Bill C-9

Divorce, Annulment, Separation or Breakdown of Common-law Partnership

1811. (1) Subsection 25(2) of the Act is replaced by the following:

(2) Subject to subsections (4), (7) and (8), pension benefits, pension benefit credits and any other benefits under a pension plan are, on divorce, annulment, separation or breakdown of common-law partnership, subject to the applicable provincial property law.

(2) Subsection 25(4) of the Act is replaced by the following:

(4) A member or former member of a pension plan may assign all or part of their pension benefit, pension benefit credit or other benefit under the plan to their spouse, former spouse, common-law partner or former common-law partner, effective as of divorce, annulment, separation, or breakdown of the common-law partnership, as the case may be. The assignee is, in respect of the assigned portion of the pension benefit, pension benefit credit or other benefit, deemed for the purposes of this Act, except section 21,

(a) to have been a member of that pension plan; and

(b) to have ceased to be a member of that pension plan as of the effective date of the assignment.

However, a subsequent spouse or common-law partner of the assignee is not entitled to any pension benefit, pension benefit credit or other benefit under the pension plan in respect of that assigned portion.

(3) The portion of subsection 25(5) of the Act before paragraph (b) is replaced by the following:

(5) On divorce, annulment, separation or breakdown of a common-law partnership, if a court order or an agreement between the parties provides for the distribution of property between a member or former member and their spouse, former spouse or former common-law partner, the administrator shall determine and administer any pension benefit, pension benefit credit or other benefit of a pension plan of the member or former member in the prescribed manner and in accordance with the court order or agreement on receipt of

(a) a written request from either the member or former member or their spouse, former spouse or former common-law partner that all or part of the pension benefit, pension benefit credit or other benefit, as the case may be, be distributed or administered in accordance with the court order or the agreement; and

(4) The portion of subsection 25(5) of the English version of the Act after paragraph (b) is replaced by the following:

However, in the case of a court order, the administrator shall not administer the pension benefit, pension benefit credit or other benefit in accordance with the court order until all appeals from that order have been finally determined or the time for appealing has expired.

(5) Subsection 25(8) of the Act is replaced by the following:

(7.1) A pension plan may provide that, if no part of the pension benefit of a member or former member is required to be distributed to that person’s spouse, former spouse or former common-law partner under a court order or agreement referred to in subsection (5), a joint and survivor pension benefit may be adjusted so that it becomes payable in the normal form of the pension benefit as defined in subsection 22(1).

(8) The aggregate of the following amounts shall not be greater than the actuarial present value of the pension benefit or other benefit, as the case may be, that would have been payable to the member or former member had the divorce, annulment, separation or breakdown not occurred:

(a) the actuarial present value of the pension benefit or other benefit paid to the member or former member, and

(b) the actuarial present value of the pension benefit or other benefit paid to the spouse, former spouse or former common-law partner of the member or former member.

1812. The heading before section 26 of the Act is replaced by the following:

Portability of Pension Benefit Credits and Purchase of Life Annuities

1813. (1) The portion of paragraph 26(3)(b) of the Act before subparagraph (i) is replaced by the following:

(b) that, if part of the pension benefit payable results from the excess described in subsection 21(1), the member or the survivor, as the case may be, must choose one of the following options in respect of that excess:

(2) Subsection 26(4) of the Act is repealed.

1814. The Act is amended by adding the following after section 26:

26.1 The administrator of a pension plan must obtain the consent of the Superintendent to transfer moneys out of the pension fund under section 26 or purchase an immediate or deferred life annuity if, in the Superintendent’s opinion, the transfer or purchase would impair the solvency of the pension fund. The Superintendent may consent to the transfer or purchase or may direct the administrator to carry out the transfer or purchase.

1815. (1) The portion of paragraph 28(1)(b) of the Act before subparagraph (i) is replaced by the following:

(b) that each member of the plan and the member’s spouse or common-law partner will be given, in the prescribed circumstances and manner and within six months — or any longer period permitted by the Superintendent — after the end of each year of operation of the plan, a written statement showing

(2) Paragraphs 28(1)(c) and (d) of the Act are replaced by the following:

(b.1) that each former member of the plan and the former member’s spouse or common-law partner will be given, in the prescribed circumstances and manner and within six months — or any longer period permitted by the Superintendent — after the end of each year of operation of the plan, a written statement showing

(i) the prescribed ratio of the plan or, if there is no prescribed ratio, the funded ratio, if applicable, and

(ii) any other prescribed information;

(c) that each member and former member of the plan, every other person entitled to pension benefits under the plan and their spouses or common-law partners may, once in each year of operation of the plan, either personally or by an agent or mandatary authorized in writing for that purpose,

(i) examine copies of the documents or information filed with the Superintendent under subsection 9.01(5), 10(1) or 10.1(1), section 12 or subsection 29.03(4) or any regulations made under paragraph 39(1)(i), the reports provided under subsection 9.01(6), the letters of credit referred to in subsection 9.11(1), the documents submitted under subsection 29.3(3), and of any other prescribed documents, at the Canadian head office of the administrator or at any other place that is agreed to by the administrator and the person requesting to examine the documents, and

(ii) order, in writing, a copy of any of those documents;

(d) that, if a member of the plan retires or ceases to be a member of the plan for any reason other than the termination of the whole of the plan, the administrator shall give to that member and to the member’s spouse or common-law partner a written statement, in the prescribed form, of the member’s pension benefits and other benefits payable under the plan, within 30 days after the date of the retirement or cessation of membership, or any longer period permitted by the Superintendent; and

(e) that, if a member of the plan dies, the administrator shall give the written statement referred to in paragraph (d) in the prescribed form within 30 days after the date of the death — or any longer period permitted by the Superintendent — to the survivor, if there is one, to the member’s designated beneficiary, if the administrator has been notified of the designation and there is no survivor, or, in every other case, to the executor, administrator or liquidator of the member’s estate or succession.

(3) Section 28 of the Act is amended by adding the following after subsection (2):

(2.1) A pension plan shall provide that if the whole of the plan is terminated, the administrator shall give to each member and former member and to the spouse or common-law partner of each member and former member, a written statement, in the prescribed form, informing them of

(a) the termination of the plan within 30 days or any longer period permitted by the Superintendent; and

(b) the member’s pension benefits and other benefits payable under the plan within 120 days after the termination or any longer period that the Superintendent may allow.

1816. (1) Subsection 29(3) of the Act is replaced by the following:

(2.1) The Superintendent may also declare the whole of a pension plan terminated if there is a cessation of crediting of benefits to the plan members.

(3) In a declaration made under subsection (2) or (2.1), the Superintendent shall declare a pension plan or part of a pension plan, as the case may be, to be terminated as of the date that the Superintendent considers appropriate in the circumstances.

(2) Subsection 29(4) of the Act is replaced by the following:

(4) If employer contributions to a multi-employer pension plan that is a defined benefit plan are suspended or cease as a result of the adoption of a new defined benefit plan, the original plan is deemed not to have been terminated, and the pension benefits and other benefits provided under the original plan are deemed to be benefits provided under the new plan in respect of any period of membership before the adoption of the new plan, whether or not the assets and liabilities of the original plan have been consolidated with those of the new plan.

(3) Subsection 29(5) of the Act is replaced by the following:

(4.1) Only the Superintendent may declare part of a pension plan terminated.

(4.2) Subject to subsections (1), (2) and (2.1), the whole of a pension plan is terminated only if the administrator or employer notifies the Superintendent in writing of their decision to terminate the pension plan and the date of the termination.

(4.3) As of the date of the termination of the whole of a pension plan, there is to be no crediting of benefits to the plan members under that pension plan.

(5) An administrator or employer who terminates or winds up a pension plan shall notify the Superintendent in writing not less than 60 and not more than 180 days before the date of the termination or winding-up.

