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Bill C-8

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	Administrative Monetary Penalties
	Interpretation
Definitions	24. (1) The following definitions apply in this section and in sections 25 to 37.
``entity'' « entité »	``entity'' means an entity as defined in section 2 of the Bank Act.
``financial institutions Act'' « loi sur les institutions financières »	``financial institutions Act'' means the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act, the Pension Benefits Standards Act, 1985 and the Trust and Loan Companies Act.
``penalty'' « pénalité »	``penalty'' means an administrative monetary penalty.
``person'' Version anglaise seulement	``person'' means a natural person or an entity.
Non-applicati on	(2) This section and sections 25 to 37 do not apply in respect of consumer provisions as defined in section 2 of the Financial Consumer Agency of Canada Act.
	Violations
Regulations	25. (1) The Governor in Council may make regulations
	(a) designating, as a violation that may be proceeded with under sections 26 to 37, the contravention of a specified provision of a financial institutions Act or of a specified provision of a regulation made under one or the non-compliance with
	(i) an order made by the Superintendent under a financial institutions Act,
	(ii) a direction made under a financial institutions Act to cease or refrain from committing an act or pursuing a course of conduct that is an unsafe or unsound practice, or to perform a remedial act,
	(iii) terms and conditions imposed by the Superintendent or an undertaking given to the Superintendent under a financial institutions Act, or
	(iv) a prudential agreement entered into with the Superintendent under a financial institutions Act;
	(b) classifying each violation as a minor violation, a serious violation or a very serious violation;
	(c) fixing, in accordance with subsection (2), a penalty, or a range of penalties, in respect of any violation;
	(d) respecting the service of documents required or authorized to be served under sections 26 to 37, including the manner and proof of service and the circumstances under which documents are deemed to be served; and
	(e) generally for carrying out the purposes and provisions of section 24, this section and sections 26 to 37.
Maximum penalties	(2) The maximum penalty for a violation is
	(a) in the case of a violation that is committed by a natural person, $10,000 for a minor violation, $50,000 for a serious violation and $100,000 for a very serious violation; and
	(b) in the case of a violation that is committed by an entity, $25,000 for a minor violation, $100,000 for a serious violation and $500,000 for a very serious violation.
Criteria for penalty	26. Except if a penalty is fixed under paragraph 25(1)(c), the amount of a penalty shall, in each case, be determined taking into account
	(a) the degree of intention or negligence on the part of the person who committed the violation;
	(b) the harm done by the violation;
	(c) the history of the person who committed the violation with respect to any prior violation or conviction under a financial institutions Act within the five-year period immediately before the violation; and
	(d) any other criteria that may be prescribed by regulation.
How act or omission may be proceeded with	27. If a contravention or non-compliance that is designated under paragraph 25(1)(a) can be proceeded with either as a violation or as an offence, proceeding in one manner precludes proceeding in the other.
	Proceedings
Commission of violation	28. (1) Every contravention or non-compliance that is designated under paragraph 25(1)(a) constitutes a violation and the person who commits the violation is liable to a penalty determined in accordance with sections 25 and 26.
Notice of violation	(2) If the Superintendent believes on reasonable grounds that a person has committed a violation, he or she may issue, and shall cause to be served on the person, a notice of violation.
Contents of notice	(3) A notice of violation shall name the person believed to have committed a violation, identify the violation and set out
	(a) the penalty that the Superintendent proposes to impose;
	(b) the right of the person, within 30 days after the notice is served or within any longer period that the Superintendent specifies, to pay the penalty or to make representations to the Superintendent with respect to the violation and the proposed penalty, and the manner for doing so; and
	(c) the fact that, if the person does not pay the penalty or make representations in accordance with the notice, the person will be deemed to have committed the violation and the Superintendent may impose a penalty in respect of it.
	Determination of Responsibility and Penalty
Payment of penalty	29. (1) If the person pays the penalty proposed in the notice of violation, the person is deemed to have committed the violation and proceedings in respect of it are ended.
Representa- tions to Superinten- dent	(2) If the person makes representations in accordance with the notice, the Superintendent shall decide, on a balance of probabilities, whether the person committed the violation and, if so, may, subject to any regulations made under paragraph 25(1)(c), impose the penalty proposed, a lesser penalty or no penalty.
Failure to pay or make representa- tions	(3) A person who neither pays the penalty nor makes representations in accordance with the notice is deemed to have committed the violation and the Superintendent may, subject to any regulations made under paragraph 25(1)(c), impose the penalty proposed, a lesser penalty or no penalty.
Notice of decision and right of appeal	(4) The Superintendent shall cause notice of any decision made under subsection (2) or (3) to be issued and served on the person together with, in the case of a serious violation or very serious violation, notice of the right of appeal under section 30.
	Appeal to Federal Court
Right of appeal	30. (1) A person on whom a notice under subsection 29(4) in respect of a serious violation or very serious violation is served may, within 30 days after the notice is served, or within any longer period that the Court allows, appeal the decision to the Federal Court.
Court to take precautions against disclosing	(2) In an appeal, the Court shall take every reasonable precaution, including, when appropriate, conducting hearings in private, to avoid the disclosure by the Court or any person of confidential information referred to in subsection 22(1).
Powers of Court	(3) On an appeal, the Court may confirm, set aside or, subject to any regulations made under paragraph 25(1)(c), vary the decision of the Superintendent.
	Enforcement
Debts to Her Majesty	31. (1) A penalty constitutes a debt due to Her Majesty in right of Canada and may be recovered in the Federal Court.
Time limit	(2) No proceedings to recover a debt referred to in subsection (1) may be commenced later than five years after the debt became payable.
