S-225
Third Session, Fortieth Parliament,
59 Elizabeth II, 2010
SENATE OF CANADA
BILL S-225
An Act respecting the reorganization and privatization of Atomic Energy of Canada Limited
first reading, November 18, 2010
THE HONOURABLE SENATOR HERVIEUX-PAYETTE, P.C.
4031015
SUMMARY
This enactment amends Part 18 of the Jobs and Economic Growth Act to set out new terms and conditions for the reorganization and divestiture of Atomic Energy of Canada Limited. The enactment provides for the privatization of the corporation with certain restrictions on the control of its voting shares by foreign residents. It stipulates that the responsible Minister must retain ownership of seventy percent of those shares. It provides measures for the protection and transition of the corporation’s employee pension plan.
The enactment makes consequential amendments to the Access to Information Act, the Financial Administration Act, the Federal-Provincial Fiscal Arrangements Act and the Payments in Lieu of Taxes Act.
Available on the Parliament of Canada Web Site at the following address:http://www.parl.gc.ca
3rd Session, 40th Parliament,
59 Elizabeth II, 2010
senate of canada
BILL S-225
An Act respecting the reorganization and privatization of Atomic Energy of Canada Limited
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
2010, c. 12
JOBS AND ECONOMIC GROWTH ACT
1. The heading before section 2137 of the Jobs and Economic Growth Act is replaced by the following:
Reorganization and Privatization
2. Sections 2137 to 2148 of the Act are replaced by the following:
Definitions
2137. (1) The following definitions apply in this Part.
“AECL”« EACL »
“AECL” means Atomic Energy of Canada Limited.
“Minister”« ministre »
“Minister” means the Minister of Natural Resources.
Same meaning
(2) Unless a contrary intention appears, words and expressions used in this Part have the same meaning as in the Canada Business Corporations Act.
Operation of Canada Business Corporations Act
(3) In the event of any inconsistency between this Part and the Canada Business Corporations Act, or anything issued, made or established under that Act, this Part prevails to the extent of the inconsistency.
Operation of Competition Act
(4) Nothing in, or done under the authority of, this Part affects the operation of the Competition Act in respect of the acquisition of any interest in an entity.
Her Majesty
Act binding on Her Majesty
2138. This Act is binding on Her Majesty in right of Canada or a province.
Change of Status
Agency status revoked
2139. (1) AECL, being the company incorporated or acquired pursuant to subsection 10(2) of the Atomic Energy Control Act, chapter A-19 of the Revised Statutes of Canada, 1970, and continued pursuant to the Canada Business Corporations Act, ceases to be an agent of Her Majesty in right of Canada.
Ministerial powers
(2) The Minister may do and perform all acts and things necessary for or incidental to the change of the status of AECL.
Official Languages Act
(3) The Official Languages Act applies to AECL.
Share Transactions
Share transactions by Minister
2140. (1) Subject to subsection (2), the Minister is hereby authorized to
(a) acquire, hold, dispose of and otherwise deal with shares or debt obligations of, and security interests in, AECL; and
(b) enter into any agreement or arrangement necessary for or incidental to any activity referred to in paragraph (a).
Voting shares
(2) The Minister may not dispose of more than thirty percent of the voting shares of AECL and shall remain the owner of seventy percent of those shares.
Share transactions by AECL
(3) Subject to subsection (2), AECL is hereby authorized to issue and sell or otherwise dispose of shares of the Corporation.
Reorganization
Articles of amendment
2141. (1) Forthwith after this section comes into force, AECL shall submit to the Minister for approval articles of amendment prepared in accordance with section 2142.
Submission to Director
(2) Forthwith after the Minister approves articles of amendment submitted pursuant to subsection (1), AECL shall send the approved articles to the Director.
Presumption
(3) Articles of amendment sent to the Director pursuant to this section are, subject to this Part, deemed for all purposes to have been sent under section 177 of the Canada Business Corporations Act.
Mandatory provisions in articles of amendment
2142. (1) The articles of amendment for AECL shall contain
(a) provisions preventing AECL from selling, transferring or otherwise disposing of, whether by one transaction or event or several related transactions or events, all or substantially all of its assets to any one person or group of associated persons or to non-residents, otherwise than by way of security only in connection with the financing of AECL;
(b) provisions requiring AECL to take the measures necessary to apply the Official Languages Act to its staff and all its activities;
(c) provisions respecting the enforcement of the constraints imposed pursuant to paragraph (e);
(d) provisions requiring AECL to locate its head office in Canada;
(e) provisions specifying that non-residents cannot possess more than one-third of voting shares, other than the voting shares belonging to the Minister; and
(f) provisions requiring that a majority of the members of the board of directors be Canadian citizens.
