Bill C-20

1st Session, 39th Parliament,

55 Elizabeth II, 2006

house of commons of canada

BILL C-20

An Act respecting airports, airport authorities and other airport operators and amending the Transportation Appeal Tribunal of Canada Act

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

SHORT TITLE

1. This Act may be cited as the Canada Airports Act.

INTERPRETATION

2. The following definitions apply in this Act.

“aeronautical fee” means a charge that is imposed on aircraft operators for services and the use of facilities that are provided by or on behalf of an airport operator

(a) for the landing, taking off, movement or parking of aircraft;

(b) for the enplaning or deplaning of persons, including their movement between an aircraft and an air terminal building or through an air terminal building; or

(c) for the loading on aircraft or the unloading off aircraft of baggage or cargo or the processing of baggage or cargo.

For the purposes of paragraphs (b) and (c), the reference to facilities does not include facilities that are leased to an air carrier.

“Agency” means the Canadian Transportation Agency referred to in subsection 7(1) of the Canada Transportation Act.

“air carrier” means the operator of an aircraft whose services for the transportation of passengers or cargo are available to the public.

“aircraft operator”, in respect of an airport, means an air carrier, or any other operator of an aircraft, who uses the airport.

“airport authority” means a corporation set out in the schedule.

“airport operator” means

(a) an airport authority;

(b) the Government of Yukon, in respect of the airport it owns in Whitehorse, the Government of the Northwest Territories, in respect of the airport it owns in Yellowknife, and the Government of Nunavut, in respect of the airport it owns in Iqaluit; or

(c) anyone who is not referred to in paragraph (a) or (b) and who operates an airport in Canada.

“common-law partner”, in respect of an individ-ual, means a person who is cohabiting with the individual in a conjugal relationship, having so cohabited for a period of at least one year.

“entity” includes a corporation, a partnership, a trust, a joint venture or an unincorporated association or organization.

“fee” means an aeronautical fee or a passenger fee.

“financial requirements” means the amount of money that is required by an airport operator for the following purposes, with no amount being counted as required under more than one paragraph:

(a) to cover all of the operator’s costs, determined in accordance with generally accepted accounting principles;

(b) to meet debt servicing requirements and other contractual obligations related to the borrowing of money; and

(c) to provide reserves that are necessary, in the operator’s opinion, for future expenditures.

“Minister” means the Minister of Transport.

“nominating body” means an entity that nominates candidates for the office of director of an airport authority under any of sections 88 to 90 and 92.

“officer” means a person who acts as chief executive officer or chief financial officer of an airport authority or of another entity or any other person who is designated as an officer by the board of the authority or by the entity.

“passenger fee” means a charge imposed by an airport operator that is payable only by persons who travel on aircraft that land or take off at the operator’s airport, regardless of the manner in which and by whom the charge is collected.

“principal airport”, in respect of an airport authority, means an airport set out in column 2 of the schedule opposite the name of the authority.

“slot” means a period of time that is allocated to any person during which an aircraft operated by that person is authorized to land at or take off from an airport.

“transfer date”, in respect of an airport authority, means the date, as set out in the schedule opposite the name of the authority, on which the Minister transferred to the authority the operation, management, maintenance and development of the authority’s principal airport.

“Tribunal” means the Transportation Appeal Tribunal of Canada established by subsection 2(1) of the Transportation Appeal Tribunal of Canada Act.

“users” means aircraft operators and passengers.

3. (1) For the purposes of this Act, an airport is considered to have met a particular passenger threshold if, for each of three consecutive calendar years, the sum of the annual number of passengers enplaned at the airport and the annual number of passengers deplaned at the airport is equal to or greater than that threshold. An airport that has attained a particular passenger threshold is considered to continue to meet the threshold until, for each of three consecutive calendar years, that sum falls below that threshold.

(2) If an airport authority operates more than one principal airport, each of those airports is deemed to meet the threshold of the principal airport that meets the highest threshold.

4. (1) For the purposes of this Act, persons are related if

(a) they are close relatives;

(b) they carry on business together;

(c) one is the employer of the other;

(d) one is a director or officer of the other; or

(e) they are both directors or officers of the same for-profit entity, other than a corporation in which the airport authority has an ownership interest.

(2) For the purposes of paragraph (1)(a), “close relative”, in relation to an individual, means

(a) a spouse or common-law partner of the individual;

(b) a child, grandchild, parent or grandparent of the individual or of the individual’s spouse or common-law partner;

(c) a child of the individual’s parent or a child of a parent of the individual’s spouse or common-law partner;

(d) the spouse or common-law partner of any person referred to in paragraph (b) or (c); or

(e) any other person who is a member of a class of persons prescribed by the regulations for the purposes of this subsection.

(3) The Governor in Council may make regulations prescribing classes of persons for the purposes of paragraph (2)(e).

5. (1) For the purposes of this Act, a corporation is controlled by a person if

(a) shares or memberships in the corporation to which are attached more than 50% of the votes that may be cast to elect directors of the corporation are held, other than by way of security only, by or for the benefit of that person; and

(b) the votes attached to those shares or memberships are sufficient, if exercised, to elect a majority of the directors of the corporation.

(2) For the purposes of this Act, a corporation is a subsidiary of another corporation if

(a) it is controlled by

(i) that other corporation,

(ii) that other corporation and one or more corporations that are themselves controlled by that other corporation, or

(iii) two or more corporations that are themselves controlled by that other corporation; or

(b) it is a subsidiary of a corporation that is itself a subsidiary of that other corporation.

(3) For the purposes of this Act, the ownership interest of a subsidiary of an airport authority in a corporation is deemed to be an ownership interest of the authority in that corporation.

HER MAJESTY

6. This Act is binding on Her Majesty in right of Canada or a province.

APPLICATION OF ACT

7. This Act does not apply in respect of airports operated under the authority of the Minister of National Defence.

CANADIAN AIRPORT POLICY

8. It is in the public interest that Canada have a national network of airports that supports the achievement of national, regional and local economic and social objectives and promotes Canada’s international competitiveness and trade objectives, which objectives are most likely to be achieved if each airport in the national network is operated in a manner that

(a) provides for a high level of safety, security and environmental protection;

(b) is efficient and economically sustainable and responds effectively to the needs of users;

(c) takes into account the importance of the airport to the economic needs and priorities of the communities and region that it serves;

(d) is transparent and provides users, and the public in the region served by that airport, with the opportunity to express their views on airport operations, airport development and fees;

(e) is businesslike and reflects the high degree of autonomy that airport operators have in the management of facilities and services;

(f) provides air carriers with equitable access to facilities and services;

(g) permits Canada to meet its international obligations and compete in global markets; and

(h) takes into account the role played by airports in linking the air transportation system with other modes of transportation.

