1st Session, 36th Parliament,
46 Elizabeth II, 1997

The House of Commons of Canada

BILL C-2

An Act to establish the Canada Pension Plan Investment Board and to amend the Canada Pension Plan and the Old Age Security Act and to make consequential amendments to other Acts

      Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

SHORT TITLE

Short title

1. This Act may be cited as the Canada Pension Plan Investment Board Act.

INTERPRETATION

Definitions

2. The definitions in this section apply in this Act.

``appropri-
ate provincial Minister''
« ministre provincial compétent »

``appropriate provincial Minister'', in respect of a province, means the province's minister of the Crown who has primary responsibility for that province's finances.

``Board''
« Office »

``Board'' means the Canada Pension Plan Investment Board established by section 3.

``by-law''
Version anglaise seulement

``by-law'' means a by-law of the Board.

``court''
« tribunal »

``court'' means

      (a) in the Province of Ontario, the Ontario Court (General Division);

      (b) in the Province of Quebec, the Superior Court of the Province;

      (c) in the Provinces of Nova Scotia and British Columbia, the Supreme Court of the Province;

      (d) in the Provinces of New Brunswick, Manitoba, Saskatchewan and Alberta, the Court of Queen's Bench for the Province;

      (e) in the Provinces of Prince Edward Island and Newfoundland, the trial division of the Supreme Court of the Province; and

      (f) in the Yukon Territory, the Northwest Territories and Nunavut, the Supreme Court.

``entity''
« entité »

``entity'' means a body corporate, a trust, a partnership, a fund, an unincorporated association or organization, Her Majesty in right of Canada or of a province or an agency of Her Majesty in right of Canada or of a province and the government of a foreign country or any political subdivision or agency of the government of a foreign country.

``Minister''
« ministre »

``Minister'' means the Minister of Finance.

``participa-
ting province''
« province partici-
pante »

``participating province'' means a province other than

      (a) a territory; and

      (b) a province providing a comprehensive pension plan as defined in subsection 3(1) of the Canada Pension Plan.

``subsidia-
ry''
« filiale »

``subsidiary'' means a corporation that is wholly owned by the Board directly or indirectly through any number of subsidiaries each of which is wholly owned directly or indirectly by the Board.

CONSTITUTION OF THE BOARD

Board established

3. (1) There is established a corporation to be known as the Canada Pension Plan Investment Board.

Not agent of Her Majesty

(2) The Board is not an agent of Her Majesty.

Not part of public service of Canada

(3) Directors, officers, employees and agents of the Board are not part of the public service of Canada.

Canada Corporations Act

(4) The Canada Corporations Act, chapter C-32 of the Revised Statutes of Canada, 1970, does not apply to the Board.

CAPITAL AND SHARES

Capital

4. (1) The capital of the Board is $100. The Minister shall pay the capital of the Board out of the Consolidated Revenue Fund.

Shares

(2) The capital is divided into 10 shares having a par value of $10 each. The shares shall be issued to the Minister to be held on behalf of Her Majesty in right of Canada.

Registration

(3) The shares issued to the Minister shall be registered by the Board in the name of the Minister.

OBJECTS AND POWERS

Objects

5. The objects of the Board are

    (a) to manage any amounts that are transferred to it under section 111 of the Canada Pension Plan in the best interests of the contributors and beneficiaries under that Act; and

    (b) to invest its assets with a view to achieving a maximum rate of return, without undue risk of loss, having regard to the factors that may affect the funding of the Canada Pension Plan and the ability of the Canada Pension Plan to meets its financial obligations.

Powers of Board

6. (1) The Board has the capacity and, subject to this Act, the rights, powers and privileges of a natural person.

No inconsistent business or activity

(2) The Board and its subsidiaries shall not, directly or indirectly, carry on any business or activity or exercise any power that is inconsistent with the Board's objects, or that the Board is restricted by this Act from carrying on or exercising, and shall not, directly or indirectly, exercise any of its powers in a manner contrary to this Act.