Enforcement provisions
(2) Without limiting the generality of paragraph (1)(c), the provisions referred to therein may provide for the filing of declarations, the suspension of voting rights, the forfeiture of dividends, the refusal of the issue or registration of voting shares and the sale of voting shares held contrary to the constraints and payment of the net proceeds of the sale to the person entitled thereto.
Exemption for small transactions
(3) Where the directors of AECL are of the reasonable opinion, from the central securities register of AECL or otherwise, that a subscriber for or a transferee of voting shares of AECL would, on acquiring the shares, hold, beneficially own or control voting shares to which are attached not more than the lesser of two one-hundredths of one per cent of the votes that may ordinarily be cast to elect directors of AECL and ten thousand such votes, the directors are entitled to assume that the subscriber or transferee is not and will not be an associate of anyone else and, unless the address to be recorded in the register for the subscriber or transferee is outside Canada, that the shares will not be held, beneficially owned or controlled in contravention of the articles of amendment for AECL.
Exceptions
(4) No provision imposing constraints pursuant to paragraph (1)(e) applies in respect of voting shares of AECL that are held
(a) by the Minister in trust for Her Majesty in right of Canada;
(b) by one or more underwriters solely for the purpose of distributing the shares to the public; or
(c) by any person who provides centralized facilities for the clearing of trades in securities and is acting in relation to trades in the shares solely as an intermediary in the payment of funds or the delivery of securities, or both.
Associates
(5) For the purposes of this section, a person is an associate of another person if
(a) one is a corporation of which the other is an officer or director;
(b) one is a corporation that is controlled by the other or by a group of persons of which the other is a member;
(c) one is a partnership of which the other is a partner;
(d) one is a trust of which the other is a trustee;
(e) both are corporations controlled by the same person;
(f) both are members of a voting trust that relates to voting shares of AECL;
(g) both, in the reasonable opinion of the directors of AECL, are parties to an agreement or arrangement a purpose of which is to require them to act in concert with respect to their interests, direct or indirect, in AECL or are otherwise acting in concert with respect to those interests; or
(h) both are at the same time associates, within the meaning of any of paragraphs (a) to (g), of the same person.
Exceptions
(6) Notwithstanding subsection (5), for the purposes of this section,
(a) where a person who, but for this paragraph, would be an associate of another person submits to AECL a statutory declaration stating that
(i) no voting shares of AECL held or to be held by the declarant are or will be, to the declarant’s knowledge, held in the right of, for the use or benefit of or under the control of, any other person of which, but for this paragraph, the declarant would be an associate, and
(ii) the declarant is not acting and will not act in concert with any such other person with respect to their interests, direct or indirect, in AECL, the declarant and that other person are not associates so long as the directors of AECL are satisfied that the statements in the declaration are being complied with and that there are no other reasonable grounds for disregarding the declaration;
(b) two corporations are not associates pursuant to paragraph (5)(h) by reason only that under paragraph (5)(a) each is an associate of the same individual; and
(c) where the directors of AECL are of the reasonable opinion, from the central securities register of AECL or otherwise, that any person holds, beneficially owns or controls voting shares to which are attached not more than the lesser of two one hundredths of one per cent of the votes that may ordinarily be cast to elect directors of AECL and ten thousand such votes, that person is not an associate of anyone else and no one else is an associate of that person.
Control
(7) For the purposes of this section, “control” means control in any manner that results in control in fact, whether directly through the ownership of securities or indirectly through a trust, an agreement or arrangement, the ownership of any body corporate or otherwise, and, without limiting the generality of the foregoing,
(a) a body corporate is deemed to be controlled by a person if
(i) securities of the body corporate to which are attached more than fifty per cent of the votes that may be cast to elect directors of the body corporate are held, otherwise than by way of security only, by or for the benefit of that person, and
(ii) the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate; and
(b) a partnership or unincorporated organization is deemed to be controlled by a person if an ownership interest therein representing more than fifty per cent of the assets of the partnership or organization is held, otherwise than by way of security only, by or for the benefit of that person.
