Canada Business Corporations Act

(2) The following provisions of the Canada Business Corporations Act apply, with any modifications that the circumstances require, to the Authority and its directors, members, officers and employees as if the Authority were a corporation incorporated under that Act, this Part were its articles of incorporation and its members were its shareholders:

    (a) subsection 15(1) (capacity of a natural person);

    (b) section 16 (by-law not required to confer powers on Authority, restriction on powers of Authority, and validity of acts of Authority);

    (c) subsection 21(1) (access to Authority's records by members and creditors);

    (d) section 23 (corporate seal not needed to validate instrument);

    (e) subsections 103(1) to (4) (powers of directors to make and amend by-laws, member approval of by-laws and effective date of by-laws);

    (f) subsection 105(1) (qualifications of directors);

    (g) subsection 108(2) (resignation of director);

    (h) section 110 (right of director to attend members' meetings and statements by retiring directors);

    (i) subsection 114(1) (place of directors' meetings);

    (j) section 116 (validity of acts of directors and officers);

    (k) section 117 (validity of directors' resolutions not passed at meeting);

    (l) subsections 119(1) and (4) (liability of directors);

    (m) section 120 (conflict of interests of directors);

    (n) section 123 (directors' dissents);

    (o) section 124 (directors' indemnity);

    (p) section 155 (financial statements);

    (q) section 158 (approval of financial statements by directors);

    (r) section 159 (sending financial statements to members before annual meeting);

    (s) sections 161 and 162 (qualifications and appointment of auditor);

    (t) section 168 (rights and duties of auditor);

    (u) section 169 (examination by auditor);

    (v) section 170 (auditor's right to information);

    (w) subsections 171(3) to (9) (duty and administration of audit committee and penalty for failure to comply);

    (x) section 172 (qualified privilege in defamation for auditor's statements); and

    (y) subsections 257(1) and (2) (certificates of Authority as evidence).

Remuneration of directors

65. Directors shall be paid a fee for attendance at meetings of the board of directors, as fixed by the by-laws of the Authority.

Duty of care

66. (1) The directors and officers of the Authority in exercising their powers and performing their duties shall

    (a) act honestly and in good faith with a view to the best interests of the Authority; and

    (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

Limit of liability

(2) Directors and officers are not liable for a failure to comply with subsection (1) if they rely in good faith on

    (a) a written report of the auditor of the Authority or financial statements represented by an officer of the Authority as fairly reflecting the financial condition of the Authority; or

    (b) a report of a lawyer, notary, accountant, engineer, appraiser or other person whose position or profession lends credibility to a statement made by that person.

President

67. (1) The board of directors shall appoint a President to act as the chief executive officer of the Authority.

Other staff

(2) The President may employ any other officers and employees that are necessary to conduct the work of the Authority.

Annual general meeting

68. The Authority shall hold an annual general meeting of representatives for the purpose of

    (a) presenting the annual report and audited financial statements of the Authority;

    (b) electing the board of directors; and

    (c) dealing with such other business of the Authority as may be presented by the board of directors.

By-laws

69. The board of directors may make by-laws

    (a) respecting the calling and conduct of meetings of the board, including the holding of meetings by tele-conference;

    (b) fixing the fees to be paid to directors for attendance at meetings of the board and the reimbursement of reasonable travel and living expenses to directors;

    (c) respecting the duties and conduct of the directors, officers and employees of the Authority and the terms and conditions of employment and of the termination of employment of officers and employees of the Authority;

    (d) respecting the signing and sealing of securities and interest coupons issued by the Authority; and

    (e) generally for the conduct and management of the affairs of the Authority.

Head office

70. The head office of the Authority shall be on reserve lands at a location determined by the board of directors.

Annual budget

71. At the beginning of every year, the President shall prepare an annual budget of the Authority and present it to the board of directors for approval.

Purposes

Mandate

72. The purposes of the Authority are to

    (a) secure for its borrowing members, through the use of property tax revenues,

      (i) long-term financing of capital infrastructure for the provision of local services on reserve lands,

      (ii) lease financing of capital assets for the provision of local services on reserve lands, or

      (iii) short-term financing to meet cash-flow requirements for operating or capital purposes under a law made under paragraph 4(1)(b), or to refinance a short-term debt incurred for capital purposes;gtggggtyty

    (b) secure for its borrowing members, through the use of other revenues prescribed by regulation, financing for any purpose prescribed by regulation;

    (c) secure the best possible credit terms for its borrowing members;

    (d) provide investment services to its members and first nations organizations; and

    (e) provide advice regarding the development of long-term financing mechanisms for first nations.

