Bill 187                                                       2007

An Act respecting Budget measures, interim appropriations and other matters

Note: This Act amends or repeals more than one Act.  For the legislative history of these Acts, see Public Statutes – Detailed Legislative History on www.e-Laws.gov.on.ca.

 

CONTENTS
1. 2. 3. Schedule 1 Schedule 2 Schedule 3 Schedule 4 Schedule 5 Schedule 6 Schedule 7 Schedule 8 Schedule 9 Schedule 10 Schedule 11 Schedule 12 Schedule 13 Schedule 14 Schedule 15 Schedule 16 Schedule 17 Schedule 18 Schedule 19 Schedule 20 Schedule 21 Schedule 22 Schedule 23 Schedule 24 Schedule 25 Schedule 26 Schedule 27 Schedule 28 Schedule 29 Schedule 30 Schedule 31 Schedule 32 Schedule 33 Schedule 34 Schedule 35 Schedule 36 Schedule 37 Schedule 38 Schedule 39 Schedule 40 Schedule 41	Contents of this Act Commencement Short title Assessment Act Capital Investment Plan Act, 1993 Charitable Gifts Act City of Toronto Act, 2006 Community Small Business Investment Funds Act Corporations Tax Act Credit Unions and Caisses Populaires Act, 1994 and Related Amendments Early Childhood Educators Act, 2007 and a Related Amendment Education Act Election Act Election Finances Act Electricity Act, 1998 Environmental Protection Act Escheats Act Family Responsibility and Support Arrears Enforcement Act, 1996 French Language Services Act Income Tax Act Insurance Act Interim Appropriation Act, 2007 Justices of the Peace Act Legislative Assembly Act Mining Act Mining Tax Act Ministry of Citizenship and Culture Act Ministry of Revenue Act Municipal Act, 2001 Municipal Conflict of Interest Act Niagara Escarpment Planning and Development Act Ontario Loan Act, 2007 Ontario Water Resources Act Pension Benefits Act Police Services Act Prepaid Hospital and Medical Services Act Proceedings Against the Crown Act Registered Insurance Brokers Act Retail Sales Tax Act Ryerson University Act, 1977 Securities Act Status of Ontario’s Artists Act, 2007 Tobacco Tax Act Workplace Safety and Insurance Act, 1997

 

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Contents of this Act

   1.  This Act consists of this section, sections 2 and 3 and the Schedules to this Act.

Commencement

   2.  (1)  Subject to subsections (2) and (3), this Act comes into force on the day it receives Royal Assent.

Same

   (2)  The Schedules to this Act come into force as provided in each Schedule.

Same

   (3)  If a Schedule to this Act provides that any provisions are to come into force on a day to be named by proclamation of the Lieutenant Governor, a proclamation may apply to one or more of those provisions, and proclamations may be issued at different times with respect to any of those provisions.

Short title

   3.  The short title of this Act is the Budget Measures and Interim Appropriation Act, 2007.

 

Schedule 1
Assessment Act

   1.  (1)  Subsection 6.1 (2) of the Assessment Act is repealed and the following substituted:

Land in municipalities

   (2)  The council of a local or upper-tier municipality, as the case may be, may pass by-laws exempting land described in subsection (1) from taxation for its purposes on such conditions as may be set out in the by-laws.

   (2)  Section 6.1 of the Act is amended by adding the following subsection:

Transition

   (6)  Despite the repeal of section 325 of the Municipal Act, 2001 on December 20, 2006, a by-law passed under that section that was in effect on December 19, 2006 is, on and after December 20, 2006, deemed to have been authorized by subsection (2).

   2.  Section 15 of the Act is amended by adding the following subsection:

Same, non-municipal territory

   (2)  Where necessary for the purposes of elections to boards constituted under the District Social Services Administration Boards Act or under other provincial statutes, the Minister may direct the assessment corporation to conduct an enumeration of the inhabitants of all or part of the non-municipal territory and the assessment corporation shall do so at the times and in the manner required by the Minister.

   3.  Subsection 19 (1) of the Act is amended by striking out “or average current value, as determined under section 19.1” at the end.

   4.  Section 19.1 of the Act is repealed and the following substituted:

Adjustments for certain property classes

   19.1  (1)  In this section,

“eligible increase” has the meaning prescribed by the Minister; (“augmentation admissible”)

“general reassessment” means the updating of assessments as a result of the application of a new valuation day under subsection 19.2 (1). (“réévaluation générale”)

Property classes

   (2)  This section applies with respect to land in the residential property class, the farm property class, the managed forest property class and such other property classes or sub-classes as may be prescribed by the Minister.

Phasing in eligible increases

   (3)  For 2009 and subsequent taxation years, if the current value of land increases because of a general reassessment, the current value of the land shall be reduced according to the following rules:

    1.  For the first taxation year to which the general reassessment applies, the current value of the land is reduced by an amount equal to 75 per cent of the eligible increase.

    2.  For the taxation year following the taxation year in paragraph 1, the current value of the land is reduced by an amount equal to 50 per cent of the eligible increase.

    3.  For the taxation year following the taxation year in paragraph 2, the current value of the land is reduced by an amount equal to 25 per cent of the eligible increase.

Further adjustments

   (4)  The Minister may, by regulation, provide for such other adjustments to the current value of land for the 2009 and subsequent taxation years as he or she considers appropriate including, without limiting the generality of the foregoing,

  (a)  adjustments relating to a change made pursuant to section 32, 33 or 34;

  (b)  adjustments resulting from an application, a request for reconsideration or a complaint under section 39.1, 40 or 46;

   (c)  adjustments where there is no eligible increase in the current value;

  (d)  adjustments in such other circumstances as may be prescribed.

   5.  Subsections 19.2 (1), (2), (3) and (4) of the Act are repealed and the following substituted:

Valuation days

   (1)  Subject to subsection (5), the day as of which land is valued for a taxation year is determined as follows:

    1.  For the 2006, 2007 and 2008 taxation years, land is valued as of January 1, 2005.

    2.  For the period consisting of the four taxation years from 2009 to 2012, land is valued as of January 1, 2008.

    3.  For each subsequent period consisting of four consecutive taxation years, land is valued as of January 1 of the year preceding the first of those four taxation years.

   6.  Subsection 41 (4) of Schedule A to the Budget Measures Act, 2006 (No. 2) is repealed and the following substituted:

Same

   (4)  Subsection 18 (2), sections 22, 24, 25, 26, 28, 29, subsections 30 (1), (2), (3) and (4) and sections 36, 37, 38 and 39 come into force on January 1, 2008.

Same

   (5)  Subsections 30 (5), (6) and (7) come into force on January 1, 2007.

Commencement

   7.  (1)  Subject to subsections (2) and (3), this Schedule comes into force on the day the Budget Measures and Interim Appropriation Act, 2007 receives Royal Assent.

Same

   (2)  Section 1 is deemed to have come into force on December 20, 2006.

Same

   (3)  Section 6 is deemed to have come into force on January 1, 2007.

 

Schedule 2
Capital Investment Plan Act, 1993

   1.  Section 8 of the Capital Investment Plan Act, 1993 is amended by adding the following subsections:

Ontario Financing Authority powers

   (7)  With the approval of the Minister of Finance, the Ontario Financing Authority may determine salary ranges and remuneration, excluding benefits, for public servants who work in the Authority and who are members of a prescribed class.

Same

   (8)  With the approval of the Minister of Finance, the Ontario Financing Authority may determine benefits to be provided in addition to the benefits determined under subsection 33 (3) of the Public Service of Ontario Act, 2006 for public servants who work in the Authority and who are members of a prescribed class.

Regulations re classes

   (9)  For the purposes of subsection (7) or (8) or both, the Minister of Finance may, by regulation, prescribe one or more of the classes that are created under subsection 33 (1) of the Public Service of Ontario Act, 2006.

Subclasses

   (10)  For the purposes of subsection (7) or (8) or both, the Ontario Financing Authority may establish subclasses within the prescribed classes of public servants and may determine different salary ranges, remuneration and benefits for each subclass.

Policies and procedures

   (11)  The Ontario Financing Authority may establish policies and procedures relating to the management and administration of the salary ranges and remuneration determined under subsection (7) and the additional benefits determined under subsection (8).

Conflict

   (12)  The salary ranges and remuneration determined under subsection (7) prevail over those determined under subsections 33 (2) and (3) of the Public Service of Ontario Act, 2006.

Same

   (13)  The policies and procedures established under subsection (11) prevail over directives of the Public Service Commission issued under subsection 43 (1) of the Public Service of Ontario Act, 2006 and over policies, procedures and directives issued under the Management Board of Cabinet Act.

   2.  Section 20 of the Act is repealed and the following substituted:

Authorized investments

   20.  Despite any other Act, securities issued by the corporations are authorized investments for public bodies as defined in section 29 and for trusts.

   3.  Subsection 35 (1) of the Act is amended by striking out “to an officer or employee of the Crown employed in or seconded to the Authority” and substituting “to the chief executive officer of the Authority or to a public servant employed under Part III of the Public Service of Ontario Act, 2006 who works in the Authority”.

Commencement

   4.  (1)  Subject to subsections (2) and (3), this Schedule comes into force on the day the Budget Measures and Interim Appropriation Act, 2007 receives Royal Assent.

Same

   (2)  Sections 1 and 3 come into force on the day subsection 33 (2) of the Public Service of Ontario Act, 2006 comes into force.

Same

   (3)  Section 2 comes into force on the day section 15 of Schedule O to the Budget Measures Act, 2006 (No. 2) comes into force.

 

schedule 3
Charitable Gifts Act

   1.  Section 6 of the Charitable Gifts Act is repealed and the following substituted:

Investment of proceeds

   6.  The proceeds of any disposition pursuant to section 2 may be invested only in investments authorized under sections 27 to 31 of the Trustee Act, but no such investment shall be made that results in the person making the investment holding more than a 10 per cent interest in any one business. 

Commencement

   2.  (1)  Subject to subsection (2), this Schedule comes into force on the day the Budget Measures and Interim Appropriation Act, 2007 receives Royal Assent.

Same

   (2)  Section 1 comes into force on the day section 15 of Schedule O to the Budget Measures Act, 2006 (No. 2) comes into force.

