Bill S-5

Canadian Payments Act

207. Paragraphs 9(3)(a) and (b) of the Canadian Payments Act are replaced by the following:

(a) banks, but excluding federal credit unions as defined in section 2 of the Bank Act, and authorized foreign banks;

(b) centrals, cooperative credit associations and federal credit unions as defined in that section;

208. Subsection 18(3) of the Act is replaced by the following:

(3) A by-law establishing a penalty shall not be submitted to the Minister for approval until it has been submitted for approval to the members and approved by them at a meeting of members.

209. The Act is amended by adding the following after section 46:

46.1 (1) An order of a compliance panel established under paragraph 8(1)(a) of Canadian Payments Association By-law No. 6 — Compliance may be made an order of the Federal Court or of a superior court of a province and may be enforced in the same manner as an order of that court as if it had been an order of that court on the date of the decision.

(2) An order of a compliance panel may be made an order of a court in accordance with the usual practice and procedure of the court in such matters, if any, or by the filing of a certified copy of the decision with the registrar of the court.

(3) If an order of a compliance panel that has been made an order of a court is rescinded or varied by a subsequent order of the compliance panel, the order of the court is vacated and the subsequent order may be made an order of the court in accordance with subsection (2).

(4) The President may enforce any order of a compliance panel whether or not the order has been made an order of a court.

Winding-up and Restructuring Act

210. (1) Paragraph 161(1)(a) of the Winding-up and Restructuring Act is replaced by the following:

(a) costs of liquidation;

(2) Subsections 161(2) to (6) of the Act are replaced by the following:

(2) No payment on a claim by a policyholder of a company insuring risks under policies referred to in subparagraph (1)(c)(i) claiming a minimum amount that the company has agreed to pay under a policy in respect of an amount for which a segregated fund is maintained under section 451, subsection 542.03(2) or section 593 of the Insurance Companies Act for a deficiency if the assets of the fund are insufficient to satisfy such a claim, shall be made unless the assets of the company are sufficient to pay the claims referred to in subsection (1) and all of the terms of the policies of policyholders referred to in that subsection have been satisfied in full including any interest component of those policies accruing to the date of payment of the claim.

(2.1) No payment on a claim by a creditor of a company insuring risks under policies referred to in subparagraph (1)(c)(i) shall be made unless the assets of the company are sufficient to pay the claims referred to in subsections (1) and (2) and all of the terms of the policies of the policyholders referred to in those subsections have been satisfied in full including any interest component of those policies accruing to the date of payment of the claim.

(3) For the purposes of subsections (2) and (2.1), the interest component of the claims of policyholders referred to in subparagraph (1)(c)(i) shall be treated as part of the claim that has arisen under the policy in accordance with the terms of the policy.

(4) No payment on a claim by a creditor of a company insuring risks under policies referred to in subparagraph (1)(c)(ii) shall be made unless the assets of the company are sufficient to pay the claims referred to in subsection (1).

(5) Holders of subordinated indebtedness, within the meaning of subsection 2(1) of the Insurance Companies Act, of a company and other indebtedness that by their terms rank equally or are subordinate to such indebtedness are entitled to receive payment on their claims only if the assets of the company are sufficient to pay the claims referred to in subsections (2), (2.1) and (4).

(6) Despite anything in this Part but subject to subsection (8), if a company is a foreign company, no claim, after the payment of costs of liquidation, ranks against the assets other than claims described in paragraphs (a) to (c), and the balance, if any, of the assets remaining after those claims are paid shall be applied by the liquidator in satisfaction of the claims of any other creditors — but not including policyholders and creditors of the foreign company in respect of a class of insurance not specified in the order referred to in paragraph (b) — of the insurance business in Canada of the foreign company in accordance with subsections (2), (2.1) and (4):

(a) the preferred creditors referred to in paragraph (1)(b);

(b) holders of policies of a class of insurance specified in the order of the Superintendent under Part XIII of the Insurance Companies Act other than holders of a policy exempt from Part XIII by virtue of section 572.1 of that Act; and

(c) expenses described in paragraph 686(1)(a) of the Insurance Companies Act, that were incurred by the Superintendent in respect of the company and assessed against and paid by other companies pursuant to that Act, and interest in respect of those expenses at the rate that is specified by the Superintendent.