Definitions
(8) The following definitions apply in this section.
“corporation”« société »
“corporation” includes a body corporate, partnership and unincorporated organization;
“non-resident”« non-résident »
“non-resident” means
(a) an individual, other than a Canadian citizen, who is not ordinarily resident in Canada,
(b) a corporation incorporated, formed or otherwise organized outside Canada,
(c) a foreign government or an agency thereof,
(d) a corporation controlled by non-residents as defined in any of paragraphs (a) to (c),
(e) a trust
(i) established by a non-resident as defined in any of paragraphs (b) to (d), other than a trust for the administration of a pension fund for the benefit of individuals a majority of whom are residents, or
(ii) in which non-residents as defined in any of paragraphs (a) to (d) have more than fifty per cent of the beneficial interest, or
(f) a corporation that is controlled by a trust described in paragraph (e),
but does not include
(g) a mutual company within the meaning of the Insurance Companies Act, if its head office and chief place of business are situated in Canada and at least three quarters of its board of directors and each committee of its directors are Canadian citizens who are ordinarily resident in Canada, or
(h) a company within the meaning of that Act that is a subsidiary of a foreign institution within the meaning of that Act or a foreign company within the meaning of that Act, where the company or the foreign company is acquiring shares to form part of the assets of a segregated fund maintained pursuant to section 451 or 593 of that Act that has been established with respect to one or more policies or amounts for the administration of a pension fund for the benefit of individuals a majority of whom are residents;
“person”« personne »
“person” includes any individual, corporation, government or agency thereof, trustee, executor, administrator and other legal representative;
“resident”« résident »
“resident” means an individual, corporation, government or agency thereof or trust that is not a non-resident;
“voting share”« action avec droit de vote »
“voting share” means a share carrying a voting right under all circumstances or under some circumstances that have occurred and are continuing, and includes a security currently convertible into such a share and currently exercisable options and rights to acquire such a share or such a convertible security.
Restriction on amendment
2143. AECL and its shareholders and directors shall not
(a) make any articles or by-laws inconsistent with this Part or the provisions included in its articles of amendment pursuant to subsection 2142(1); or
(b) apply for continuance of AECL in another jurisdiction.
Pensions
Pension rights
2144. (1) In the manner and to the extent provided by the regulations made under subsection (3), the Public Service Superannuation Act, the Supplementary Retirement Benefits Act and the regulations made under those Acts apply to any person who meets all of the following criteria:
(a) the person, on the coming into force of section 2139, was employed by AECL and was a contributor under the Public Service Superannuation Act and, immediately before the coming into force of this section, was employed by that corporation or AECL;
(b) the President of the Treasury Board has not made a payment to AECL pursuant to section 40 of the Public Service Superannuation Act in respect of the pensionable service to that person’s credit under that Act immediately before the coming into force of this section;
(c) the person has not received or opted to receive any annuity or other benefit under section 12 or 13 of the Public Service Superannuation Act in respect of the pensionable service to that person’s credit under that Act immediately before the coming into force of this section; and
(d) the person elects, within one year after the coming into force of this section and in such form and manner as the President of the Treasury Board may direct, to have the Public Service Superannuation Act, the Supplementary Retirement Benefits Act and the regulations made under those Acts apply to the person in the manner and to the extent provided by the regulations made under subsection (3).
Election irrevocable
(2) An election referred to in paragraph (1)(d) is irrevocable.
Regulations
(3) The Governor in Council may, on the recommendation of the President of the Treasury Board, make regulations
(a) respecting the manner in which and the extent to which provisions, as amended, of the Acts and regulations referred to in subsection (1) apply to persons who make an election under paragraph (1)(d);
(b) adapting provisions of those Acts and regulations for the purposes of this section; and
(c) generally for carrying out the purposes and provisions of this section.
Retroactive application of regulations
(4) Regulations made under subsection (3) may, if they so provide, be retroactive and have effect with respect to any period before they were made.