Proceeds payable to Receiver General	(3) A penalty paid or recovered under sections 25 to 30, this section and sections 32 to 37 is payable to and shall be remitted to the Receiver General.
Certificate	32. (1) The unpaid amount of any debt referred to in subsection 31(1) may be certified by the Superintendent.
Registration in Federal Court	(2) Registration in the Federal Court of a certificate made under subsection (1) has the same effect as a judgment of that Court for a debt of the amount specified in the certificate and all related registration costs.
	Rules about Violations
Violations not offences	33. For greater certainty, a violation is not an offence and, accordingly, section 126 of the Criminal Code does not apply in respect of one.
Due diligence available	34. (1) Due diligence is a defence in a proceeding in relation to a violation.
Common law principles	(2) Every rule and principle of the common law that renders a circumstance a justification or an excuse in relation to a charge for an offence under a financial institutions Act applies in respect of a violation to the extent that it is not inconsistent with this Act.
Continuing violation	35. A minor violation that is continued on more than one day constitutes a separate violation for each day during which it is continued.
	General Provisions
Evidence	36. In a proceeding in respect of a violation or a prosecution for an offence, a notice purporting to be issued under subsection 28(2) or 29(4) or a certificate purporting to be made under subsection 32(1) is admissible in evidence without proof of the signature or official character of the person appearing to have signed it.
Time limit	37. (1) No proceedings in respect of a violation may be commenced later than six months after the subject-matter of the proceedings became known to the Superintendent, in the case of a minor violation, or two years after the subject-matter of the proceedings became known to the Superintendent, in the case of a serious violation or a very serious violation.
Certificate of Superinten- dent	(2) A document appearing to have been issued by the Superintendent, certifying the day on which the subject-matter of any proceedings became known to the Superintendent, is admissible in evidence without proof of the signature or official character of the person appearing to have signed it and is, in the absence of evidence to the contrary, proof of the matter asserted in it.
	477. Sections 23.3, 24 and 25 of the Act are renumbered as sections 38, 39 and 40, respectively.
1991, c. 45	Trust and Loan Companies Act
	*478. (1) The definition ``subsidiary'' in section 2 of the Trust and Loan Companies Act* is replaced by the following:**
``subsidiary'' « filiale »	``subsidiary'' means an entity that is a subsidiary of another entity within the meaning of section 5;
1991, c. 47, par. 753(a), c. 48, par. 493(a)	(2) Paragraphs (c) and (d) of the definition ``financial institution'' in section 2 of the Act are replaced by the following:
	(c) an association to which the Cooperative Credit Associations Act applies or a central cooperative credit society for which an order has been made under subsection 473(1) of that Act,
	(d) an insurance company or a fraternal benefit society incorporated or formed under the Insurance Companies Act,
	(3) Section 2 of the Act is amended by adding the following in alphabetical order:
``Agency'' « Agence »	``Agency'' means the Financial Consumer Agency of Canada established under section 3 of the Financial Consumer Agency of Canada Act;
``bank holding company'' « société de portefeuille bancaire »	``bank holding company'' means a body corporate that is incorporated or formed under Part XV of the Bank Act;
``Commission er'' « commissaire »	``Commissioner'' means the Commissioner of the Financial Consumer Agency of Canada appointed under section 4 of the Financial Consumer Agency of Canada Act;
``consumer provision'' « disposition visant les consomma- teurs »	``consumer provision'' means a provision referred to in paragraph (d) of the definition ``consumer provision'' in section 2 of the Financial Consumer Agency of Canada Act;
``equity'' « capitaux propres »	``equity'', in respect of a company, means its equity as determined in accordance with the regulations;
``federal financial institution'' « institution financière fédérale »	``federal financial institution'' means
	(a) a company,
	(b) a bank,
	(c) an association to which the Cooperative Credit Associations Act applies or a central cooperative credit society for which an order has been made under subsection 473(1) of that Act, or
	(d) an insurance company or a fraternal benefit society incorporated or formed under the Insurance Companies Act;
``insurance holding company'' « société de portefeuille d'assuran- ces »	``insurance holding company'' means a body corporate that is incorporated or formed under Part XVII of the Insurance Companies Act;
	479. The Act is amended by adding the following before section 3:
Major shareholder	2.1 For the purposes of this Act, a person is a major shareholder of a body corporate if
	(a) the aggregate of the shares of any class of voting shares of the body corporate that are beneficially owned by the person and that are beneficially owned by any entities controlled by the person is more than 20 per cent of the outstanding shares of that class of voting shares of the body corporate; or
	(b) the aggregate of the shares of any class of non-voting shares of the body corporate that are beneficially owned by the person and that are beneficially owned by any entities controlled by the person is more than 30 per cent of the outstanding shares of that class of non-voting shares of the body corporate.
Widely held	2.2 For the purposes of this Act, a body corporate is widely held if it has no major shareholder.
	480. (1) Paragraph 3(1)(d) of the French version of the Act is replaced by the following:
	d) dans tous les cas, la personne dont l'influence directe ou indirecte auprès de l'entité est telle que son exercice aurait pour résultat le contrôle de fait de celle-ci.
	(2) The portion of subsection 3(3) of the Act before paragraph (a) is replaced by the following:
Deemed control	(3) A person is deemed to control, within the meaning of paragraph (1)(a) or (b), an entity if the aggregate of
	(3) Section 3 of the Act is amended by adding the following after subsection (3):
Guidelines	(4) The Minister may, for any purpose of any provision of this Act that refers to control within the meaning of paragraph (1)(d), make guidelines respecting what constitutes such control, including guidelines describing the policy objectives that the guidelines and the relevant provisions of the Act are intended to achieve and, if any such guidelines are made, the reference to paragraph (1)(d) in that provision shall be interpreted in accordance with the guidelines.

Bill C-8

Administrative Monetary Penalties

Trust and Loan Companies Act