PART 1

AIRPORTS

Powers, Duties and functions of Minister and Governor in Council

9. The Minister is responsible for the protection of the public interest in respect of airports.

10. The Minister shall monitor the operation and performance of airports and the national network of airports.

11. (1) The Minister may audit or review, or cause to be audited or reviewed, the business and affairs and the records and procedures of airport authorities.

(2) The person conducting the audit or review has all the powers of an inspector under this Act.

12. (1) The Minister may impose any terms and conditions that the Minister considers appropriate on any direction that the Minister is empowered to make under this Act and may specify in the direction the time within which the direction is required to be complied with.

(2) The direction shall be sent by registered mail to the individual or entity to which it is directed or shall be served on that individual or entity.

(3) The Statutory Instruments Act does not apply to the direction.

13. (1) The Minister may impose any terms and conditions that the Minister considers appropriate on any approval that the Minister is empowered to give under this Act.

(2) The Statutory Instruments Act does not apply to the approval.

14. The Minister shall appoint one or more persons to conduct a comprehensive review of the operation of this Act and the performance of airport operators and airports for the five-year period after the day on which this section comes into force. The review shall address, among other things, any matters specified by the Minister. A report of the review shall be submitted to the Minister within 18 months after the end of that five-year period.

15. Only the Minister may exercise the powers conferred on the Minister under section 14, subsection 18(3), section 19, subsections 22(1) and (2), sections 33 and 50, paragraphs 57(3)(e) and 69(b), sections 77, 81, 87 and 99, subsections 101(1), 102(1), 105(5) and 157(2), sections 180 and 181, subsection 187(1), section 200, subsections 201(1) and 202(2), sections 205 and 206, subsections 210(1) and (4) and section 247.

16. (1) The Governor in Council may, by order, take any steps or direct an airport operator or any other person to take any steps that the Governor in Council considers necessary for the effective continued operation of the national network of airports or of any airport, if the Governor in Council is of the opinion that

(a) an extraordinary disruption to the effective continued operation of the network or the airport exists or is imminent, other than a disruption caused by a labour dispute;

(b) failure to act under this section would be contrary to the interests of users of the national network of airports or any airport, or contrary to the public interest; and

(c) no other provision of this Act or provision of any other Act of Parliament is sufficient and appropriate to avoid or remedy the disruption and counter the actual or anticipated damage caused by it.

(2) An order made under this section has effect for no more than 90 days after it is made.

(3) The Governor in Council may renew the order for one further period of not more than 90 days.

(4) The Minister shall cause an order made under this section to be laid before each House of Parliament within the first seven days on which that House is sitting after the order is made.

(5) Every order so laid before a House of Parliament stands referred to the committee of the House that the House considers appropriate.

(6) If a resolution directing that an order made under this section be repealed is adopted by each House of Parliament within the first 30 days on which that House is sitting after the order is laid before it, the order ceases to have effect

(a) on the later of the days on which the resolutions are adopted;

(b) if one resolution specifies that the order will cease to have effect on a later day, on that specified day; or

(c) if both of the resolutions specify that the order will cease to have effect on a later day, on the later of those specified days.

Slots

17. Slots are the property of Her Majesty in right of Canada.

18. (1) The air carriers operating at an airport and the airport operator may, in accord-ance with the regulations or, if there are no regulations, by agreement, select a slot coordinator if

(a) the air carriers, after consultation with the operator, decide that slot allocation is desirable; or

(b) the Minister designates the airport, under section 19, as an airport requiring slot allocation.

(2) The air carriers and the airport operator may agree on the terms for engaging a slot coordinator, including the coordinator’s remuneration and the responsibilities of the air carriers and the airport operator for paying the remuneration.

(3) If the air carriers and the airport operator do not agree on the selection of a slot coordinator or the terms of the engagement, the Minister may select the coordinator or decide the terms, as the case may be.

(4) For greater certainty, a slot coordinator is not an agent of Her Majesty in right of Canada.

19. (1) If, in the Minister’s opinion, the demand for slots at an airport exceeds the supply, the Minister may, by order, designate the airport as one requiring slot allocation.

(2) The Minister may specify in the order, after consultation with the airport operator and NAV CANADA, a corporation incorporated on May 26, 1995 under Part II of the Canada Corporations Act, the periods for which the order applies and the maximum number of slots that may be allocated over a specified period.

20. (1) A slot coordinator shall allocate, renew and withdraw slots in accordance with the regulations or, if there are no regulations, in a manner consistent with the slot allocation procedures applied by the international air transport industry.

(2) The slot coordinator for an airport may allocate or renew slots at the airport only if the necessary facilities and services are available at the airport’s air terminal building.

21. (1) The air carriers operating at an airport and the airport operator shall provide the slot coordinator with any information in their possession that, in the slot coordinator’s opinion, is required to carry out the slot coordinator’s functions.

(2) Unless required under subsection (3) or otherwise required by law, a slot coordinator shall not disclose any confidential information supplied to them by an air carrier or airport operator that is treated consistently in a confidential manner by the carrier or operator except if the disclosure is made in a way that does not identify or permit the identification of the source of the information.

(3) A slot coordinator shall provide to the Minister, in the form and manner and within the time that the Minister specifies, any information that the Minister considers necessary to exercise the Minister’s powers or carry out the Minister’s duties and functions under this Act.

22. (1) The Minister may, by order, require a slot coordinator for an airport or, if there is no slot coordinator, the person who is responsible for the allocation of slots at an airport, to allocate, renew or withdraw any slot at the airport if, in the Minister’s opinion, doing so is necessary for ensuring equitable access to slots by air carriers that provide domestic air services.

(2) The Minister may, by order, with the concurrence of the Minister of Foreign Affairs, require a slot coordinator for an airport or, if there is no slot coordinator, the person who is responsible for the allocation of slots at an airport, to withdraw any slot at the airport from a foreign air carrier.

(3) The Minister’s order prevails over any regulations made under section 24 to the extent of any inconsistency.

(4) The order is not a regulation for the purposes of the Statutory Instruments Act.

23. (1) No person to whom a slot has been allocated may transfer the slot. Any transfer of a slot is without effect.

(2) Despite subsection (1), a person to whom a slot has been allocated may, as long as they do not receive any consideration, lend the slot or exchange it for one other slot in accordance with the regulations or, if there are no regulations, by agreement. The loan or exchange may be made only after notice is given to the slot coordinator, or, if there is no slot coordinator, the person who is responsible for the allocation of slots at an airport.

