Bill C-38

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First Reading

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Subsidiary	5. An entity is a subsidiary of another entity if it is controlled by the other entity .
	243. Subsection 6(2) of the Act is repealed.
	244. The Act is amended by adding the following after section 13:
References in other Acts	13.1 A reference in any other Act of Parliament to ``an association to which the Cooperative Credit Associations Act applies'' is to be construed as not including a central cooperative credit society for which an order has been made under subsection 473(1).
	245. Section 14 of the Act is replaced by the following:
Application of Act	14. This Act applies to the former-Act association, and to every body corporate incorporated or formed by or under this Act, so long as it is not discontinued under this Act.
1997, c. 15, s. 116	246. Section 22 of the Act is replaced by the following:
Sunset provision	22. Associations shall not carry on business after the day that is five years after this section comes into force , except that if Parliament dissolves on that day or at any time within the three-month period before that day , associations may continue to carry on business until the day that is one hundred and eighty days after the first day of the first session of the next Parliament.
	247. The heading of Part III of the Act is replaced by the following:
	INCORPORATION, CONTINUANCE AND DISCONTINUANCE
	248. Sections 23 and 24 of the Act are replaced by the following:
Incorporation of association	23. On the application of one or more persons made in accordance with this Act, the Minister may, subject to this Part, issue letters patent incorporating an association.
Who may apply for incorporation	24. An application for incorporation of an association may only be made by
	(a) an association; or
	(b) persons who are entitled to be members of an association under Part IV that include at least
	(i) two central cooperative credit societies not all of which are incorporated under the laws of one province,
	(ii) ten local cooperative credit societies not all of which are incorporated under the laws of one province, or
	(iii) two or more leagues not all of which are incorporated under the laws of one province.
	249. Section 27 of the Act is replaced by the following:
Matters for consideration	27. Before issuing letters patent to incorporate an association, the Minister shall take into account all matters that the Minister considers relevant to the application, including
	(a) the nature and sufficiency of the financial resources of the applicant or applicants as a source of continuing financial support for the association;
	(b) the soundness and feasibility of the plans of the applicant or applicants for the future conduct and development of the business of the association;
	(c) the business record and experience of the applicant or applicants;
	(d) the character and integrity of the applicant or applicants or, if the applicant or any of the applicants is a body corporate, its reputation for being operated in a manner that is consistent with the standards of good character and integrity;
	(e) whether the association will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution;
	(f) the impact of any integration of the businesses and operations of the applicant or applicants with those of the association on the conduct of those businesses and operations; and
	(g) the best interests of the financial system in Canada.
	250. The Act is amended by adding the following after section 31:
	Continuance
Federal corporations	31.1 (1) A body corporate incorporated under the Canada Business Corporations Act or any other Act of Parliament may apply to the Minister for letters patent continuing the body corporate as an association.
Other corporations	(2) A body corporate incorporated otherwise than by or under an Act of Parliament may, if so authorized by the laws of the jurisdiction where it is incorporated, apply to the Minister for letters patent continuing the body corporate as an association.
Continuance for the purpose of amalgamation	(3) A body corporate incorporated or continued otherwise than under this Act may apply to the Minister for letters patent continuing the body corporate as an association if the body corporate proposes to be continued under this Act for the purpose of amalgamating with another body corporate in compliance with this Act.
Application for continuance	31.2 (1) When a body corporate applies for letters patent under section 31.1, sections 24 to 27 apply in respect of the application, with any modifications that the circumstances require.
Special resolution approval	(2) When a body corporate applies for letters patent under section 31.1, the application must be duly authorized by a special resolution.
Copy of special resolution	(3) A copy of the special resolution must be filed with the application.
Power to issue letters patent	31.3 (1) On the application of a body corporate under subsection 31.1(1) or (2), the Minister may, subject to this Part, issue letters patent continuing the body corporate as an association if the body corporate
	(a) satisfies the requirements for incorporation as an association or will, immediately after the letters patent are issued, satisfy those requirements;
	(b) is organized and operated and carries on its business on a cooperative basis or will, immediately after the letters patent are issued, be organized and operated and carry on its business on a cooperative basis; and
	(c) has a capital and corporate structure that, if set out in the letters patent and by-laws, would meet the requirements of this Act.
Power to issue letters patent	(2) On the application of a body corporate under subsection 31.1(3), the Minister may, subject to this Part, issue letters patent continuing the body corporate as an association only if the Minister is of the opinion that the association that results from the amalgamation will
	(a) satisfy the requirements for incorporation as an association;
	(b) be organized and operated and carry on its business on a cooperative basis; and
	(c) have a capital and corporate structure that meet the requirements of this Act.
Issue of letters patent	(3) If letters patent are issued to a body corporate under subsection (1) or (2), section 27 applies in respect of the issue of letters patent, with any modifications that the circumstances require.
Effect of letters patent	31.4 On the day set out in the letters patent continuing a body corporate as an association under section 31.3,
	(a) the body corporate becomes an association as if it had been incorporated under this Act; and
	(b) the letters patent are deemed to be the incorporating instrument of the continued company.
Copy of letters patent	31.5 (1) When a body corporate is continued as an association under section 31.3, the Superintendent shall without delay send a copy of the letters patent to the appropriate official or public body in the jurisdiction in which the body corporate was incorporated.
Notice of issuance of letters patent	(2) The Superintendent shall cause to be published in the Canada Gazette a notice of the issuance of letters patent continuing a body corporate as an association.