(4) Subsection 29(6) of the Act is replaced by the following:

(6) If the whole of a pension plan is terminated, the employer shall, without delay, pay into the pension fund all amounts that would otherwise have been required to be paid to meet the prescribed tests and standards for solvency referred to in subsection 9(1) and, without limiting the generality of the foregoing, the employer shall pay into the pension fund

(a) an amount equal to the normal cost that has accrued to the date of the termination;

(b) the amounts of any prescribed special payments that are due on termination or would otherwise have become due between the date of the termination and the end of the plan year in which the pension plan is terminated;

(c) the amounts of payments that are required to be made under a workout agreement that are due on termination or would otherwise have become due between the date of the termination and the end of the plan year in which the pension plan is terminated;

(d) all of the following amounts that have not been remitted to the pension fund at the date of the termination:

(i) the amounts deducted by the employer from members’ remuneration, and

(ii) other amounts due to the pension fund from the employer; and

(e) the amounts of all of the payments that are required to be made under subsection 9.14(2).

(5) Section 29 of the Act is amended by adding the following after subsection (6):

(6.1) If the whole of a pension plan that is not a multi-employer pension plan is terminated, the employer shall pay into the pension fund, in accordance with the regulations, the amount — calculated periodically in accordance with the regulations — that is required to permit the plan to satisfy any obligations with respect to pension benefits as they are determined on the date of the termination.

(6.2) Subsection 8(1) does not apply in respect of the amount that the employer is required to pay into the pension fund under subsection (6.1). However, it applies in respect of any payments that are due and that have not been paid into the pension fund in accordance with the regulations made for the purposes of subsection (6.1).

(6.3) If, on the winding-up of the pension plan, there remains in the pension fund an amount that is more than the amount required to permit the plan to satisfy all obligations with respect to pension benefits as they are determined on the date of termination, the portion of the remaining amount that is, according to the regulations, attributable to the payments made under subsection (6.1) does not constitute a surplus and, subject to subsection (7), is to revert to the benefit of the employer.

(6.4) On the winding-up of the pension plan or the liquidation, assignment or bankruptcy of the employer, the amount required to permit the plan to satisfy any obligations with respect to pension benefits as they are determined on the date of termination is payable immediately.

(6.5) Subsection 8(1) does not apply in respect of the amount that the employer is required to pay into the pension fund under subsection (6.4). However, it applies in respect of any payments that have accrued before the date of the winding-up, liquidation, assignment or bankruptcy and that have not been remitted to the fund in accordance with the regulations made for the purposes of subsection (6.1).

(6) Subsection 29(7) of the Act is replaced by the following:

(7) On the termination or winding-up of the whole of a pension plan, no part of the assets of the plan shall revert to the benefit of the employer until the Superintendent’s consent has been obtained and provision has been made for the payment to members and former members and their spouses, common-law partners, designated beneficiaries, estates or successions of all accrued or payable benefits in respect of membership up to the date of the termination or winding-up.

(7) Subsections 29(9) to (12) of the Act are replaced by the following:

(9) On the termination of the whole or part of a pension plan, the administrator of the plan shall file with the Superintendent a termination report, prepared by a person having the prescribed qualifications, setting out the nature of the pension benefits and other benefits to be provided under the plan and a description of the methods of allocating and distributing those benefits and deciding the priorities in respect of the payment of full or partial benefits to the members. The report must also give the amount referred to in subsection (6.1) — calculated as at the date of termination — and contain any prescribed information.

(10) Assets of the pension plan may not be applied toward the provision of any benefits until the Superintendent has approved the termination report. The administrator of the plan may nevertheless pay pension benefits, as they fall due, to the person entitled.

(11) If the whole of a pension plan has been terminated and the Superintendent is of the opinion that no action or insufficient action has been taken to wind up the plan, the Superintendent may direct the administrator to distribute the assets of the plan in accordance with the regulations made under paragraph 39(1)(j), and may direct that any expenses incurred in connection with that distribution be paid out of the pension fund of the plan, and the administrator shall comply with any such direction without delay.

1817. Section 29.1 of the Act is replaced by the following:

DISTRESSED PENSION PLAN WORKOUT SCHEME

29.01 (1) Sections 29.02 to 29.3 apply only in respect of a defined benefit plan that is not a multi-employer pension plan.

(2) Sections 29.02 to 29.3 do not apply in respect of an employer who is an agent of Her Majesty in right of Canada.

29.02 The following definitions apply in sections 29.03 to 29.3:

“beneficiary” means any person, other than a member, who is entitled to pension benefits under a pension plan.

“representative” means a bargaining agent for unionized members or a representative appointed under subsection 29.08(3).

29.03 (1) Subject to the regulations, an employer may elect to enter into a distressed pension plan workout scheme, as provided for in this section and sections 29.04 to 29.3, unless the employer is in the process of being liquidated, has made an assignment or has become bankrupt or the whole of the pension plan has been terminated.

(2) The election must be authorized by a resolution of the employer and, in the case of a Crown corporation, must also be authorized by the Minister and the appropriate Minister, as defined in subsection 83(1) of the Financial Administration Act.

(3) The election must be made by means of a declaration, in the prescribed form, of an officer of the employer and the declaration must

(a) state that the employer does not anticipate being able to make the payments required under subsection 9(1.1) or that the employer is the subject of proceedings under the Companies’ Creditors Arrangement Act or Part III of the Bankruptcy and Insolvency Act;

(b) state that the employer intends to negotiate with the representatives of the members and beneficiaries with the purpose of entering into a workout agreement;

(c) indicate, in the case of an employer who is not the subject of proceedings under the Companies’ Creditors Arrangement Act or Part III of the Bankruptcy and Insolvency Act, what portion of the payments referred to in subsection 29.07(1) the employer intends to defer; and

(d) contain any prescribed information.

(4) The employer must, without delay, file the declaration, a certified copy of the employer’s resolution and any prescribed documents with the Superintendent and provide the Minister and the administrator with a copy of the documents filed.

(5) The employer must, in accordance with the regulations, provide notice of the declaration to the members and beneficiaries.

29.04 (1) On the day on which the declaration is filed with the Superintendent, a negotiation period for the purposes of paragraph 29.03(3)(b) begins and, subject to subsections (2) and (3), ends on the date that is determined in accordance with the regulations.

(2) The Minister may extend the negotiation period by a period of up to three months and, in determining whether to do so, must take into account any written representations made by the employer or the representatives and any other matter that the Minister considers relevant. No more than one extension may be granted in respect of any negotiation period.

(3) The Minister may terminate the negotiation period by notifying the Superintendent, the administrator, the employer and the representatives of the date of the termination.

29.05 Despite section 29.04, the negotiation period ends, and may not be extended, on the liquidation, assignment or bankruptcy of the employer.

29.06 Despite section 11.1 and subsections 29(2) and (2.1), the Superintendent may not revoke the registration of a pension plan or declare the whole of a pension plan terminated during the negotiation period.

29.07 (1) If an employer makes an election under subsection 29.03(1), the payments to the pension fund that become due during the negotiation period are deferred, to the extent specified in the declaration, except payments that relate to normal cost and payments of the amounts that the employer has deducted from members’ remuneration.

(2) Subsection 8(1) does not apply to the deferred payments during the negotiation period.

(3) The deferred payments and interest on those payments become due immediately if

(a) the whole of the pension plan is terminated during the negotiation period;

(b) the employer becomes the subject of proceedings under the Companies’ Creditors Arrangement Act or Part III of the Bankruptcy and Insolvency Act during the negotiation period;

(c) the workout agreement does not provide for the payment of the deferred amounts; or

(d) there is no workout agreement at the end of the negotiation period.

(4) Subsections (1) to (3) do not apply if, at the time the election is made to enter into a distressed pension plan workout scheme, the employer is the subject of proceedings under the Companies’ Creditors Arrangement Act or Part III of the Bankruptcy and Insolvency Act.