24. The Governor in Council may make regulations respecting slots, including regulations respecting

(a) the selection of slot coordinators;

(b) the allocation, renewal and withdrawal of slots; and

(c) the loan or exchange of slots.

PART 2

PROVISIONS APPLICABLE TO CERTAIN AIRPORT OPERATORS

General

25. Sections 26 to 30 apply to an airport operator referred to in paragraph (a) or (b) of the definition “airport operator” in section 2 and to any airport operator referred to in paragraph (c) of that definition who operates an airport that meets a passenger threshold of 300,000.

26. Airport operators shall take any measures that are necessary to permit Canada to meet its international obligations under bilateral and multilateral agreements in respect of aeronautics and of trade.

27. Airport operators of airports serving international traffic shall display the national flag of Canada, and erect signs welcoming passengers to Canada, in prominent places.

28. Airport operators shall, at their airports, assist the Government of Canada in welcoming and facilitating state visits to Canada by foreign dignitaries.

29. Airport operators shall provide to the Minister, in the form and manner and within the time that the Minister specifies, any information and any documents that the Minister considers necessary to exercise the Minister’s powers or carry out the Minister’s duties and functions under this Act.

30. Unless required under section 29 or otherwise required by law, an airport operator shall not disclose confidential information supplied to it by an air carrier that is treated consistently in a confidential manner by the carrier except if the disclosure is made in a way that does not identify or permit the identification of the source of the information.

Equitable Access

31. Sections 32 and 33 apply to an airport operator referred to in paragraph (a) or (b) of the definition “airport operator” in section 2 and to any airport operator referred to in paragraph (c) of that definition who operates an airport that meets a passenger threshold of 300,000.

32. (1) Every airport operator shall give all air carriers who operate or wish to operate aircraft at the operator’s airport equitable access to the air terminal buildings and facilities for the landing, taking off, movement or parking of aircraft.

(2) No airport operator is required to construct or expand an air terminal building or facilities for the landing, taking off, movement or parking of aircraft in order to comply with subsection (1).

(3) Subsection (1) does not apply in respect of

(a) a runway at an airport designated under section 19 as an airport requiring slot allocation; or

(b) an air terminal building, or part of one, or facilities for the landing, taking off, movement or parking of aircraft, that is under the control of a person, other than an airport operator, under a contract that is in effect on June 15, 2006 until the earliest of any of the following days, as determined by the contract as it read on June 15, 2006,

(i) the day on which the airport operator has the right to terminate the contract,

(ii) the day on which an extension to the contract takes effect, if the airport operator could have refused that extension but did not, and

(iii) the expiry date of the contract.

33. The Minister may direct an airport operator to take any measures that, in the Minister’s opinion, are necessary in order for the operator to meet its obligations under section 32.

Fees

34. Sections 35 and 36 apply to an airport operator referred to in paragraph (b) of the definition “airport operator” in section 2 and to any airport operator referred to in paragraph (c) of that definition who operates an airport that meets a passenger threshold of 300,000.

35. (1) An airport operator who proposes to establish or increase a fee shall

(a) ensure that any differences in the fee among users of particular facilities and services are based on objective criteria that are applied in the same manner to all users;

(b) ensure that the fee does not differentiate among users on the basis of their nationality;

(c) if it is an aeronautical fee, ensure that it is structured in such a way that an aircraft operator would not, for the purpose of avoiding the fee, be encouraged to engage in practices that would adversely affect aviation safety or security;

(d) inform aircraft operators and the public in the region served by the airport of the proposal and explain how the fee has been determined, including its relationship to the airport operator’s financial requirements;

(e) provide opportunities for aircraft operators and the public in the region served by the airport to obtain additional information about the proposal and to express their views on it;

(f) consider the views that have been expressed; and

(g) inform aircraft operators and the public in the region served by the airport of the airport operator’s decision in respect of the proposal.

(2) An airport operator shall inform aircraft operators and the public in the region served by the airport of any reduction in or elimination of a fee.

36. An airport operator shall make available to anyone on request, and post on the operator’s website, if it has one, the following information:

(a) the amount of each fee;

(b) the conditions under which persons become subject to each fee;

(c) the method used to collect each fee; and

(d) the use of revenues generated by each passenger fee.

Disclosure

37. Sections 38 and 39 apply to an airport operator referred to in paragraph (b) of the definition “airport operator” in section 2 and to any airport operator referred to in paragraph (c) of that definition who operates an airport that meets a passenger threshold of 300,000.

38. An airport operator shall prepare an annual report on the operation of its airport in respect of each of the operator’s fiscal years. The annual report shall include

(a) a narrative and statistical summary of aircraft, passenger and cargo traffic at the airport;

(b) the financial results for the operation of the airport, including

(i) the amount of revenues, broken down into revenues from aeronautical fees, revenues from passenger fees and revenues from other sources,

(ii) the amount of operating expenditures, and

(iii) the amount of capital expenditures;

(c) a description of any financial information related to the operation of the airport that the airport operator is required by law to make available to the public;

(d) information on the use of revenues generated by passenger fees;

(e) a list of grants, contributions and subsidies received in respect of the airport and the purpose for which they were given;

(f) a summary of initiatives for the next five years that have been approved by the airport operator, including capital projects;

(g) a summary of consultations with aircraft operators and with the public in the region served by the airport; and

(h) a description of the types of documents respecting the airport that are available to the public and a description of how copies of these documents may be obtained.

39. An airport operator shall hold an annual meeting, to which the public is invited, in respect of the operation of its airport in each of the operator’s fiscal years. The operator shall present its annual report at the meeting and give members of the public an opportunity to express their views and to ask questions.

PART 3

AIRPORT AUTHORITIES

Powers of Governor in Council

40. The Governor in Council may, by order, amend the schedule by adding, amending or deleting the name of a corporation or an airport or by adding or deleting a transfer date.

Continuance

41. The corporations that are, on the day on which this section comes into force, set out in column 1 of Part 1 of the schedule are continued, on that day, as not-for-profit corporations without share capital under this Act, under the names set out in that column.

42. A corporation set out in column 1 of Part 2 of the schedule is continued as a not-for-profit corporation without share capital under this Act, under the name set out in that column, on the day on which the corporations’s name is deleted from Part 2 of the schedule and that name is added to column 1 of Part 1 of the schedule.

43. On the day on which the name of a corporation, other than a corporation set out in the schedule on the day on which section 42 comes into force, is added to column 1 of Part 1 of the schedule, the corporation is continued as a not-for-profit corporation without share capital under this Act, under the name set out in that column.