R.S., 1985, c. A-1
ACCESS TO INFORMATION ACT
3. Section 68.2 of the Access to Information Act is repealed.
R.S., 1985, c. F-8
FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS ACT
4. Schedule I to the Federal-Provincial Fiscal Arrangements Act is amended by striking out the following:
Atomic Energy of Canada Limited
Énergie atomique du Canada, Limitée
R.S., 1985, c. F-11
FINANCIAL ADMINISTRATION ACT
5. Part I of Schedule III to the Financial Administration Act is amended by striking out the following:
Atomic Energy of Canada Limited
Énergie atomique du Canada, Limitée
R.S., 1985, c. M-13
PAYMENTS IN LIEU OF TAXES ACT
6. Schedule III to the Payments in Lieu of Taxes Act is amended by striking out the following:
Atomic Energy of Canada Limited
Énergie atomique du Canada, Limitée
Published under authority of the Senate of CanadaAvailable from:Publishing and Depository ServicesPublic Works and Government Services Canada
Explanatory Notes
Jobs and Economic Growth Act
Clause 1: Existing text of heading:
Reorganization and Divestiture
Clause 2: Existing text of sections 2137 to 2148:
2137. (1) The following definitions apply in this Part.
“AECL” means Atomic Energy of Canada Limited.
“assets” includes
(a) in relation to an entity, the securities of another entity held by, on behalf of or in trust for the entity; and
(b) intangible property.
“Minister” means the Minister of Natural Resources.
“security” means
(a) in relation to a corporation, a share of any class or series of shares or a debt obligation of the corporation, and includes any conversion or exchange privilege, option or other right to acquire a share or debt obligation of the corporation; and
(b) in relation to any other entity, any ownership interest in or debt obligation of the entity and includes any conversion or exchange privilege, option or other right to acquire an ownership interest or debt obligation of the entity.
(2) In this Part “corporation”, “share” and “wholly-owned subsidiary” have the same meaning as in subsection 83(1) of the Financial Administration Act.
(3) Unless a contrary intention appears, words and expressions used in this Part have the same meaning as in the Canada Business Corporations Act.
(4) In the event of any inconsistency between this Part and the Canada Business Corporations Act or anything issued, made or established under that Act, this Part prevails to the extent of the inconsistency.
(5) Nothing in, or done under the authority of, this Part affects the operation of the Competition Act in respect of the acquisition of any interest in an entity.
2138. The purpose of this Part is to authorize a number of measures for the reorganization and divestiture of all or any part of AECL’s business.
2139. (1) The Minister may, with the approval of the Governor in Council and on any terms that the Governor in Council considers appropriate,
(a) despite section 11 of the Nuclear Energy Act, sell or otherwise dispose of some or all of the securities of AECL;
(b) procure an addition to, or other material change in, the objects or purposes for which AECL is incorporated or the restrictions on the businesses or activities that it may carry on, as set out in its articles;
(c) procure the amalgamation of AECL; or
(d) procure the dissolution of AECL.
(2) The Minister may do anything or cause anything to be done that is necessary for, or incidental to, a measure approved under subsection (1).
2140. (1) The Minister may, with the approval of the Governor in Council and on any terms that the Governor in Council considers appropriate,
(a) procure the incorporation of a corporation, securities of which, on incorporation, would be held by, on behalf of or in trust for, Her Majesty in right of Canada and sell or otherwise dispose of some or all of the securities of the corporation;
(b) procure the formation of any other entity, securities of which, on formation, would be held by, on behalf of or in trust for, Her Majesty in right of Canada and sell or otherwise dispose of some or all of the securities of the entity;
(c) acquire securities of a corporation that, on acquisition, would be held by, on behalf of or in trust for, Her Majesty in right of Canada and sell or otherwise dispose of some or all of the securities of the corporation; and
(d) acquire securities of any other entity that, on acquisition, would be held by, on behalf of or in trust for, Her Majesty in right of Canada and sell or otherwise dispose of some or all of the securities of the entity.
(2) The Minister may do anything or cause anything to be done that is necessary for, or incidental to, a measure approved under subsection (1).
(3) The Governor in Council may, by order, declare that any of the provisions of Part X of the Financial Administration Act do not apply to a corporation referred to in subsection (1)(a).