29.08 (1) Once the declaration has been filed with the Superintendent, the employer must, without delay, apply to the Federal Court for the appointment of

(a) a representative who has exclusive authority to negotiate a workout agreement on behalf of the beneficiaries; and

(b) a representative who has exclusive authority to negotiate a workout agreement on behalf of the non-unionized members, if any.

(2) If the employer is the subject of proceedings under the Companies’ Creditors Arrangement Act or Part III of the Bankruptcy and Insolvency Act, the employer must make the application instead to the appropriate court as determined by the regulations.

(3) The Federal Court or the court referred to in subsection (2) must appoint representatives who meet the prescribed eligibility criteria. The appointment is subject to any terms that the Federal Court or other court considers appropriate.

(4) Within five days after the day on which a representative is appointed, the administrator must provide the representative with the names and home addresses of the non-unionized members or beneficiaries that they represent and a copy of the declaration.

(5) Each representative — or, if the representative agrees, the employer — must, in the prescribed manner and within the prescribed period, notify the non-unionized members or beneficiaries that they represent of their appointment and provide them with any prescribed information.

(6) The costs associated with the application made under subsection (1) or (2) must be paid by the employer and not out of the pension fund.

29.09 (1) The employer and administrator must provide the representatives with any prescribed information in the prescribed manner and within the prescribed period.

(2) The reasonable fees and expenses of the representatives must be paid by the employer and not out of the pension fund.

29.1 (1) Subject to the regulations made for the purposes of sections 29.03 to 29.09, this section and sections 29.2 and 29.3, the employer and the representatives may negotiate a workout agreement that, among other things, proposes a funding schedule in respect of the pension plan for the period specified in the agreement.

(2) The proposed funding schedule may not provide for payments that become due before the day on which the negotiation period begins or that relate to normal cost.

(3) A workout agreement may not be entered into in respect of a pension plan that has been terminated in whole.

29.2 (1) The members and beneficiaries must be provided with the prescribed information regarding the proposed workout agreement within the prescribed period by their respective representatives or, if the representative agrees, by the employer.

(2) A representative who is not a bargaining agent may consent to a proposed workout agreement only if less than one third of the members or beneficiaries that they represent object to the agreement within the prescribed period.

(3) Any objection expressed by a representative on behalf of the members or beneficiaries that they represent is to be counted as a separate objection for each person that they represent.

29.3 (1) The proposed funding schedule may take effect only if it is approved by the Minister, on the request of the employer and the representatives who consent to the proposed workout agreement.

(2) The request for approval of the funding schedule may be submitted to the Minister only if less than one third of the members and less than one third of the beneficiaries object to the proposed workout agreement within the prescribed period.

(3) A request for approval must be submitted within the prescribed period and must be accompanied by

(a) a copy of the proposed workout agreement signed by the employer and the representatives that consent to it;

(b) the funding schedule in the form that the Superintendent directs;

(c) a written statement from each representative who consents to the proposed workout agreement or the employer, as the case may be, confirming that the requirements set out in subsection 29.2(1) have been met;

(d) a written statement in which the employer confirms that the requirement set out in subsection (2) has been met; and

(e) any prescribed documents or information.

(4) The Minister may approve the funding schedule only if, in the Superintendent’s opinion, it complies with the regulations made under subparagraph 39(1)(n.1)(v). In deciding whether or not to approve the funding schedule, the Minister must consider the prescribed criteria and any other matter that the Minister considers relevant.

(5) The Minister must notify the Superintendent, employer, administrator and representatives of the decision and, if the funding schedule is approved, must provide the Superintendent with a copy of the schedule.

(6) On approval by the Minister, the funding schedule is, for the purposes of this Act — except section 38 — and the regulations, considered to be part of the prescribed tests and standards for solvency in respect of the pension plan in question.

(7) In the event of an inconsistency between the approved funding schedule and the provisions of the regulations, the funding schedule prevails to the extent of the inconsistency.

1818. Subsection 33.2(1) of the Act is replaced by the following:

33.2 (1) In addition to any other action that the Superintendent may take in respect of a pension plan, the Superintendent may bring against the administrator, employer or any other person any cause of action that a member, former member or any other person entitled to a benefit from the plan could bring.

1819. (1) Subparagraph 38(1)(b)(ii) of the English version of the Act is replaced by the following:

(ii) in any record, writing or other document, makes a false or deceptive statement or a false or deceptive entry, or

(2) Subsection 38(5) of the English version of the Act is replaced by the following:

(5) If a corporation or other body is guilty of an offence under this section, every officer, director, agent or mandatary or member of the corporation or body who directed, authorized, assented to, acquiesced in or participated in the offence is a party to and guilty of the offence and is liable on summary conviction to the punishment provided for the offence, whether or not the corporation or body has been prosecuted or convicted.

1820. (1) Section 39 of the Act is amended by adding the following after paragraph (e):

(e.1) respecting the interest to be paid on the amounts due to the pension fund from the employer or the administrator;

(e.2) respecting the letters of credit referred to in subsection 9.11(1), including regulations

(i) specifying the types of payments that may be replaced by a letter of credit,

(ii) specifying the circumstances in which a payment or part of a payment may be replaced by a letter of credit and the conditions and restrictions that apply,

(iii) specifying the eligibility criteria that the issuer of the letter of credit and the trustee referred to in section 9.13 must meet,

(iv) specifying the terms and conditions that a letter of credit and a trust agreement must contain,

(v) specifying the circumstances in which, on the direction of the employer, a letter of credit may be cancelled or its face value amended and the conditions that apply, and

(vi) specifying the circumstances in which a letter of credit must be cancelled or its face value reduced and the amount — or part of the amount — in respect of which it was obtained to be paid by the employer into the pension fund;

(e.3) respecting the reduction of payments referred to in section 9.16, including specifying the conditions under which they may be reduced and the types of payments that may be reduced;

(2) Section 39 of the Act is amended by adding the following after paragraph (h.1):

(h.2) respecting solvency ratios and solvency ratio levels and the manner in which they are to be determined;

(3) Paragraph 39(i) of the Act is replaced by the following:

(i) authorizing the Superintendent to specify the information in respect of pension plans that is to be provided to the Superintendent by the administrator;

(i.1) authorizing the Superintendent to spec- ify the information in respect of pension plans that is to be provided to the Superintendent by the employer;

(4) Paragraph 39(j) of the French version of the Act is replaced by the following:

(5) Paragraph 39(j.1) of the Act is replaced by the following:

(j.1) respecting the manner in which the administrator of a pension plan must deal with complaints or inquiries from members of the pension plan, former members and any other persons entitled to pension benefits under the plan;

(6) Section 39 of the Act is amended by adding the following after paragraph (k.1):

(k.2) respecting variable benefits;

(7) Paragraph 39(l) of the French version of the Act is replaced by the following:

(8) Paragraph 39(m) of the Act is replaced by the following:

(l.1) defining the term “normal cost” for the purposes of paragraph 29(6)(a) and subsections 29.07(1) and 29.1(2);

(m) respecting the meaning of “impair the solvency” for the purposes of section 26.1;

(9) Section 39 of the Act is amended by adding the following after paragraph (m):

(m.1) respecting payment of the amount described in subsection 29(6.1);

(m.2) respecting the manner in which the amount described in subsection 29(6.1) is to be calculated, including the periodic adjustment of that amount between the date of termination and the date of the winding-up of the pension plan;

(m.3) respecting the determination of the portion referred to in subsection 29(6.3) and the reversion of that portion to the benefit of the employer;

(10) The portion of paragraph 39(n) of the French version of the Act before subparagraph (i) is replaced by the following:

(11) Section 39 of the Act is amended by adding the following after paragraph (n):

(n.1) respecting the distressed pension plan scheme provided for in sections 29.01 to 29.3, including regulations

(i) specifying the circumstances in which the election referred to in subsection 29.03(1) may not be made,

(ii) specifying the form and content of the notice to be provided under subsection 29.03(5) as well as the manner in which and the period within which it is to be provided,

(iii) respecting the negotiation process,

(iv) respecting the determination of the day on which the negotiation period is to end, and

(v) respecting the funding schedule, including what it may provide for and the requirements that it must meet;

(12) Section 39 of the Act is renumbered as subsection 39(1) and is amended by adding the following:

(2) A regulation made under this Act may be made applicable generally to all pension plans or specifically to one or more classes of pension plans.