Application

44. Sections 45 to 135 apply to airport authorities set out in Part 1 of the schedule.

Effect of Continuance

45. On continuance of a corporation under any of sections 41 to 43, the corporation’s constating documents cease to have effect. However, its by-laws remain in effect until the day on which the corporation files with the Minister by-laws replacing them.

46. When a corporation is continued under any of sections 41 to 43,

(a) its property becomes the property of the continued corporation;

(b) the continued corporation becomes liable for its obligations;

(c) any existing cause of action, claim or liability to prosecution is unaffected;

(d) any civil, criminal or administrative action or proceeding pending by or against it may be continued by or against the continued corporation; and

(e) a conviction against it, or a ruling, order or judgment in favour of or against it, may be enforced by or against the continued corporation.

47. (1) No airport authority shall, unless authorized by the Governor in Council, be continued as a body corporate under any other Act of Parliament or any Act of a provincial legislature or under the laws of a foreign state.

(2) The directors of an airport authority shall ensure that the airport authority complies with subsection (1).

By-laws

48. (1) An airport authority whose name is set out in Part 1 of the schedule on the day on which this section comes into force shall, within 90 days after that day, adopt by-laws that comply with this Act and file them with the Minister. Any subsequent amendment to those by-laws shall be filed with the Minister within 30 days after the day on which the amendment is made.

(2) A corporation whose name is added to Part 1 of the schedule shall, within 90 days after the day on which its name is added to Part 1, adopt by-laws that comply with this Act and file them with the Minister. Any subsequent amendment to those by-laws shall be filed with the Minister within 30 days after the day on which the amendment is made.

49. The by-laws shall provide for the regulation of the business and affairs of the airport authority, including provisions

(a) stating the board’s duties and responsibilities;

(b) governing the nomination, appointment, removal and resignation of directors;

(c) governing the appointment, removal and resignation of the chief executive officer;

(d) establishing a code of conduct for the directors and officers, including conflict of interest rules and rules for the protection of confidential information; and

(e) respecting the retention by the board or a director of the services of professionals who are independent from the authority, and the payment of their fees and expenses.

50. If, in the Minister’s opinion, the by-laws of an airport authority do not comply with this Act, the Minister may, within 90 days after the day on which the by-laws or any amendments to them are filed, direct the authority to amend its by-laws to ensure that they are in compliance with this Act.

51. A by-law or an amendment to a by-law that is not filed with the Minister in accordance with section 48 or that is not amended as directed by the Minister under section 50 ceases to be in force.

52. The airport authority shall send without delay a copy of its by-laws and any amendments to them to all nominating bodies.

Office

53. An airport authority shall have an office at or near its principal airport at which documents may be served on or delivered to the authority.

Records

54. (1) An airport authority shall prepare, and maintain at its office, adequate accounting records and adequate records of its business and affairs. The records of its business and affairs shall include

(a) the by-laws and any amendments to them;

(b) a register of nominating bodies;

(c) a register of directors and officers;

(d) the minutes of meetings of its board of directors and of any committee of the board;

(e) the resolutions of its board of directors and of any committee of the board;

(f) the minutes of meetings with air carriers, with the public in the region served by the airport and with the nominating bodies; and

(g) a register of the debt obligations issued by the authority.

(2) Subject to any other Act of Parliament, or any Act of the legislature of a province, that provides for a longer retention period, an airport authority shall retain its accounting records for at least 12 years. The authority shall also retain records of its business and affairs for the term of the lease of the principal airport granted by Her Majesty to the airport authority.

(3) The records referred to in subsection (2) include similar records that the airport authority was retaining before its continuance.

55. The records shall at all reasonable times be open to inspection by the directors. An airport authority shall provide to a director, on request, free of charge, any extract of the records.

56. An airport authority and its agents and mandataries shall take reasonable precautions to prevent the loss or destruction of the records required under this Act, to prevent the falsification of entries in those records and to facilitate the detection and correction of inaccuracies in them.

Powers, Capacity and Activities

57. (1) The objects of an airport authority are to operate, manage, maintain and develop its principal airport in accordance with this Act and, in particular, with the Canadian airport policy set out in paragraphs 8(a) to (h).

(2) The objects include

(a) the administration of the lands comprising the principal airport and of buildings and facilities on those lands;

(b) the participation in the operation and development of elements of a public transportation system that are on and serve the principal airport; and

(c) the operation, management, maintenance or development of facilities that are not on the principal airport but that are used solely for the operation of that airport.

(3) An airport authority may also

(a) conduct any activity at the principal airport that is related to air transportation, if that activity benefits users of the principal airport or persons who provide goods or services to those users;

(b) provide any services related to airport activities, including consulting or training, if those services are provided by means of resources that are normally used in the operation, management, maintenance or development of the principal airport;

(c) grant a licence for intellectual property developed by the authority by means of resources that are normally used in the operation, management, maintenance or development of the principal airport;

(d) operate, manage, maintain and develop the airports set out in column 3 of the schedule opposite the authority’s name; and

(e) with the Minister’s approval, conduct any other activity that is related to the operation, management, maintenance or development of an airport other than one that is set out in the schedule opposite the authority’s name.

58. An airport authority shall not carry on business as an air carrier.

59. An airport authority shall not carry on any business or engage in any activity unless it is permitted by this Act.

60. An airport authority shall not carry out its objects or do any of the activities described in subsection 57(3) in a partnership or a joint venture.

61. An airport authority is not an agent of Her Majesty in right of Canada.

62. Subject to this Act, an airport authority has the capacity of a natural person.

63. An airport authority may apply its revenues only for carrying out its objects, for doing any of the activities described in subsection 57(3) or as otherwise permitted under this Act. It shall not distribute any surplus.

64. (1) Subject to the by-laws, an airport authority may issue bonds, debentures or other debt obligations for consideration consisting of money, other property or past services.

(2) The monetary value of the property or services shall not be less than the fair equivalent of the monetary amount that the airport authority would have received if the debt obligation had been issued for money.

(3) For the purposes of this section, “property” does not include a promissory note or a promise to pay.

65. The Governor in Council may make regulations that make applicable, to airport authorities, any provision, if the provision concerns debt obligations or trust indentures, of an Act of Parliament allowing for the creation of corporations or of any regulation made under such an Act and that make any adaptations to that provision, only for the purpose of applying that provision to airport authorities, that the Governor in Council considers appropriate.

66. An airport authority may invest any money that it has in its reserves, or any money that it does not require in the short term, only in bonds, debentures or other debt obligations of or guaranteed by

(a) a bank set out in Schedule I to the Bank Act; or

(b) a government or corporation whose credit rating is in one of the three highest rating categories as established by an internationally recognized credit rating agency.

