Government of Canada / Gouvernement du Canada
Symbol of the Government of Canada

Search

Port Authorities Management Regulations (SOR/99-101)

Regulations are current to 2022-11-16 and last amended on 2016-03-29. Previous Versions

PART 2Directors and Officers (continued)

Liability of Directors (continued)

 If execution has issued, the amount recoverable from a director is the amount remaining unsatisfied after execution.

  •  (1) If a director satisfies a debt referred to in section 19 that is proved in liquidation and dissolution or bankruptcy proceedings, the director is entitled to any preference to which the employee would have been entitled and, if a judgment has been obtained, the director is entitled to an assignment of the judgment.

  • (2) A director who satisfies a debt referred to in section 19 is entitled to contribution from the other directors who were liable for the debt.

  •  (1) Directors who vote for or consent to resolutions authorizing any of the following matters are jointly and severally, or solidarily, liable to restore to the port authority any amounts or property so distributed or paid and not otherwise recovered by the port authority:

    • (a) financial assistance contrary to section 32; and

    • (b) payment of an indemnity or advance contrary to section 25 or 28.

  • (2) A director who satisfies a judgment for a debt owed under this section is entitled to contribution from the other directors who were liable for the debt.

  • (3) A director who is liable under subsection (1) may apply to a court for an order to recover money or property mentioned in that subsection.

  • (4) A court may, on application under subsection (3), if it is satisfied that it is equitable to do so,

    • (a) order any person to pay or deliver to the director the money or property mentioned in subsection (1); or

    • (b) make any order that it sees fit.

  • (5) An action to enforce a liability imposed by this section may not be commenced more than two years after the date of the resolution authorizing the action complained of.

Defence of Due Diligence

 A director is not liable under any of sections 19 or 21 to 23 if the director exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances to prevent a failure to fulfil their duties, including reliance in good faith on financial statements of the port authority, on the reports of experts and on information presented by officers or professionals.

Indemnities and Advances

  •  (1) A port authority may indemnify a person who is a director or officer of the port authority, or a former director or officer, against all the costs, charges and expenses, including an amount paid to settle an action or satisfy a claim, reasonably incurred by the person in respect of any civil, criminal, administrative, investigative or other proceeding in which the person is involved by reason of being or having been a director or officer of the port authority.

  • (2) A port authority may not indemnify a person under subsection (1) unless

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

    • (b) in the case of a criminal or administrative proceeding, the person had reasonable grounds for believing that the conduct was lawful.

  • (3) A port authority may not indemnify a person under subsection (1) in respect of an action by or on behalf of the port authority against the person unless a court so orders.

 Despite subsection 25(1), a person referred to in subsection 25(1) is entitled to indemnity for the costs, charges and expenses referred to in that subsection if the person

  • (a) was not judged by a court to have committed any fault or omitted to do anything that the person ought to have done; and

  • (b) fulfils the conditions prescribed in subsection 25(2).

  •  (1) A court may, on application by a port authority or a person referred to in section 26, approve an indemnity referred to in that section and make any further order that it sees fit.

  • (2) The court may, in respect of the application, order notice to be given to any interested person and the person is entitled to appear and be heard in person or by counsel.

  •  (1) A port authority may advance moneys to a person who is a director or officer of the port authority, or a former director or officer, in respect of all the costs, charges and expenses that the person may reasonably incur in respect of any civil, criminal, administrative, investigative or other proceeding in which the person is involved by reason of being or having been a director or officer of the port authority, including an amount to settle an action or satisfy a claim.

  • (2) A port authority may not advance moneys to a person under subsection (1) in respect of an action by or on behalf of the port authority against the person unless a court so orders.

 If an advance is made under subsection 28(1), the person shall repay the moneys if a court judges that the person did not fulfil the conditions prescribed in subsection 25(2).

Remuneration of Officers

 Unless the letters patent or by-laws provide otherwise, the board of directors of a port authority may fix the remuneration of the officers or employees of the port authority.

PART 3Financial Matters

Categories of Investments

 For the purposes of paragraph 32(b) of the Act, a port authority may invest in the following categories of investments:

  • (a) an investment in a subsidiary that the port authority is authorized to incorporate under its letters patent;

  • (b) any debt that, on the day on which the debt is acquired, is of a category of investments that meets the requirements set out in the schedule; and

  • (c) an investment made in accordance with the Pension Benefits Standards Act, 1985 and the regulations made under that Act if the moneys invested are moneys of a pension fund for a pension plan that is administered by the port authority and registered in accordance with that Act.