 

Schedule 4
City of Toronto Act, 2006

   1.  Section 323 of the City of Toronto Act, 2006 is amended by adding the following subsection:

Exception, vacant unit rebate

   (1.1)  For 2007 and subsequent taxation years, no cancellation, reduction or refund of taxes is permitted under clause (1) (h) in respect of land that is eligible property under section 331.

   2.  Subsection 333 (20) of the Act is repealed and the following substituted:

Notice to City

   (20)  The owner of an eligible property in respect of which a record of site condition has been filed in the Environmental Site Registry under section 168.4 of the Environmental Protection Act shall, within 30 days after the record of site condition is filed, notify the City of the filing and the City shall, within 30 days after receiving the notice, advise the Minister of Finance of the filing.

Commencement

   3.  (1)  Subject to subsection (2), this Schedule comes into force on the day the Budget Measures and Interim Appropriation Act, 2007 receives Royal Assent.

Same

   (2)  Section 2 comes into force on a day to be named by proclamation of the Lieutenant Governor.

 

Schedule 5
Community Small Business Investment Funds Act

   1.  The definition of “eligible year” in subsection 16.1 (7) of the Community Small Business Investment Funds Act is repealed and the following substituted:

“eligible year” means a calendar year after 2000 and before 2012.

   2.  Subsection 17 (3) of the Act is amended by striking out the portion before clause (a) and substituting the following:

Disposition of investment

   (3)  For the purposes of this section, the labour sponsored investment fund corporation shall be deemed to continue to hold the investment,

.     .     .     .     .

Commencement

   3.  This Schedule comes into force on the day the Budget Measures and Interim Appropriation Act, 2007 receives Royal Assent.

 

Schedule 6
Corporations Tax Act

   1.  Section 11.2 of the Corporations Tax Act is amended by adding the following subsections:

Effect of transfer

   (13.1)  For the purposes of this section, if a qualified Ontario SR & ED expenditure made or incurred by a corporation in a specified taxation year or in the taxation year preceding the first specified taxation year of a corporation is transferred to another corporation pursuant to subsection 127 (13) of the Federal Act, the amount transferred, 

  (a)  is deemed not to be a qualified Ontario SR & ED expenditure made or incurred by the transferor; and

  (b)  is deemed to be a qualified Ontario SR & ED expenditure made or incurred by the other corporation in the other corporation’s first taxation year that ends after the specified taxation year or that preceding year, as the case may be.

Application of subs. (13.1)

   (13.2)  Subsection (13.1) applies in respect of a qualified Ontario SR & ED expenditure made or incurred by a corporation before or after subsection (13.1) comes into force.

   2.  (1)  Subsection 43.1 (3) of the Act is amended by striking out the portion before clause (a) and substituting the following:

Corporate minimum tax account, taxation years ending before March 23, 2007

   (3)  The amount of a corporation’s corporate minimum tax account for a taxation year ending before March 23, 2007 is,

.     .     .     .     .

   (2)  Section 43.1 of the Act is amended by adding the following subsections:

Corporate minimum tax account, taxation years ending after
March 22, 2007

   (3.1)  The amount of a corporation’s corporate minimum tax account for a taxation year ending after March 22, 2007 is determined as follows:

    1.  If the corporation is not a life insurance corporation, the amount of the corporation’s corporate minimum tax account for the year is the sum of all amounts each of which is,

            i.  the amount of corporate minimum tax payable by the corporation under Part II.1 for a previous taxation year that ends before March 23, 2007 and is not earlier than the tenth taxation year before the taxation year, to the extent the tax has not been deducted under this section in determining the amount of tax payable under this Part by the corporation for a previous taxation year, or

           ii.  the amount of corporate minimum tax payable by the corporation under Part II.1 for a previous taxation year that ends after March 22, 2007 and is not earlier than the twentieth taxation year before the taxation year, to the extent the tax has not been deducted under this section in determining the amount of tax payable under this Part by the corporation for a previous taxation year.

    2.  If the corporation is a life insurance corporation, the amount of the corporation’s corporate minimum tax account for the year is the sum of all amounts each of which is,

            i.  the amount determined under subsection (3.2) in respect of a previous taxation year that ends before March 23, 2007 and is not earlier than the tenth taxation year before the taxation year, to the extent the amount has not been deducted under this section in determining the amount of tax payable under this Part by the corporation for a previous taxation year, or

           ii.  the amount determined under subsection (3.2) in respect of a previous taxation year that ends after March 22, 2007 and is not earlier than the twentieth taxation year before the taxation year, to the extent that the amount has not been deducted under this section in determining the amount of tax payable under this Part by the corporation for a previous taxation year.

Same

   (3.2)  For the purposes of subparagraphs 2 i and ii of subsection (3.1), the amount determined in respect of a previous taxation year is the amount by which the corporation’s corporate minimum tax for that year, as determined under Part II.1 before any deduction permitted under subsection 57.3 (2), exceeds the greater of,

  (a)  the amount that would be determined in respect of the corporation under clause 74.1 (1) (a) for that year; and

  (b)  the amount of tax payable under this Part for that year after all deductions from tax to which the corporation is entitled for that year, other than a deduction permitted under this section.

   3.  (1)  Clause 43.10 (4) (b) of the Act is amended by striking out “April 1, 2007” and substituting “April 1, 2008”.

   (2)  Clause 43.10 (4) (c) of the Act is amended by striking out “March 31, 2007” and substituting “March 31, 2008”.

   4.  (1)  Clause (a) in the definition of “C”, as set out in clause (b) of the definition of “A”, in subsection 43.13 (3) of the Act is repealed and the following substituted:

  (a)  after May 18, 2004 and before January 1, 2015, and

   (2)  Paragraph 1 of subsection 43.13 (7) of the Act is repealed and the following substituted:

    1.  The apprentice’s employment as an apprentice in an apprenticeship program with the corporation commenced before January 1, 2012.

   (3)  Subparagraphs 1 iii and 2 ii of subsection 43.13 (9) of the Act are amended by striking out “January 1, 2011” wherever it appears and substituting in each case “January 1, 2015”.

   5.  Subsection 44.1 (2) of the Act is amended by striking out “clause 57.3 (2) (b)” and substituting “clause 43.1 (3.2) (b), 57.3 (2) (b)”.

   6.  Subsection 57.5 (5) of the Act is repealed and the following substituted:

Eligible losses for a taxation year

   (5)  Except as provided in subsection (7), the amount of a corporation’s eligible losses for a taxation year that is deducted or deemed to be deducted under this Part for the year is equal to the lesser of “A” and “B” where,

  “A”  is the amount by which “C” exceeds “D” where,

         “C”  is the sum of all amounts each of which is,

                 (a)  the corporation’s adjusted net loss for a prior taxation year that commenced after 1993, ended before March 23, 2007 and is not earlier than the tenth taxation year before the taxation year, or

                 (b)  the corporation’s adjusted net loss for a prior taxation year that ends after March 22, 2007 and is not earlier than the twentieth taxation year before the taxation year, and

         “D”  is the sum of all amounts each of which is an amount included in the amount determined under clause (a) or (b) of the definition of “C” that was deducted or is deemed to have been deducted as an eligible loss under this Part for a prior taxation year, and

  “B”  is the amount by which the corporation’s adjusted net income for the taxation year exceeds the amount, if any, of its pre-1994 loss that is deducted or deemed to be deducted for the taxation year.

   7.  Subsection 61 (1) of the Act is amended by adding the following clause:

(b.1) for taxation years commencing after September 30, 2006, its accumulated other comprehensive income;

   8.  (1)  Subsection 62 (4) of the Act is repealed and the following substituted:

Definition, “any other surplus”

   (4)  For the purpose of this Part,

“any other surplus” includes, in respect of a corporation for a taxation year, in addition to any amount included under subsection (7), any amount required to be included in the corporation’s income for the purposes of Part II for the taxation year or a previous taxation year to the extent that the amount is not included in the corporation’s income as shown on its financial statements, but does not include,

  (a)  an amount referred to in subsection 11 (5) or (6) or 11.0.1 (3), or

  (b)  an amount referred to in paragraph 12 (1) (o) or subsection 15 (1) or (2), 17 (1) or 37.1 (3) of the Income Tax Act (Canada), as made applicable by subsection 11 (1).

   (2)  Subsection 62 (7) of the Act is amended by striking out the portion before clause (a) of the definition of “any other surplus”, “total assets” and “cost of investments” and substituting the following:

Definitions

   (7)  For the purposes of this Part,

“accumulated other comprehensive income”, “any other surplus”, “cost of investments” and “total assets” includes any amount,

.     .     .     .     .

   9.  Subsection 62.1 (2) of the Act is amended by striking out “and” at the end of clause (d) and by adding the following clause:

(d.1) for taxation years commencing after September 30, 2006, the amount of its accumulated other comprehensive income; and

   10.  (1)  Subsection 66 (1.1) of the Act is amended by adding “and” at the end of clause (b) and by repealing clauses (c) and (d) and substituting the following:

   (c)  0.15 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2009 and before July 1, 2010 to the total number of days in the taxation year.

   (2)  Subsection 66 (1.2) of the Act is repealed and the following substituted:

No tax payable after June 30, 2010

   (1.2)  No tax is payable under this Part by a corporation that is not a financial institution for a taxation year commencing after June 30, 2010.

   (3)  The definition of “G” in subsection 66 (4.1) of the Act is amended by adding “and” at the end of clause (b) and by repealing clauses (c) and (d) and substituting the following:

   (c)  0.3 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2009 and before July 1, 2010 to the total number of days in the taxation year, and

   (4)  The definition of “J” in subsection 66 (4.2) of the Act is amended by adding “and” at the end of clause (b) and by repealing clauses (c) and (d) and substituting the following:

   (c)  0.45 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2009 and before July 1, 2010 to the total number of days in the taxation year, and

   (5)  The definition of “L” in subsection 66 (4.3) of the Act is amended by adding “and” at the end of clause (b) and by repealing clauses (c) and (d) and substituting the following:

   (c)  0.36 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2009 and before July 1, 2010 to the total number of days in the taxation year, and

   (6)  Subsection 66 (4.4) of the Act is repealed and the following substituted:

No tax payable after June 30, 2010 by financial institution

   (4.4)  No tax is payable under this Part by a financial institution for a taxation year commencing after June 30, 2010.

