Bill S-19

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First Reading

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1998, c. 1	CANADA COOPERATIVES ACT
	136. *(1) The definitions ``distributing cooperative'', ``member loan'', ``person'' and ``security'' in subsection 2(1) of the Canada Cooperatives Act* are replaced by the following:**
``distributing cooperative'' « coopérative ayant fait appel au public »	``distributing cooperative'' means, subject to subsections 4(4) and (5), a distributing cooperative as defined in the regulations .
``member loan'' « prêt de membre »	``member loan'' means a loan required by the cooperative from its members as a condition of membership or to continue membership in the cooperative, and, for the purpose of Parts 8, 16, 17, 18.1 and 19 and subsection 163(2), a member loan is deemed to be a membership share issued at par value.
``person'' « personne »	``person'' means an individual or an entity, and includes a personal representative.
``security'' « valeur mobilière »	``security'' includes an investment share, a debt obligation of a cooperative and a certificate evidencing such a share or debt obligation and, for the purposes of Parts 18.1 and 19, includes a membership share.
	(2) Subsection 2(1) of the Act is amended by adding the following in alphabetical order:
``personal representa- tive'' « représen- tant personnel »	``personal representative'' means a person who stands in place of and represents another person including, but not limited to, a trustee, an executor, an administrator, a receiver, an agent, a liquidator of a succession, a guardian, a tutor, a curator, a mandatary or an attorney.
	137. Subsections 4(4) to (6) of the Act are replaced by the following:
Exemptions - on application by cooperative	(4) On the application of a cooperative, the Director may determine that the cooperative is not or was not a distributing cooperative if the Director is satisfied that the determination would not be prejudicial to the public interest.
Exemptions - classes of cooperatives	(5) The Director may determine that a class of cooperatives are not or were not distributing cooperatives if the Director is satisfied that the determination would not be prejudicial to the public interest.
	138. Subsection 12(1) of the English version of the Act is amended by striking out the word ``and'' at the end of paragraph (b), by adding the word ``and'' at the end of paragraph (c) and by adding the following after paragraph (c):
	(d) a notice that is required to be given under subsection 30(2) or 81(1) indicates that the cooperative, if it came into existence, would be in compliance with the Act.
	139. Paragraph 16(b) of the Act is replaced by the following:
	(b) contained undertakings by every member and the successors, assigns and personal representatives of every member to observe all the provisions of the articles and by-laws.
	140. Paragraph 19(4)(a) of the Act is replaced by the following:
	(a) make an order respecting the nature and extent of the obligations and liability under the contract of the cooperative and the person who entered into or purported to enter into the contract by or on behalf of the cooperative; and
	141. Subsections 20(4) and (5) of the Act are replaced by the following:
Alternate form	(4) The name of a cooperative may be set out in its articles in an English form, a French form, an English form and a French form, or a combined English and French form, so long as the combined form meets the prescribed criteria. The cooperative may use and be legally designated by any such form.
	142. (1) Subsection 28(1) of the Act is amended by adding the word ``or'' at the end of paragraph (e) and by replacing paragraphs (f) and (g) with the following:
	(f) a sale, lease or exchange of all or substantially all of the property of the cooperative was not authorized.
	(2) Subsection 28(2) of the English version of the Act is replaced by the following:
Exception	(2) Subsection (1) does not apply in respect of a person who has, or ought to have, knowledge of a situation described in that subsection by virtue of their relationship to the cooperative.
	143. Subsection 31(3) of the Act is replaced by the following:
When records or registers kept outside Canada	(3) Despite subsection (1), but subject to the Income Tax Act, the Excise Tax Act, the Customs Act and any other Act administered by the Minister of National Revenue , a cooperative may keep all or any of its records mentioned in paragraphs (1)(a), (b), (c), (f) and (g) and (2)(a) and (b) at a place outside Canada , if
	(a) the records are available for inspection, by means of a computer terminal or other technology , during regular office hours at the registered office or another office in Canada designated by the directors; and
	(b) the cooperative provides the technical assistance to facilitate an inspection referred to in paragraph (a) .