Effects of continuance	31.6 Where a body corporate is continued as an association,
	(a) the property of the body corporate continues to be the property of the association;
	(b) the association continues to be liable for the obligations of the body corporate;
	(c) an existing cause of action or claim by or against the body corporate or any liability of the body corporate to prosecution is unaffected;
	(d) a civil, criminal or administrative action or proceeding pending by or against the body corporate may continue to be prosecuted by or against the association;
	(e) a conviction against, or any ruling, order or judgment in favour of or against the body corporate may be enforced by or against the association;
	(f) a person who, on the day the body corporate becomes an association, was the holder of a security issued by the body corporate is not deprived of any right or privilege available to the person at that time in respect of the security or relieved of any liability in respect of the security, but any such right or privilege may be exercised only in accordance with this Act; and
	(g) the by-laws of the body corporate, except those that are in conflict with this Act, continue as the by-laws of the association.
Transitional	31.7 (1) Despite any other provision of this Act or the regulations, the Minister may, on the recommendation of the Superintendent, by order, grant to an association in respect of which letters patent were issued under section 31.3 permission to
	(a) engage in a business activity specified in the order that an association is not otherwise permitted by this Act to engage in and that the body corporate continued as the association was engaging in at the time the application for the letters patent was made;
	(b) continue to have issued and outstanding debt obligations the issue of which is not authorized by this Act if the debt obligations were outstanding at the time the application for the letters patent was made;
	(c) hold assets that an association is not otherwise permitted by this Act to hold if the assets were held by the body corporate continued as the association at the time the application for the letters patent was made;
	(d) acquire and hold assets that an association is not otherwise permitted by this Act to acquire or hold if the body corporate continued as the association was obliged, at the time the application for the letters patent was made, to acquire those assets; and
	(e) maintain outside Canada any records or registers required by this Act to be maintained in Canada and maintain and process outside Canada information and data relating to the preparation and maintenance of those records or registers.
Duration	(2) The permission shall be expressed to be granted for a period specified in the order not exceeding
	(a) with respect to any activity described in paragraph (1)(a), thirty days after the date of issue of the letters patent or, if the activity is conducted under an agreement existing on the date of issue of the letters patent, the expiration of the agreement;
	(b) with respect to any matter described in paragraph (1)(b), ten years; and
	(c) with respect to any matter described in any of paragraphs (1)(c) to (e), two years.
Renewal	(3) Subject to subsection (4), the Minister may, on the recommendation of the Superintendent, by order, renew a permission with respect to any matter described in paragraphs (1)(b) to (d) for any further period or periods that the Minister considers necessary.
Limitation	(4) The Minister shall not grant to an association a permission
	(a) with respect to matters described in paragraph (1)(b), that purports to be effective more than ten years after the date of the approval for the association to commence and carry on business, unless the Minister is satisfied on the basis of evidence on oath provided by an officer of the association that the association will not be able at law to redeem at the end of the ten years the outstanding debt obligations to which the permission relates; and
	(b) with respect to matters referred to in paragraphs (1)(c) and (d), that purports to be effective more than ten years after the date of the approval for the association to commence and carry on business.
1998, c. 1, s. 382	251. Section 32 of the Act is replaced by the following
Transferring to other federal Acts	32. (1) An association may
	(a) apply for letters patent continuing the association as a company under subsection 33(1) of the Trust and Loan Companies Act or amalgamating and continuing the association as a company under section 228 and subsection 234(1) of that Act;
	(b) apply for letters patent continuing the association as a bank under subsection 35(1) of the Bank Act or amalgamating and continuing the association as a bank under section 223 and subsection 229(1) of that Act;
	(c) apply for letters patent continuing the association as a bank holding company under subsection 684(1) of the Bank Act or amalgamating and continuing the association as a bank holding company under section 803 and subsection 809(1) of that Act;
	(d) with the approval of the Minister, apply for a certificate of continuance under section 187 of the Canada Business Corporations Act; or
	(e) with the approval of the Minister, apply for a certificate of continuance, or a certificate of continuance and a certificate of amalgamation, under section 285 of the Canada Cooperatives Act.
Conditions for approval	(2) No approval referred to in paragraph (1)(d) or (e) may be given to an association unless the Minister is satisfied that
	(a) the application has been authorized by a special resolution of the members; and
	(b) the association holds no deposits that are insured under the Canada Deposit Insurance Corporation Act.
	252. Section 36 of the Act is replaced by the following:
Name	36. The name of an association shall include
	(a) the word ``cooperative'' or ``coopérative'', along with another word or expression indicating the financial nature of the association,
	(b) the phrase ``central credit union'', ``credit union central'' or ``fédération de caisses populaires'', or
	(c) any word or phrase specified by the Minister
	or any combination or derivative thereof.
1996, c. 6, s. 50	253. Section 37 of the Act is replaced by the following:
Affiliated entity	37. Despite section 35, an association that is affiliated with another entity may, with the consent of that entity and the approval of the Superintendent, be incorporated with, or change its name to, substantially the same name as that of the affiliated entity.
1996, c. 6, s. 52	254. Subsection 40(2) of the Act is replaced by the following:
Revoking name	(2) If an association has been directed under subsection (1) to change its name and has not, within sixty days after the service of the direction, changed its name to a name that is not prohibited by this Act, the Superintendent may revoke the name of the association and assign to it a name and, until changed in accordance with section 219 or 221 , the name of the association is thereafter the name so assigned.

Bill C-38

INCORPORATION, CONTINUANCE AND DISCONTINUANCE

Continuance