   11.  The definition of “D” in clause 66.1 (3.2) (b) of the Act is amended by adding “and” at the end of clause (b) and by repealing clauses (c) and (d) and substituting the following:

   (c)  0.45 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2009 and before July 1, 2010 to the total number of days in the taxation year.

Commencement

   12.  This Schedule comes into force on the day the Budget Measures and Interim Appropriation Act, 2007 receives Royal Assent.

 

Schedule 7
Credit Unions and Caisses Populaires Act, 1994 and Related Amendments

   1.  (1)  The definitions of “association of credit unions”, “auditor”, “by-law” and “Commission” in section 1 of the Credit Unions and Caisses Populaires Act, 1994 are repealed.

   (2)  The definition of “credit union” in section 1 of the Act is repealed and the following substituted:

“credit union” means a corporation incorporated or continued as a credit union or caisse populaire under this Act or a predecessor of this Act; (“caisse”, “caisse populaire”)

   (3)  The definition of “deposit” in section 1 of the Act is repealed and the following substituted:

“deposit” includes money deposited with a credit union under a federal or provincial registered savings plan or fund; (“dépôt”)

   (4)  Clauses (a) and (b) of the definition of “financial institution” in section 1 of the Act are repealed and the following substituted:

  (a)  a bank or authorized foreign bank within the meaning of section 2 of the Bank Act (Canada),

  (b)  an insurer licensed under the Insurance Act,

   (5)  The definition of “financial institution” in section 1 of the Act is amended by striking out “and” at the end of clause (e) and by adding the following clauses:

  (g)  a retail association as defined under the Cooperative Credit Associations Act (Canada), and

   (h)  such other entities or classes of entities as may be prescribed;

   (6)  The definition of “officer” in section 1 of the Act is repealed and the following substituted:

“officer”, in respect of a credit union, means,

  (a)  the chair of the board required under section 94.2,

  (b)  the corporate secretary required under subsection 140 (1),

   (c)  the chief executive officer required under subsection 140 (1), and

  (d)  any other officer provided for in the by-laws referred to in subsection 140 (1); (“dirigeant”)

   (7)  Section 1 of the Act is amended by adding the following definition:

“patronage share” means a share of a class provided for by the articles of a credit union in accordance with section 53; (“part de ristourne”)

   (8)  The definition of “personal representative” in section 1 of the Act is amended by striking out “a tutor”.

   (9)  The definitions of “real estate” and “stabilization authority” in section 1 of the Act are repealed.

   2.  The English version of subsection 2 (2) of the Act is amended by striking out “his or her” and substituting “their”.

   3.  (1)  Subsection 5 (2) of the Act is amended by striking out “Superintendent” and substituting “Corporation”.

   (2)  Subsection 5 (3) of the Act is repealed and the following substituted:

Revocation of order

   (3)  The Corporation may, by order, revoke an order under subsection (2) if the Corporation believes that the credit union has failed to comply with a term set out in the order under subsection (2) or that it is no longer appropriate to deem the corporate body in respect of which the order under subsection (2) was made to be an affiliate.

Procedural rules

   (4)  Section 240.1 applies with respect to an order under this section.

   4.  Section 7 of the Act is repealed and the following substituted:

Member

   7.  (1)  For the purposes of this Act, a person is a holder of a membership share of a credit union when, according to the register under section 230, the person is the owner of the membership share or is entitled to be entered in the register as the owner of the share.

Holder of membership share

   (2)  A reference in this Act to the holding of a membership share by or in the name of a person is a reference to the fact that the person is registered or is entitled to be registered in the register under section 230 as the holder of the share.

   5.  Part II of the Act is repealed.

   6.  Clause 13 (2) (c) of the Act is repealed and the following substituted:

   (c)  is an undischarged bankrupt or has been discharged as a bankrupt in the five years preceding the date the application to incorporate the credit union is made under subsection 15 (1).

   7.  Subsection 14 (1) of the Act is repealed and the following substituted:

Contents of articles

   (1)  The articles of incorporation must set out the prescribed information.

   8.  (1)  Subsection 15 (1) of the Act is repealed and the following substituted:

Application for incorporation

   (1)  An application to incorporate a credit union may be made by sending to the Superintendent two copies of the proposed articles of incorporation and the proposed by-laws of the credit union and paying the application fee established by the Minister.

   (2)  Subsection 15 (2) of the Act is amended by striking out the portion before paragraph 1 and substituting the following:

Inquiry before incorporation

   (2)  The Superintendent shall inquire into the circumstances, sufficiency and regularity of the articles and by-laws and may do any of the following before issuing a certificate of incorporation:

.     .     .     .     .

   9.  (1)  Subsection 16 (1) of the Act is repealed and the following substituted:

Certificate of incorporation

   (1)  Subject to subsection (2), the Superintendent shall issue a certificate of incorporation to the incorporators.

   (2)  Subsection 16 (2) of the Act is amended by striking out the portion before paragraph 1 and substituting the following:

Grounds for refusing certificate

   (2)  The Superintendent shall not issue a certificate of incorporation if the articles do not meet the requirements of section 14 or 15 or if the incorporators do not satisfy the Superintendent of the following matters:

.     .     .     .     .

   (3)  Paragraph 3 of subsection 16 (2) of the Act is repealed and the following substituted:

    3.  The credit union will be operated in such a way that deposits will be safeguarded without the likelihood of a claim against the Corporation.

   10.  Sections 18 and 19 of the Act are repealed and the following substituted:

Refusal of certificate

   18.  If the Superintendent decides, after giving the applicants for incorporation an opportunity to make written submissions, not to issue a certificate of incorporation, he or she shall notify the incorporators, in writing, and set out the reasons for the decision.

Language and form of corporate name

   19.  (1)  The corporate name of a credit union must be in the language and form authorized in the articles and approved by the Superintendent.

Use of “credit union”

   (2)  Subject to subsections (3) and (4), the corporate name of a credit union must include the words “credit union” or “caisse populaire”.

Use of “caisse populaire”

   (3)  Only a corporation incorporated under this Act or a predecessor of this Act that provides financial services to its members and promotes the interests of the French-speaking community in Ontario by providing management and democratic control in French may include “caisse populaire” in its corporate name, and all other corporations incorporated under this Act or a predecessor of this Act shall include “credit union” in their corporate names.

Use of “Limited”, etc.

   (4)  The corporate name of a credit union must have at the end of it one of the following: “Limited”, “Ltd”, “Limitée”, “Ltée”, “incorporated”, “incorporée” or “Inc”.

   11.  Subsections 19.1 (1) and (2) of the Act are repealed and the following substituted:

Use of other name

   (1)  A credit union shall not carry on business under or identify itself by a name other than its corporate name unless the Superintendent has approved that name.

Restriction on approval

   (2)  The Superintendent shall not approve a name under subsection (1),

  (a)  if the name includes “credit union” or “caisse populaire”, unless the name is derived from the credit union’s corporate name; or

  (b)  if the name would be precluded as a corporate name under section 21.

   12.  Section 20 of the Act is repealed and the following substituted:

Prohibition, use of “credit union”, “caisse populaire”

   20.  No person, other than a credit union or prescribed person or entity, shall carry on business using a name in which “credit union” or “caisse populaire” is used.

   13.  (1)  The English version of subsection 21 (1) of the Act is amended by striking out the portion before clause (a) and substituting the following:

Restrictions re corporate names

   (1)  A credit union may not be incorporated under this Act with a corporate name that,

.     .     .     .     .

   (2)  Subsections 21 (3), (4) and (5) of the Act are repealed and the following substituted:

Exception for affiliates

   (3)  Clauses (1) (d) and (e) do not apply with respect to a credit union that is affiliated with another entity if the Superintendent is satisfied that the entity consents to it having a corporate name substantially similar to the entity’s name.

Change of corporate name

   (4)  If a credit union has acquired a corporate name contrary to subsection (1), the Superintendent may, by order, issue a certificate of amendment to the articles changing the name of the credit union.

Procedural rules

   (5)  Section 240.1 applies with respect to an order under subsection (4).

   14.  Section 22 of the Act is repealed and the following substituted:

Reserving a corporate name

   22.  (1)  A person may reserve a corporate name for a period of up to 90 days by making an application to the Superintendent and paying the fee established by the Minister.

Effect of reservation

   (2)  During the period that the corporate name is reserved, a body corporate is not entitled to acquire the name or a similar name without the written consent of the person for whose use and benefit the name is reserved.

Renewal of reservation of corporate name

   (3)  Within 30 days before the expiry of the reservation of a corporate name under subsection (1), the person who reserved the name may apply for a renewal of the reservation for a further period of not more than 90 days by submitting an application for the renewal to the Superintendent and paying the fee established by the Minister.

Corporate seal

   22.1  A credit union may, but need not, have a corporate seal.

   15.  (1)  Clause 24 (2) (d) of the Act is repealed and the following substituted:

  (d)  each member has only one vote at its general meetings or in respect of elections of its directors.

   (2)  Subsection 24 (3) of the Act is repealed and the following substituted:

Exception

   (3)  Clause (2) (d) does not prevent a member from voting as a proxy holder as allowed under section 217.3.

   16.  Part III of the Act is amended by adding the following sections:

Financial years

   27.1  (1)  The financial year of a credit union must end on December 31.

Existing financial years with different year ends

   (2)  The following apply if, on the day this section comes into force, a credit union’s financial year ends on a date other than December 31:

    1.  The credit union’s financial year need not be changed.

    2.  If the credit union’s financial year is changed, it must be changed so that it ends on December 31.

Special rule not to apply to amalgamated credit unions

   (3)  Subsection (2) does not apply to a credit union formed by the amalgamation of two or more credit unions after the day this section comes into force; in such a case, the financial year of the amalgamated credit union must end on December 31.

Corporations Act not to apply

   27.2  The Corporations Act does not apply to credit unions.

   17.  Section 28 of the Act is repealed and the following substituted:

Membership

   28.  (1)  Membership in a credit union is governed by the credit union’s by-laws, subject to the provisions of this Act and the credit union’s articles.

Minimum membership shares required

   (2)  To be a member, a person or entity must hold the minimum number of membership shares required under the by-laws of the credit union.

