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Bill C-27

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Activities of Airport Authorities

Airport undertaking

50. (1) An airport authority may not own or operate any business or undertaking that is not an airport undertaking.

General rule

(2) In its airport undertaking, an airport authority may only

    (a) engage in essential and complementary activities;

    (b) acquire an interest in land, or in the province of Quebec a right relating to an immovable, if required for the operation or expansion of the facilities, air terminal building or road network referred to in paragraph (a) of the definition ``essential activities'' in subsection 2(1); and

    (c) acquire, operate, manage, maintain or develop other airport infrastructure in the region, and for that purpose acquire an interest in land, or in the province of Quebec a right relating to an immovable, if it does so under an agreement entered into with the Minister.

Operation of airport undertaking

(3) An airport authority must carry out its airport undertaking alone and not in partnership or as a joint venture with any person.

Operation as an air carrier

(4) An airport authority must not hold an ownership interest in, operate as or be an air carrier.

Essential activities

51. (1) Essential activities may only be carried out by

    (a) an airport authority; or

    (b) any person who acts on behalf of the airport authority and who

      (i) is not a corporation in which the authority holds an interest,

      (ii) does not engage in essential activities that, in total, represent more than 50% of the total costs incurred for essential activities at the airport,

      (iii) does not sit on the board of the authority or, in the case of a corporation, does not have directors, officers, employees, agents or mandataries who sit on the board,

      (iv) is not an air carrier or a corporation controlled by an air carrier, and

      (v) conducts its transactions with the authority on commercial terms.

Exception

(2) In carrying out essential activities, an airport authority may enter into a contract with any person for the provision of services to the authority if the person

    (a) conducts its transactions with the authority on commercial terms; and

    (b) is not an entity in which the authority holds an interest.

Exception

(3) A person who does not meet the requirements set out in paragraph (1)(b) may engage in essential activities under a contract with an airport authority that was in effect on September 1, 2002, until the day on which the contract expires, the contract is terminated or any renewal or extension of the contract expires.

Complementa ry activities

52. (1) Complementary activities may only be carried out by

    (a) an airport authority;

    (b) a corporation referred to in subsection 54(1); or

    (c) any other person who is not a corporation in which the airport authority holds an ownership interest.

Exception

(2) A person who does not meet the requirements set out in paragraph (1)(b) or (c) may engage in complementary activities under a contract with an airport authority that was in effect on September 1, 2002, until the day on which the contract expires, the contract is terminated or any renewal or extension of the contract expires.

Investments in Other Corporations

Ownership interest

53. No airport authority may have an ownership interest in any entity except a subsidiary or a corporation referred to in subsection 54(1). No subsidiary may have an ownership interest in any entity except a corporation.

Ownership interest in certain corporations

54. (1) An airport authority may hold an ownership interest in a Canadian-controlled corporation that

    (a) leases lands from the authority that are identified in the land use plan as unnecessary for essential activities in the future and meets the following criteria, namely,

      (i) the corporation is incorporated under the Canada Business Corporations Act solely for the purpose of constructing, operating, managing or maintaining buildings, facilities or infrastructure in order to develop those lands,

      (ii) it is not owned in whole or in part by an air carrier or a corporation controlled by an air carrier,

      (iii) it holds no interest in another corporation,

      (iv) it develops the lands alone and not in partnership or as a joint venture with any person,

      (v) it uses the lands in a manner that is compatible with air transportation, and

      (vi) its lease with the authority is on commercial terms;

    (b) provides to air carriers on the airport de-icing or fuelling facilities and services or facilities and services approved by the Minister and meets the following criteria, namely,

      (i) the corporation is incorporated under the Canada Business Corporations Act solely to provide those facilities and services,

      (ii) it holds no interest in another corporation,

      (iii) it conducts its transactions with the authority on commercial terms, and

      (iv) it provides the facilities and services alone and not in partnership or as a joint venture with any person; or

    (c) has entered into a contract with the authority for the provision of services referred to in the definition ``complementary activities'' in subsection 2(1) on the airport, if

      (i) the contract was awarded to the lowest bidder under a public bid solicitation process,

      (ii) the corporation does not impose a charge on any person other than the authority,

      (iii) the corporation conducts its transactions with the authority on commercial terms,

      (iv) the corporation is incorporated under the Canada Business Corporations Act solely to provide those services to the authority,

      (v) the corporation holds no interest in another corporation, and

      (vi) the corporation provides the services alone and not in partnership or as a joint venture with any person.