(3) The portion of paragraph 161(8)(b) of the Act before clause (ii)(A) is replaced by the following:

(b) risks falling within some other class of insurance, other than accident and sickness insurance, credit protection insurance and other approved products insurance,

(i) in the case of the costs of liquidation and the claims of preferred creditors, the costs, portions of expenses and claims shall be paid from the assets in Canada, maintained for the policies referred to in subparagraphs (ii) and (iii), together with the assets under the control of the chief agent, in the proportion that the court considers fair and equitable,

(ii) in the case of policies falling within the classes of life insurance, accident and sickness insurance, credit protection insurance and other approved products insurance, claims shall be paid

(4) Subsection 161(9) of the Act is replaced by the following:

(9) For greater certainty, the costs, claims and expenses referred to in subsections (6) and (8) shall be paid in accordance with the priorities set out in subsection (1).

211. Section 164 of the Act is replaced by the following:

164. (1) The assets of the company in Canada that may be on deposit with any government in Canada or with trustees or otherwise held for the company or for the protection of the policyholders of the company of the class or classes that are affected by the winding-up order shall, on order of the court having jurisdiction, be transferred to the liquidator.

(2) If the company is a Canadian company that has deposited with the government of any state or country outside Canada, or with any trustee or other person in that state or country, any of its assets for the protection of the company’s policyholders in that state or country, the liquidator may request that government, trustee or other person to transfer those assets to the liquidator and on the transfer being made, those assets shall be used for the benefit of all the company’s policyholders in the same manner as any other assets of the company.

(3) If a government, trustee or other person referred to in subsection (2) does not transfer the assets deposited with it within the period commencing with the date of the liquidator’s request for the transfer of those assets that the Court may fix, the policyholders of the company, for whose protection the deposit was made, are deemed to have refused the reinsurance, if any, arranged by the liquidator, and, whether transfer or reinsurance has been arranged or not, to have forfeited all right and claim to any share of the assets of the company other than the assets so deposited for their protection outside Canada.

Office of the Superintendent of Financial Institutions Act

212. The Office of the Superintendent of Financial Institutions Act is amended by adding the following after section 39:

IMMUNITIES

39.1 The Superintendent, any Deputy Superintendent, any officer or employee of the Office or any person acting under the direction of the Superintendent, is not a compellable witness in any civil proceedings in respect of any matter coming to their knowledge as a result of exercising any of their powers or performing any of their duties or functions under this Act or the Acts listed in the schedule.

Payment Clearing and Settlement Act

213. (1) The portion of section 2 of the English version of the Payment Clearing and Settlement Act before the definition “Bank” is replaced by the following:

2. The following definitions apply in this Act.

(2) The definition “clearing and settlement system” in section 2 of the Act is replaced by the following:

“clearing and settlement system” means a system or arrangement for the clearing or settlement of payment obligations or payment messages in which

(a) there are at least three participants, at least one of which is a Canadian participant and at least one of which has its head office in a jurisdiction other than the jurisdiction where the head office of the clearing house is located;

(b) clearing or settlement is all or partly in Canadian dollars; and

(c) the payment obligations that arise from clearing within the system or arrangement are ultimately settled through adjustments to the account or accounts of one or more of the participants at the Bank.

For greater certainty, it includes a system or arrangement for the clearing or settlement of securities transactions, derivatives contracts, foreign exchange transactions or other transactions where the system or arrangement also clears or settles payment obligations arising from those transactions.

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

“Canadian participant” means a participant that is incorporated or formed under an enactment of Canada or a province.

214. Section 15 of the Act is replaced by the following:

15. If a clearing house or a participant fails to comply with a provision of this Act, with a directive issued to it by the Governor of the Bank in connection with any matter under this Act or with an agreement that it has entered into under section 5, or if a person to whom a request referred to in subsection 14(1) is directed fails to comply with the request, the Bank or the Governor may apply to a superior court for an order directing the clearing house, participant or person, as the case may be, to comply with the provision, directive, agreement or request and, on the application, the court may so order and make any further order it thinks fit.

