performed regardless of whether or not the fee is paid.

This amendment will make the payment of the required fee a prerequisite to any mandatory act by the Director. In essence, no action by the Director is mandatory unless the required fee has been paid. This amendment allows effective enforcement of payment for services when the DIA is used to set fees.

Similar Provincial Laws

Current Wording
N/A

Proposed Wording
372.1 The fee in respect of the filing, examination, or copying of any document or in respect of any action that the Director is required or authorized to take must be paid to the Director on the filing, examination, or copying or before the Director takes the action in respect of which the fee is payable.

Part 22 General (clauses 229-232)

The correction provisions would be expanded to enable cooperatives or other interested persons to request a correction to articles, certificates or other documents. The Director would be permitted to correct the document provided no members, shareholders or creditors of the cooperative are prejudiced. A new provision is included enabling the Director or any interested party to apply to the court for a correction order in the event the applicant is of the view that a correction would be prejudicial to a member, shareholder or creditor (s. 376.1). Similarly, a new cancellation provision would allow the Director to cancel the articles and related certificate of a cooperative (s. 376.2).

The number of people authorized to sign forms would be expanded to those with authority and knowledge of the cooperative (367(3)).

The execution of a document by several persons in several documents of like form would be permitted (s. 367(4)).

The regulation making power would be broadened to reflect amendments made elsewhere in the statute (s. 372(1)).

A new provision would be added requiring that the requisite fee must be paid before the Director performs the service requested (s. 372.1).

The Director would be permitted to refuse to issue a certificate of existence if the Director has knowledge that the cooperative has not sent a document required to be sent under the Act or has not paid a required fee (s. 375(2)).

A number of consequential amendments required as a result of amendments to other parts of the Act are also included in this Part, as are several minor technical amendments, amendments to the French version and amendments designed to clarify and facilitate the efficient operation and administration of the statute.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. 229
CCA Section No. 373(2)(b) and (2)(b)(iv)
Topic: General (Government Administration)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
(A) Replace the word "prescribed " with "required".

(B) Remove the words "articles or statement" from par. 373(2)(b)(iv) and replace "representative" with "agent".

Purpose of Change
The Corporations Directorate would be granted the ability to choose between using the CCA or the Department of Industry Act (DIA) for setting fees [see clause 228].

The current CCA wording requires that where a provision in the Act requires payment of a "prescribed fee" then the fee must be set by regulation, which necessarily eliminates the DIA as an alternative vehicle for setting the fees. Fees fixed pursuant to the DIA are not set by regulation and therefore are not "prescribed" within the meaning of the CCA. In order to be able to fix fees under the DIA, the wording "prescribed fees" must be replaced by "required fees".

The Director can only issue a certificate related to incorporation. The Director does not issue articles. Consequently, the Director can only give to the cooperative a copy of the certificate of incorporation, not a copy of the articles. The proposed amendment would correct this anomaly.

Also, the word "representative" is replaced by "agent", which is more precise.

Similar Provincial Laws

Current Wording
373. (2) When this Act requires that articles or a statement relating to a cooperative be sent to the Director,

…

(b) on receiving the articles or statement in the form that the Director has fixed, any other required documents and the prescribed fees, the Director must

…

(iv) send the certificate, articles or statement, or a copy, image or photographic, electronic or

other reproduction of it, to the cooperative or its representative, and

Proposed Wording
373. (2)(b) on receiving the articles or statement in the form that the Director has fixed, any other required documents and the required fees, the Director must

(2)(b)(iv) send the certificate, or a copy, image or photographic, electronic or other reproduction of it, to the cooperative or its agent, and

Bill Clause No. 230
CCA Section No. 375(1) and new (2)
Topic: General (Government Administration)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
These amendments clarify that the Director has the authority to refuse to issue a certificate of compliance if the required documents have not been filed.

Purpose of Change
The purpose of a certificate of compliance is to act as a verification from the Director that certain basic statutory filings, such as annual returns, have been made and therefore the cooperative has not been, and is not about to be, dissolved for failure to make a filing. In some instances however, it is not possible for the Director to know if a cooperative is in complete compliance with the Act. For example, a change of directors may have occurred, but no notice of change of directors has been filed.