Member who ceases to hold the minimum

   (3)  A member who ceases to hold enough shares to be a member shall, nonetheless, continue to be a member of the credit union for the purposes of this Act, subject to any limitations in the by-laws of the credit union, including limitations on the rights that member may exercise.

Ground for expulsion

   (4)  For greater certainty, subsection (3) does not prevent holding fewer than the minimum number of shares from being set out in the by-laws of the credit union as a ground for expulsion under subsection 47 (1).

   18.  (1)  Subsections 30 (1) and (2) of the Act are repealed and the following substituted:

Limitation on membership

   (1)  The by-laws of every credit union shall provide that the membership of the credit union is limited to persons, related persons and entities who come within a bond of association and shall specify the nature of the bond of association.

   (2)  Subsections 30 (4), (5), (6) and (7) of the Act are repealed.

   19.  Paragraph 3 of subsection 31 (1) of the Act is repealed and the following substituted:

    3.  Members who do not come within the bond of association must be identified as such in the register under section 230.

   20.  Subsection 33 (1) of the Act is amended by striking out the portion before clause (a) and substituting the following:

Record, information relating to membership

   (1)  Every person or entity whose name is registered in the register under section 230 is entitled to,

.     .     .     .     .

   21.  The heading immediately before section 35 and sections 35 and 36 of the Act are repealed.

   22.  Sections 38 and 39 of the Act are repealed and the following substituted:

Not bound by trust

   38.  (1)  A credit union is not bound to see to the execution of any trust to which any membership share is subject.

Application

   (2)  Subsection (1) applies whether the trust is express, implied or constructive.

Trusts for named beneficiaries

   39.  (1)  A credit union may accept deposits from a member in trust for a named beneficiary only if,

  (a)  the member holds, in trust for the beneficiary, the minimum number of membership shares required under subsection 28 (2);

  (b)  the member and the beneficiary are related persons;

   (c)  the deposits are money the member is required to hold in accordance with subsection 57 (1) of the Law Society Act; or

  (d)  the deposits are required or governed under an Act and are prescribed for the purposes of this clause.

Deposit is separate for deposit insurance purposes

   (2)  A deposit of a member in trust for a named beneficiary shall be deemed, for the purpose of paragraph 2 of subsection 270 (2), to be a deposit separate from any other deposit of the member.

Exercise of rights of membership shares held in trust

   (3)  The following apply with respect to membership shares held by a member in trust for a beneficiary:

    1.  The member shall exercise the rights attached to the shares, subject to paragraph 2.

    2.  At a meeting of members, the member does not have an additional vote as a result of holding the membership shares in trust.

Disclosure of beneficiary

   (4)  The member shall disclose to the credit union such personal information concerning the beneficiary as the credit union requires to comply with all applicable laws.

Failure to disclose

   (5)  A credit union may refuse to accept or maintain a deposit made by a member in trust for a named beneficiary if the member refuses or fails to provide the information referred to in subsection (4).

   23.  Section 41 of the Act is repealed and the following substituted:

Members under the age of 18 years

   41.  If permitted by the by-laws of a credit union, a person under the age of 18 years may be a member of the credit union, subject to such conditions and restrictions as may be set out in the by-laws.

   24.  Sections 42 and 43 of the Act are repealed and the following substituted:

Limited payment re deceased member

   42.  (1)  If a member of a credit union dies and the credit union makes a payment of an amount described in subsection (2) to such person as the credit union is satisfied is entitled to receive the amount, the payment discharges any obligation of the credit union and its board in respect of and to the extent of the amount paid even if the payment is made without letters probate or letters of administration being taken out.

Type of payments

   (2)  The payment referred to in subsection (1) is a payment of the following:

    1.  An amount not exceeding the prescribed amount payable from the amount on deposit in the name of the deceased or in consideration for the membership shares of the deceased.

    2.  An amount not exceeding the prescribed amount payable from any money that is received by the credit union under any policy of insurance on the life of the deceased.

Restrictions

   (3)  Subsection (1) applies only if the credit union pays the amount in good faith and the credit union receives, before the payment,

  (a)  a statutory declaration attesting to the person’s entitlement to receive the amount; or

  (b)  such other evidence of the person’s entitlement to the amount as the credit union considers to be appropriate in the circumstances.

Credit union can require more

   (4)  Nothing in this section prevents the credit union from requiring additional documentation or evidence as the credit union considers appropriate.

Recovery from recipient

   (5)  Subsection (1) does not affect any right of a person claiming to be entitled to recover the amount from the person to whom it was paid.

No limit on other powers, requirements

   (6)  For greater certainty, this section does not prevent a credit union from making a payment or transfer as otherwise allowed or required by law.

If deceased member was trustee

   (7)  If a member of a credit union dies holding membership shares or money on deposit in trust for a named beneficiary, the credit union may pay the amount of, or transfer, the membership shares or deposit and any interest or dividends on them,

  (a)  to the executor or administrator of the estate of the deceased member; or

  (b)  to the beneficiary if there is no executor or administrator of the estate of the deceased member or, if the beneficiary is a minor, to the beneficiary’s parent or guardian.

   25.  The heading immediately before section 44 and sections 44 and 45 of the Act are repealed and the following substituted:

Liens

Lien for liability

   44.  (1)  A credit union has a lien on the deposits and membership shares of a member for any liability to it by the member, and may set off any sum standing to the credit of the member on the books of the credit union towards the payment of the liability.

Limitation, member’s share account

   (2)  Despite subsection (1), a credit union shall not apply any service charges or other deductions against a member’s share account except upon the termination of the membership.

   26.  Section 46 of the Act is amended by adding the following subsection:

Rights of withdrawing member

   (3)  The by-laws of a credit union shall set out the rights of a withdrawing member which shall include the right to receive payment for the member’s membership shares, subject to subsection 62 (3), and the return of any money on deposit and property held by the credit union.

   27.  (1)  Sections 47, 48 and 49 of the Act are repealed and the following substituted:

Expulsion of members

   47.  (1)  A member of a credit union may be expelled from membership, in accordance with the by-laws, by a resolution of the board on the grounds set out in the by-laws.

Member rights relating to expulsion

   (2)  The by-laws of a credit union shall provide for the following rights:

    1.  The right of a member to receive advance notice of any meeting of the board at which the board will consider a resolution to expel the member.

    2.  The right of the member not to be expelled without being given an opportunity to appear at the meeting of the board to make submissions and to be represented at the meeting by legal counsel or an agent.

    3.  The right of an expelled member to appeal the decision of the board at the next general meeting of the members.

    4.  The right of the expelled member to be reinstated as a member of the credit union if, at the next general meeting, the members, by a majority of the votes cast at the meeting, set aside the resolution of the board.

    5.  The right of the expelled member to receive payment for the member’s membership shares, subject to subsection 62 (3), and the return of any money on deposit and property held by the credit union.

Procedures to be set out in by-laws

   (3)  The by-laws of a credit union shall set out the following:

    1.  The procedures to be followed by the board to provide the advance notice referred to in paragraph 1 of subsection (2).

    2.  The procedures to be followed relating to the appeal referred to in paragraph 3 of subsection (2).

Notice of decision

   (4)  If the board passes a resolution expelling a member, the credit union shall, within five days after the resolution is passed, notify the member of the decision of the board by registered letter addressed to the member at the member’s last known address.

   (2)  Paragraph 2 of subsection 47 (2) of the Act, as enacted by subsection (1), is amended by striking out “by legal counsel or an agent” and substituting “by a person authorized under the Law Society Act to represent the member”.

   28.  The Act is amended by adding the following heading immediately before section 50:

Representative Actions by Members

   29.  Section 51 of the Act is repealed and the following substituted:

Classes of shares

   51.  (1)  The articles of a credit union must provide for a class of shares known as membership shares and may provide for additional classes of shares, including patronage shares referred to in section 53.

Nature of shares

   (2)  The shares of a credit union are personal property.

Form

   (3)  The shares of a credit union are without nominal or par value and, if they are not membership shares or patronage shares, must be in registered form.

   30.  Subsections 52 (1), (2), (3) and (4) of the Act are repealed and the following substituted:

Membership shares

   (1)  Membership shares confer on the holder the right to receive dividends declared on the shares and to receive the remaining property of the credit union on dissolution.

Number of shares that member can hold

   (2)  Subject to any prescribed limit or limit set out in the by-laws of the credit union, a member may hold more than the minimum number of membership shares required under subsection 28 (2) to be a member.

Transfer prohibited

   (3)  The holder of a membership share may not transfer an interest in the share to a person other than the credit union or another credit union and any transaction that purports to make such a transfer is void.

   31.  Section 53 of the Act is repealed and the following substituted:

Patronage shares

   53.  (1)  The articles of a credit union may provide for a class of shares known as patronage shares to be payable to members as a dividend under section 65 or as a patronage return under section 66.

Nature of share

   (2)  A patronage share does not confer on the holder the right to vote at meetings of the members of the credit union, the right to notice of any meeting of members of the credit union, the right to receive dividends or the right to receive the remaining property of the credit union on dissolution.

Transfer prohibited

   (3)  The holder of a patronage share may not transfer an interest in the share to a person other than the credit union or another credit union and any transaction that purports to make such a transfer is void.

Rights of classes

   53.1  (1)  For each class of shares, the articles must set out,

  (a)  the rights, privileges, restrictions and conditions attaching to the shares of the class; and

  (b)  the maximum number, if any, of shares of the class that the credit union is authorized to issue.

Restrictions

   (2)  Shares, other than membership shares, do not confer on their holder the right to vote at meetings of the members of the credit union except as permitted under this Act or the right to receive any of the remaining property of the credit union on dissolution.

   32.  (1)  Subsection 54 (1) of the Act is amended by striking out “determine” and substituting “set out”.

   (2)  Subsection 54 (2) of the Act is amended by adding “and the limitations under this Act” at the end.

   (3)  Subsections 54 (6) and (7) of the Act are repealed and the following substituted:

Information to Superintendent

   (6)  Before issuing shares in series, the credit union must file with the Superintendent articles of amendment designating the series and setting out the rights, privileges, restrictions and conditions attaching to the shares.

   33.  Section 55 of the Act is repealed.

   34.  Subsection 56 (1) of the Act is amended by adding “or patronage shares” after “membership shares”.

   35.  Subsection 57 (1) of the Act is amended by adding “or patronage shares” after “membership shares” in the portion before clause (a).