215. (1) Paragraph 18(2)(a) of the Act is replaced by the following:

(a) to any government agency or regulatory body, charged with the regulation of

(i) financial institutions, as defined in section 2 of the Trust and Loan Companies Act, for purposes related to that regulation, or

(ii) entities that provide clearing or settlement services in connection with securities transactions or eligible financial contracts, for purposes related to that regulation, and

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

(3) Nothing in subsection (1) prevents the Bank from disclosing any information or documents pertaining to a clearing and settlement system that the Bank has designated under subsection 4(1) to any government agency or regulatory body charged with the regulation of systems or arrangements for the clearing or settlement of payment obligations or payment messages, for purposes related to that regulation, if the Bank is satisfied that the information or documents will be treated as confidential by the agency or body to whom they are disclosed.

216. Subsection 22(3) of the Act is repealed.

Financial Consumer Agency of Canada Act

217. (1) Paragraph (a) of the definition “consumer provision” in section 2 of the Financial Consumer Agency of Canada Act is replaced by the following:

(a) paragraphs 157(2)(e) and (f), section 413.1, subsection 418.1(3), sections 439.1 to 459.5, subsections 540(2) and (3) and 545(4) and (5), paragraphs 545(6)(b) and (c), subsection 552(3) and sections 559 to 576.3 of the Bank Act together with any regulations made under or for the purposes of those provisions;

(2) Paragraph (a) of the definition “consumer provision” in section 2 of the Act is replaced by the following:

(a) paragraphs 157(2)(e) and (f), sections 273.1 and 413.1, subsection 418.1(3), sections 439.1 to 459.5, subsections 540(2) and (3) and 545(4) and (5), paragraphs 545(6)(b) and (c), subsection 552(3) and sections 559 to 576.2 of the Bank Act together with any regulations made under or for the purposes of those provisions;

(3) The definition “consumer provision” in section 2 of the Act is amended by adding the following after paragraph (a):

(a.1) sections 992 to 1003 of the Bank Act as those sections apply to any notice, document or other information that is required under the provisions referred to in paragraph (a);

(4) The definition “consumer provision” in section 2 of the Act is amended by adding the following after paragraph (b):

(b.1) sections 487.01 to 487.12 of the Cooperative Credit Associations Act as those sections apply to any notice, document or other information that is required under the provisions referred to in paragraph (b);

(5) The definition “consumer provision” in section 2 of the Act is amended by adding the following after paragraph (c):

(c.1) sections 1034 to 1045 of the Insurance Companies Act as those sections apply to any notice, document or other information that is required under the provisions referred to in paragraph (c);

(6) The definition “consumer provision” in section 2 of the Act is amended by striking out “and” at the end of paragraph (d) and by adding the following after that paragraph:

(d.1) sections 539.01 to 539.12 of the Trust and Loan Companies Act as those sections apply to any notice, document or other information that is required under the provisions referred to in paragraph (d); and

218. (1) Subsection 17(1) of the French version of the Act is replaced by the following:

(2) Subsection 17(3) of the French version of the Act is replaced by the following:

219. 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 $500,000 in the case of a violation that is committed by a financial institution or a payment card network operator.

220. The Act is amended by adding the following after section 33:

IMMUNITIES

33.1 The Commissioner, any Deputy Commissioner, any officer or employee of the Agency or any person acting under the direction of the Commissioner, is not a compellable witness in any civil proceedings in respect of any matter coming to their knowledge as a result of exercising any of their powers or performing any of their duties or functions under this Act or the Acts listed in Schedule 1.

221. Schedule 1 to the Act is amended by replacing the references after the heading “SCHEDULE 1” with the following:

PART 6

COORDINATING AMENDMENTS AND COMING INTO FORCE

Coordinating Amendments

222. On the first day on which both subsections 217(1) and (2) are in force, paragraph (a) of the definition “consumer provision” in section 2 of the Financial Consumer Agency of Canada Act is replaced by the following:

(a) paragraphs 157(2)(e) and (f), sections 273.1 and 413.1, subsection 418.1(3), sections 439.1 to 459.5, subsections 540(2) and (3) and 545(4) and (5), paragraphs 545(6)(b) and (c), subsection 552(3) and sections 559 to 576.3 of the Bank Act together with any regulations made under or for the purposes of those provisions;

223. (1) In this section, “other Act” means the Jobs and Economic Growth Act.