Certificates of compliance are most often used as a tool to facilitate transactions where assurances are made to a financial institution or other commercial parties that the cooperative is in compliance with the statute. From this perspective, it is important to make it clear that only certain filings are being attested to in the certificate of compliance and that the issuance of the certificate does not certify complete statutory compliance. This amendment will clarify the matters which may be attested to in the certificate.

Similar Provincial Laws

Current Wording
375. The Director may provide any person with a certificate that a cooperative has sent to the Director a document required to be sent, or has paid any fees prescribed.

Proposed Wording
375. (1) The Director may provide any person with a certificate that a cooperative

(a) has sent to the Director a document required to be sent;

(b) has paid all required fees; or

(2) For greater certainty, the Director may refuse to issue a certificate under paragraph (1)(c) if the Director has knowledge that the cooperative is in default of sending a document required to be sent or is in default of paying a required fee.

Bill Clause No. 230
CCA Section No. 376 and new 376.1
Topic: General (Government Administration)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Subsection 376(1) is renumbered to become s. 376 and a new correction provision is provided.

Purpose of Change
The proposed new section deals with the correction of a document (articles, notice, certificate) containing an error. It is not clear under the current CCA if the only correction possible is of an error caused by the Director. This change would make explicit the Director's authority to request changes in any document which contains an error. This amendment would increase flexibility by clarifying the method of correcting the documents listed.

The new provision would require that the Director be satisfied that corrections will not prejudice the cooperative's members, shareholders or creditors. This is designed to protect members, shareholders and creditors.

Also, the proposed amendment would increase flexibility by allowing cooperatives to request changes.

A new provision would entitle the Director, the cooperative or any interested party, to apply for a court order directing the Director to make a correction to a document and determining the rights of the members, shareholders or creditors, when the applicant is of the view that a correction would prejudice a member, shareholder or creditor.

Similar Provincial Laws

Current Wording
376. (1) The Director may alter a notice or document, other than an affidavit or statutory declaration, if authorized to do so by the person who sent the document or by their representative.

(2) If a certificate that contains an error is issued to a cooperative by the Director, the directors, members or shareholders must, on the request of the Director, pass the resolutions and send the documents required to comply with this Act, and take any other steps that the Director may reasonably require. The Director may demand the surrender of the certificate and issue a corrected certificate.

(3) A certificate corrected under subsection (2) must bear the date of the certificate it replaces.

(4) If a corrected certificate issued under subsection (2) materially amends the terms of the original certificate, the Director must without delay give notice of the correction in a publication generally available to the public.

Proposed Wording
376. The Director may alter a notice or document, other than an affidavit or statutory declaration, if authorized to do so by the person who sent the document or by their representative.

376.1 (1) If there is an error in articles, a notice, a certificate or other document, the directors, members or shareholders must, on the request of the Director, pass the resolutions and send to the Director the documents required to comply with this Act, and take any other steps that the Director may reasonably require so that the Director may correct the document.

(2) Before proceeding under subsection (1), the Director must be satisfied that the correction would not prejudice any of the members, shareholders or creditors of the cooperative.

(3) The Director may, at the request of the cooperative or of any other interested person, accept a correction to any of the documents referred to in subsection (1) if

(a) the correction is approved by the directors of the cooperative, unless the error is obvious or was made by the Director; and

(b) the Director is satisfied that the correction would not prejudice any of the members, shareholders or creditors of the cooperative and that the correction reflects the original intention of the cooperative or the incorporators, as the case may be.

(4) If, in the view of the Director, of the cooperative or of any interested person who wishes a correction, a correction to any of the documents referred to in subsection (1) would prejudice any of the members, shareholders or creditors of a cooperative, the Director, the cooperative or the person, as the case may be, may apply to the court for an order that the document be corrected and for an order determining the rights of the members, shareholders or creditors.

(5) An applicant under subsection (4) must give the Director notice of the application, and the Director is entitled to appear and to be heard in person or by counsel.