   36.  (1)  Subsection 59 (1) of the Act is amended by adding “other than a patronage share” after “share”.

   (2)  Section 59 of the Act is amended by adding the following subsection:

Exception for certain asset purchases

   (1.1)  Subsection (1) does not apply to the issue of shares by a credit union if the issue is part of a transaction in which the credit union (the “purchaser credit union”) acquires the assets of another credit union (the “vendor credit union”) and, as part of that transaction, shareholders of the vendor credit union are to be issued with shares of the purchaser credit union.

   (3)  Subsection 59 (3) of the Act is repealed.

   37.  The English version of section 60 of the Act is amended by striking out “his or her” and substituting “the person’s”.

   38.  Subsection 62 (1) of the Act is repealed and the following substituted:

Purchase and redemption of shares

   (1)  A credit union may purchase or redeem its shares only in accordance with this section and the articles and by-laws of the credit union.

   39.  Sections 63 and 64 of the Act are repealed and the following substituted:

Cancellation of shares

   63.  A credit union shall cancel its shares or fractions of its shares that it has purchased, redeemed or otherwise acquired, other than through the realization of security.

Shares acquired through realization of security

   64.  (1)  If a credit union acquires any of its shares through the realization of security, the credit union shall sell, cancel or otherwise dispose of them within six months after the day of the realization.

Same

   (2)  If a subsidiary of a credit union acquires shares of the credit union through the realization of security, the credit union shall cause the subsidiary to sell or otherwise dispose of them within six months after the day of the realization.

   40.  The heading immediately before section 65 and section 65 of the Act are repealed and the following substituted:

Dividends and Patronage Returns

Declaration of dividend

   65.  (1)  The board may declare, subject to the by-laws, and the credit union may pay a dividend.

Form of dividend

   (2)  A dividend may be paid,

  (a)  in cash;

  (b)  by issuing patronage shares;

   (c)  by issuing fully paid shares, other than membership shares, or options or rights to acquire fully paid shares, other than membership shares, in any class or series of shares;

  (d)  in a combination of two or more forms of dividends described in clauses (a), (b) and (c); or

  (e)  in property, with the approval of the Superintendent.

   41.  Subsection 66 (2) of the Act is repealed and the following substituted:

Form of patronage return

   (2)  A patronage return may be paid,

  (a)  in cash;

  (b)  by issuing patronage shares;

   (c)  by issuing fully paid shares, other than membership shares, or options or rights to acquire fully paid shares, other than membership shares, in any class or series of shares; or

  (d)  in a combination of two or more forms of patronage returns described in clauses (a), (b) and (c).

Rebate of interest

   (3)  A patronage return may include a rebate of interest paid by members during a financial year in respect of loans from the credit union.

   42.  Subsections 68 (3) and (4) of the Act are repealed.

   43.  Subsection 69 (1) of the Act is amended by striking out the portion before clause (a) and substituting the following:

Adjustment due to conversion

   (1)  On a conversion of outstanding shares, other than membership shares or patronage shares, of a credit union into shares of another class or series, the credit union shall,

.     .     .     .     .

   44.  (1)  Subsection 72 (1) of the Act is repealed and the following substituted:

Reduction by special resolution

   (1)  The stated capital of a credit union may be reduced by special resolution of the members of the credit union.

   (2)  The French version of subsection 72 (4) of the Act is repealed and the following substituted:

Conditions d’approbation

   (4)  Le surintendant ne peut approuver la résolution extraordinaire que si la demande à cet effet a été présentée dans les trois mois qui suivent son adoption et qu’une copie de la résolution, accompagnée d’un avis de l’intention de demander son approbation, a été publiée dans la Gazette de l’Ontario.

   45.  Subsection 73 (2) of the Act is repealed and the following substituted:

Shares held by personal representative

   (2)  A person holding shares as a personal representative who is registered in the register under section 230 as a member or shareholder and described as the personal representative for a named person is not personally liable under subsection (1), but the named person is liable.

   46.  Section 74 of the Act is amended by adding “or patronage shares” after “membership shares”.

   47.  The Act is amended by adding the following section immediately before the heading “Offering Statement”:

Restrictions on transfer of securities

   74.1  (1)  A security issued under circumstances described in clause 75 (1) (a) shall not be transferred except to another member of the credit union or to a prescribed person.

Same

   (2)  The transfer of a security that is permitted under subsection (1) shall be made in the prescribed manner and subject to the prescribed conditions.

Same

   (3)  The transfer of a security that is permitted under subsection (1) is effective when the transfer is recorded in the register under section 230.

   48.  Clauses 75 (3) (a) and (b) of the Act are repealed and the following substituted:

  (a)  membership shares;

  (b)  patronage shares; or

   (c)  shares under section 65 or 66.

   49.  The French version of clause 76 (c) of the Act is repealed and the following substituted:

    c)  soit les personnes inscrites comme courtier en bourse, courtier en valeurs mobilières ou courtier négociant aux termes de la Loi sur les valeurs mobilières.

   50.  (1)  Subsections 77 (1) and (2) of the Act are repealed and the following substituted:

Offering statement

   (1)  Application for a receipt for an offering statement is made by filing with the Superintendent a copy of the offering statement and paying the fee established by the Minister.

Contents

   (2)  The offering statement must contain such information as may be prescribed.

   (2)  Subsection 77 (4) of the Act is repealed and the following substituted:

Certificate

   (4)  The offering statement must be accompanied by a disclosure certificate signed by the chair of the board and the chief executive officer, certifying that the offering statement satisfies the requirements of subsections (2) and (3).

   51.  Subsections 78 (2), (3), (4) and (5) of the Act are repealed and the following substituted:

Refusal to issue, revocation

   (2)  The Superintendent may refuse to issue or may revoke a receipt for an offering statement in any of the following circumstances:

    1.  The credit union is in contravention of section 84.

    2.  The credit union is subject to the supervision of the Corporation or under the administration of the Corporation.

Same

   (3)  Before refusing to issue a receipt or revoking a receipt, the Superintendent shall give the applicant an opportunity to make written submissions.

Same

   (4)  A decision to refuse to issue a receipt or a decision to revoke a receipt must be given in writing and must include the reasons for the refusal or revocation.

Expiry of receipt

   (5)  A receipt for an offering statement expires on the earlier of,

  (a)  the date that is six months after the day it is issued; and

  (b)  the date on which the offering of securities contemplated by the offering statement for which the receipt is granted is closed in accordance with the offering statement.

   52.  Subsection 79 (1) of the Act is repealed and the following substituted:

Renewal of receipt

   (1)  Application for renewal of the receipt for an offering statement may be made by filing an application with the Superintendent with a copy of the statement and paying the fee established by the Minister.

   53.  Subsection 81 (3) of the Act is repealed and the following substituted:

Withdrawal from purchase

   (3)  An agreement of purchase and sale in respect of securities is not binding on the purchaser if the person from whom the purchaser has agreed to purchase the security receives written notice of the purchaser’s intention not to be bound by the agreement not later than midnight on the second business day after receipt by the purchaser of the latest offering statement and any statement of material change.

Same

   (4)  Subsection (3) applies with necessary modifications in respect of a person who is subscribing for securities to be issued by a credit union.

Receipt by fax, etc., considered written notice

   (5)  Without limiting how else a written notice may be given, a written notice is considered to be received by a recipient for the purposes of subsection (3) if the recipient receives the notice by facsimile or electronic means.

Business day

   (6)  In subsection (3),

“business day” means a day that is not,

  (a)  Saturday, or

  (b)  Sunday or any other holiday, other than Easter Monday and Remembrance Day.

   54.  (1)  Subsection 82 (5) of the Act is amended by striking out the portion before paragraph 1 and substituting the following:

Defence

   (5)  A person who signed the disclosure certificate required under subsection 77 (4) or a director is not liable under this section if the person proves one of the following:

.     .     .     .     .

   (2)  Paragraph 2 of subsection 82 (5) of the Act is repealed and the following substituted:

    2.  The person was not aware of the misrepresentation when the offering statement or material change statement was filed with the Superintendent. After the receipt for the statement was issued but before the purchaser bought the security, the person immediately after the person became aware of the misrepresentation advised the Superintendent that the person withdrew consent to the filing of the statement with the Superintendent.

   55.  Section 83 of the Act is repealed and the following substituted:

Restriction on Commission for Purchase or Sale

No commission by directors, officers, employees

   83.  None of the following persons shall charge or accept payment of a commission on the purchase or sale of a security of a credit union:

    1.  The directors, officers and employees of the credit union.

    2.  The related persons of a director, officer or employee of the credit union.

    3.  If the credit union is a member of a league, the directors, officers and employees of the league.

   56.  Section 84 of the Act is amended by adding the following subsections:

Forming of groups relating to capital requirements

   (3)  Subject to the regulations and with the approval of the Corporation, two or more credit unions may enter into an agreement with a league to form a group for the purposes of assisting the credit unions in satisfying the requirements of this section relating to capital.

Revocation of approval

   (4)  The Corporation may, by order, revoke its approval under subsection (3) on a prescribed ground.

Procedural rules

   (5)  Section 240.1 applies with respect to an order under subsection (4).

   57.  Sections 85, 86, 87, 88 and 89 of the Act are repealed and the following substituted:

Capital and liquidity policies

   85.  (1)  A credit union shall establish capital and liquidity policies for the credit union consistent with the regulations governing adequate capital and liquidity and the credit union shall adhere to those policies.

Policies to be prudent

   (2)  The capital and liquidity policies of a credit union shall consist of policies, standards and procedures that a reasonable and prudent person would apply in order to ensure the financial soundness of the credit union, avoid undue risk of loss and obtain a reasonable return.

Approval and review by board

   (3)  The capital and liquidity policies of a credit union are subject to the approval of the board and the board shall review the policies at least once each year.

Order if policies inadequate, etc.

   (4)  If the Corporation considers the capital and liquidity policies of the credit union to be inadequate or imprudent, the Corporation may order the credit union to amend them in accordance with the order.

Procedural rules

   (5)  Section 240.1 applies with respect to an order under this section.

Appeal to Tribunal

   (6)  The credit union that is subject to an order under this section may appeal the order to the Tribunal in accordance with section 240.4.