(2) On the first day on which both subsection 1894(8) of the other Act and this section are in force, the definition “member” in section 2 of the Bank Act is replaced by the following:

“member”, in relation to a federal credit union, means a person who is one of the members of the federal credit union in accordance with subsection 47.04(2);

(3) On the first day on which both subsection 1950(3) of the other Act and section 5 of this Act are in force, subsection 138(1.1) of the Bank Act is replaced by the following:

(1.1) A bank with equity of twelve billion dollars or more that is not a federal credit union must set out in the notice of a meeting the number of eligible votes, as defined under subsection 156.09(1), that may be cast at the meeting as of the record date for determining shareholders entitled to receive the notice of meeting or, if there are to be separate votes of shareholders at the meeting, the number of eligible votes, as defined in that subsection, in respect of each separate vote to be held at the meeting.

(4) On the first day on which both section 1995 of the other Act and this section are in force, paragraph 216.14(1)(d) of the Bank Act is replaced by the following:

(d) respecting, for the purposes of a proposal to become a bank with common shares, the value of the converting federal credit union and of its membership shares and shares, if any, and authorizing the Superintendent to specify a day as of which those values must be estimated;

(5) If section 2057 of the other Act comes into force before section 17 of this Act, then that section 17 is replaced by the following:

17. Subsection 376.1(1) of the Act is replaced by the following:

376.1 (1) No person who has a significant interest in any class of shares of a widely held bank with equity of twelve billion dollars or more may have a significant interest in any class of shares of a subsidiary of the widely held bank that is a bank or a bank holding company.

(6) If section 2057 of the other Act comes into force on the same day as section 17 of this Act, then that section 17 is deemed to have come into force before that section 2057.

(7) If section 2058 of the other Act comes into force before section 18 of this Act, then that section 18 is replaced by the following:

18. Subsection 376.2(1) of the Act is replaced by the following:

376.2 (1) No person who has a significant interest in any class of shares of a bank may have a significant interest in any class of shares of any widely held bank with equity of twelve billion dollars or more, or of any widely held bank holding company with equity of twelve billion dollars or more, that controls the bank.

(8) If section 2058 of the other Act comes into force on the same day as section 18 of this Act, then that section 18 is deemed to have come into force before that section 2058.

(9) If section 2060 of the other Act comes into force before section 20 of this Act, then, on the day on which that section 20 comes into force, section 377.1 of the Bank Act is amended by adding the following after subsection (1):

(1.1) Subsection (1) does not apply in respect of a person who acquires control of a federal credit union.

(10) If section 2060 of the other Act comes into force on the same day as section 20 of this Act, then that section 20 is deemed to have come into force before that section 2060.

(11) If section 2062 of the other Act comes into force before section 22 of this Act, then that section 22 is replaced by the following:

22. Subsection 380(1) of the Act is replaced by the following:

380. (1) On application by a bank, other than a bank with equity of twelve billion dollars or more, the Superintendent may exempt any class of non-voting shares of the bank the aggregate book value of which is not more than 30 per cent of the aggregate book value of all the outstanding shares of the bank from the application of sections 373 and 379.

(12) If section 22 of this Act comes into force before section 2062 of the other Act, then, on the day on which that section 2062 comes into force, subsection 380(1) of the Bank Act is replaced by the following:

380. (1) On application by a bank, other than a bank with equity of twelve billion dollars or more, the Superintendent may exempt any class of non-voting shares of the bank the aggregate book value of which is not more than 30 per cent of the aggregate book value of all the outstanding shares of the bank from the application of sections 373 and 379.

(13) If section 2062 of the other Act comes into force on the same day as section 22 of this Act, then that section 22 is deemed to have come into force before that section 2062 and subsection (12) applies as a consequence.

(14) On the first day on which both subsection 2069(2) of the other Act and section 31 of this Act are in force, paragraph 396(2)(a) of the Bank Act is replaced by the following:

(a) more than 10 per cent but no more than 20 per cent of any class of the outstanding voting shares of a widely held bank with equity of twelve billion dollars or more that is not a federal credit union; or

(15) On the first day on which both subsection 2071(2) of the other Act and section 32 of this Act are in force, subsection 401.2(2) of the Bank Act is replaced by the following:

(2) Despite subsection (1), a bank may record in its securities register or members register a transfer or issue of any share or membership share of the bank to a foreign bank, or to a foreign institution, that is controlled by the government of a foreign country or any political subdivision of a foreign country, or by any agent or agency of a foreign government, if the share or membership share that is transferred or issued is beneficially owned by the foreign bank or foreign institution or by an entity controlled by the foreign bank or foreign institution.