Financial Assistance

  •  (1) Subject to the letters patent, a port authority or a body corporate controlled by a port authority shall not, directly or indirectly, give financial assistance by means of a loan, guarantee or otherwise to

    • (a) any of its directors, officers or employees, a shareholder of the body corporate or an associate of any of them; or

    • (b) any person for the purpose of or in connection with a purchase of a share issued or to be issued by the body corporate.

  • (2) For the purposes of subsection (1), “associate” has the meaning assigned in subsection 2(1) of the Canada Business Corporations Act.

Annual Financial Statements

Content of Annual Financial Statements

 The annual financial statements required by section 36 of the Act need not be designated by the names set out in subsection 37(2) of the Act.

 Every port authority and every wholly-owned subsidiary of a port authority shall, in its annual financial statements, set out comparative information from the previous fiscal year’s annual financial statements.

  •  (1) A port authority and a wholly-owned subsidiary of a port authority shall each ensure that its annual financial statements include at least the following information:

    • (a) wages, salaries and employee benefits;

    • (b) professional fees and fees for consulting services;

    • (c) maintenance and repair costs;

    • (d) depreciation of fixed assets; and

    • (e) real property taxes and grants in lieu of taxes.

  • (2) A port authority shall ensure that its annual financial statements include the name, title and total remuneration — incorporating fees, allowances and other benefits — of each of the four persons who, in that fiscal year, held office with or were employed by one or more members of the corporate group made up of the port authority and its wholly-owned subsidiaries, and who received the highest remuneration from the group overall.

  • (3) Subsection (2) applies only if the remuneration in the fiscal year exceeds

    • (a) in respect of a fiscal year that ends on or before December 31, 1999, $100,000; and

    • (b) in respect of a fiscal year that ends on or before December 31 of each subsequent year, the amount established in the previous year, adjusted on January 1 of that subsequent year by the change in the consumer price index between the two previous years.

  • (4) The consumer price index for any year is the annual average all-items consumer price index for Canada (not seasonally adjusted) published by Statistics Canada in respect of that year.

  • (5) The chief executive officer and the directors of the port authority or a wholly-owned subsidiary shall not be counted for the purpose of subsection (2).

  • (6) If more than four persons qualify as receiving the highest remuneration because some of them receive the same remuneration, the prescribed information on all of them shall be included in the financial statements.

 A port authority and a wholly-owned subsidiary of a port authority shall each ensure that its annual financial statements include the following information:

  • (a) total estimated capital expenditures, including those authorized or committed at year end, and, in respect of each capital project for which the combined capital expenditures are estimated to exceed $1 million, a brief description of the project and the amount of the expenditures; and

  • (b) total estimated proceeds from capital dispositions, including dispositions authorized, committed or receivable at year end, and, in respect of each capital disposition for which they exceed or are estimated to exceed $1 million, the amount of the proceeds and a brief description.

 Information required by sections 35 and 36 may be presented in any one of the categories of income or expenses that is appropriate, broken down among them or presented in a footnote or endnote to the statements.

  •  (1) For the purposes of subsection 37(3) of the Act, a port authority and a wholly-owned subsidiary of a port authority shall each specify in its annual financial statements

    • (a) the name, title and total remuneration of every director and every chief executive officer who held office with it in that fiscal year; and

    • (b) the name, title and total remuneration of every officer and every employee of it who held office or was employed in that fiscal year if the remuneration exceeded the threshold prescribed in section 39.

  • (2) The port authority and the wholly-owned subsidiary shall each show in its annual financial statements a breakdown into the following amounts of remuneration in respect of each person referred to in subsection (1):

    • (a) salaries and fees;

    • (b) allowances; and

    • (c) other benefits.

  • (3) Information required by this section may be presented in any one of the categories of expenses that is appropriate or in a footnote or endnote to the statements.

Remuneration Threshold

  •  (1) For the purposes of paragraph 37(3)(c) of the Act, the remuneration threshold applicable to officers and employees of a port authority or of a wholly-owned subsidiary of a port authority is $150,000. Beginning on January 1, 2000, the remuneration threshold is adjusted on January 1 of each year by the change in the consumer price index between the previous two years.

  • (2) The consumer price index for any year is the annual average all-items consumer price index for Canada (not seasonally adjusted) published by Statistics Canada in respect of that year.

Approval of Annual Financial Statements

  •  (1) The board of directors of a port authority shall approve the annual financial statements referred to in paragraph 36(a) of the Act and the approval shall be evidenced by the signature of one or more directors.

