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Bill S-5

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SUMMARY

This enactment simplifies the provisions of the Blue Water Bridge Authority Act respecting the borrowing powers of the Blue Water Bridge Authority and places a monetary limit on them. Borrowing transactions will require the approval of the Ministers of Transport and Finance.

EXPLANATORY NOTES

Clause 1: Subsection 7(3) reads as follows:

(3) For greater certainty, it is hereby declared that section 30 of the Interpretation Act applies to the Bridge Authority.

Clause 2: Section 13 and the heading before it read as follows:

Issuance of Bonds

13. (1) Subject to the approval of the Governor in Council or such other authority in Canada as the Governor in Council may designate and such authority in the United States as the appropriate authority in the United States prescribes, the Bridge Authority may issue bonds in Canada or the United States for the purpose of obtaining funds with which to perform any of its functions, including refunding, under this Act.

(2) If the proceeds from any issue of bonds exceeds the cost, as finally determined, of carrying out the purposes for which any bonds were issued, the excess of proceeds over such cost shall be added to the sinking fund provided for in paragraph (b) of subsection (2) of section 9.

(3) A bond issued by the Bridge Authority

    (a) shall be sold at such price as the Bridge Authority may determine, but not less than a price at which the interest-yield basis will equal six and one-half per cent per annum as computed from standard tables of bond values;

    (b) shall bear interest at a coupon rate not exceeding six per cent per annum, payable semi-annually;

    (c) shall be payable solely from funds obtained by the Bridge Authority pursuant to statutory authority conferred by this or any other Act of the Parliament of Canada and by the appropriate authority in the United States;

    (d) shall mature not more than twenty-five years after its date of issue; and

    (e) shall be issued in such form, not inconsistent with this section, as the Bridge Authority may determine.

(4) In the discretion of the Bridge Authority, a bond issued by it

    (a) may be issued with a call provision reserving to the Bridge Authority the right to redeem the bond before maturity at a price or prices not exceeding the sum of the accrued interest plus one hundred and fifty per cent of the par value;

    (b) may be temporary, with or without coupons, and exchangeable for definitive bonds upon the issuance of the latter; or

    (c) may be issued in bearer form, or registrable as to principal, or registrable as to principal and interest.

(5) A bond issued by the Bridge Authority may be made payable in the currency of Canada or of the United States in the discretion of the Bridge Authority.

(6) The Bridge Authority may, in its discretion, issue bond anticipation notes payable from the proceeds of its bonds when issued; and a reference in this Act to bonds of the Bridge Authority includes bond anticipation notes.

(7) The Bridge Authority may purchase any bond issued by it at a price not exceeding the sum of the accrued interest plus one hundred and fifty per cent of the par value of the bond, and may exercise any contractual rights reserved to itself under the authority of paragraph (a) of subsection (4) or otherwise when in the judgment of the Bridge Authority it may be to its financial interest to do so.

Clause 3: Sections 14 to 16 read as follows:

14. (1) The Bridge Authority may enter into trust agreements to secure any bonds issued or to be issued by it.

(2) A trust agreement for the purpose referred to in subsection (1) may be made with any bank or trust company in Canada or the United States legally qualified to execute such a trust agreement.

(3) In specifying the rights and duties of the Bridge Authority, the trustee and the bondholders, a trust agreement may, subject to the rights of the holder of any bonds of the Bridge Authority then outstanding, and subject to section 17, contain such provisions and covenants affecting the security or protection of any bonds issued by the Bridge Authority as may be appropriate, including but not limited to the following:

    (a) setting forth any function that the Bridge Authority may perform pursuant to this Act and providing that the Bridge Authority will faithfully perform the same;

    (b) limiting the purposes and uses for which the proceeds of sale of any bonds issued by the Bridge Authority may be employed and pledging such proceeds to secure the payment of any bonds issued by the Bridge Authority;

    (c) specifying the conditions that must exist before additional bonds may be issued, limiting the amount thereof, and specifying any terms and conditions that such additional bonds and associated security instruments shall contain;

    (d) providing that such bonds shall be payable from any or all lawful revenues of the Bridge Authority and pledging the revenues of the Bridge Authority for such purpose;

    (e) providing for the appointment of trustees, depositaries, and paying-agents to receive, hold, disburse, invest, and re-invest all or any part of the funds of the Bridge Authority, for the approval by a representative of the bondholders of the security given by any bank or trust company with which funds of the Bridge Authority may be deposited and for any other means of safeguarding funds of the Bridge Authority;

    (f) setting forth procedures, if any, by which the terms of any contract with bondholders may be granted or abrogated, the amount of the bonds the holders of which must consent thereto and the manner in which such consent may be given; and

    (g) imposing reasonable restrictions upon the right of action of individual bondholders.

15. (1) Any trust agreement that is entered into by the Bridge Authority to secure any bonds or refunding bonds issued by it and that empowers the trustee thereunder to declare the principal amount of any such outstanding bonds or refunding bonds due and payable as a result of any default in payment of principal, interest or both in accordance with the terms thereof, shall provide therein and be subject as follows:

    (a) before declaring the said principal amount due and payable, the trustee shall give notice in writing of such default to the Minister of Finance;

    (b) if Parliament is in session at the time the notice referred to in paragraph (a) is received by the Minister of Finance, the trustee shall not declare the said principal amount due and payable before the prorogation of that session, but if Parliament is not in session at the time such notice is so received, he shall not declare the said principal amount due and payable before the prorogation of the next ensuing session of Parliament; and

    (c) if at the session of Parliament referred to in paragraph (b) Parliament takes any action as the result of which past due principal and interest with interest on past due interest, together with fees, counsel fees and expenses of the trustee and of the receiver, if any, are paid to the trustee not later than sixty days after such prorogation, the default shall thereby be remedied.

16. The bonds or other obligations of the Bridge Authority are not obligations of Her Majesty, nor is Her Majesty liable on any such obligations.

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