2141. (1) AECL, a corporation referred to in paragraph 2140(1)(a), any other entity referred to in paragraph 2140(1)(b) or any one of their wholly-owned subsidiaries or wholly-owned entities may, with the approval of the Governor in Council and on any terms that the Governor in Council considers appropriate,
(a) sell or otherwise dispose of some or all of its assets;
(b) sell or otherwise dispose of some or all of its liabilities;
(c) issue securities and sell or otherwise dispose of some or all of those securities;
(d) reorganize its capital structure;
(e) acquire assets of a corporation or any other entity;
(f) procure an addition to, or other material change in, the objects or purposes for which it is incorporated or formed or the restrictions on the businesses or activities that it may carry on, as set out in its articles or constituting documents;
(g) procure the incorporation of a corporation, securities of which, on incorporation, would be held by, on behalf of or in trust for, the entity that procures the incorporation;
(h) procure the formation of any other entity, securities of which, on formation, would be held by, on behalf of or in trust for, the entity that procures the formation;
(i) acquire securities of a corporation or any other entity that, on acquisition, would be held by, on behalf of or in trust for, the entity that acquires the securities;
(j) sell or otherwise dispose of some or all of the securities of a corporation or any other entity that are held by, on behalf of or in trust for, the entity that sells or otherwise disposes of the securities;
(k) procure its amalgamation or the amalgamation of any of its wholly-owned subsidiaries;
(l) procure its dissolution or the dissolution of any of its wholly-owned subsidiaries; or
(m) do anything that is necessary for, or incidental to, a measure approved under paragraphs (a) to (l).
(2) The Governor in Council may, on the recommendation of the Minister and on any terms that the Governor in Council considers appropriate, direct AECL, a corporation referred to in paragraph 2140(1)(a) or any other entity referred to in paragraph 2140(1)(b) to take, or cause any of its wholly-owned subsidiaries or wholly-owned entities to take, a measure referred to in subsection (1).
(3) The Governor in Council may not issue a directive to AECL, a corporation referred to in paragraph 2140(1)(a) or any other entity referred to in paragraph 2140(1)(b)
(a) after any of its securities are sold or otherwise disposed of; or
(b) with respect to any of its wholly-owned subsidiaries or wholly-owned entities, after the wholly-owned subsidiaries or wholly-owned entities’ securities are sold or otherwise disposed of.
(4) The directors of AECL or of the corporation, or persons acting in a similar capacity with respect to the entity, must comply with a directive issued by the Governor in Council. That compliance is in the best interests of AECL, the corporation or the entity, as the case may be, to whom the directive is issued.
(5) As soon as is feasible after implementing a directive and completing any actions that are required to be taken in connection with that implementation, AECL, the corporation or the entity must notify the Minister that it has done so.
2142. The Statutory Instruments Act does not apply to a directive.
2143. (1) The Minister is to cause a copy of a directive to be laid before each House of Parliament on any of the first 15 days on which that House is sitting after the day on which the directive is issued.
(2) However, if the Minister is of the opinion that publishing information contained in the directive would be detrimental to Canada’s interests or the commercial interests of AECL or the corporation or other entity to whom the directive is issued, as the case may be, the Minister is to cause a copy of the directive to be laid before each House of Parliament on any of the first 15 days on which that House is sitting after the day on which he or she is notified that the directive has been implemented.
(3) The Minister must consult the board of directors of AECL or the corporation, or the person or group of persons acting in a similar capacity for the entity, before forming an opinion whether publishing information contained in the directive would be detrimental.
2144. AECL or a corporation or other entity referred to in subsection 2141(1) must pay the proceeds from the sale or other disposition of any assets, securities or liabilities under that subsection to the Receiver General.
2145. Sections 89, 90 and 91 and subsection 99(2) of the Financial Administration Act do not apply to any measure referred to in sections 2139 to 2141.
2146. On the requisition of the Minister and with the concurrence of the Minister of Finance, there may be paid out of the Consolidated Revenue Fund any amount that is required to carry out a measure referred to in sections 2139 to 2141.
Nuclear Energy Act
2147. Subsection 11(2) of the Nuclear Energy Act is replaced by the following:
(2) A company that is a Crown corporation within the meaning of subsection 83(1) of the Financial Administration Act is for all its purposes an agent of Her Majesty in right of Canada.
Coming into Force
2148. The provisions of this Part come into force on a day or days to be fixed by order of the Governor in Council.
Access to Information Act
Clause 3: Existing text of section 68.2:
68.2 This Act does not apply to any information that is under the control of Atomic Energy of Canada Limited other than information that relates to
(a) its general administration; or
(b) its operation of any nuclear facility within the meaning of section 2 of the Nuclear Safety and Control Act that is subject to regulation by the Canadian Nuclear Safety Commission established under section 8 of that Act.