	144. Subsection 32(4) of the Act is replaced by the following:
Inspection and copying of records by members, creditors and shareholders	(4) Members, creditors and shareholders of the cooperative, their personal representatives and the Director may examine the records referred to in paragraphs 31(1)(a), (b), (c) (f) and (g) during the usual business hours of the cooperative and may take extracts from the records, free of charge, or have copies of them made after payment of a reasonable fee.
	145. Subsection 33(1) of the Act is replaced by the following:
Lists	33. (1) Members, shareholders and creditors of a cooperative and their personal representatives and, where the cooperative is a distributing cooperative, any other person, may request that the cooperative provide them with a list of members or shareholders, no later than ten days after the cooperative receives the affidavit referred to in subsection (2) and after payment of a reasonable fee.
	146. Subsection 48(3) of Act is replaced by the following:
Electronic meeting	(3) Subject to the by-laws, a member or a shareholder may, in accordance with the regulations, if any , attend a meeting of the cooperative by means of a telephonic, electronic or other communication facility if it permits all participants to communicate adequately with each other during the meeting.
Clarification	(3.1) For greater certainty, a meeting of the cooperative may be held entirely by telephonic, electronic or other communication facility so long as the requirements of subsection (3) are met.
	147. Subsection 50(3) of the Act is replaced by the following:
Order to delay calling of annual meeting	(3) Despite subsection (1), the cooperative may apply to the court for an order extending the time for calling an annual meeting.
	148. (1) Subsection 51(1) of the Act is replaced by the following:
Record date	51. (1) The directors may, within the prescribed period , fix in advance a date as the record date for the determination of the members or shareholders who are entitled to receive payment of a dividend or for any other purpose except the right to receive notice of, or to vote at, a meeting.
	(2) Subsections 51(3) and (4) of the Act are replaced by the following:
Record date - notice of shareholders' meetings	(3) For the purpose of determining the shareholders who are entitled to receive notice of a meeting of the shareholders, the directors may, within the prescribed period , fix in advance a date as the record date for that determination.
Record date - voting at shareholders' meetings	(4) For the purposes of determining the shareholders who are entitled to vote at a meeting of shareholders, the directors may, within the prescribed period , fix in advance a date as the record date for that determination.
	(3) The portion of subsection 51(6) of the Act before paragraph (a) is replaced by the following:
If record date fixed	(6) If a record date with respect to shareholders is fixed under this section, unless notice of the date is waived by each shareholder whose name is set out in the securities register at the close of business on the day the directors fix the record date, notice of the record date must be given within the prescribed period
	149. Subsection 52(1) of the Act is replaced by the following:
Notice of meetings	52. (1) Notice of the time and place of a meeting of a cooperative must be sent within the prescribed period
	(a) to each person who is entitled to vote at the meeting;
	(b) to each director; and
	(c) to the auditor of the cooperative, if any.
Exception	(1.1) In the case of a cooperative that is not a distributing cooperative, the notice may be sent within a shorter period if so specified in the articles.
	150. (1) Subsections 58(2) and (3) of the Act are replaced by the following:
Proposals by members or directors to amend articles	(2) Any member or director may, in accordance with section 290, make a proposal to amend the articles.
Proposals by other persons to amend articles	(2.1) Any other person may, in accordance with section 290, make a proposal to amend the articles if the person
	(a) has been, for at least the prescribed period, the registered holder or the beneficial owner of at least the prescribed number of outstanding investment shares of the cooperative; or
	(b) has the support of persons who, in the aggregate, and including or not including the person that submits the proposal, have been, for at least the prescribed period, the registered holders, or the beneficial owners of, at least the prescribed number of outstanding investment shares of the cooperative.
Information to be provided	(2.2) A proposal submitted by a person described in paragraph (2.1)(a) must be accompanied by the following information:
	(a) the name and address of the person and of the person's supporters, if applicable; and
	(b) the number of investment shares held or owned by the person and by the person's supporters, if applicable, and the date the investment shares were acquired.