No invalidity

(3) No act of the Board, including a transfer of property, is invalid by reason only that the Board was without the capacity or power to so act.

MANAGEMENT

Board of Directors

Board of directors

7. The Board shall be managed by a board of directors of 12 directors, including the Chairperson.

Principal duties

8. (1) Subject to this Act, the board of directors shall manage or supervise the management of the business and affairs of the Board.

Specific duties

(2) Without limiting the generality of subsection (1), the board of directors shall

    (a) establish written investment policies, standards and procedures in accordance with section 35;

    (b) establish procedures for the identification of potential conflicts of interest and procedures to resolve those conflicts;

    (c) establish a code of conduct for officers and employees of the Board; and

    (d) designate a committee of the board of directors to monitor application of the conflict of interest procedures and the code of conduct.

Power to delegate

9. (1) Subject to subsection (2) and the by-laws, the board of directors may delegate to the Chairperson, to a committee of the board of directors or to any officer of the Board any of the powers or duties of the board of directors.

Limits on power

(2) The board of directors may not delegate the power to

    (a) adopt, amend or repeal by-laws;

    (b) establish the Board's investment policies, standards and procedures;

    (c) fill a vacancy in a committee of directors or in the office of auditor of the Board;

    (d) appoint officers to the Board or fix their remuneration; or

    (e) approve the annual financial statements of the Board and any other financial statements issued by the Board.

Directors

Appointment of directors

10. (1) Each director shall be appointed by the Governor in Council, on the recommendation of the Minister, to hold office during good behaviour for such term, not exceeding three years, as will ensure, as far as possible, the expiration in any one year of the terms of office of not more than one half of the directors.

Committee to advise Minister

(2) The Minister may establish a committee to advise the Minister on the appointment of directors. The committee shall consist of a representative designated by the Minister and a representative of each participating province designated by the appropriate provincial Minister for that province.

Consultation with participating provinces/

(3) The Minister shall consult with the appropriate provincial Ministers of the participating provinces before making any recommendation to the Governor in Council with respect to the appointment of directors and before making an appointment under subsection (8).

Factors for consideration in appointments

(4) Before making any recommendation to the Governor in Council with respect to the appointment of directors, and before making an appointment under subsection (8), the Minister shall have regard to the desirability of having directors who are representative of the various regions of Canada and having on the board of directors a sufficient number of directors with proven financial ability or relevant work experience such that the Board will be able to effectively achieve its objects.

Reappoint-
ment

(5) A director is eligible for reappointment for one or more additional terms of office.

Removal

(6) The Governor in Council may remove a director for cause.

Continuation in office

(7) If no person is appointed to take office as a director on the expiration of the term of an incumbent director, the incumbent director continues in office until a successor is appointed.

Vacancy

(8) Where a person ceases to be a director during the term for which the person was appointed, the Minister shall appoint a qualified person to hold office as a director for the remainder of the term.

Disqualified persons

(9) The following persons are disqualified from being directors:

    (a) a person who is less than 18 years of age;

    (b) a person who is of unsound mind and has been so found by a court in Canada or elsewhere;

    (c) a person who has the status of a bankrupt;

    (d) a person who is not a natural person;

    (e) a person who is an agent or employee of Her Majesty in right of Canada or in right of a province;

    (f) a person who is a member of the Senate or House of Commons of Canada or a member of a provincial legislature;

    (g) a person who is an agent or employee of the government of a foreign country or any political subdivision of a foreign country; and

    (h) a person who is not a resident of Canada.

Remunera-
tion and benefits of directors

(10) A director is entitled to receive from the Board such remuneration and benefits as may be fixed by the by-laws, which remuneration and benefits shall be fixed having regard to the remuneration and benefits received by persons having similar responsibilities and engaged in similar activities.

Resignation

11. (1) The resignation of a director becomes effective at the time the Board receives a written resignation or at the time specified in the resignation, whichever is later.

Copy of resignation

(2) The Board shall send a copy of a director's resignation to the Clerk of the Privy Council within 15 days after receiving it.