Functions and Powers

Powers of board of directors

73. (1) For the purposes of this Part, the board of directors may by resolution

    (a) borrow money in an amount authorized by the resolution;

    (b) issue securities of the Authority;

    (c) lend securities to generate income, if the loan is fully secured;

    (d) enter into agreements for risk management purposes, including swaps; and

    (e) provide for

      (i) payments related to the issuance of securities,

      (ii) the registration, transfer, management and redemption of securities,

      (iii) the re-issuance, reinstatement or other disposition of lost, stolen, destroyed or damaged securities or interest coupons,

      (iv) the examination, cancellation or destruction of securities and of materials used in their production, or

      (v) the timing of the issuance of securities.

Security issuance requirements

(2) A resolution respecting the issuance of securities shall set out

    (a) the rate of interest;

    (b) the time and place of repayment of principal and interest; and

    (c) the currency in which repayment of principal and interest will be made.

Security issuance resolutions

(3) A resolution respecting the issuance of securities may provide that

    (a) the securities are to be redeemable in advance of maturity at a time and price set out in the resolution;

    (b) all or any part of the securities may be paid, refunded or renewed;

    (c) the securities are to be issued in an amount sufficient to realize the amount of any securities called in and paid before maturity, for a term not longer than the remainder of the term of the securities called in and paid; or

    (d) the securities and any interest coupons attached to them are to be in the form set out in the resolution, and are to be exchangeable for other securities of the same issue on any terms and conditions set out in the resolution.

Amount of issue

(4) The Authority may issue securities the principal amounts of which, after payment of any discount and the costs of issue and sale, will realize the net amount authorized by the board of directors in a resolution made under paragraph (1)(a).

Declaration conclusive

(5) A declaration in a resolution authorizing the issuance of securities that it is necessary to issue securities in the principal amount authorized in order to realize the net amount authorized is conclusive evidence of that fact.

Sale price

(6) The board of directors may sell securities at their par value or at other than par value.

Delegation

(7) The board of directors may delegate its powers under this section to a committee of directors and officers of the Authority, subject to such limitations as the board of directors may impose.

Application to become borrowing member

74. (1) A first nation may apply to the Authority to become a borrowing member.

Criteria

(2) The Authority shall accept a first nation as a borrowing member only if the First Nations Financial Management Board has issued to the first nation a certificate under subsection 48(3) and has not subsequently revoked it.

Ceasing to be a borrowing member

75. A first nation may cease to be a borrowing member only with the consent of all other borrowing members.

Priority

76. (1) The Authority has a priority over all other creditors of a first nation that is insolvent, for any moneys that are authorized to be paid to the Authority under a law made under paragraph 4(1)(b) or (d).

Debts to the Crown

(2) For greater certainty, subsection (1) does not apply to Her Majesty.

Limitations - infrastructure loans

77. The Authority shall not make a long-term loan to a borrowing member for the purpose of financing capital infrastructure for the provision of local services on reserve lands unless

    (a) the First Nations Tax Commission has approved a law made by the borrowing member under paragraph 4(1)(d);

    (b) the loan is to be paid out of the property tax revenues of the borrowing member in priority to other creditors of the borrowing member; and

    (c) where the loan is to be paid out of transfer payments from the Crown, the borrowing member has entered into a written agreement with the Crown for the use of the transfer payments for that purpose.

Limitations - other long-term loans

78. The Authority shall not make a long-term loan to a borrowing member for a purpose other than financing capital infrastructure for the provision of local services on reserve lands unless

    (a) the loan is secured by revenues prescribed by regulation, other than property tax revenues; and

    (b) the Authority and the borrowing member comply with any other conditions for such a loan that are prescribed by regulation.

Limitations - short-term loans

79. The Authority shall not make a short-term loan to a borrowing member for a purpose described in subparagraph 72(a)(iii) unless the loan is made in anticipation of local revenues of the borrowing member set out in a law made under paragraph 4(1)(b) or other revenues prescribed by regulation.

Sinking fund

80. (1) The Authority shall establish a sinking fund, or any other system of repayment prescribed by regulation, to fulfil its repayment obligations to the holders of each security issued by the Authority.

Separate accounts

(2) Where a sinking fund is established, a separate sinking fund account shall be kept for each borrowing member participating in a security issued by the Authority.

Sinking fund investments

(3) Funds in a sinking fund may be invested only in

    (a) securities issued or guaranteed by Canada or a province;

    (b) securities of a local, municipal or regional government in Canada;