(6) The Director may demand the surrender of the original document, and may issue a corrected certificate or file the corrected articles, notice or other document.

(7) A corrected document must bear the date of the document it replaces unless

(a) the correction is made with respect to the date of the document, in which case the document must bear the corrected date; or

(b) the court decides otherwise.

(8) If a corrected certificate materially amends the terms of the original certificate, the Director must without delay give notice of the correction in a publication generally available to the public.

Bill Clause No. 230
CCA Section No. new 376.2
Topic: General (Government Administration)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
The proposed amendment provides for a new cancellation provision.

Purpose of Change
The CCA does not have a provision that specifically allows the Director to cancel articles and related certificates. This amendment would provide an efficient way to deal with certificates that have been incorrectly issued. To add flexibility, the circumstances under which a cancellation can occur would be prescribed in the regulations.

As with correction orders (s. 376.1), the section includes provisions to protect shareholders, creditors and members of the cooperative. It requires that cancellations not prejudice members, shareholders or creditors (s. 376.2(2)). To balance the interests of members, shareholders and creditors with the interests of the Director and the cooperative, the section allows the Director or any interested party to make an application to the court for an order cancelling the articles and the certificate and determining the rights of the members, shareholders or creditors (s. 376.2(4)).

Similar Provincial Laws

Current Wording
N/A

Proposed Wording
376.2 (1) In the prescribed circumstances, the Director may cancel the articles and related certificate of a cooperative.

(2) Before proceeding under subsection (1), the Director must be satisfied that the cancellation would not prejudice any of the members, shareholders or creditors of the cooperative.

(3) In the prescribed circumstances, the Director may, at the request of a cooperative or of any other interested person, cancel the articles and related certificate of the cooperative if

(a) the cancellation is approved by the directors of the cooperative; and

(b) the Director is satisfied that the cancellation would not prejudice any of the members, shareholders or creditors of the cooperative and that the cancellation reflects the original intention of the cooperative or the incorporators, as the case may be.

(4) If, in the view of the Director, of the cooperative or of any interested person who wishes a cancellation, a cancellation of articles and a related certificate would prejudice any of the members, shareholders or creditors of a cooperative, the Director, the cooperative or the person, as the case may be, may apply to the court for an order that the articles and certificate be cancelled and for an order determining the rights of the members, shareholders or creditors.

(5) An applicant under subsection (4) must give the Director notice of the application, and the Director is entitled to appear and to be heard in person or by counsel.

(6) The Director may demand the surrender of a cancelled certificate.

Bill Clause No. 231
CCA Section No. 377(1)
Topic: General (Government Administration)

Sources of Proposed Law
Proposed amendments to the Canada Business Corporations Act (CBCA)

Changes From Present Law
Replace the word "prescribed " with "required".

Purpose of Change
The Corporations Directorate would be granted the ability to choose between using the CCA or the Department of Industry Act (DIA) for setting fees [see clause 228].

The current CCA wording requires that where a provision in the Act requires payment of a "prescribed fee" then the fee must be set by regulation, which necessarily eliminates the DIA as an alternative vehicle for setting the fees. Fees fixed pursuant to the DIA are not set by regulation and therefore are not "prescribed" within the meaning of the CCA. In order to be able to fix fees under the DIA the wording "prescribed fee" must be replaced with "required fee".

Similar Provincial Laws

Current Wording
377. (1) A person who has paid the prescribed fee is entitled during usual business hours to examine a document required by this Act or the regulations to be sent to the Director, except a report sent under subsection 330(2), and to make copies of it or take extracts from it.

Proposed Wording
377. (1) A person who has paid the required fee is entitled during usual business hours to examine a document required by this Act or the regulations to be sent to the Director, except a report sent under subsection 330(2), and to make copies of it or take extracts from it.

Bill Clause No. 232
CCA Section No. 378(3)
Topic: General (Government Administration)

Sources of Proposed Law

Changes From Present Law
Move the Director's retention period found in the CCA to the regulations.

Purpose of Change
This will add flexibility to the Act by allowing the Director's retention period to be more easily amended from time-to-time.