67. An airport authority may loan money only to a subsidiary, and may guarantee a loan only on behalf of a subsidiary.

68. An airport authority may not indemnify a corporation in which the authority has an ownership interest for any amount, unless the corporation is a subsidiary and the subsidiary is liable to pay that amount.

69. An airport authority may acquire an interest in land or, in Quebec, a right relating to an immovable, only if the acquisition

(a) is necessary for the operation or development, on its principal airport, of an air terminal building, parking facilities abutting an air terminal building or facilities for the landing, taking off, movement or parking of aircraft; or

(b) is approved by the Minister.

70. The total amount payable by an airport authority in a calendar year to any one supplier of goods and services, other than any amount payable for a capital project, may not exceed 25% of the authority’s operating expenses for the previous calendar year.

71. An airport authority may distribute airport traffic among airports or air terminal buildings that it operates.

72. (1) An airport authority may make a donation to a charitable or educational organization.

(2) An airport authority may not make a political contribution.

73. (1) No airport authority and no guarantor of an obligation of an airport authority may assert against a person dealing with the authority or against a person who acquired rights from the authority

(a) that the by-laws of the authority have not been complied with;

(b) that a person held out by the authority as a director, officer, agent or mandatary of the authority has not been duly appointed or is not authorized to exercise the powers and perform the duties that are customary in the activities of the authority or usual for a director, an officer, an agent or a mandatary; or

(c) that a document issued by any director, officer, agent or mandatary of the authority with actual or usual authority to issue the document is not valid.

(2) Subsection (1) does not apply in respect of a person dealing with the authority, or who acquired rights from the authority, who has, or ought to have, knowledge of a situation described in that subsection by virtue of their relationship with the airport authority.

74. Except as otherwise permitted by this Act, an airport authority may not have an interest or a right in any entity.

Ownership Interests in Corporations

75. (1) An airport authority may have an ownership interest in any corporation other than an air carrier if

(a) the corporation is primarily engaged in activities related to the operation, management, maintenance or development of airports;

(b) the corporation prepares annual financial statements;

(c) the corporation has a policy for the payment of dividends;

(d) an agreement referred to in section 80 has been entered into in respect of the corporation;

(e) in the case of a corporation that operates in Canada, the corporation is subject to a federal or provincial law of incorporation; and

(f) in the case of a corporation that carries on business at the airport authority’s principal airport, the corporation does not have an ownership interest in any entity.

(2) An airport authority may, on a short-term basis, have an ownership interest in an air carrier that is undergoing a financial reorganization, solely for the purpose of recovering amounts owed to the authority by the air carrier.

76. An airport authority shall ensure that its subsidiaries do not have an ownership interest in any entity except a corporation.

77. If, in the Minister’s opinion, an airport authority is in contravention of section 74, 75, 76, 79, 80 or 179 or in contravention of an approval made or given under section 81, the Minister may direct the authority to take any measures that the Minister considers necessary to bring the authority into compliance with that provision or approval, including requiring the authority to divest itself of any ownership interest in an entity.

78. (1) An airport authority shall not enter into a transaction or agreement with a corporation in which it has an ownership interest unless the transaction or agreement is on commercial terms.

(2) An airport authority may procure goods or services from such a corporation only if it does so by way of a competitive bidding process.

79. (1) An airport authority shall not acquire an ownership interest in a corporation or increase its financial exposure in a corporation in which it has an ownership interest if

(a) without taking the acquisition or increase into account, the total financial exposure of the authority in corporations in which it has an ownership interest exceeds 10% of the authority’s net assets at the end of the previous calendar year; or

(b) the acquisition or increase would cause the authority’s total financial exposure in corporations in which it has an ownership interest to exceed 10% of the authority’s net assets at the end of the previous calendar year.

(2) For the purposes of subsection (1), the airport authority’s financial exposure in a corporation is the sum of the following:

(a) the positive or negative amount determined by subtracting, from the sum of the amount provided by the authority to the corporation in equity and the value of contributions in kind made by the authority to the corporation, the sum of any dividends received by the authority from the corporation and any proceeds received by the authority from the sale of shares of the corporation,

(b) the amount of any debt obligation owed to the authority by the corporation, including earned but unpaid interest,

(c) the amount of any debt obligation, including earned but unpaid interest, that has never been paid to the authority by the corporation but whose collection is no longer sought by the authority,

(d) 25% of the amount outstanding on any loans made by a third party to the corporation, including earned but unpaid interest, whose repayment is guaranteed by the authority,

(e) the amount of payments or the value of property provided in fulfilment of those guarantees, and

(f) any amounts paid or required to be paid by the authority in respect of the activities of the corporation, other than for the purchase by the authority of goods or services from the corporation, minus any amounts recovered by the authority.

(3) The amounts determined under paragraphs (2)(a), (c), (e) and (f) are aggregate amounts for the period beginning on the transfer date.

(4) The calculation of an airport authority’s total financial exposure does not include the authority’s financial exposure in a corporation whose sole purpose is to develop lands on the authority’s principal airport.

80. An airport authority shall not have an ownership interest in a corporation unless an agreement to indemnify the authority for any amounts that the authority is required to pay in respect of that corporation, other than amounts referred to in paragraphs 79(2)(a), (b) and (d), is signed by

(a) the corporation; or

(b) any other corporation in which the authority has an ownership interest, if that corporation itself has an ownership interest in the corporation.

81. (1) Subsection 79(1) does not apply in respect of the acquisition of an ownership interest in a corporation, or an increase in an airport authority’s financial exposure in a corporation in which it has an ownership interest, that is approved by the Minister.

(2) The terms and conditions to which an approval may be subject include limits on the airport authority’s financial exposure in the corporation.

Corporate Governance and Accountability

Board

82. The directors shall collectively have the skills, knowledge and experience, including the knowledge and experience in the aviation industry, that are necessary to carry out the duties of the board.

83. (1) The board of an airport authority is responsible for establishing the authority’s strategic direction, for taking major decisions for the authority and for overseeing the management of the authority’s business and affairs.