(16) If section 2072 of the other Act comes into force before section 33 of this Act, then that section 33 is replaced by the following:

33. Subsection 401.3(3) of the Act is replaced by the following:

(3) Subsections (1) and (2) do not apply to a foreign bank, or to a foreign institution, that is controlled by the government of a foreign country or any political subdivision of a foreign country, or by any agent or agency of a foreign government, if the share referred to in subsection (1), or, in the case of a federal credit union, a membership share, is beneficially owned by the foreign bank or foreign institution or by an entity controlled by the foreign bank or foreign institution.

(17) If section 33 of this Act comes into force before section 2072 of the other Act, then, on the day on which that section 2072 comes into force, subsection 401.3(3) of the Bank Act is replaced by the following:

(3) Subsections (1) and (2) do not apply to a foreign bank, or to a foreign institution, that is controlled by the government of a foreign country or any political subdivision of a foreign country, or by any agent or agency of a foreign government, if the share referred to in subsection (1), or, in the case of a federal credit union, a membership share, is beneficially owned by the foreign bank or foreign institution or by an entity controlled by the foreign bank or foreign institution.

(18) If section 2072 of the other Act comes into force on the same day as section 33 of this Act, then that section 33 is deemed to have come into force before that section 2072 and subsection (17) applies as a consequence.

(19) On the first day on which both section 2079 of the other Act and this section are in force,

(a) subparagraph 487(2)(a)(i) of the Bank Act is replaced by the following:

(i) in accordance with any provisions for the conversion of other issued and outstanding membership shares or securities of the bank into shares of that class of shares, or into membership shares,

(b) subparagraph 487(2)(a)(iv) of the Bank Act is replaced by the following:

(iv) in accordance with the terms of an amalgamation or conversion under Part VI,

(20) If section 2104 of the other Act comes into force before section 203 of this Act, then, on the day on which that section 203 comes into force, subsection 45.2(1) of the Canada Deposit Insurance Corporation Act is replaced by the following:

45.2 (1) All information regarding the affairs of a federal institution, provincial institution or local cooperative credit society, or of any person dealing with one, that is obtained or produced by or for the Corporation is confidential and shall be treated accordingly.

(21) If section 203 of this Act comes into force before section 2104 of the other Act, then, on the day on which that section 2104 comes into force, section 45.2 of the Canada Deposit Insurance Corporation Act is replaced by the following:

45.2 (1) All information regarding the affairs of a federal institution, provincial institution or local cooperative credit society, or of any person dealing with one, that is obtained or produced by or for the Corporation is confidential and shall be treated accordingly.

(2) The Corporation may, if it is satisfied that the information will be treated as confidential by the recipient and after consultation with the Superintendent, disclose any information obtained from the Superintendent regarding the affairs of a federal member institution

(a) to any government agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision;

(b) to any other agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision; or

(c) to any deposit insurer or any compensation association for purposes related to its operation.

(22) If section 2104 of the other Act comes into force on the same day as section 203 of this Act, then that section 2104 is deemed to have come into force before that section 203 and subsection (20) applies as a consequence.

224. (1) In this section, “other Act” means the Sustaining Canada’s Economic Recovery Act.

(2) If section 52 of this Act comes into force before section 149 of the other Act, then that section 149 is repealed.

(3) If section 149 of the other Act comes into force on the same day as section 52 of this Act, then that section 149 is deemed to have come into force before that section 52.

(4) On the first day on which both section 160 of the other Act and section 218 of this Act are in force, subsection 17(1) of the French version of the Financial Consumer Agency of Canada Act is replaced by the following:

Coming into Force

225. (1) Subject to subsection (2), the provisions of this Act, except sections 3, 77, 105, 123, 154, 163 and 222 to 224, come into force on a day or days to be fixed by order of the Governor in Council.

(2) Sections 9 to 11 and 207 and subsection 217(2) come into force on a day or days to be fixed by order of the Governor in Council, which may not be earlier than the day on which subsection 1894(8) of the Jobs and Economic Growth Act, chapter 12 of the Statutes of Canada, 2010, comes into force.