Similar Provincial Laws

Current Wording
378. (3) The Director is not required to produce any document, other than a certificate and attached articles or statement filed under section 373, more than six years after the date it is received.

Proposed Wording
378. (3) The Director is not required to produce any document, other than a certificate and attached articles or statement filed under section 373, after the expiration of the prescribed period.

Part 23 Continuance (no amendments)

There are no amendments proposed in respect of this Part.

Part 24 Consequential Amendments (no amendments)

There are no proposed amendments to this Part.

Other Amendments (clauses 233-241)

Clause 233 and 234 clarify that Parts 19.1 of the CBCA and 18.1 of the CCA, Apportioning Award of Damages, will not apply to proceedings commenced before the coming into force of each respective part.

Clauses 235 to 238 repeal the definition of "associate" in the Air Canada Public Participation Act, the Canada Development Corporation Reorganization Act, the CN Commercialization Act and the Nordion and Theratronics Divestiture Authorization Act.

Minor consequential amendments are brought to the Budget Implementation Act and to the Canada Post Act because of changes made to the CBCA (clause 239 and 240).

Clause 241 specifies that the coming into force of the amendments to the CBCA and CCA will be on a day or days to be fixed by order of the Governor in Council.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No.: 233
CBCA Section No.: Part XIX.1
Topic: Transitional Provisions

Sources of Proposed Law
N/A

Changes From Present Law
N/A

Purpose of Change
This amendment clarifies that the new Part XIX.1, Apportioning Award of Damages, does not apply to proceedings commenced before the coming into force of clause 115 of this Bill.

Similar Provincial Laws
N/A

Current Wording
N/A

Proposed Wording
Part XIX.1 of the Canada Business Corporations Act, as enacted by section 115 of this Act, does not apply to any proceeding commenced before the coming into force of that section.

Bill Clause No. 234
CCA Section No. Canada Cooperatives Act Part 18.1
Topic: Transitional Provisions

Sources of Proposed Law

Changes From Present Law
N/A

Purpose of Change
This amendment clarifies that the new Part 18.1, Apportioning Award of Damages, does not apply to proceedings commenced before the coming into force of clause 218 of this Bill.

Similar Provincial Laws

Current Wording
N/A

Proposed Wording
Part 18.1 of the Canada Cooperatives Act, as enacted by section 214 of this Act, does not apply to any proceeding commenced before the coming into force of that section.

Bill Clause No. 235
CCA Section No. Air Canada Public Participation Acts. 6(4) and (5)
Topic: Harmonization with the Canada Business Corporations Act

Sources of Proposed Law

Changes From Present Law
(A) Repeal s. 6(4) of the Air Canada Public Participation Act, which sets out a definition of "associate".

(B) The portion of s. 6(5) of the Act before paragraph (a) is replaced by "(5) For the purposes of this section,"

(C) Section 6(5) of the Act is amended by adding the word "and" at the end of paragraph (a) and by repealing paragraph (b) as a consequence of the repeal of s. 6(4).

Purpose of Change
(A) The definitions of "associate" in the Air Canada Public Participation Act, Canada Development Corporation Reorganization Act, CN Commercialization Act, and Nordion and Theratronics Divestiture Authorization Act are repealed. In the absence of a definition of "associate" in these statutes, the definition of "associate" found in the CBCA will then apply. This will expand the rights of individuals, corporations (including directors and officers), partnerships, and trusts to more freely communicate among themselves and / or act in concert with respect to their interests, direct or indirect in these corporations without running afoul of any statutory ownership restrictions.

(B) & (C) These are consequential amendments required as a result of the repeal of s. 6(4).

Similar Provincial Laws

Current Wording
6. (4) For the purposes of this section, a person is an associate of another person if

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

(b) one is a corporation that is controlled by the other or by a group of persons of which the other is a member;

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

(d) one is a trust of which the other is a trustee;

(e) both are corporations controlled by the same person;

(f) both are members of a voting trust that relates to voting shares of the Corporation;

(g) both are parties to an agreement or arrangement, a purpose of which is to require them to act in concert with respect to their interests, direct or indirect, in the Corporation; or

(h) both are at the same time associates, within the meaning of any of paragraphs (a) to (g), of the same person.

(5) Notwithstanding subsection (4), for the purposes of this section,

(a) where a resident who, but for this paragraph, would be an associate of a person submits to the Corporation a statutory declaration stating that no voting shares of the Corporation held or to be held by the resident are or will be, to the resident's knowledge, held in the right of, for the use or benefit of or under the control of any person of which, but for this paragraph, the resident would be an associate, that resident and that person are not associates so long as the voting shares held by the resident are not held contrary to the statements made in the declaration;

(b) two corporations are not associates pursuant to paragraph (4)(h) by reason only that under paragraph (4)(a) each is an associate of the same individual; and

(c) where it appears from the central securities register of the Corporation that any person holds, beneficially owns or controls voting shares to which are attached not more than the lesser of two one-hundredths of one per cent of the votes that may ordinarily be cast to elect directors of the Corporation and five thousand such votes, that person is not an associate of anyone else and no one else is an associate of that person.

Proposed Wording
(5) For the purposes of this section,

(a) where a resident who, but for this paragraph, would be an associate of a person submits to the Corporation a statutory declaration stating that no voting shares of the Corporation held or to be held by the resident are or will be, to the resident's knowledge, held in the right of, for the use or benefit of or under the control of any person of which, but for this paragraph, the resident would be an associate, that resident and that person are not associates so long as the voting shares held by the resident are not held contrary to the statements made in the declaration; and

(b) where it appears from the central securities register of the Corporation that any person holds, beneficially owns or controls voting shares to which are attached not more than the lesser of two one_hundredths of one per cent of the votes that may ordinarily be cast to elect directors of the Corporation and five thousand such votes, that person is not an associate of anyone else and no one else is an associate of that person.

Bill Clause No. 236
Canada Development Corporation Reorganization Act s. 5(6) and (7)
Topic: Harmonization with the Canada Business Corporations Act

Sources of Proposed Law

Changes From Present Law
(A) Repeal s. 5(6) of the Canada Development Corporation Reorganization Act, which sets out a definition of "associate".

(B) The portion of s. 5(7) of the Act before paragraph (a) is replaced by "(7) For the purposes of this section,"

(C) Section 5(7) of the Act is amended by adding the word "and" at the end of paragraph (a) and by repealing paragraph (b) as a consequence of the repeal of s. 5(6).

Purpose of Change
See explanation at clause 235

Similar Provincial Laws

Current Wording
(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.

(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.

Proposed Wording
(7) 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; and

(b) 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.

Bill Clause No. 237
CN Commercialization Act s. 8(4) and (5)
Topic: Harmonization with the Canada BusinessCorporations Act

Sources of Proposed Law

Changes From Present Law
(A) Repeal s. 8(4) of the CN Commercialization Act, which sets out a definition of "associate".

(B) The portion of s. 8(5) of the Act before paragraph (a) is replaced by "(5) For the purposes of this section,"

(C) Section 8(5) of the Act is amended by adding the word "and" at the end of paragraph (a) and by repealing paragraph (b) as a consequence of the repeal of s. 8(4).

Purpose of Change
See explanation at clause 235

Similar Provincial Laws

Current Wording
(4) For the purposes of this section, a person is an associate of another person if

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

(b) one is a corporation that is controlled by the other or by a group of persons of which the other is a member;

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

(d) one is a trust of which the other is a trustee;

(e) both are corporations controlled by the same person;

(f) both are members of a voting trust that relates to voting shares of CN;

(g) both, in the reasonable opinion of the directors of CN, are parties to an agreement or arrangement a purpose of which is to require them to act in concert with respect to their interests, direct or indirect, in CN or are otherwise acting in concert with respect to those interests; or

(h) both are at the same time associates, within the meaning of any of paragraphs (a) to (g), of the same person.