  • (2) A port authority shall not issue, publish or circulate copies of the annual financial statements unless they are

    • (a) approved and signed in accordance with subsection (1); and

    • (b) accompanied by the report of the auditor of the port authority.

Audits

Qualification of Auditor

  •  (1) Subject to subsection (5), an auditor of a port authority shall be independent of the port authority, any body corporate controlled by the port authority and their directors and officers.

  • (2) For the purposes of this section,

    • (a) independence is a question of fact; and

    • (b) a person is not independent if the person or the person’s business partner

      • (i) is a business partner, director, officer or employee of the port authority or a body corporate controlled by the port authority, or a business partner of a director, officer or employee of any of them,

      • (ii) has the beneficial ownership of, or directly or indirectly controls, a material interest in a borrowing of the port authority or a share or borrowing of a body corporate controlled by the port authority, or

      • (iii) has been a receiver, receiver-manager, liquidator or trustee in bankruptcy of the port authority or a body corporate controlled by the port authority within two years before the day on which the appointment as auditor would take effect.

  • (3) An auditor who becomes disqualified under this section shall, subject to subsection (5), resign without delay on becoming aware of the disqualification.

  • (4) An interested person may apply to a court for an order declaring an auditor to be disqualified under this section and the office of auditor to be vacant.

  • (5) An interested person may apply to a court for an order exempting an auditor from disqualification under this section and the court may, if it is satisfied that an exemption would not unfairly prejudice the port authority, make an exemption order on any terms that it thinks fit, which order may have retroactive effect.

Appointment of Auditor

  •  (1) The board of directors of a port authority shall

    • (a) at its first meeting, appoint an auditor to hold office until the close of the first annual meeting; and

    • (b) before the first and each subsequent annual meeting, appoint an auditor to hold office from the close of that annual meeting until the close of the next following annual meeting.

  • (2) Despite paragraph (1)(b), if an auditor is not appointed before an annual meeting, the incumbent auditor continues in office until a successor is appointed.

  • (3) The port authority shall announce at the annual meeting the name of the auditor appointed to hold office beginning at the close of the meeting.

Remuneration of Auditor

 The remuneration of the auditor of a port authority shall be fixed by the board of directors.

Vacancy in Office of Auditor

  •  (1) If a vacancy occurs in the office of auditor of a port authority, the board of directors shall without delay appoint an auditor to fill the vacancy for the remainder of the term of the predecessor.

  • (2) If a vacancy occurs in the office of auditor and the board of directors does not appoint an auditor, a court may, on the application of an interested person, appoint and fix the remuneration of an auditor, who holds office until an auditor is appointed by the board of directors.

Removal of Auditor

 The board of directors of a port authority may remove from office an auditor other than an auditor appointed by the Minister under subsection 43(2) of the Act or by a court.

Ceasing to Hold Office

  •  (1) An auditor of a port authority ceases to hold office when

    • (a) the auditor dies or resigns;

    • (b) the auditor is removed; or

    • (c) the auditor ceases to hold office under section 42.

  • (2) The resignation of an auditor becomes effective on the day on which a written resignation is received by the port authority or on the day specified in the resignation, whichever is later.

  •  (1) An auditor is entitled to submit a written statement to the port authority giving the reasons for resignation or the reasons for opposing a proposed action or resolution when the auditor

    • (a) resigns;

    • (b) receives a notice or otherwise learns of a meeting of the board of directors called for the purpose of removing the auditor; or

    • (c) receives a notice or otherwise learns of a meeting of the board of directors at which another person is to be appointed to fill the office of auditor, whether because of the resignation or removal of the incumbent auditor or because the term of office has expired or is about to expire.

  • (2) The port authority shall, in respect of the auditor’s written statement, as soon as possible after it is submitted,

    • (a) send a copy to the Minister and to its directors and chief executive officer and the proposed replacement auditor; and

    • (b) publish a notice in a major newspaper published or distributed in the municipalities where the port is situated setting out that the statement is available to the public at its registered office.

  • (3) No person shall accept an appointment or consent to be appointed as the auditor of a port authority if the person is replacing an auditor who has resigned or been removed or whose term of office has expired or is about to expire until the person has requested and received from that auditor a written statement of the circumstances and the reasons, in the auditor’s opinion, for the replacement.

  • (4) Despite subsection (3), a person otherwise qualified may accept an appointment or consent to be appointed as the auditor of a port authority if, within 15 days after making a request referred to in that subsection, the person does not receive a reply.

  • (5) Unless subsection (4) applies, the appointment as auditor of a port authority of a person who has not complied with subsection (3) is null and void.

 
Date modified: