Bill C-44

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	Legal Regime Applicable to Port Authorities
Liability arising when acting as agent of Crown	20. (1) If a port authority or a wholly-owned subsidiary of a port authority is acting as agent of Her Majesty in right of Canada, the port authority or subsidiary must fulfil or satisfy an obligation or liability in respect of the port authority or subsidiary, as the case may be, arising from its exercise of, or its failure to exercise, a power or right or arising by operation of law. Her Majesty is not responsible for fulfilment or satisfaction of the obligation or liability, except that if a judgment or decision is rendered by a court of competent jurisdiction in respect of the obligation or liability, Her Majesty is responsible for satisfying the judgment or decision to the extent that it remains unsatisfied by the port authority or subsidiary at least thirty days after the judgment or decision becomes final.
Liability arising when not acting as agent of Crown	(2) If a port authority or a wholly-owned subsidiary of a port authority is not acting as agent of Her Majesty in right of Canada, an obligation or liability in respect of the port authority or subsidiary, as the case may be, arising from its exercise of, or its failure to exercise, a power or right or arising by operation of law is an obligation or liability of the port authority or subsidiary, as the case may be, and not an obligation or liability of Her Majesty.
Insurance required	(3) A port authority and a wholly-owned subsidiary of a port authority shall fully maintain in good standing at all times the insurance coverage required by any regulations made under section 52.
Financial Administra- tion Act	20.1 The Financial Administration Act, other than subsection 9(3) and sections 155, 155.1 and 156, does not apply to a port authority or a wholly-owned subsidiary of a port authority.
No appropriation	21. No payment to a port authority or a wholly-owned subsidiary of a port authority may be made under an appropriation by Parliament to enable the port authority or subsidiary to discharge an obligation or liability. This section applies
	(a) even if the port authority or subsidiary is an agent of Her Majesty in right of Canada as provided under section 5.1; and
	(b) notwithstanding any authority given under any other Act, other than an authority given under the Emergencies Act, any other Act in respect of emergencies or any Act of general application providing for grants.
No guarantee	22. No guarantee may be given under the authority of Parliament by or on behalf of Her Majesty for the discharge of an obligation or liability of a port authority or a wholly-owned subsidiary of a port authority. This section applies even if the port authority or subsidiary is an agent of Her Majesty in right of Canada as provided under section 5.1.
Canada Business Corporations Act	23. (1) Subject to this Part and any regulations made under subsection (2), the Canada Business Corporations Act applies to port authorities.
Regulations	(2) The Governor in Council may, by regulation, adapt the Canada Business Corporations Act and any regulations made under that Act, including provisions imposing punishment, in the manner the Governor in Council considers appropriate for the purposes of applying that Act or those regulations to port authorities, or exclude provisions of that Act and those regulations from applying to port authorities.
	Capacity and Powers
Capacity and powers	24. (1) A port authority is incorporated for the purpose of operating the port in respect of which its letters patent are issued and, for that purpose and for the purposes of this Act, has the powers of a natural person.
Activities	(2) The power of a port authority to operate a port is limited to the power to engage in
	(a) port activities related to shipping, navigation, transportation of passengers and goods, handling of goods and storage of goods, to the extent that those activities are specified in the letters patent; and
	(b) other activities that are deemed in the letters patent to be necessary to support port operations.
Carrying on activities	(2.1) The activities that a port authority may engage in under paragraph (2)(b) may be carried on by the port authority directly or through a wholly-owned subsidiary of the port authority. The port authority and the subsidiary are not agents of Her Majesty in right of Canada for the purpose of engaging in those activities.
Restricted business or powers	(3) A port authority shall not carry on any activity or exercise any power that it is restricted by its letters patent from carrying on or exercising, nor shall it exercise any of its powers in a manner contrary to its letters patent or this Act.
Contracts	(3.1) A port authority or wholly-owned subsidiary of a port authority that enters into a contract other than as agent of Her Majesty in right of Canada shall do so in its own name. It shall expressly state in the contract that it is entering into the contract on its own behalf and not as agent of Her Majesty in right of Canada. For greater certainty, the contracts to which this subsection applies include a contract for the borrowing of money.
Duty of directors	(3.2) The directors of a port authority shall take all necessary measures to ensure
	(a) that the port authority and any wholly-owned subsidiary of the port authority comply with subsection (3.1); and
	(b) that any subcontract arising directly or indirectly from a contract to which subsection (3.1) applies expressly states that the port authority or subsidiary, as the case may be, enters into the contract on its own behalf and not as agent of Her Majesty in right of Canada.
Borrowing limitations may be imposed	(3.3) If a port authority or a wholly-owned subsidiary of a port authority fails to comply with subsection (3.1), or the directors of a port authority fail to comply with subsection (3.2), the Minister of Finance, on the recommendation of the Minister of Transport, may impose any limitations that the Minister of Finance considers to be in the public interest on the power of the port authority or subsidiary to borrow money, including limitations on the time and terms and conditions of any borrowing.
No effect on status	(3.4) For greater certainty, the imposition under subsection (3.3) of limitations on the power of a port authority or subsidiary to borrow money or the imposition of other limitations or controls by the Minister, any other member of the Queen's Privy Council for Canada or the Governor in Council, through the issuance of letters patent, the granting of any approval or any other means, does not expand the extent, if any, to which the port authority or subsidiary is an agent of Her Majesty in right of Canada beyond that described in section 5.1.
Obligation when contracting as agent of the Crown	(3.5) A port authority, or a wholly-owned subsidiary of a port authority, that enters into a contract as an agent of Her Majesty in right of Canada is bound by the contract and is responsible to Her Majesty for the performance of obligations to other parties under the contract.
Existing uses	(4) Except for a use authorized under this Act, a port authority may continue to use any real property that it manages, holds or occupies for any purpose for which the property was used on June 1, 1996 in the case of a port authority referred to in section 10, or the date of issuance of its letters patent in any other case, but, if the port authority ceases to use it for that purpose at any time, the port authority may not reinstitute the use.
Restric- tions - subsidiaries	(5) The directors of a port authority shall take all necessary measures to ensure that its wholly-owned subsidiaries
	(a) have and exercise only the powers authorized in the letters patent of the port authority;
	(b) carry on only the activities authorized in the letters patent; and
	(c) do not exercise any power or carry on any activity in a manner contrary to the letters patent or this Act.
Provisions applicable to subsidiary	(5.1) The Governor in Council may declare that any provision of this Part that applies only to port authorities applies to a wholly-owned subsidiary of a port authority. In that case, the provision applies to the subsidiary as if it were a port authority, with such modifications as the circumstances require.
Existing activities	(6) A wholly-owned subsidiary of a port authority may continue to carry on any activity or exercise any power that it carried on or exercised on December 1, 1995 but, if the subsidiary ceases to carry on the activity or exercise the power at any time, it may not recommence it unless the activity or power is authorized in the letters patent.
Restriction on corporate activities	(7) Unless the letters patent of a port authority provide otherwise, the port authority or a wholly-owned subsidiary of the port authority shall not
	(a) cause the incorporation of a corporation whose shares on incorporation would be held by, on behalf of or in trust for the port authority or subsidiary;
	(b) acquire shares of a corporation to be held on behalf of or in trust for the port authority or subsidiary;
	(c) acquire all or substantially all of the assets of another corporation;
	(d) sell or otherwise dispose of shares of a wholly-owned subsidiary of the port authority; or
	(e) cause the dissolution or amalgamation of a wholly-owned subsidiary of the port authority.
Powers of port authority re railways	25. (1) Subject to any other Act and to any regulations made under any other Act, a port authority may
	(a) construct, purchase, lease, operate and maintain railways on lands it manages, holds or occupies;
	(b) enter into agreements with any person for the maintenance of the railways referred to in paragraph (a) and for their operation, in a manner that will provide all railway companies whose lines reach the port with the same facilities for traffic as those enjoyed by that person; and
	(c) enter into arrangements with any person for facilitating traffic to, from or within the limits of the port.
Port authority not railway company	(2) A railway referred to in paragraph (1)(a) is subject to the Railway Safety Act but is not subject to Part III of the Canada Transportation Act.
Power to make by-laws	26. Unless the letters patent provide otherwise, the directors of a port authority may, by resolution, make, amend or repeal by-laws that regulate the affairs of the port authority or the duties of its officers and employees.
Borrowing powers	27. (1) Subject to the letters patent, a port authority may borrow money on the credit of the port authority for port purposes.
Delegation of borrowing powers	(2) Unless the letters patent or by-laws of a port authority provide otherwise, the board of directors may, by resolution, delegate the powers referred to in subsection (1) to a committee established by the directors.
No pledge of property	(3) A port authority may not mortgage, hypothecate, pledge or otherwise create a security interest in the federal real property it manages in any way other than to pledge the revenues of that property, but it may create such a security interest in fixtures on federal real property to the extent authorized in the letters patent.
Definition of ``security interest''	(4) For the purposes of subsection (3), ``security interest'' means an interest in or charge on property of a port authority to secure the discharge of an obligation or liability of the port authority.
Powers to invest	28. A port authority may invest any moneys in its reserves or any moneys that it does not immediately require in
	(a) debentures, bonds, bankers' acceptances or other debt obligations of or guaranteed by Her Majesty in right of Canada or any province or municipality in Canada or any member of the Canadian Payments Association; or
	(b) investments of a category prescribed by regulation by the Governor in Council for the purposes of this section.
Deemed knowledge of letters patent	28.01 A person who deals with a port authority, acquires rights from a port authority or directly or indirectly acquires rights relating to a port authority is deemed to know the contents of the letters patent of the port authority.
	Annual Meeting
Annual meeting	28.1 The directors of a port authority shall call an annual meeting not later than eighteen months after the port authority comes into existence and subsequently not later than fifteen months after holding the last preceding annual meeting.
Meeting open to public	29. (1) The annual meeting of a port authority shall be open to the public and held in any of the municipalities where the port is situated, in premises large enough to accommodate the anticipated attendance.
Notice of meeting	(2) A port authority shall, at least thirty days before the annual meeting, have a notice published in a major newspaper published or distributed in the municipalities where the port is situated setting out the time and location of the meeting and specifying that the port authority's financial statements are available to the public at its registered office.
Availability to public	(3) At the annual meeting, the board of directors shall ensure
	(a) that there are available a sufficient number of copies of the most recent audited annual financial statements of the port authority for the persons present at the meeting; and
	(b) that the chief executive officer and the directors are available to answer questions about the operations of the port authority posed by the persons present at the meeting.
Annual financial statements	29.1 The board of directors of a port authority shall present at every annual meeting
	(a) comparative financial statements that relate separately to
	(i) the period that ended not more than six months before the annual meeting and that began on the date the port authority came into existence or, if the port authority has completed a fiscal year, immediately after the end of the last completed fiscal year, and
	(ii) the immediately preceding fiscal year;
	(b) the report of the auditor of the port authority; and
	(c) any further information respecting the financial position of the port authority and its wholly-owned subsidiaries and the results of their operations required by this Act, any regulations made under this Act, the letters patent or the by-laws.

Bill C-44

Legal Regime Applicable to Port Authorities

Capacity and Powers

Annual Meeting