Additional requirements

   86.  (1)  The Corporation may order a credit union,

  (a)  to increase its capital; or

  (b)  to provide additional liquidity in such forms and amounts as the Corporation may require.

Circumstances

   (2)  Despite a credit union’s compliance with the regulations governing adequate capital and liquidity, the Corporation may impose the requirements set out in subsection (1),

  (a)  if there are reasonable grounds to believe that the credit union is not complying with the requirements of this Act and the regulations concerning the management of risk in making loans and investments and in the general management of credit union business;

  (b)  if the Corporation considers that imposing the requirement is necessary to protect the interests of members, shareholders or depositors; or

   (c)  if the Corporation considers that imposing the requirement is necessary to ensure the financial security and integrity of the credit union.

Compliance

   (3)  The credit union shall comply with the order within such time as the Corporation specifies in the order.

Time for compliance if member of a group

   (4)  If the credit union is in a group formed under subsection 84 (3), the time for compliance specified under subsection (3) for an order under clause (1) (a) must be at least 30 days after the copy of the order is given to the credit union under section 240.2.

Procedural rules

   (5)  Section 240.1 applies with respect to an order under this section.

Appeal to Tribunal

   (6)  The credit union that is subject to an order under this section may appeal the order to the Tribunal in accordance with section 240.4.

Variation of requirements

   87.  (1)  A credit union may apply to the Corporation for a variation of the requirements under section 84.

Application

   (2)  An application must be in a form approved by the Corporation and must describe how and when the credit union will meet the requirements under section 84.

Variation

   (3)  The Corporation may grant the variation subject to any terms it considers appropriate if it considers that granting the variation is in the interest of the members of the credit union and that the credit union will meet the requirements under section 84 within a reasonable time.

Valuation of asset

   88.  If the Corporation has appraised the value of an asset held by a credit union or a subsidiary and the value determined by the Corporation varies materially from the value placed by the credit union or the subsidiary on the asset, the Corporation shall send to the credit union, its auditor and its audit committee a written notice of the value of the asset as determined by the Corporation.

Report re adequacy

   89.  A credit union shall provide a report in a form approved by the Corporation concerning its compliance with section 84 to such persons and at such times as required by the Corporation.

Notification if credit union insolvent

   89.1  If the Corporation believes that a credit union is unable to provide for the payment of its liabilities as they become due, the Corporation shall immediately notify the Superintendent in writing.

   58.  (1)  Section 92 of the Act is repealed and the following substituted:

Disqualified individuals

   92.  (1)  The following individuals are disqualified from being directors of a credit union:

    1.  One whose membership in any credit union has been terminated, other than voluntarily.

    2.  One who a court has decided is of unsound mind.

    3.  One who is an undischarged bankrupt or who has been discharged as a bankrupt in the five years preceding the date on which he or she may be elected as director.

    4.  One who is unable to obtain a bond of an insurer licensed under the Insurance Act to write surety and fidelity insurance.

    5.  One who is more than 90 days in arrears in the payment of a debt owed to the credit union unless the credit union has agreed to extend the time for repayment.

    6.  One who is a listed person within the meaning of the United Nations Suppression of Terrorism Regulations under the United Nations Act (Canada).

    7.  One who has been convicted, in the five years preceding the date on which he or she may be elected as a director, of an offence described in subsection (3) and who has not received a pardon for the offence.

    8.  One whose membership in a professional association has been terminated, in the five years preceding the date on which he or she may be elected as director, for professional misconduct.

    9.  An employee of the credit union or a league in which the credit union is a member or his or her spouse, parent or child.

  10.  A professional advisor who provides services to the credit union in his or her professional capacity or who has provided such services in the three years preceding the date on which he or she may be elected as a director.

  11.  An employee of the Corporation.

  12.  A public servant employed in regulating credit unions.

  13.  One who has not met the training requirements or qualifications for directors established by the credit union.

  14.  One who has not met any reasonable condition or qualification set out in the by-laws of the credit union.

Exception

   (2)  An individual is not an employee for the purposes of paragraph 9 of subsection (1) solely because he or she provides, without remuneration, services to the credit union or league that are ordinarily provided by an employee.

Type of offence

   (3)  An offence referred to in paragraph 7 of subsection (1) is an offence that,

  (a)  is related to the qualifications, functions or duties of a director of a body corporate;

  (b)  involves theft or fraud;

   (c)  involves a contravention or failure to comply with this Act, a predecessor of this Act or an Act governing a subsidiary of the credit union; or

  (d)  involves a contravention or failure to comply with the Securities Act.

   (2)  Paragraph 12 of subsection 92 (1) of the Act, as enacted by subsection (1), is repealed and the following substituted:

  12.  A public servant employed under Part III of the Public Service of Ontario Act, 2006 whose employment duties include regulating credit unions.

   59.  Subsection 93 (1) of the Act is repealed and the following substituted:

Number of directors

   (1)  Subject to subsection (2), the number of directors shall be as provided in the by-laws.

   60.  The Act is amended by adding the following sections:

Disclosure of interest by candidates

   94.1  (1)  A person who is a candidate for director of a credit union shall disclose, before the election, everything the person would have to disclose under section 146 if the person were a director.

Clarification, existing directors, etc.

   (2)  For greater certainty,

  (a)  subsection (1) applies in relation to the re-election of a director as well as to the election of a person who is not already a director;

  (b)  the obligation to disclose under subsection (1) is in addition to any requirement to disclose under section 146 and applies even if a disclosure has already been made under that section; and

   (c)  a general notice described in subsection 146 (6) is not sufficient disclosure of an interest in a contract for the purposes of subsection (1).

Disclosure to board

   (3)  A disclosure required under subsection (1) shall be made in writing to the board of the credit union.

Notice to members

   (4)  The board shall give the members notice of the disclosure before the election is held.

How notice to members given

   (5)  The by-laws of the credit union may specify how the board shall give notice of the disclosure under subsection (4).

Chair of board

   94.2  The directors shall elect or appoint a chair of the board from among themselves.

   61.  Subsection 95 (4) of the Act is repealed and the following substituted:

Maximum number

   (4)  The by-laws shall provide for a maximum number of consecutive terms for directors.

   62.  The Act is amended by adding the following section:

Term of office, chair

   95.1  (1)  The chair of the board shall hold office for such term as the by-laws provide.

Maximum number

   (2)  The by-laws shall provide for a maximum number of consecutive terms for the chair of the board.

   63.  Subsection 97 (1) of the Act is repealed and the following substituted:

Vacancies

   (1)  If a vacancy occurs in the board and a quorum of directors remains, the directors remaining in office may appoint a qualified individual to fill the vacancy until the next annual meeting of the members of the credit union.

   64.  (1)  Clause 98 (1) (e) of the Act is repealed and the following substituted:

  (e)  when the Corporation replaces the board and appoints a person to assume the powers of the board under subsection 295 (1).

   (2)  Section 98 of the Act is amended by adding the following subsection:

Notice if no quorum of directors

   (3)  The credit union shall notify the Superintendent if, after a director ceases to hold office, there is not a quorum of directors in office.

   65.  (1)  Subsections 100 (4) and (5) of the Act are repealed and the following substituted:

Right to make representations

   (4)  At the meeting, the director is entitled to speak to the resolution calling for his or her removal and may do so personally or through legal counsel or an agent.

   (2)  Subsection 100 (4) of the Act, as re-enacted by subsection (1), is amended by striking out “through legal counsel or an agent” and substituting “through a person authorized under the Law Society Act to represent the member”.

   66.  Sections 101 and 102 of the Act are repealed and the following substituted:

Removal by Superintendent

   101.  (1)  The Superintendent may, by order, remove a director of a credit union if the Superintendent is of the opinion that the director is not suitable to hold office as a director on the basis of the character or competence of the director.

Risk of prejudice

   (2)  In forming an opinion under subsection (1), the Superintendent must consider whether the interests of the members, depositors and creditors of the credit union have been or are likely to be prejudiced by the director’s holding office.

Procedural rules

   (3)  Section 240.1 applies with respect to an order under this section.

Appeal to Tribunal

   (4)  The director who is subject to an order under this section may appeal the order to the Tribunal in accordance with section 240.4.

Statement re opposition

   102.  (1)  A director who opposes any proposed action or resolution by the directors or members is entitled to give the credit union a written statement setting out why he or she opposes the proposed action or resolution.

Circulation of statement

   (2)  The credit union shall, within 30 days after receipt of the statement, send a copy of the statement to the Superintendent.

Immunity

   (3)  A credit union and a person acting on its behalf do not incur any liability by reason only of sending the statement as required by subsection (2).

   67.  Subsections 103 (2), (3), (4), (5) and (6) of the Act are repealed and the following substituted:

Information to Superintendent and Corporation

   (2)  The Superintendent or the Corporation may require the director to provide such information relating to the resignation as the Superintendent or the Corporation, as the case may be, specifies and the director shall promptly do so.

Statement re disagreement

   (3)  If a director resigns as a result of a disagreement with the other directors or the officers of a credit union, the director shall give the credit union, the Superintendent and the Corporation a written statement setting out the nature of the disagreement.

Advising members that statement available

   (4)  The credit union shall, within 30 days after receipt of the statement under subsection (3), advise every member that a copy of the statement is available on request.

Method of advising members

   (5)  The advising of the members under subsection (4) may be by deliveries permitted under section 335 or by such other method as is provided for in the credit union’s by-laws.

Duty to give copy of statement

   (6)  The credit union shall give a copy of the statement to every member who requests it.

Immunity

   (7)  A credit union and a person acting on its behalf do not incur any liability by reason only of advising the members under subsection (4) or giving a copy of the statement to a member.

   68.  Subsections 104 (1) and (2) of the Act are repealed and the following substituted:

Duties of the board

   (1)  The board shall manage or supervise the management of the business and affairs of the credit union and shall perform such additional duties as may be imposed under this Act, the regulations, the by-laws of the Corporation respecting credit unions or the by-laws of the credit union.

Board, etc., not to manage day to day activities

   (2)  The board, a committee of the board or a director shall not directly manage, or be involved in, the day to day activities of the credit union.