(3) A regulation made for the purposes of subsection 8(4.1) or 9(1), sections 9.11 to 9.15 or subsection 10.1(2) may be made applicable generally to all pension plans or specifically to one or more pension plans.

1821. The Act is amended by adding the following after section 39:

39.1 (1) A regulation made under this Act may incorporate by reference a document produced by a person or body other than the Minister or the Superintendent.

(2) A regulation may incorporate by reference a document that the Minister or Superintendent reproduces or translates from a document produced by a person or body other than the Minister or Superintendent, with any adaptations of form or reference that will facilitate its incorporation.

(3) A regulation may incorporate by reference a document that the Minister or Superintendent produces jointly with a provincial or foreign government or government agency for the purpose of harmonizing the regulation with other laws.

(4) A document may be incorporated by reference as it exists on a particular date or as it is amended from time to time.

(5) No person may be convicted of an offence or subjected to a penalty for the contravention of a regulation if a document that is relevant to the offence or contravention is incorporated by reference in the regulation unless it is proved that, at the time of the alleged contravention, the document was reasonably accessible to the person or reasonable steps had been taken to ensure that the document was accessible to the public.

(6) For greater certainty, a document that is incorporated by reference in a regulation is not required to be transmitted for registration or published in the Canada Gazette by reason only that it is incorporated by reference.

(7) A regulation that is specifically applicable to one pension plan or one employer may not incorporate by reference a document produced by the employer or administrator or any person related to either of them, including any body corporate that — within the meaning of subsections 2(2), (4) and (5) of the Canada Business Corporations Act — is affiliated with either of them or is the holding body corporate or a subsidiary of either of them.

1822. Paragraphs 40(b) to (d) of the Act are repealed.

1823. The heading before section 43 and sections 43 to 45 of the Act are repealed.

1824. The French version of the Act is amended by replacing “acquises” with “accumulées” in the following provisions:

(a) paragraph (a) of the definition “régime à cotisations déterminées” in subsection 2(1);

(b) paragraph 16.1(5)(a); and

(c) paragraph 30(1)(c) and subsection 30(2).

1825. The English version of the Act is amended by replacing “void” with “void or, in Quebec, null” in the following provisions:

(a) the definition “spouse” in subsection 2(1);

(b) paragraphs 16.1(4)(g) and (5)(c);

(c) subsections 36(1), (2) and (4); and

(d) subsections 37(1) and (2).

Transitional Provision

1826. If, as a result of the adoption of a new plan, employer contributions to a pension plan are suspended or cease before the day on which subsection 29(4) of the Pension Benefits Standards Act, 1985, as enacted by subsection 1816(2), comes into force, the original plan is deemed not to have been terminated, and the pension benefits and other benefits provided under the original plan are deemed to be benefits provided under the new plan in respect of any period of membership before the adoption of the new plan, regardless of whether the assets and liabilities of the original plan have been consolidated with those of the new plan.

Coming into Force

1827. The provisions of this Part — other than sections 1788, 1789, 1792, 1793, 1794, 1796, 1798, 1799, 1801, 1803, 1810 and 1811, subsection 1813(2), section 1814, subsections 1816(1) and (3), section 1819, subsections 1820(2) to (5), (7), (8) and (10) and sections 1821, 1824 and 1825 — come into force on a day or days to be fixed by order of the Governor in Council.

PART 10

AGREEMENT ON SOCIAL SECURITY BETWEEN CANADA AND THE REPUBLIC OF POLAND — RETROACTIVE COMING INTO FORCE

1828. Despite sections 41 and 42 of the Old Age Security Act, the Agreement on Social Security between Canada and the Republic of Poland, signed on April 2, 2008, is deemed to have come into force in Canada on October 1, 2009.

1829. All actions taken in accordance with the conditions of the Agreement referred to in section 1828 during the period beginning on October 1, 2009 and ending on the day on which section 1828 comes into force, including the exchange of information — with respect to a person — that is obtained under the Old Age Security Act or prepared under that Act from that information between the competent authorities or competent institutions of Canada and the Republic of Poland and the payment of any benefits purporting to have been made under that Act, are deemed to be lawful.

1830. For the purposes of section 1829, “competent authority” and “competent institution” have the same meanings as in the Agreement referred to in section 1828.

PART 11

EXPORT DEVELOPMENT ACT

1831. Paragraph 10(1.1)(h) of the Export Development Act is replaced by the following:

(h) make any investment or enter into any transaction, including any transaction whose object is the management of portfolio risks, that is necessary or desirable for the financial management of the Corporation;

1832. Section 17 of the Act is replaced by the following:

17. (1) The Corporation may establish offices in and outside Canada, and the Corporation’s head office shall be in the National Capital Region as described in the schedule to the National Capital Act.

(2) The Corporation shall obtain the approval of the Minister and the Minister of Foreign Affairs before establishing any office outside Canada.

(3) The approval may be of a limited duration and may be subject to conditions.

(4) Either the Minister or the Minister of Foreign Affairs may, if he or she considers it appropriate, revoke the approval by giving notice to the Corporation of the revocation and of its effective date.

1833. Subsection 23(6) of the Act is replaced by the following:

(6) The Minister, with the concurrence of the Minister of Finance, may authorize the Corporation to make any investment or enter into any transaction or any class of transactions — including the forgiveness in whole or in part of any debt or obligation — that is necessary or desirable for the management of assets and liabilities arising out of any transaction that may be entered into under this section.

PART 12

PAYMENT CARD NETWORKS

Enactment of Payment Card Networks Act

1834. The Payment Card Networks Act is enacted as follows:

An Act respecting payment card networks

SHORT TITLE

1. This Act may be cited as the Payment Card Networks Act.

PURPOSE

2. The purpose of this Act is to regulate national payment card networks and the commercial practices of payment card network operators.

INTERPRETATION

3. The following definitions apply in this Act.

“acquirer” means an entity that enables merchants to accept payments by payment card by providing merchants with access to a payment card network for the transmission or processing of those payments. It does not include that entity’s agent or mandatary.

“entity” means a corporation, trust or partnership, or an unincorporated association or organization.

“issuer” means an entity or provincial Crown corporation that issues payment cards.

“Minister” means the Minister of Finance.

“payment card” means a credit or debit card — or any other prescribed device — used to access a credit or debit account on terms specified by the issuer. It does not include a credit card issued for use only with the merchants identified on the card.

“payment card network” means an electronic payment system — other than a prescribed payment system — used to accept, transmit or process transactions made by payment card for money, goods or services and to transfer information and funds among issuers, acquirers, merchants and payment card users.

“payment card network operator” means an entity that operates or manages a payment card network, including by establishing standards and procedures for the acceptance, transmission or processing of payment transactions and by facilitating the electronic transfer of information and funds.

APPLICATION

4. This Act applies to payment card network operators.

FINANCIAL CONSUMER AGENCY OF CANADA

5. (1) The Financial Consumer Agency of Canada, established under section 3 of the Financial Consumer Agency of Canada Act, is responsible for supervising payment card network operators to determine whether they are in compliance with the provisions of this Act and the regulations.

(2) The Commissioner of the Financial Consumer Agency of Canada, appointed under section 4 of the Financial Consumer Agency of Canada Act, must, from time to time but at least once in each year, make or cause to be made any examination and inquiry that the Commissioner considers necessary to determine whether the provisions of this Act and the regulations are being complied with and, after the conclusion of each examination and inquiry, must report on it to the Minister.

(3) For the purposes of this section, the Commissioner has all the powers of a person appointed as a commissioner under Part II of the Inquiries Act for the purpose of obtaining evidence under oath, and may delegate those powers to any person acting under the Commissioner’s direction.