(2) The board may not delegate, to a committee of the board or otherwise, the duty

(a) to adopt by-laws;

(b) to appoint or remove directors, the chief executive officer and the auditor and to fix their remuneration;

(c) to approve the responsibilities of the chief executive officer and the chairperson;

(d) to approve the responsibilities of committees of the board and to appoint directors to them;

(e) to approve plans for the orientation and training of the directors, the chief executive officer and the chairperson and to approve succession planning;

(f) to review the assessment of the principal risks to the airport authority and the measures proposed to manage those risks;

(g) to approve plans that the authority is required to prepare under this Act;

(h) to approve the methodology for determining fees;

(i) to approve the authority’s major policies, including policies on borrowing, on audits and on the distribution of airport traffic among airports or air terminal buildings operated by the authority;

(j) to approve financial statements, the annual budget, significant borrowings, the establishing or revising of fees, the acquisition of an interest in land or, in Quebec, a right relating to an immovable, the acquisition of an ownership interest in any corporation and any increase in financial exposure in a corporation, and any other major decisions;

(k) to periodically assess the performance of the board, the committees of the board, the directors and the chief executive officer; and

(l) to appoint the individual or firm conducting a performance review under section 192 or 193, to fix their remuneration and to approve the terms of reference for the review.

(3) If an airport authority defaults under a trust indenture that was in effect on June 15, 2006, subsection (2) does not prevent a trustee from exercising the duties that have been expressly delegated to the trustee by the airport authority under the trust indenture as it read on that day.

84. The board of an airport authority consists of a number of directors that is fixed in the authority’s by-laws and that number shall not be less than nine or more than 15.

85. (1) The board of an airport authority shall elect a chairperson from among its members for a term not exceeding two years. The chairperson’s term may be renewed more than once.

(2) A director who is also the airport authority’s chief executive officer may not be the chairperson.

(3) The chairperson may not be a director or chief executive officer of a corporation in which the airport authority has an ownership interest.

Appointment, Removal and Resignation of Directors

86. (1) The directors are appointed to hold office during good behaviour for terms of not more than three years, which shall be staggered so that the number of terms that expire in a year is, as much as possible, the same from year to year.

(2) No person shall hold office as a director of any given airport authority for more than nine years in their lifetime. However, the period that a person held office as director before the transfer date shall not be counted.

(3) Despite subsection (2), one director of any given airport authority may hold office for more than nine years but not for more than 12 years.

87. The Minister shall appoint two directors.

88. The airport authority’s by-laws shall

(a) provide that one director is to be appointed by the board from candidates nominated by the government of the province in which the authority’s principal airport is located;

(b) provide for the number of candidates that the government of that province is required to nominate for that office; and

(c) provide for the process to be followed if that government, on being notified of a vacancy under subsection 96(1), does not nominate candidates in accordance with this Act and the by-laws.

89. (1) The airport authority’s by-laws shall provide for a number of not less than two and not more than five directors to be appointed by the board from candidates nominated by regional authorities or municipalities that are designated by the by-laws as nominating bodies. The nominating bodies designated by the by-laws shall include

(a) the municipality in which the principal airport is located; and

(b) the principal municipality served by the principal airport, if it is not the municipality in which the airport is located.

(2) The board shall appoint, from the candidates nominated,

(a) at least one director from persons who reside in the municipality in which the principal airport is located; and

(b) at least one director from persons who reside in the principal municipality served by the principal airport, if it is not the municipality in which the airport is located.

90. (1) The airport authority’s by-laws shall provide for a number of not less than two and not more than five directors to be appointed by the board from candidates nominated by non-governmental organizations that are designated by the by-laws as nominating bodies.

(2) The designated organizations shall be chosen from at least two of the following:

(a) an economic organization;

(b) a community organization;

(c) a provincial association of lawyers, notaries, engineers or accountants;

(d) a labour organization, other than a bargaining agent for any employees of the airport authority or an air carrier; and

(e) the national association of domestic air carriers, in the case of an airport authority that does not operate a principal airport that meets a passenger threshold of two million.

(3) The directors shall be appointed by the board from candidates nominated by designated organizations and shall be chosen from at least two of the organizations and associations referred to in paragraphs (2)(a) to (d) or, in the case of an airport authority that does not operate a principal airport that meets a passenger threshold of two million, paragraphs (2)(a) to (e).

91. The number of entities designated as nominating bodies under section 89 or 90 may exceed the number of directors that are to be appointed under that section.

92. (1) The by-laws of an airport authority that operates a principal airport that meets a passenger threshold of two million but does not operate a principal airport that meets a passenger threshold of 10 million shall designate the national association of domestic air carriers as a nominating body and provide for one director to be appointed by the board from the candidates nominated by that association.

(2) The by-laws of an airport authority that operates a principal airport that meets a passenger threshold of 10 million shall designate the national association of domestic air carriers as a nominating body and provide for two directors to be appointed by the board from the candidates nominated by that association.

93. No more than three directors who have been nominated by the same nominating body may serve on a board at any time.

94. An entity may become a nominating body under sections 89, 90 or 92 only with its consent and may cease to be a nominating body by resigning.

95. (1) The directors appointed under sections 87 to 90 and section 92 may appoint up to three other directors who have the particular skills, knowledge or experience needed by the board to carry out its duties.

(2) The chief executive officer may be appointed as a director only in accordance with subsection (1).

(3) The board shall appoint the successors for any directors appointed under subsection (1).

96. (1) At least three months before the expected date of a vacancy on the board or, in the case of an unexpected vacancy, without delay after it occurs, an airport authority shall, if the vacancy is in respect of an office for which the Minister makes the appointment, notify the Minister or shall, if the vacancy is in respect of an office for which nominating bodies are authorized to nominate candidates, notify those nominating bodies. The notification shall set out the qualifications required for becoming a director and the particular skills, knowledge and experience needed by the board at that time.

(2) Before nominating a person to be a director, the nominating bodies shall consider the information contained in the notification and consult with the governance committee established by the board under section 124.

97. The airport authority’s by-laws shall

(a) provide for the number of candidates that a nominating body designated under section 89, 90 or 92 is required to nominate for each office for which that body is authorized to nominate candidates; and

(b) provide a process to be followed to appoint a director if the nominating bodies authorized to nominate candidates for that office, on being notified of a vacancy under subsection 96(1), do not nominate a candidate that, in the board’s opinion, meets the qualifications, skills, knowledge and experience set out in the notification.

98. (1) A nominating body designated under section 89 or 90 that does not exercise its power to nominate in respect of two consecutive vacancies ceases to be a nominating body, if it has been notified of each of those vacancies under subsection 96(1).

(2) Subsection (1) does not apply to a nominating body that is a municipality in which the principal airport is located or that is the principal municipality served by the principal airport.

99. If the number of directors on a board is less than nine for a period of three months, the Minister may appoint the number of directors required to bring that number to nine. The appointments are for a term of one year.