   69.  Section 105 of the Act is amended by adding the following subsection:

Required matters

   (1.1)  The by-laws of a credit union shall provide for the following matters:

    1.  The appointment of officers of the credit union and the establishment of their duties.

    2.  The calling of meetings of the board, including the minimum number of times the board must meet each financial year if the minimum number of times exceeds the prescribed minimum number of times, the place or places where meetings of the board may be held and the manner in which notice of the meetings must be given.

   70.  Subsection 107 (2) of the Act is repealed and the following substituted:

Filing

   (2)  Within 30 days after a by-law is confirmed, the credit union shall file two copies of it with the Superintendent.

   71.  Section 108 of the Act is repealed and the following substituted:

Disclosure of expenses and remuneration

   108.  A credit union’s annual audited financial statements must disclose the total expenses of the board and the total remuneration paid to the directors during the year.

   72.  The heading immediately before section 109 and section 109 of the Act are repealed and the following substituted:

Establishment of and delegation to committees

   109.  (1)  The board may establish committees and, subject to subsection (2), may delegate powers and assign duties to those committees.

Limitation on delegation

   (2)  The following powers cannot be delegated to a committee of the board:

    1.  Filling vacancies on the board or the audit committee.

    2.  Appointing or removing an officer or director of the credit union.

    3.  Appointing signing officers.

    4.  Adopting, amending or repealing by-laws.

    5.  Issuing securities except in the manner and on the terms authorized by the board.

    6.  Authorizing the payment of a commission upon the sale of shares.

    7.  Purchasing, redeeming or otherwise acquiring shares issued by the credit union.

    8.  Approving the financial statements.

    9.  Authorizing the purchase, sale, lease, exchange or other disposition of material assets.

  10.  Declaring dividends or patronage returns.

  11.  Expelling a member.

   73.  The heading immediately before section 110 and sections 110 to 120 of the Act are repealed.

   74.  The heading immediately before section 121 and sections 121 to 124 of the Act are repealed.

   75.  Sections 125 to 139 of the Act are repealed and the following substituted:

Audit Committee

Audit committee

   125.  (1)  The board of every credit union shall establish an audit committee composed of members appointed by the board from among the directors.

Minimum number of members

   (2)  The audit committee must have at least three members.

When member ceases to be member

   (3)  A person ceases to be a member of the audit committee of a credit union when he or she ceases to be a director or when he or she resigns from the committee or is replaced by the board.

Training

   (4)  Every member of an audit committee shall satisfy such training requirements or qualifications for audit committee members as are established by the credit union.

Meetings

   (5)  The audit committee shall hold a meeting no less frequently than once every quarter during each year and meetings may be called by the credit union’s auditor, a member of the audit committee or any director.

Quorum

   (6)  A majority of the members of the audit committee constitutes a quorum.

Minutes

   (7)  The audit committee shall keep minutes of its meetings.

Report to the board

   (8)  The audit committee shall report to the board within 60 days after each committee meeting or at the next board meeting, whichever is earlier, setting out the results of the meeting.

Report to the members

   (9)  The audit committee shall report to the members of the credit union at the annual meeting by a report containing such information as may be prescribed.

Powers and duties of audit committee

   126.  The audit committee has such powers and duties as are set out in this Act, prescribed by the regulations or set out in the by-laws.

Notification about certain matters

   127.  (1)  The audit committee shall promptly notify the board, the credit union’s auditor, the Corporation and the Superintendent if any of the following matters come to the attention of the committee:

    1.  Funds, securities or other property of the credit union have been or may have been misappropriated or misdirected.

    2.  The board, a director, an officer or an employee of the credit union has contravened or failed to comply with this Act, the regulations or the by-laws and the contravention or failure to comply materially affects the credit union.

Assistance

   (2)  Subject to the board’s approval, which shall not be unreasonably withheld, the committee may retain one or more persons to assist it in determining whether a misappropriation or misdirection has occurred.

Remuneration

   (3)  The committee shall fix the remuneration payable to the persons retained under subsection (2) and the credit union shall pay it.

Power to call board meeting

   128.  The audit committee may call a meeting of the board to consider a matter of concern to the committee.

   76.  (1)  Subsection 140 (1) of the Act is repealed and the following substituted:

Officers

   (1)  In addition to the chair of the board required under section 94.2, a credit union must have a corporate secretary and a chief executive officer and may have such other officers as are provided for in the by-laws.

   (2)  Section 140 of the Act is amended by adding the following subsection:

Chief executive officer

   (3.1)  The chief executive officer shall be an employee of the credit union appointed by the board.

   (3)  Subsection 140 (5) of the Act is repealed and the following substituted:

Remuneration reported in financial statements

   (5)  A credit union’s annual audited financial statements must disclose the prescribed information about the remuneration paid during the year to the officers and employees of the credit union.

   77.  Sections 142 and 143 of the Act are repealed and the following substituted:

Duty of confidentiality

   142.  (1)  Every director, officer, member of a committee or employee of a credit union shall keep confidential all information received by the credit union or by a subsidiary or other affiliate of the credit union that the director, officer, committee member or employee knows or should know is confidential to the credit union or subsidiary or other affiliate.

Use of information

   (2)  No director, officer, member of a committee or employee of a credit union shall make use of information referred to in subsection (1) in any transaction in order to obtain, directly or indirectly, a benefit or advantage for any person other than the credit union or a subsidiary or other affiliate of the credit union.

Confidentiality re members

   143.  (1)  Every director, officer, member of a committee or employee of a credit union shall keep confidential all information respecting members of the credit union.

Exception – consent

   (2)  Despite subsection (1), information respecting a member may be disclosed with the consent of the member.

Exceptions

   (3)  Despite subsection (1), a director, officer or member of a committee or an employee authorized by the board may disclose information,

  (a)  to a person acting in a confidential or professional relationship to the credit union, including an employee of a league in which the credit union is a member;

  (b)  to a financial institution with which the credit union has transactions that may involve confidential matters;

   (c)  to another credit union with which the credit union of the director, officer, committee member or employee proposes to amalgamate, for the purposes of the amalgamation, if the credit unions have signed letters of intent to enter into an agreement for the amalgamation;

  (d)  to a person to whom the credit union proposes to sell assets, for the purposes of the sale, if the credit union and the person have signed letters of intent to enter into an agreement of purchase and sale for the sale;

  (e)  to a credit grantor or to a reporting agency, if the disclosure is for the purpose of determining the creditworthiness of the member;

    (f)  to the Superintendent and the Corporation; and

  (g)  to any other person entitled to the information by law.

   78.  Subsection 144 (1) of the Act is repealed and the following substituted:

Duty of care

   (1)  Every director, officer and member of a committee shall exercise the powers and discharge the duties of his or her office honestly, in good faith and in the best interests of the credit union.

   79.  Subsection 145 (1) of the Act is repealed and the following substituted:

Duty to comply

   (1)  Every director, officer, member of a committee and employee of a credit union shall comply with this Act, the regulations made under it and the articles and by-laws of the credit union.

   80.  Section 146 of the Act is repealed and the following substituted:

Disclosure of interest

   146.  (1)  This section applies to every director, officer, member of a committee or employee of a credit union who,

  (a)  is a party to a material contract or proposed material contract with the credit union;

  (b)  is a director or an officer of an entity that is a party to a material contract or proposed material contract with the credit union;

   (c)  has a material interest in a person who is a party to a material contract or proposed material contract with the credit union; or

  (d)  is a spouse, parent or child of an individual who is a party to a material contract or proposed material contract with the credit union.

Same

   (2)  The director, officer, committee member or employee shall disclose, in writing, to the credit union or ask to have the nature and extent of his or her interest entered in the minutes of board meetings.

Time of disclosure, director

   (3)  A director shall make the disclosure,

  (a)  at the board meeting at which a proposed contract is first considered;

  (b)  if the director was not then interested in a proposed contract, at the first meeting after the director becomes so interested;

   (c)  if the director becomes interested after a contract is made, at the first meeting after the director becomes so interested; or

  (d)  if a person who is interested in a contract later becomes a director, at the first meeting after he or she becomes a director.

Same, officer or committee member

   (4)  An officer, committee member or employee shall make the disclosure,

  (a)  promptly after he or she becomes aware that a proposed contract is to be considered or a contract has been considered at a board meeting;

  (b)  if he or she becomes interested after a contract is made, promptly after becoming so interested;

   (c)  if a person who is interested in a contract later becomes an officer, committee member or employee, promptly after becoming an officer, committee member or employee.

Same, no board approval

   (5)  If a material contract or proposed material contract is one that, in the ordinary course of business of the credit union, would not require approval by the board or the members, the director, officer, committee member or employee shall make the disclosure promptly after becoming aware of the contract or proposed contract.

Continuing disclosure

   (6)  A general notice to the board by a director, officer, committee member or employee declaring that he or she is a director or officer of an entity, or has a material interest in a person, and is to be regarded as interested in any contract made with that entity or person, is sufficient disclosure of an interest in relation to any contract so made.

   81.  Subsections 147 (1), (2) and (3) of the Act are repealed and the following substituted:

Voting

   (1)  A director to whom section 146 applies shall not be present at any meeting while the contract is being discussed or vote on, or attempt to influence the voting on, any resolution to approve the contract.

Exception

   (2)  Subsection (1) does not apply if the contract is,

  (a)  an arrangement by way of security for money lent to or obligations undertaken by the director for the benefit of the credit union or a subsidiary of it;

  (b)  a contract relating primarily to the director’s remuneration as a director or as a member of a committee or an officer, employee or agent of the credit union or a subsidiary of it or an entity controlled by it;

   (c)  a contract for indemnity under section 157 or for insurance under section 156; or

  (d)  a contract with a subsidiary of the credit union.

   82.  Section 148 of the Act is repealed and the following substituted:

Avoidance standards

   148.  (1)  If a director, officer, committee member or employee made a required disclosure in respect of a contract referred to in subsection 146 (1), the contract was approved by the board or by the members of the credit union and the contract was reasonable and fair to the credit union at the time it was approved, the contract is neither void nor voidable by reason only,

  (a)  of the relationship between the person or entity and the director, officer, committee member or employee; or

  (b)  that an interested director is present at or is counted to determine the presence of a quorum at the board meeting that authorized the contract.

Application to court

   (2)  If a director, officer, committee member or employee of a credit union fails to disclose an interest in a material contract in accordance with section 146, a court may, on the application of the credit union or a member of the credit union, set aside the contract on such conditions as the court thinks fit.