Regulations

(2) The Governor in Council may make regulations respecting the criteria, including additional criteria, that are applicable to corporations referred to in subsection (1).

Application

55. (1) Subsections 56(3) and (4) apply in respect of the directors and officers of corporations referred to in subsection 54(1) as if they were subsidiaries.

Application

(2) Section 96 applies in respect of those corporations as if they were airport authorities.

Requirements for subsidiaries

56. (1) A subsidiary must meet the following criteria:

    (a) it must be incorporated under the Canada Business Corporations Act if it operates in North America;

    (b) its sole purpose must be

      (i) to engage in activities, with respect to an airport whose name is not set out in Part 1 or 2 of Schedule 1 opposite the name of the airport authority of which it is a subsidiary, that would meet the criteria for essential or complementary activities if they were carried out in respect of an airport whose name is listed opposite the name of that airport authority, or

      (ii) to carry out activities referred to in subsection 54(1) on an airport whose name is set out in Part 1 or 2 of Schedule 1 opposite the name of the airport authority of which it is a subsidiary; and

    (c) its transactions with the airport authority must be conducted on commercial terms.

Regulations

(2) The Governor in Council may make regulations respecting the criteria, including additional criteria, that are applicable to a subsidiary referred to in subsection (1).

Chairperson

(3) The chairperson of the airport authority may not be the chairperson or chief executive officer of a subsidiary.

Directors

(4) Less than 50% of the directors of the airport authority may be directors of a subsidiary.

Maximum financial exposure

57. (1) An airport authority may increase its financial exposure in other corporations in any year by up to 2% of its unconsolidated gross revenues for the previous fiscal year if the increase does not make its total financial exposure greater than 10% of its unconsolidated gross revenues for that previous fiscal year.

Financial exposure

(2) Financial exposure means the aggregate of the following amounts, not including amounts invested before January 1, 2003:

    (a) the amount provided to another corporation by the airport authority in equity and contributed capital minus the amount of any dividends received and any proceeds from the sale of shares of that corporation,

    (b) the amount of the loans made to another corporation, including earned but unpaid interest, minus any amounts repaid,

    (c) the value of contributions in kind to another corporation;

    (d) the amount of outstanding loan guarantees in respect of another corporation,

    (e) the amount of payments made in fulfilment of loan guarantees,

    (f) the amount of all indemnities in relation to another corporation,

    (g) any reserves set up for the purposes of paragraphs (a) and (b); and

    (h) any amount required to be paid in respect of the activities of a corporation referred in subsection 54(1), including an amount to be paid pursuant to any judgement of a court.

Dividend

(3) Subject to subsection (4), a corporation in which an airport authority holds an ownership interest must declare and pay a dividend to its shareholders, within six months after the end of its fiscal year, in an amount equal to 100% of the profits available for distribution for the year minus the amount that it is prudent to set aside for necessary reserves.

Exception

(4) A corporation must not declare or pay a dividend if there are reasonable grounds for believing that

    (a) the corporation is, or would after the payment be, unable to pay its liabilities as they become due; or

    (b) the realizable value of the corporation's assets would thereby be less than the aggregate of its liabilities and capital.

Indemnity

(5) An airport authority may not hold an ownership interest in another corporation unless the corporation agrees to indemnify the authority for any amount that it is required to pay in respect of that corporation, other than an amount referred to in subsection (2).

Statement to Minister

58. (1) Within 30 days after the coming into force of this section, every airport authority must submit to the Minister a statement of the total amount of the authority's financial exposure in any corporation in which it had an ownership interest on the coming into force of this section, including all information and documents in the authority's possession respecting its investments in those corporations.

Ministerial approval

(2) The Minister may permit the airport authority's financial exposure to exceed the 10% limit referred to in subsection 57(1) if the Minister considers it necessary in order to keep Canadian control over a corporation referred to in subsection 54(1) or 56(1) that was in existence on January 1, 2003.

Application

(3) An airport authority must meet the requirements of sections 53 to 57, and ensure that any corporation referred to in those sections that was in existence on the coming into force of this section meets those requirements and the requirements of this section, within five years after that coming into force.

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