100. Before a person takes office as a director, the airport authority shall conduct an information session, which the person shall attend, on the authority’s objects and obligations, the Minister’s role and the director’s powers, duties and functions, including duties imposed by any law and the authority’s by-laws.

101. (1) The Minister may remove, for cause, any director whom the Minister has appointed.

(2) The board may remove, for cause, any director whom it has appointed, by means of a resolution approved by two thirds of the board excluding the director in question.

102. (1) The Minister shall remove any director whom the Minister has appointed, if the board determines, by means of a resolution approved by two thirds of the board excluding the director in question, that the director

(a) ceases to be eligible under section 105;

(b) has breached the conflict of interest rules contained in the by-laws; or

(c) has disclosed confidential information contrary to the by-laws.

(2) The board shall remove any director whom it has appointed if the board determines, by means of a resolution approved by two thirds of the board excluding the director in question, that any of paragraphs (1)(a) to (c) apply in respect of the director.

103. (1) A director may resign by sending a letter of resignation to the chairperson of the board.

(2) A director’s resignation becomes effective on the day on which the letter of resignation is received by the chairperson or on the day specified in the letter of resignation, whichever is later.

(3) The director shall also send a copy of their letter of resignation without delay to the Minister, if the Minister made the appointment, or to their nominating body, if any.

104. (1) A director of an airport authority is entitled to submit to the authority a written statement giving reasons for resigning or for opposing their removal.

(2) The airport authority shall without delay send a copy of the statement to the Minister and all nominating bodies.

(3) No airport authority or person acting on its behalf incurs any liability by reason only of complying with subsection (2).

Ineligibility for Office of Director

105. (1) A person is not eligible to hold office as a director of an airport authority if the person

(a) is not independent within the meaning of subsections (2) to (4);

(b) is the spouse, the common-law partner or a child of a director of the authority or is a child of such a director’s spouse or common-law partner;

(c) is neither a Canadian citizen, nor a permanent resident within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act;

(d) maintains their principal residence outside Canada;

(e) is less than 18 years of age;

(f) has been declared incompetent by a court in Canada or elsewhere; or

(g) has the status of an undischarged bankrupt.

(2) A person is not independent if the person has a relationship or interest that, in the board’s opinion, interferes with, or gives the appearance of interfering with, the person’s ability to act in the airport authority’s best interests.

(3) A person is not independent if they are, or within the two years before their appointment have been,

(a) a member of the Senate, the House of Commons or the legislature of a province; or

(b) an elected official of a regional authority or municipality.

(4) A person is not independent if they are, or within the year before their appointment have been,

(a) an employee or agent of Her Majesty in right of Canada or a province, or an employee or agent of a federal or provincial Crown corporation;

(b) an employee of a regional authority or municipality;

(c) a director, officer or employee of an air carrier;

(d) a director, officer or employee of a labour organization that is a bargaining agent for employees of the airport authority or an air carrier;

(e) an officer, other than the chief executive officer, or employee of the airport authority;

(f) a shareholder of a corporation in which the airport authority has an ownership interest;

(g) a director, officer or employee of another airport authority;

(h) in receipt of remuneration or financial benefit from the airport authority, other than any remuneration or financial benefit received in their capacity as a director or chief executive officer; or

(i) a spouse or common-law partner of any person referred to in subsection (3) or in any of paragraphs (a) to (h).

(5) The Minister may exempt a person from the application of paragraphs (1)(b) and (4)(i) if, in the Minister’s opinion, the person’s exercise of the powers, duties and functions of a director is unlikely to be affected by the spousal, common-law or parent-child relationship in question.

106. An airport authority shall ensure that a majority of the directors of the airport authority are not directors or officers of any of the corporations in which the authority has an ownership interest.

Duties, Liabilities and Indemnification of Directors and Officers

107. (1) Directors and officers of an airport authority shall, in exercising their powers and carrying out their duties and functions,

(a) act honestly and in good faith with a view to the authority’s best interests; and

(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

(2) Every director and officer of an airport authority shall comply with this Act and the airport authority’s by-laws.

(3) No provision in a contract, the by-laws or a resolution of the board or a committee of the board relieves a director or an officer from the duty to act in accordance with this Act or a direction, order or approval made or given under this Act, or relieves them from liability for a failure to comply with this Act or the direction, order or approval.

(4) In carrying out their duties and functions, directors appointed by the Minister have no duty toward, and do not represent the interests of, the Minister, and directors nominated by a nominating body have no duty toward, and do not represent the interests of, the nominating body.

108. (1) A director is considered to have discharged their duty under subsection 107(1) if the director has relied in good faith on

(a) the airport authority’s financial statements that are represented to the director by the authority’s chief executive officer or chief financial officer or in a written report of the authority’s auditor as fairly reflecting the authority’s financial condition; or

(b) a report by a person whose profession lends credibility to a statement made by them.

(2) A director is considered to have complied with subsection 107(2) if the director has exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on a document described in paragraph (1)(a) or (b).

109. (1) An officer is considered to have discharged their duty under subsection 107(1) if the officer has relied in good faith on a report by a person whose profession lends credibility to a statement made by them.

(2) An officer is considered to have complied with subsection 107(2) if the officer has exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on a report by a person whose profession lends credibility to a statement made by them.

110. The board or a director may, in accordance with the airport authority’s by-laws and at the authority’s expense, retain the services of a professional who is independent from the authority to enable the board or director to exercise their powers and carry out their duties and functions.

111. An airport authority may purchase and maintain insurance for the benefit of present or former directors or officers against any liability incurred by them in their capacity as directors or officers of the authority.

112. (1) An airport authority may indemnify its present or former directors or officers against all costs, including an amount paid to settle an action or satisfy a judgment, that are reasonably incurred in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved by reason of being or having been a director or officer of the authority.

(2) An airport authority may not indemnify a person under subsection (1) unless the person

(a) acted honestly and in good faith with a view to the best interests of the authority; and

(b) had, in the case of a criminal or administrative action or proceeding that is enforced by a fine or an administrative monetary penalty, as the case may be, reasonable grounds for believing that their conduct was lawful.

(3) Despite subsection (1), a person referred to in that subsection is entitled to an indemnity from the airport authority in respect of all costs reasonably incurred by the person in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which they are subject by reason of being or having been a director or officer, if the person seeking the indemnity

(a) was not judged by the court or other competent authority to have committed any wrong or to have omitted to do anything that they ought to have done; and

(b) fulfils the conditions set out in subsection (2).

(4) An airport authority may advance money to a person referred to in subsection (1) for the costs of a proceeding referred to in that subsection. The person shall repay the money if they do not fulfil the conditions set out in subsection (2).