Information not part of proposal	(2.3) The information provided under subsection (2.2) does not form part of the proposal or of the supporting statement referred to in subsection (3) and is not included for the purposes of the prescribed maximum word limit set out in subsection (3).
Proof may be required	(2.4) If requested by the cooperative within the prescribed period, a person who submits a proposal must provide proof, within the prescribed period, that the person meets the requirements of subsection (2.1).
Proposal and statement to accompany notice of meeting	(3) A proposal submitted for consideration at a meeting must be attached to the notice of the meeting, together with, if requested by the person making the proposal, a statement in support of the proposal and the name and address of person making the proposal. The statement and the proposal must together not exceed the prescribed maximum number of words .
	(2) Paragraph 58(4)(a) of the Act is replaced by the following:
	(a) the proposal is not submitted to the cooperative at least the prescribed number of days before the anniversary date of the notice of meeting that was sent to members and shareholders in connection with the previous annual meeting;
	(3) Paragraph 58(4)(b) of the English version of the Act is replaced by the following:
	(b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal grievance against the cooperative or its directors, officers, members or security holders;
	(4) Paragraphs 58(4)(c) and (d) of the Act are replaced by the following:
	(c) not more than the prescribed period before the receipt of a proposal , a person failed to present, at a meeting, a proposal that, at the person's request, had been attached by the cooperative to the notice of the meeting;
	(d) substantially the same proposal was attached to a notice of meeting relating to a meeting of the cooperative held not more than the prescribed period before the receipt of the proposal and the proposal did not receive the prescribed minimum amount of support at the meeting ; or
	(5) Section 58 of the Act is amended by adding the following after subsection (4):
Cooperative may refuse to include proposal	(4.1) If a person described in subsection (2.1) makes a proposal and fails to continue to hold or own the number of investment shares referred to in that subsection up to and including the day of the meeting, the cooperative is not required to include in the notice of a meeting, or attach to it, any proposal submitted by that person for any meeting held within the prescribed period following the date of the meeting.
	151. Subsections 60(1) and (2) of the Act are replaced by the following:
Refusal to include proposal	60. (1) If a cooperative refuses to include a proposal in a notice of a meeting referred to in section 52, the cooperative, not later than the prescribed period after receiving the proposal, must notify the person submitting the proposal of its intention to omit the proposal from the notice and send the person a statement of the reasons for the refusal.
Restraining order by court	(2) On the application of a person submitting a proposal that claims to be aggrieved by a cooperative's refusal under subsection (1), a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order it thinks fit.
	152. The Act is amended by adding the following after section 64:
Loaned share agreement	64.1 Unless otherwise specified in a securities lending agreement, the voting rights of a loaned investment share accrue to the borrower of the share.
	153. Subsection 69(3) of the Act is amended by adding the word ``or'' at the end of paragraph (a), by striking out the word ``or'' at the end of paragraph (b) and by repealing paragraph (c).
	154. Section 70 of the Act is repealed.
	155. Paragraph 71(1)(b) of the Act is replaced by the following:
	(b) it is not feasible to conduct the meeting in the manner required by this Act or the by-laws; or
	156. Subsection 78(4) of the Act is replaced by the following:
Resident in Canada	(4) A majority of the directors must be resident in Canada. However, if the cooperative has only four directors, at least two directors must be resident in Canada.
	157. Subsection 83(7) of the Act is replaced by the following:
Consent in writing	(7) A consent in writing referred to in paragraph (6)(a) is effective during the individual's term of office unless it is revoked or another date is specified in the consent.
	158. (1) The portion of subsection 85(1) of the Act before paragraph (a) is replaced by the following:
Vacancy on board	85. (1) Subject to subsection (3), if there is a vacancy on the board of directors, except a vacancy because of an increase in number of directors or because of a failure to elect or appoint the number of directors required by the articles, and there is still a quorum on the board, the remaining directors may
	(2) The portion of subsection 85(2) of the Act before paragraph (a) is replaced by the following:

Bill S-19

CANADA COOPERATIVES ACT