(4) For the purposes of this section, the Commissioner or a person acting under the Commissioner’s direction

(a) has a right of access to any records, including electronic records, of a payment card network operator; and

(b) may require the directors or officers of a payment card network operator to provide information and explanations, to the extent that they are reasonably able to do so.

(5) A payment card network operator must provide the Commissioner with any information that the Commissioner may require for the purposes of this section.

(6) Subject to subsection (7), information regarding the business or affairs of a payment card network operator, or regarding persons dealing with one, that is obtained by the Commissioner or by a person acting under the Commissioner’s direction, in the course of the exercise or performance of powers, duties and functions under this section or under subsection 5(1.1) or (2.1) of the Financial Consumer Agency of Canada Act, and any information prepared from that information, is confidential and must be treated accordingly.

(7) If the Commissioner is satisfied that the information will be treated as confidential by the person to whom it is disclosed, the Commissioner may disclose it to the Deputy Minister of Finance, or any officer of the Department of Finance authorized in writing by the Deputy Minister of Finance, for the purpose of policy analysis related to the regulation of payment card network operators.

(8) The Commissioner may enter into an agreement, called a “compliance agreement”, with a payment card network operator for the purpose of implementing any measure designed to further compliance by it with the provisions of this Act and the regulations.

REGULATIONS

6. The Governor in Council may, on the recommendation of the Minister, make regulations

(a) respecting payment card networks;

(b) specifying the types of rates that a payment card network operator must disclose and the manner in which the disclosure must be made;

(c) prescribing the time and manner in which a payment card network operator must give notice of any new rates or any changes in its rates or fee schedules, as well as to whom the notice must be given;

(d) prescribing conditions regarding the issuance of payment cards that a payment card network operator must include in any agreement entered into with an issuer;

(e) prescribing conditions that a payment card network operator must include in any agreement entered into with an acquirer;

(f) prescribing anything that by this Act is to be prescribed; and

(g) generally for carrying out the purposes and provisions of this Act.

GENERAL

7. A payment card network operator that is a party to an agreement containing any of the conditions required by regulations made under paragraph 6(d) or (e) must take reasonable measures to enforce those conditions.

8. The Minister may, by order, exempt a payment card network operator from any of the provisions of this Act or the regulations.

Related Amendments to the Financial Consumer Agency of Canada Act

1835. Section 2 of the Financial Consumer Agency of Canada Act is amended by adding the following in alphabetical order:

“payment card network operator” means an entity, as defined in section 3 of the Payment Card Networks Act, that operates or manages a payment card network, as defined in that section, including by establishing standards and procedures for the acceptance, transmission or processing of payment transactions and by facilitating the electronic transfer of information and funds.

1836. Section 3 of the Act is amended by adding the following after subsection (2):

(3) The objects of the Agency are also to

(a) supervise payment card network operators to determine whether they are in compliance with the provisions of the Payment Card Networks Act and its regulations;

(b) promote the adoption by payment card network operators of policies and procedures designed to implement the provisions of the Payment Card Networks Act and its regulations;

(c) monitor the implementation of voluntary codes of conduct that have been adopted by payment card network operators and that are publicly available, and to monitor any public commitments made by them regarding their commercial practices in relation to payment card networks; and

(d) promote public awareness about the obligations of payment card network operators under a voluntary code of conduct or under the Payment Card Networks Act.

1837. (1) Section 5 of the Act is amended by adding the following after subsection (1):

(1.1) The Commissioner shall also examine and inquire into, and report to the Minister from time to time on, all matters connected with the administration of the Payment Card Networks Act and its regulations.

(2) Section 5 of the Act is amended by adding the following after subsection (2):

(2.1) The Commissioner may also collect any personal information that he or she considers necessary in furtherance of the objects described in subsection 3(3).

(3) Section 5 of the Act is amended by adding the following after subsection (3):

(3.1) If a payment card network operator has adopted a voluntary code of conduct or made a public commitment referred to in paragraph 3(3)(c), the Commissioner may make or cause to be made any review that he or she considers necessary to monitor compliance with the code or the commitment, as the case may be.

(4) Section 5 of the Act is amended by adding the following after subsection (5):

(6) The Commissioner may also carry on any activity that he or she considers necessary in furtherance of the objects described in subsection 3(3).

1838. The Act is amended by adding the following after section 7:

7.1 In order to carry out the objects described in paragraph 3(3)(c), the Agency, in the name of Her Majesty in right of Canada or in its own name, may enter into an agreement with a payment card network operator, including an agreement respecting the provision of information or the payment of fees.

1839. The Act is amended by adding the following after section 14:

14.1 The Commissioner, a person appointed under subsection 4(4) or a Deputy Commissioner shall not hold, directly or indirectly, any interest or right in any shares of a payment card network operator.

1840. (1) Section 16 of the Act is amended by adding the following after subsection (1):

(1.1) The Commissioner, a person appointed under subsection 4(4), a Deputy Commissioner and any person appointed under section 10 shall not accept or receive, directly or indirectly, any grant or gratuity from a payment card network operator, or any of its directors, officers or employees, and no payment card network operator, or any of its directors, officers or employees shall make or give any such grant or gratuity.

(2) The portion of subsection 16(2) of the Act before paragraph (a) is replaced by the following:

(2) Every person, financial institution, bank holding company, insurance holding company or payment card network operator that contravenes subsection (1) or (1.1) is guilty of an offence and liable

1841. Section 17 of the Act is amended by adding the following after subsection (2):

(3) Subject to subsection (4) and except as otherwise provided in this Act, information regarding the business or affairs of a payment card network operator, or regarding persons dealing with one, that is obtained by the Commissioner or by a person acting under the direction of the Commissioner, in the course of the exercise or performance of powers, duties and functions under subsection 5(1.1) or (2.1), and any information prepared from that information, is confidential and shall be treated accordingly.

(4) If the Commissioner is satisfied that the information will be treated as confidential by the person to whom it is disclosed, the Commissioner may disclose it to the Deputy Minister of Finance, or any officer of the Department of Finance authorized in writing by the Deputy Minister of Finance, for the purpose of policy analysis related to the regulation of payment card network operators.

1842. (1) Subsection 18(1) of the Act is replaced by the following:

18. (1) The Commissioner shall, before December 31 in each year, ascertain the total amount of expenses incurred during the immediately preceding fiscal year for or in connection with the administration of this Act and the consumer provisions — excluding the expenses incurred in connection with the objects described in subsection 3(3) — and the amounts of any prescribed categories of those expenses in relation to any prescribed group of financial institutions.

(2) Section 18 of the Act is amended by adding the following after subsection (5):

(5.1) The Commissioner shall, before December 31 in each year, ascertain the total amount of expenses incurred during the immediately preceding fiscal year in connection with the objects described in paragraphs 3(3)(a), (b) and (d).

(5.2) The amount ascertained under subsection (5.1) is final and conclusive for the purposes of this section.

(5.3) As soon as possible after ascertaining the amount under subsection (5.1), the Commissioner shall assess a portion of the total amount of expenses against each payment card network operator to the extent and in the manner that may be prescribed.

(5.4) The Commissioner may, during each fiscal year, prepare an interim assessment against any payment card network operator.

(5.5) Every assessment and interim assessment is final and conclusive and binding on the payment card network operator against which it is made.

1843. (1) Subsection 19(1) of the Act is amended by adding the following after paragraph (a):

(a.1) designating, as a violation that may be proceeded with under sections 20 to 31, the contravention of a specified provision of the Payment Card Networks Act or its regulations;

(a.2) designating, as a violation that may be proceeded with under sections 20 to 31, the non-compliance with an agreement entered into under section 7.1;

(2) Subsection 19(2) of the Act is replaced by the following:

(2) The maximum penalty for a violation is $50,000 in the case of a violation that is committed by a natural person, and $200,000 in the case of a violation that is committed by a financial institution or a payment card network operator.

1844. Section 21 of the Act is replaced by the following:

21. If a contravention or non-compliance that is designated under paragraph 19(1)(a) or (a.1) can be proceeded with either as a violation or as an offence, proceeding in one manner precludes proceeding in the other.

1845. Subsection 22(1) of the Act is replaced by the following:

22. (1) Every contravention or non-compliance that is designated under paragraphs 19(1)(a) to (a.2) constitutes a violation and the person that commits the violation is liable to a penalty determined in accordance with sections 19 and 20.

1846. Subsection 24(2) of the Act is replaced by the following:

(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 17(1) or (3).

1847. Section 28 of the Act is amended by adding the following after subsection (2):

(3) Every rule and principle of the common law that renders any circumstance a justification or excuse in relation to a charge for an offence in relation to a provision of the Payment Card Networks Act applies in respect of a violation to the extent that it is not inconsistent with this Act.

1848. Section 34 of the Act is replaced by the following:

34. The Minister shall cause to be laid before each House of Parliament, not later than the fifth sitting day of that House after September 30 next following the end of each fiscal year, a report showing the operations of the Agency for that year and describing

(a) in aggregate form, its conclusions on the compliance, in that year, of financial institutions with the consumer provisions applicable to them; and

(b) in aggregate form, its conclusions on the compliance, in that year, of payment card network operators with the provisions of the Payment Card Networks Act and its regulations.

1849. Schedule 1 to the Act is amended by adding the following in alphabetical order:

Payment Card Networks Act

Coming into Force

1850. Sections 6 and 7 of the Payment Card Networks Act, as enacted by section 1834, come into force on a day to be fixed by order of the Governor in Council.

PART 13

FINANCIAL CONSUMER AGENCY OF CANADA ACT

Amendments to the Act

1851. (1) Paragraphs 3(2)(a) and (b) of the Financial Consumer Agency of Canada Act are replaced by the following:

(a) supervise financial institutions to determine whether they are in compliance with

(i) the consumer provisions applicable to them, and

(ii) the terms and conditions or undertakings with respect to the protection of customers of financial institutions that the Minister imposes or requires, as the case may be, under an Act listed in Schedule 1 and the directions that the Minister imposes under this Act;

(b) promote the adoption by financial institutions of policies and procedures designed to implement

(i) provisions, terms and conditions, undertakings or directions referred to in paragraph (a),

(ii) voluntary codes of conduct that are designed to protect the interests of the customers of financial institutions that are adopted by financial institutions and that are publicly available, and

(iii) any public commitments made by financial institutions that are designed to protect the interests of their customers;

(2) Paragraph 3(2)(d) of the Act is replaced by the following:

(d) promote consumer awareness about the obligations of financial institutions under consumer provisions applicable to them and all matters connected with the protection of consumers of financial products and services;

(3) Subsection 3(2) of the Act is amended by adding “and” at the end of paragraph (e) and by adding the following after that paragraph:

(f) monitor and evaluate trends and emerging issues that may have an impact on consumers of financial products and services.

1852. (1) Subsection 5(2) of the Act is replaced by the following:

(2) The Commissioner may collect any personal information that he or she considers necessary in furtherance of the objects described in subsection 3(2).

(2) Subsection 5(5) of the Act is replaced by the following:

(5) The Commissioner may carry on any activity that he or she considers necessary in furtherance of the objects described in subsection 3(2).

1853. The Act is amended by adding the following after section 5:

5.1 (1) The Minister may give a written direction to the Commissioner if the Minister is of the opinion that it can strengthen consumer protection and the public’s confidence in that protection or enhance the public’s financial literacy.

(2) After implementing the direction, the Commissioner shall notify the Minister without delay that the direction has been implemented.

(3) The Commissioner’s compliance with a direction is deemed to be in the best interests of the Agency.

(4) The Statutory Instruments Act does not apply to a direction given under subsection (1).

(5) The Minister shall cause a notice to be published in the Canada Gazette that a direction was given under subsection (1) as soon as is feasible after the direction is implemented.

1854. Subsection 17(1) of the Act is replaced by the following:

17. (1) Subject to subsection (2) and except as otherwise provided in this Act, information regarding the business or affairs of a financial institution or regarding persons dealing with one that is obtained by the Commissioner or by any person acting under the direction of the Commissioner, in the course of the exercise or performance of powers, duties and functions referred to in subsections 5(1) and (2) and 5.1(2) and any information prepared from that information, is confidential and shall be treated accordingly.

1855. Subsections 18(2) and (3) of the Act are replaced by the following:

(1.1) After the publication of a notice under subsection 5.1(5), the Commissioner shall ascertain the amount of expenses that the Agency incurred in complying with the direction.

(2) The amounts ascertained under subsections (1) and (1.1) are final and conclusive for the purposes of this section.

(3) As soon as possible after ascertaining the amounts under subsections (1) and (1.1), the Commissioner shall assess a portion of the total amount of expenses against each financial institution to the extent and in the manner that the Governor in Council may, by regulation, prescribe.

1856. Paragraph 19(1)(a) of the Act is replaced by the following:

(a) designating, as a violation that may be proceeded with under sections 20 to 31, the contravention of a specified consumer provision, or the non-compliance with

(i) a compliance agreement entered into under an Act listed in Schedule 1, and

(ii) terms and conditions, undertakings or directions referred to in subparagraph 3(2)(a)(ii).

1857. Schedule 1 to the Act is amended by replacing “(Subsections 5(1) and 19(1) and section 20)” after the heading “SCHEDULE 1” with “(Subsections 3(2), 5(1) and 19(1) and section 20)”.

Consequential Amendments

Bank Act

1858. Section 973.02 of the Bank Act is amended by adding the following after subsection (1):

(1.1) If the Minister specifies that the Commissioner is to supervise a bank to determine if it is complying with any terms and conditions that are imposed, or undertakings that are required, by the Minister for the protection of the bank’s customers, the Commissioner may take the same measures that the Commissioner could take if the terms and conditions or undertaking were a consumer provision.

Cooperative Credit Associations Act

1859. Section 459.4 of the Cooperative Credit Associations Act is amended by adding the following after subsection (1):

(1.1) If the Minister specifies that the Commissioner is to supervise an association to determine if it is complying with any terms and conditions that are imposed, or undertakings that are required, by the Minister for the protection of the association’s customers, the Commissioner may take the same measures that the Commissioner could take if the terms and conditions or undertaking were a consumer provision.

Insurance Companies Act

1860. Section 1016.2 of the Insurance Companies Act is amended by adding the following after subsection (1):

(1.1) If the Minister specifies that the Commissioner is to supervise a company to determine if it is complying with any terms and conditions that are imposed, or undertakings that are required, by the Minister for the protection of the company’s customers, the Commissioner may take the same measures that the Commissioner could take if the terms and conditions or undertaking were a consumer provision.

Trust and Loan Companies Act

1861. Section 527.4 of the Trust and Loan Companies Act is amended by adding the following after subsection (1):

(1.1) If the Minister specifies that the Commissioner is to supervise a company to determine if it is complying with any terms and conditions that are imposed, or undertakings that are required, by the Minister for the protection of the company’s customers, the Commissioner may take the same measures that the Commissioner could take if the terms and conditions or undertaking were a consumer provision.

PART 14

PROCEEDS OF CRIME (MONEY LAUNDERING) AND TERRORIST FINANCING ACT

Amendments to the Act

1862. (1) The definition “legal counsel” in section 2 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act is replaced by the following:

“legal counsel” means, in Quebec, an advocate or a notary and, in any other province, a barrister or solicitor.

(2) Section 2 of the Act is amended by adding the following in alphabetical order:

“Financial Action Task Force” means the Financial Action Task Force on Money Laundering established in 1989.

“legal firm” means an entity that is engaged in the business of providing legal services to the public.

1863. Section 3 of the Act is amended by striking out “and” at the end of paragraph (b), by adding “and” at the end of paragraph (c) and by adding the following after paragraph (c):

(d) to enhance Canada’s capacity to take targeted measures to protect its financial system and to facilitate Canada’s efforts to mitigate the risk that its financial system could be used as a vehicle for money laundering and the financing of terrorist activities.

1864. Subsection 9(1) of the Act is replaced by the following:

9. (1) Subject to section 10.1, every person or entity referred to in section 5 shall report to the Centre, in the prescribed form and manner,

(a) any financial transaction, or any financial transaction within a class of financial transactions, specified in a directive issued under Part 1.1 that occurs or that is attempted in the course of their activities; and

(b) any prescribed financial transaction that occurs in the course of their activities.

1865. Subsection 9.6(1) of the Act is replaced by the following:

9.6 (1) Every person or entity referred to in section 5 shall establish and implement, in accordance with the regulations, a program intended to ensure their compliance with this Part and Part 1.1.

1866. Sections 9.7 and 9.8 of the Act are replaced by the following:

9.7 (1) Every entity referred to in any of paragraphs 5(a) to (g), except for authorized foreign banks within the meaning of section 2 of the Bank Act and for foreign companies within the meaning of section 2 of the Insurance Companies Act, shall ensure that their wholly owned subsidiaries that are located in a country that is not a member of the Financial Action Task Force and that carry out activities similar to those of persons and entities referred to in those paragraphs develop and apply policies and procedures that are consistent with the requirements of sections 6, 6.1 and 9.6, when the laws of the country permit it.

(2) If the development or application by a subsidiary of a policy or procedure referred to in subsection (1) would contravene the laws of the country in which the subsidiary is located, the entity shall keep and retain a record of that fact in accordance with section 6.

9.8 Every entity referred to in paragraphs 5(a) to (g), except for authorized foreign banks within the meaning of section 2 of the Bank Act and for foreign companies within the meaning of section 2 of the Insurance Companies Act, shall ensure that their branches that are located in a country that is not a member of the Financial Action Task Force and that carry out activities similar to those of persons and entities referred to in those paragraphs develop and apply policies and procedures that are consistent with the requirements of sections 6, 6.1 and 9.6 when the laws of the country permit it.

1867. Section 10.1 of the French version of the Act is replaced by the following:

1868. Section 11 of the English version of the Act is replaced by the following:

11. Nothing in this Part requires a legal counsel to disclose any communication that is subject to solicitor-client privilege or, in Quebec, the professional secrecy of legal counsel.

1869. The Act is amended by adding the following after section 11.4:

PART 1.1

PROTECTION OF CANADA’S FINANCIAL SYSTEM

Interpretation

11.41 In this Part, “foreign state” means a country other than Canada and includes any political subdivision or territory of a foreign state.

Ministerial Directive

11.42 (1) In addition to any other measure required by this Act, the Minister may, by written directive, require any person or entity referred to in section 5 to take, in order to safeguard the integrity of Canada’s financial system,

(a) any prescribed measure specified in the directive with respect to any financial transaction, or any financial transaction within a class of financial transactions, originating from or bound for any foreign state or foreign entity, that occurs or is attempted in the course of their activities; or

(b) any other measure specified in the directive with respect to those transactions.

(2) The measures specified in a directive may include provision for the following matters:

(a) the verification of the identity of any person or entity;

(b) the exercise of customer due diligence, including ascertaining the source of funds in any financial transaction, the purpose of any financial transaction or the beneficial ownership or control of any entity;

(c) the monitoring of any financial transaction or any account;

(d) the keeping and retention of any records;

(e) the reporting of any financial transaction to the Centre; and

(f) compliance with this Part and Part 1.

(3) The Minister may require the Director of the Centre to communicate a directive in accordance with the Minister’s instructions.

(4) Before issuing a directive, the Minister may take into account any circumstance that the Minister considers relevant. However, the Minister may only issue a directive if

(a) an international organization, body, association or coalition or a grouping of states (such as the Financial Action Task Force) of which Canada is a member has called on its members to take measures in relation to a foreign state or foreign entity on the ground that the state’s or entity’s anti-money laundering or anti-terrorist financing measures are ineffective or insufficient; or

(b) the anti-money laundering or anti-terrorist financing measures that a foreign state or a foreign entity has implemented are ineffective or insufficient and, as a result, the Minister is of the opinion that there could be an adverse impact on the integrity of the Canadian financial system or a reputational risk to that system.

(5) The Minister may impose any terms and conditions in the directive that the Minister considers appropriate.

11.43 The person or entity to which a directive under this Part applies shall comply with it within the time and in the manner specified in the directive.

11.44 (1) Every entity referred to in any of paragraphs 5(a) to (g), except for authorized foreign banks within the meaning of section 2 of the Bank Act and for foreign companies within the meaning of section 2 of the Insurance Companies Act, shall ensure that their wholly owned subsidiaries that are located outside Canada and that carry out activities similar to those of persons and entities referred to in those paragraphs comply with, when those subsidiaries are permitted to do so by law, any directive issued under this Part except with respect to any reporting measure as contemplated by paragraph 11.42(2)(e).

(2) If compliance with a directive by a subsidiary would contravene the laws of the country in which the subsidiary is located, the entity shall keep and retain a record of that fact in accordance with section 6.

11.45 Every entity referred to in any of paragraphs 5(a) to (g), except for authorized foreign banks within the meaning of section 2 of the Bank Act and for foreign companies within the meaning of section 2 of the Insurance Companies Act, shall ensure that their branches that are located outside Canada and that carry out activities similar to those of persons and entities referred to in those paragraphs comply with, when those branches are permitted to do so by law, any directive issued under this Part except with respect to any reporting measure as contemplated by paragraph 11.42(2)(e).

11.46 In the event of any inconsistency or conflict between a directive issued under this Part and a regulation made under this Act, the directive prevails to the extent of the inconsistency or conflict.

11.47 A directive issued under this Part is not a statutory instrument within the meaning of the Statutory Instruments Act. However, it must be published in the Canada Gazette.

11.48 (1) The Minister shall, at least every three years after the issuance of a directive under this Part, review that directive to determine whether it is advisable, in the Minister’s opinion, to amend or revoke it.

(2) In reviewing a directive, the Minister may take into account any circumstance that the Minister considers relevant.

Limitation and Prohibition of Financial Transactions

11.49 (1) The Governor in Council may, on the recommendation of the Minister, make regulations

(a) imposing a limitation or a prohibition on any person or entity referred to in section 5, with respect to entering into, undertaking or facilitating, directly or indirectly, any financial transaction, or any financial transaction within a class of financial transactions, originating from or bound for any foreign state or foreign entity;

(b) prescribing terms and conditions with respect to a limitation or prohibition referred to in paragraph (a); and

(c) excluding any transaction or any class of transactions from a limitation or prohibition imposed under paragraph (a).

(2) The Minister shall consult with the Minister of Foreign Affairs before making a recommendation.

(3) The Minister may, before making a recommendation, take into account any circumstance that the Minister considers relevant. However, the Minister may only make a recommendation

(a) if

(i) an international organization, body, association or coalition or a grouping of states (such as the Financial Action Task Force) of which Canada is a member has called on its members to take measures in relation to a foreign state or foreign entity on the ground that the state’s or entity’s anti-money laundering or anti-terrorist financing measures are ineffective or insufficient, and

(ii) there is a risk that money laundering activities or terrorist financing activities may be carried out in that foreign state or by means of that foreign entity; or

(b) if the anti-money laundering or anti-terrorist financing measures that a foreign state or a foreign entity has implemented are ineffective or insufficient, the risk of money laundering activities or terrorist financing activities being carried out in that foreign state or by means of that foreign entity is significant and, as a result, the Minister is of the opinion that there could be an adverse impact on the integrity of the Canadian financial system or a reputational risk to that system.

11.5 (1) The Minister shall, at least every three years after the making of a regulation under this Part, review that regulation to determine whether it is advisable, in the Minister’s opinion, that it be amended or repealed.

(2) In reviewing a regulation, the Minister may take into account any circumstance that the Minister considers relevant.

11.6 Every entity referred to in any of paragraphs 5(a) to (g), except for authorized foreign banks within the meaning of section 2 of the Bank Act and for foreign companies within the meaning of section 2 of the Insurance Companies Act, shall ensure that their branches that are located outside Canada and that carry out activities similar to those of persons and entities referred to in those paragraphs comply with any regulation made under subsection 11.49(1) when those branches are permitted to do so by law.

11.7 (1) The Governor in Council may, by order, authorize the Minister to issue to any person or entity referred to in section 5 a permit to enter into, undertake or facilitate a financial transaction or class of financial transactions, specified by the Minister, that is otherwise limited or prohibited by regulation.

(2) A permit may be subject to any terms and conditions that the Minister considers appropriate.

(3) The Minister may amend, suspend, revoke or reinstate a permit.

1870. (1) Paragraph 40(b) of the Act is replaced by the following:

(b) collects, analyses, assesses and discloses information in order to assist in the detection, prevention and deterrence of money laundering and of the financing of terrorist activities, and in order to assist the Minister in carrying out the Minister’s powers and duties under Part 1.1;

(2) Paragraph 40(e) of the Act is replaced by the following:

(e) ensures compliance with Parts 1 and 1.1.

1871. Subsection 52(3) of the Act is replaced by the following:

(3) Subject to subsection 53.1(1), the Director shall, at the Minister’s request, disclose to the Minister any information that the Minister considers relevant for the purpose of carrying out the Minister’s powers and duties under this Act.

1872. The Act is amended by adding the following after section 53:

53.1 (1) The Director shall, at the request of the Minister, disclose to the Minister any information received or collected by the Centre under paragraph 54(a) or (b), or any analysis conducted by the Centre under paragraph 54(c), that the Minister considers relevant for the purpose of carrying out the Minister’s powers and duties under Part 1.1.

(2) If the Director is of the opinion that information received or collected by the Centre under paragraph 54(a) or (b), or any analysis conducted by the Centre under paragraph 54(c), would assist the Minister in carrying out the Minister’s powers and duties under Part 1.1, the Director may disclose that information or analysis to the Minister.

53.2 Despite section 53.1, the Director shall not disclose any information that would directly or indirectly identify any person or entity other than a foreign entity.

53.3 (1) The Director shall seek consent for disclosure of information that was provided to the Centre in confidence by the institutions or agencies mentioned in paragraph (a), (b) or (c), as the case may be, if that information is contained in the information or analysis requested by the Minister under subsection 53.1(1):

(a) federal or provincial law enforcement agencies;

(b) federal government institutions or federal government agencies; or

(c) a government of a foreign state, an international organization established by the governments of foreign states, or an institution or agency of a foreign state that has powers and duties similar to those of the Centre, with which the Minister or the Centre has entered into a written agreement or arrangement under subsection 56(1) or (2), if the agreement or arrangement so provides.

(2) The Director shall not disclose the information that was provided to the Centre in confidence before having obtained the consent referred to in subsection (1).

1873. Paragraph 54(a) of the Act is replaced by the following:

(a) shall receive reports made under section 7, 7.1, 9, 12 or 20 or in accordance with a directive issued under Part 1.1, incomplete reports sent under subsection 14(5), reports referred to in section 9.1, information provided to the Centre by any agency of another country that has powers and duties similar to those of the Centre, information provided to the Centre by law enforcement agencies or government institutions or agencies, and other information voluntarily provided to the Centre about suspicions of money laundering or of the financing of terrorist activities;

1874. Paragraphs 55(3)(b) and (b.1) of the Act are replaced by the following:

(b) the Canada Revenue Agency, if the Centre also has reasonable grounds to suspect that the information is relevant to an offence of obtaining or attempting to obtain a rebate, refund or credit to which a person or entity is not entitled, or of evading or attempting to evade paying taxes or duties imposed under an Act of Parliament administered by the Minister of National Revenue;

(b.1) the Canada Border Services Agency, if the Centre also has reasonable grounds to suspect that the information is relevant to an offence of evading or attempting to evade paying taxes or duties imposed under an Act of Parliament administered by the Agency;

1875. (1) Subparagraphs 58(1)(c)(ii) and (ii.1) of the Act are replaced by the following:

(ii) the nature and extent of money laundering inside and outside Canada,

(ii.1) the nature and extent of the financing of terrorist activities inside and outside Canada, and

(2) Subparagraph 58(1)(c)(iii) of the English version of the Act is replaced by the following:

(iii) measures that have been or might be taken to detect, prevent and deter money laundering and the financing of terrorist activities inside and outside Canada, and the effectiveness of those measures.

1876. The Act is amended by adding the following after section 58:

58.1 (1) The Centre may, at the request of the Minister, disclose information received or collected by the Centre under paragraph 54(a) or (b), or any analysis conducted by the Centre under paragraph 54(c), to authorities specified by the Minister for the purpose of assisting the Minister in carrying out the Minister’s powers and duties under Part 1.1.

(2) Despite subsection (1), the Centre shall not disclose any information that would directly or indirectly identify any person or entity other than a foreign entity.

1877. Subsection 73(1) of the Act is amended by adding the following after paragraph (y):

(y.1) prescribing the measures to be taken for the purpose of paragraph 11.42(1)(a);

(y.2) defining the expression “foreign entity” referred to in Part 1.1, section 53.2 and subsection 58.1(2);

1878. (1) The portion of section 74 of the Act before paragraph (a) is replaced by the following:

74. (1) Every person or entity that knowingly contravenes any of sections 6, 6.1 and 9.1 to 9.3, subsection 9.4(2), sections 9.5 to 9.7, 11.1, 11.44, 11.45 and 11.6, subsections 12(1) and (4) and 36(1), section 37, subsections 55(1) and (2), section 57 and subsections 62(2), 63.1(2) and 64(3) or the regulations is guilty of an offence and liable

(2) Section 74 of the Act is amended by adding the following after subsection (1):

(2) Every person or entity that knowingly contravenes section 11.43, except insofar as it relates to any required reporting measure as contemplated by paragraph 11.42(2)(e) and specified in a directive issued under subsection 11.42(1), is guilty of an offence and liable

(a) on summary conviction, to a fine of not more than $50,000 or to imprisonment for a term of not more than six months, or to both; or

(b) on conviction on indictment, to a fine of not more than $500,000 or to imprisonment for a term of not more than five years, or to both.

1879. The portion of subsection 75(1) of the Act before paragraph (a) is replaced by the following:

75. (1) Every person or entity that knowingly contravenes section 7 or 7.1 or any regulation made under subsection 11.49(1) is guilty of an offence and liable

1880. Subsection 77(2) of the Act is replaced by the following:

(2) Every person or entity that contravenes section 11.43, only insofar as it relates to any required reporting measure as contemplated by paragraph 11.42(2)(e) and specified in a directive issued under subsection 11.42(1), is guilty of an offence and liable on summary conviction to a fine of not more than $500,000 for a first offence and of not more than $1,000,000 for each subsequent offence.

(3) No person or entity shall be convicted of an offence under subsection (1) or (2) if they establish that they exercised due diligence to prevent its commission.

1881. Section 81 of the Act is replaced by the following:

81. Proceedings under paragraph 74(1)(a), 74(2)(a), 75(1)(a) or 76(a), subsection 77(1) or (2), or paragraph 77.1(a) may be instituted within, but not after, five years after the time when the subject-matter of the proceedings arose.

1882. The Act is amended by replacing “Part 1” with “Part 1 or 1.1” in the following provisions:

(a) the portion of subsection 62(1) before paragraph (a), paragraph 62(1)(a) and subsection 62(2);

(b) paragraphs 63(2)(a) and (b);

(c) section 63.1; and

(d) section 65.