(5) Notwithstanding subsection (4), for the purposes of this section,

(a) where a person who, but for this paragraph, would be an associate of another person submits to CN a statutory declaration stating that

(i) no voting shares of CN held or to be held by the declarant are or will be, to the declarant's knowledge, held in the right of, for the use or benefit of or under the control of, any other person of which, but for this paragraph, the declarant would be an associate, and

(ii) the declarant is not acting and will not act in concert with any such other person with respect to their interests, direct or indirect, in CN,

the declarant and that other person are not associates so long as the directors of CN are satisfied that the statements in the declaration are being complied with and that there are no other reasonable grounds for disregarding the declaration;

(b) two corporations are not associates pursuant to paragraph (4)(h) by reason only that under paragraph (4)(a) each is an associate of the same individual; and

(c) where it appears from the central securities register of CN that any person holds, beneficially owns or controls voting shares to which are attached not more than the lesser of two one_hundredths of one per cent of the votes that may ordinarily be cast to elect directors of CN and five thousand such votes, that person is not an associate of anyone else and no one else is an associate of that person.

Proposed Wording
(5) For the purposes of this section,

(a) where a person who, but for this paragraph, would be an associate of another person submits to CN a statutory declaration stating that

(i) no voting shares of CN held or to be held by the declarant are or will be, to the declarant's knowledge, held in the right of, for the use or benefit of or under the control of, any other person of which, but for this paragraph, the declarant would be an associate, and

(ii) the declarant is not acting and will not act in concert with any such other person with respect to their interests, direct or indirect, in CN,

the declarant and that other person are not associates so long as the directors of CN are satisfied that the statements in the declaration are being complied with and that there are no other reasonable grounds for disregarding the declaration; and

(b) where it appears from the central securities register of CN that any person holds, beneficially owns or controls voting shares to which are attached not more than the lesser of two one-hundredths of one per cent of the votes that may ordinarily be cast to elect directors of CN and five thousand such votes, that person is not an associate of anyone else and no one else is an associate of that person.

Bill Clause No. 238
Nordion and Theratronics Divestiture Authorization Act s. 6(4) and (5)
Topic: Harmonization with the Canada Business Corporations Act

Sources of Proposed Law

Changes From Present Law
(A) Repeal s. 6(4) of the Nordion and Theratronics Divestiture Authorization Act, which sets out a definition of "associate".

(B) The portion of s. 6(5) of the Act before paragraph (a) is replaced by "(5) For the purposes of this section,"

(C) Section 6(5) of the Act is amended by adding the word "and" at the end of paragraph (a) and by repealing paragraph (b) as a consequence of the repeal of s. 6(4).

Purpose of Change
See explanation at clause 235

Similar Provincial Laws

Current Wording
(4) For the purposes of this section, a person is an associate of a 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 by the other or by a group of persons of which the other is a member;

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

(d) one is a trust of which the other is a trustee;

(e) both are corporations controlled by the same person;

(f) both are members of a voting trust that relates to voting shares of Nordion;

(g) both are parties to an agreement or arrangement, a purpose of which is to require them to act in concert with respect to their interests, direct or indirect, in Nordion; or

(h) both are at the same time associates, within the meaning of any of paragraphs (a) to (g), of the same non_resident.

(5) Notwithstanding subsection (4), for the purposes of this section,

(a) where a resident who, but for this paragraph, would be an associate of a non_resident submits to Nordion a statutory declaration stating that no voting shares of Nordion held or to be held by the resident are or will be, to the resident's knowledge, held in the right of, for the use or benefit of or under the control of any non_resident of which, but for this paragraph, the resident would be an associate, that resident and that non_resident are not associates so long as the voting shares held by the resident are not held contrary to the statements made in the declaration;

(b) two corporations are not associates pursuant to paragraph (4)(h) by reason only that pursuant to paragraph (4)(a) each is an associate of the same individual; and

(c) where it appears from the central securities register of Nordion that any person holds, beneficially owns or controls voting shares to which are attached not more than the lesser of two one_hundredths of one per cent of the votes that may ordinarily be cast to elect directors of Nordion and two thousand such votes, that person is not an associate of anyone else and no one else is an associate of that person.