113. (1) An airport authority or a person referred to in subsection 112(1) may apply to a court for an order approving an indemnity under section 112, and the court may so order and make any further order that it sees fit.

(2) On an application under subsection (1), the court may order notice to be given to any interested person and the person is entitled to appear and be heard.

114. Directors of an airport authority who vote for or consent to a resolution authorizing the application of revenues, or a distribution of any surplus of the authority, contrary to section 63, or the payment of an indemnity contrary to section 112, are jointly and severally, or solidarily, liable to restore to the authority any amounts so distributed or paid and not otherwise recovered by the authority.

115. Directors of an airport authority who vote for or consent to a resolution authorizing the issue of a bond, debenture or other debt obligation for a consideration consisting of property or past services are jointly and severally, or solidarily, liable to the authority to make good any amount by which the consideration received is less than the fair equivalent of the money that the authority would have received if that debt obligation had been issued for money on the date of the resolution.

Meetings

116. The board and each committee of the board shall keep minutes of their meetings, which include all resolutions taken at the meetings.

117. (1) The chairperson may call a meeting of the board at any time. The board shall also meet if the chairperson receives a request from one third of the directors or if a meeting is requested under section 187.

(2) The board shall meet at least four times a year.

118. A majority of the number of the board’s directors fixed by the by-laws constitutes a quorum of the board and a majority of the number of the members of a committee of the board fixed by the by-laws constitutes a quorum of the committee.

119. If the airport authority’s chief executive officer is not a director, they may attend meetings of the board and, at the request of the chairperson, shall do so.

120. The board may exclude the chief executive officer from attending meetings of the board — whether or not the chief executive officer is a director — when the board is discussing the performance or compensation of the chief executive officer or when the board considers that it is necessary to preserve its independence from the chief executive officer.

121. (1) Participation in a meeting of the board or a committee of the board may be by means of telephonic, electronic or other communication facilities that permit all participants to communicate adequately with each other during the meeting. The participants are deemed for the purposes of this Act to be present at that meeting.

(2) Subsection (1) does not apply to a mandatory meeting referred to in subsection 117(2), 125(5) or 128(2) unless the number of directors physically present at that meeting constitutes a quorum and does not apply to a meeting requested under section 187 unless subsection 187(2) is respected.

122. (1) A resolution in writing, signed by all the directors entitled to vote on that resolution at a meeting of the board or a committee of the board, is as valid as if it had been passed at a meeting of the board or committee.

(2) The resolution shall be kept with the minutes of the meetings of the board or that committee.

123. (1) A director who is present at a meeting of the board or a committee of the board is deemed to have consented to any resolution passed and action taken at the meeting unless the director

(a) requests a dissent to be entered in the minutes of the meeting, or the dissent has been entered in the minutes;

(b) sends a written dissent to the secretary of the meeting before the meeting is adjourned; or

(c) sends a dissent by registered mail or delivers it to the office referred to in section 53 without delay after the meeting is adjourned.

(2) A director who votes for or consents to a resolution is not entitled to dissent.

(3) A director who was not present at a meeting of the board or a committee of the board at which a resolution was passed or action taken is deemed to have consented to it unless within seven days after becoming aware of the resolution or action the director

(a) causes a dissent to be placed with the minutes of the meeting; or

(b) sends a dissent by registered mail or delivers it to the office referred to in section 53.

(4) Despite subsection (3), a director who is excluded from a meeting of the board or a committee of the board at which a resolution was passed or action taken is not deemed to have consented to it.

Committees

124. The board of an airport authority shall establish a governance committee and an audit committee and may establish any other committees that it considers necessary to fulfil its duties.

125. (1) The governance committee consists of a number of directors that is less than a majority of the directors of the board fixed by the by-laws but is not less than three.

(2) A director who is also the chief executive officer of the airport authority may not be a member of the governance committee.

(3) The duties of the governance committee include

(a) reviewing the airport authority’s corporate governance policies;

(b) reviewing the corporate governance of the authority, including the effectiveness of the board, the other committees of the board and individual directors;

(c) identifying the skills, knowledge and experience requirements for the board as a whole;

(d) in the case of a vacancy on the board

(i) identifying the skills, knowledge and experience required of the person who will fill the vacancy, and

(ii) if the vacancy is in respect of an office for which the Minister makes the appointment, communicating those requirements to the Minister, or, if the vacancy is in respect of an office for which one or more nominating bodies are authorized to nominate candidates, communicating those requirements to those nominating bodies;

(e) consulting with each nominating body on the qualifications of the persons being considered by that body as candidates for nomination as director; and

(f) recommending to the board an orientation program for new directors and a succession plan for directors and the chief executive officer.

(4) The chairperson of the governance committee may call a meeting of the committee at any time, but shall call a meeting at the request of a member of the committee.

(5) The governance committee shall meet at least four times a year.

126. (1) The audit committee consists of a number of directors that is less than a majority of the directors of the board fixed by the by-laws but is not less than three.

(2) A director who is also the chief executive officer of the airport authority may not be a member of the audit committee.

(3) The members of the audit committee shall be familiar with basic accounting principles and be able to read and understand financial statements.

(4) The chairperson of the board may not be the chairperson of the audit committee.

127. The duties of the audit committee include

(a) reviewing the airport authority’s accounting policies;

(b) providing an assessment of the financial risks to the airport authority and recommendations to the board regarding the management of those risks;

(c) reviewing the implementation by management of an effective system of internal controls;

(d) reviewing the authority’s financial statements and providing recommendations to the board regarding those statements;

(e) determining whether an auditor or a candidate for the position of auditor is independent, in particular by examining any existing or past relationship, whether contractual or otherwise, between the auditor or candidate and the authority or any corporation in which the authority has an ownership interest;

(f) making recommendations to the board regarding the appointment, removal and remuneration of the auditor;

(g) approving the scope of internal and external audits and approving non-audit services to be performed for the authority by the auditor; and

(h) reviewing the findings of the internal and external audits and management’s response to them, making recommendations to the board regarding the findings and response and reviewing the implementation of any of the board’s decisions regarding the committee’s recommendations.

128. (1) The chairperson of the audit committee may call a meeting of the committee at any time, but shall call a meeting at the request of the auditor or a member of the committee.

(2) The audit committee shall meet at least four times a year.

(3) The auditor shall attend any meeting of the audit committee held during the auditor’s term of office if so requested by a member of the committee.

(4) The auditor has the right to attend and to be heard at every meeting of the audit committee except when the audit committee is discussing the auditor’s performance or compensation.

(5) If the audit committee adopts a resolution under section 122, the committee shall give the auditor a copy of it without delay.