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| Replacement
security
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6.1 (1) On the maturity of a designated
security of a province that was issued before
January 1, 1998, the Board shall purchase
another security issued by that province if the
Board is requested to do so, in writing, by the
appropriate provincial Minister of that
province at least 30 days before the date of
maturity.
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| Principal
amount
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(2) The principal amount of the
replacement security shall be not more than
the principal outstanding under the maturing
designated security.
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| Term to
maturity
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(3) The replacement security shall be for a
term of 20 years.
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| Interest
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(4) The replacement security shall bear
interest at a rate fixed by the Board, in
accordance with any agreement entered into
between the Board and the Minister. The rate
shall be substantially the same as the interest
rate that the province would be required to pay
if it were to borrow the same amount for the
same term through the issuance of a security
on the public capital market.
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| Features of
replacement
security
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(5) The replacement security shall be issued
to or payable to the Board and shall be
expressed to be not negotiable and not
transferable or assignable.
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| Redemption at
request of
province
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(6) The Board shall redeem a designated
security in whole or in part before maturity if
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(a) the Board is requested to do so, in
writing, by the appropriate provincial
Minister of a province at least 30 days
before the proposed redemption date; and
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(b) the appropriate provincial Minister has
agreed to pay on the proposed redemption
date
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(i) any payments of principal or interest
due on or before the proposed
redemption date but not yet paid,
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(ii) interest on the principal amount being
redeemed accrued to the proposed
redemption date, and
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(iii) an amount equal to the present value
of the remaining instalments of principal
being redeemed and interest on that
principal.
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| Calculation of
present value
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(7) For the purposes of subparagraph
(6)(b)(iii), the present value shall be
calculated by discounting the instalments of
principal being redeemed and interest on that
principal using an interest rate fixed by the
Board, in accordance with any agreement
entered into between the Board and the
Minister of Finance. In fixing that rate, the
Board shall choose a rate that
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(a) if the designated security to be
redeemed was issued before January 1,
1998, is substantially the same as the rate
that the Government of Canada would be
required to pay if it were to borrow the
principal amount being redeemed for a term
equal to the remaining term of that
designated security through the issuance of
a security on the public capital market; or
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(b) if the designated security to be
redeemed was issued on or after January 1,
1998, is substantially the same as the rate
that the province would be required to pay
if it were to borrow the principal amount
being redeemed for a term equal to the
remaining term of that designated security
through the issuance of a security on the
public capital market.
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| Consolidation
of securities
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(8) At the request of the provincial treasurer
or other similar officer of a province, the
Board may accept in the place of any series of
designated securities of that province
acquired during any consecutive period of not
more than twelve months, on payment of any
interest then accrued on the securities, another
security of that province that is in an amount
equal to the aggregate amount then
outstanding of the designated securities of that
series, and that bears interest at a rate
determined by the Board.
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| Obligation
guaranteed by
the provincial
government
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(9) Any security purchased by the Board
under this section must be an obligation of the
government of a province or an obligation of
an agent of Her Majesty in right of a province
that is guaranteed as to principal and interest
by that government.
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15. Section 37 of the Act is replaced by the
following:
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| Income Tax
Act
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37. The Board and its subsidiaries shall
invest their assets in such a way that tax would
not be payable by the Board under subsection
206(2) of the Income Tax Act if
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(a) Part XI of that Act applied to the Board;
and
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(b) each subsidiary were a corporation that
had made a valid election under section 259
of that Act.
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16. Section 50 of the Act is replaced by the
following:
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| Statements to
go to
Ministers
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50. (1) The Board shall send copies of the
financial statements for the first, second and
third quarters of the financial year , prepared
in accordance with subsection 39(6), to the
Minister and the appropriate provincial
Ministers within 45 days after the end of the
three-month period to which they relate .
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| Statements to
be made
public
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(2) Within seven days after the financial
statements are sent as required under
subsection (1), the Board shall make the
statements available to the public.
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17. Subsection 51(1) of the Act is replaced
by the following:
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| Annual report
required
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51. (1) The Board shall as soon as possible,
but in any case within 60 days, after the end
of each financial year provide the Minister and
the appropriate provincial Ministers with an
annual report on the operations of the Board in
that year and the Board shall make copies of
the report available to the public.
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18. (1) Section 56 of the Act is replaced by
the following:
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| Duty of Board
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56. The Board shall pay into the
Consolidated Revenue Fund, for credit to the
Canada Pension Plan Account established
under subsection 108(1) of the Canada
Pension Plan, any amount required under
subsection 108.1(2) or 113(1.1) of that Act.
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(2) Section 56 of the Act is renumbered as
subsection 56(1) and is amended by adding
the following:
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| Transfer of
securities
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(2) The Board shall transfer to the Minister
any designated securities of a province or of
Canada that the Minister requires under
subsection 113(1.1) of the Canada Pension
Plan.
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| Transfer of
securities to
the Board
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19. (1) On the first day of each month
after the coming into force of this section,
1/36th of the right, title or interest of the
Minster of Finance in each security that was
purchased by the Minister under section
110 of the Canada Pension Plan, and that is
held by that Minister on the first day of the
first month following the coming into force
of this section, is transferred to the Canada
Pension Plan Investment Board established
under section 3 of the Canada Pension Plan
Investment Board Act (``the Board'').
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| Transfer of
replacement
securities
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(2) If a security referred to in subsection
(1) is replaced within the 36-month period
beginning on the first day of the first month
following the coming into force of this
section,
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(a) the Board is deemed to have acquired
a right, title or interest in the
replacement security in the same
proportion as the right, title or interest it
had acquired in the security being
replaced; and
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(b) on the first day of each month after the
day on which the replacement security is
purchased, for each month then
remaining in the 36-month period, an
equal portion of the right, title or interest
of the Minister of Finance in the
replacement security is transferred to the
Board, so that the replacement security is
fully transferred to the Board on the
same day as the security that it replaced
would have been fully transferred.
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| Rights
extinguished
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(3) If a security referred to in subsection
(1) is redeemed during the 36-month period
referred to in subsection (2) and is not
replaced, any right, title or interest of the
Board in the security is extinguished.
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| Coming into
force
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20. (1) Subject to subsection (2), the
provisions of this Act, and the provisions of
any Act as enacted by this Act, come into
force in accordance with subsection 114(4)
of the Canada Pension Plan on a day or days
to be fixed by order of the Governor in
Council.
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| Exception
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(2) Despite subsection 114(4) of the
Canada Pension Plan,
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(a) subsections 4(1) and (3), 5(3), (5), (7)
and (10) and 9(1) and (3), sections 10 and
11, subsection 12(2), section 14 and
subsection 18(2) come into force on the
day that is three years after the day on
which section 19 comes into force; and
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(b) section 8 comes into force on the day
that is four years after the day on which
section 19 comes into force.
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