Proposed Wording
(5) For the purposes of this section,

(a) where a resident who, but for this paragraph, would be an associate of a non_resident submits to Nordion a statutory declaration stating that no voting shares of Nordion held or to be held by the resident are or will be, to the resident's knowledge, held in the right of, for the use or benefit of or under the control of any non_resident of which, but for this paragraph, the resident would be an associate, that resident and that non_resident are not associates so long as the voting shares held by the resident are not held contrary to the statements made in the declaration; and

(b) where it appears from the central securities register of Nordion that any person holds, beneficially owns or controls voting shares to which are attached not more than the lesser of two one_hundredths of one per cent of the votes that may ordinarily be cast to elect directors of Nordion and two thousand such votes, that person is not an associate of anyone else and no one else is an associate of that person.

Bill Clause No. 239
Budget Implementation Act, 1997, par. 8(2)(n)
Topic: Consequential Amendments

Sources of Proposed Law

Changes From Present Law
Amend par. 8(2)(n) of the Budget Implementation Act, 1997 to reflect the new numbering of the CBCA.

Purpose of Change
Section 8 of the Budget Implementation Act, 1997 makes specific reference to the CBCA. The sections referenced in paragraph 8(2)(n) have been amended in this Bill. This change will ensure that s. 8 of the Budget Implementation Act, 1997 accurately reference the correct CBCA provisions.

Similar Provincial Laws

Current Wording
The relevant portion of subsection 8(2) reads:
8. (2) The following provisions of the Canada Business Corporations Act apply, with such modifications as the circumstances require, to the foundation and its directors, members, officers and employees as if the foundation were a corporation incorporated under that Act, this Part were its articles of incorporation and its members were its shareholders:

(n) subsections 124(1) to (4) (indemnification of directors and insurance for director's liability);

Proposed Wording
8. (2)(n) subsections 124(1) to (6) (indemnification of directors and insurance for director's liability);

Bill Clause No.240
Canada Post Corporation Act, s. 27
Topic: Consequential Amendments

Sources of Proposed Law

Changes From Present Law
Remove reference to s. 44 of the CBCA.

Purpose of Change
Section 27 of the Canada Post Corporation Act makes reference to specific sections in the CBCA. One of the referenced sections is s. 44, a section being repealed by clause 26 of this Bill.

Similar Provincial Laws

Current Wording
27. (1) The definitions "beneficial ownership", "debt obligation", "redeemable share", "security", "security interest" and "special resolution" in subsection 2(1) and sections 23 to 26, 34, 36 to 38 (except subsection 38(6)), 42 to 44 (except paragraphs 44(2)(a) and (c)), 50, 172 and 257 of the Canada Business Corporations Act apply, with such modifications as the circumstances require, in respect of the Corporation as if the references therein to articles were references to the by-laws of the Corporation.

(2) For the purposes of applying subsections 34(2), 36(2) and 38(3), section 42 and subsection 44(1) of the Canada Business Corporations Act in respect of the Corporation, the assets held by the Corporation as an agent of Her Majesty in right of Canada shall be deemed to be assets of the Corporation.

Proposed Wording
27. (1) The definitions "beneficial ownership", "debt obligation", "redeemable share", "security", "security interest" and "special resolution" in subsection 2(1) and sections 23 to 26, 34, 36 to 38 (except subsection 38(6)), 42, 43, 50, 172 and 257 of the Canada Business Corporations Act apply, with such modifications as the circumstances require, in respect of the Corporation as if the references therein to articles were references to the by-laws of the Corporation.

(2) For the purposes of applying subsections 34(2), 36(2) and 38(3) and section 42 of the Canada Business Corporations Act in respect of the Corporation, the assets held by the Corporation as an agent of Her Majesty in right of Canada shall be deemed to be assets of the Corporation.

Bill Clause No.241
Topic: Coming into force

Sources of Proposed Law

Changes From Present Law
None.

Purpose of Change
Proposed amendments to the CBCA and CCA would come into force on a day or days to be fixed by order of the Governor in Council, except for the conditional amendment provisions.

Similar Provincial Laws

Current Wording
N/A

Proposed Wording
The provisions of the Act come into force on a day or days to be fixed by order of the Governor in Council.

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