   83.  Subsection 149 (1) of the Act is repealed and the following substituted:

Prohibition re acting for credit union

   (1)  This section applies with respect to a person who is a director of a credit union or a member of a committee.

   84.  The Act is amended by adding the following section immediately before the heading “Miscellaneous”:

Prohibition re acting as trustee

   149.1  An officer or employee of a credit union shall not act as a trustee with respect to a deposit with the credit union or any other business or transaction with the credit union unless the beneficiary is a related person of the officer or employee.

   85.  Sections 150, 151 and 152 of the Act are repealed and the following substituted:

Validity of actions

   150.  An act by a director, officer or member of a committee is not invalid by reason only of a defect discovered afterward in his or her appointment, election or qualification.

Requirement for bond

   151.  (1)  Every director, officer or employee of a credit union who receives or has charge of money shall, on assuming his or her duties, furnish to the credit union a bond of an insurer licensed under the Insurance Act to write surety and fidelity insurance.

Bond

   (2)  The bond must be for an amount equal to or greater than the amount that is prescribed or determined in the prescribed manner, and must satisfy such conditions as may be prescribed.

Liability of directors, etc.

   152.  A liability imposed under this Act upon a director, officer or member of a committee is in addition to any other liability that is by law imposed upon him or her.

   86.  Section 155 of the Act is repealed and the following substituted:

Due diligence, reliance on statement, etc.

   155.  (1)  A director, officer, member of a committee or an employee of a credit union is not liable under section 153 or 209.1 and has fulfilled their duty under section 145 if they exercised the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances, including reliance in good faith on,

  (a)  financial statements of the credit union represented to them by an officer of the credit union or in a written report of the auditor of the credit union fairly to reflect the financial condition of the credit union; or

  (b)  a report of an accountant, lawyer or other professional person whose profession lends credibility to a statement made by the person.

Same

   (2)  A director, officer or member of a committee of a credit union has fulfilled their duty under section 144 if they relied in good faith on,

  (a)  financial statements of the credit union represented to them by an officer of the credit union or in a written report of the auditor of the credit union fairly to reflect the financial condition of the credit union; or

  (b)  a report of an accountant, lawyer or other professional person whose profession lends credibility to a statement made by the person.

   87.  (1)  Clause (a) of the definition of “eligible person” in subsection 157 (1) of the Act is repealed and the following substituted:

  (a)  a director, officer or member of a committee,

   (2)  Section 157 of the Act is amended by adding the following subsections:

Advance to pay for costs, etc.

   (3.1)  A credit union may advance money to an eligible person to pay for the costs, charges and expenses of any proceeding to which the person is made a party by reason of serving or having served in a qualifying capacity, but the person is required to repay the money if either of the conditions described in subsection (5) is not satisfied.

.     .     .     .     .

Advance to pay for costs, etc., derivative action

   (4.1)  With the approval of a court, a credit union may advance money to an eligible person to pay for the costs, charges and expenses of a proceeding described in subsection (4) to which the person is made a party by reason of serving or having served in a qualifying capacity, but the person is required to repay the money if either of the conditions described in subsection (5) is not satisfied.

   (3)  Clause 157 (9) (a) of the Act is repealed and the following substituted:

  (a)  acting or having acted as a director, officer or member of a committee; or

   88.  Subsection 159 (3) of the Act is repealed and the following substituted:

Vacancy

   (3)  In the event the office of auditor becomes vacant before the end of the incumbent auditor’s term of office, the board may appoint an auditor to hold office until the close of the next annual meeting.

   89.  Subclause 160 (2) (b) (i) of the Act is amended by striking out the portion before sub-subclause (A) and by repealing sub-subclauses (A) and (B) and substituting the following:

           (i)  if that person, any partner of that person or any member of a firm of accountants of which that person is an employee,

                 (A)  is a director, officer, committee member or employee of the credit union, a subsidiary of the credit union or the Corporation,

                 (B)  is a business partner of any director, officer, committee member or employee of the credit union or a subsidiary of the credit union,

   90.  Subsections 164 (6) and (7) of the Act are repealed and the following substituted:

Replacement

   (6)  If the members remove the auditor from office, they shall appoint another auditor at the same meeting to hold office for the remainder of the auditor’s term.

Vote

   (7)  The auditor appointed under subsection (6) must be appointed by a resolution passed by a majority of the votes cast at the meeting.

   91.  Section 165 of the Act is repealed and the following substituted:

Notice re resignation, etc.

   165.  A credit union shall promptly notify the Superintendent and the Corporation when an auditor resigns, is replaced or is removed from office and shall inform the Superintendent of the reasons.

   92.  Subsections 167 (1) and (2) of the Act are repealed and the following substituted:

Right of access

   (1)  The auditor of a credit union has a right of access at all times to all records and documents of the credit union.

Same

   (2)  The auditor is entitled to require from the board, directors, officers, employees and agents of the credit union such information and explanations as the auditor considers necessary to enable the auditor to make such reports as are required under this Act.

   93.  (1)  Subsections 169 (3) and (4) of the Act are repealed and the following substituted:

Qualified report

   (3)  If the auditor’s report is not an unqualified report, the auditor shall state in the report the reasons for the qualified report.

Report to Superintendent, Corporation for certain purposes

   (3.1)  Within 10 days after the annual meeting, the auditor shall provide a copy of the audited financial statements and the auditor’s report to the Superintendent and the Corporation for the purpose of assisting them in carrying out their duties and powers under this Act, including, without limiting the generality of the foregoing, for the purposes of the following:

    1.  Determining whether conditions on the deposit insurance of the credit union should be imposed or amended under section 270.

    2.  Determining whether the deposit insurance of the credit union should be cancelled under section 274.

    3.  Determining the annual premium for the credit union under section 276.1.

Facts discovered subsequently

   (4)  If facts come to the attention of an officer, the board or the audit committee which, if they had been known before the most recent annual meeting, would have required a material adjustment to the financial statement presented at the meeting, the officer, board or audit committee shall notify the auditor who reported to the members at the meeting and the board shall promptly amend the financial statement and send it to the auditor.

   (2)  Subsection 169 (7) of the Act is repealed and the following substituted:

Amended report to Superintendent, Corporation

   (7)  Within 10 days after providing the amended report to the credit union, the auditor shall provide a copy of the amended report to the Superintendent and the Corporation.

Auditing standards

   (8)  The auditor’s examination referred to in subsection (1) shall, except as otherwise specified by the Corporation, be conducted in accordance with generally accepted auditing standards, the primary source of which is the Handbook of the Canadian Institute of Chartered Accountants.

Report to address fair value, adequacy of capital, etc.

   (9)  The auditor’s report shall address the fair value of the assets and liabilities of the credit union and the credit union’s compliance with section 84.

   94.  Section 170 of the Act is repealed and the following substituted:

Duty at meetings

   170.  If the auditor is present at a meeting of members or shareholders, the auditor shall answer inquiries directed to the auditor concerning the basis for the auditor’s report under section 169.

   95.  The Act is amended by adding the following section:

Extended examination required by Corporation

   171.1  The Corporation may exercise the powers of the Superintendent under section 171 and, for that purpose, the references to the Superintendent in section 171 shall be deemed to be references to the Corporation.

   96.  (1)  Subsection 172 (1) of the Act is repealed and the following substituted:

Duty to report contravention, etc.

   (1)  The auditor of a credit union shall report in writing to the chair of the board and to the audit committee of the credit union any transaction or conditions that have come to the auditor’s attention adversely affecting the credit union that, in the auditor’s opinion, are not satisfactory and require rectification.

   (2)  Subsection 172 (2) of the Act is amended by striking out the portion before clause (a) and substituting the following:

Same

   (2)  Without restricting the generality of subsection (1), the auditor shall report on,

.     .     .     .     .

   (3)  Clause 172 (4) (a) of the Act is repealed and the following substituted:

  (a)  the auditor shall transmit the report, in writing, to the chair of the board and to the audit committee;

   (4)  Clause 172 (4) (d) of the Act is repealed and the following substituted:

  (d)  the auditor shall, at the time of transmitting the report pursuant to clause (a), provide the Superintendent and the Corporation with a copy of the report.

   97.  Paragraphs 6 and 7 of section 173 of the Act are repealed.

   98.  (1)  Subsection 174 (1) of the Act is repealed and the following substituted:

Ancillary businesses

   (1)  A credit union shall not deal in goods or engage in any trade or business except as authorized by this Act or as prescribed.

   (2)  Subsection 174 (3) of the Act is repealed and the following substituted:

Prohibition re financial services

   (3)  A credit union shall not provide financial services prescribed as prohibited.

   99.  (1)  Subsection 178 (2) of the Act is repealed and the following substituted:

Authorization by the Corporation

   (2)  Despite subsection (1), the Corporation may authorize a credit union to guarantee a payment in circumstances other than those described in that subsection.

   (2)  Subsection 178 (5) of the Act is repealed and the following substituted:

Exemption

   (5)  The Corporation may exempt a credit union from the limit under subsection (4) on the aggregate value of guarantees.

   (3)  Subsection 178 (7) of the Act is repealed and the following substituted:

Non-application of s. (1) (a)

   (7)  Clause (1) (a) does not apply with respect to a guarantee given by a credit union on behalf of a league or a financial institution that is a member of the Canadian Payments Association if the payment guaranteed represents the obligation of the league or financial institution to settle for payment items in accordance with the by-laws and rules of the Canadian Payments Association or such other guarantees as may be prescribed.

   100.  Section 179 of the Act is repealed and the following substituted:

Appointment of receiver, etc.

   179.  A credit union shall not give a person the right to appoint a receiver or a receiver and manager of the property or business of the credit union.

   101.  (1)  Clause 180 (b) of the Act is repealed and the following substituted:

  (b)  the Corporation;

   (2)  Clause 180 (j) of the Act is repealed and the following substituted:

    (j)  leagues;

(j.1)  subject to any restrictions in the by-laws of the credit union, persons who have not become members of the credit union but whose deposit accounts were acquired by the credit union as a result of the purchase of all or part of the business of another financial institution that is not a credit union;

   (3)  Section 180 of the Act is amended by adding the following subsections:

Authority to accept deposits

   (2)  A credit union may, without the intervention of another person,

  (a)  accept a deposit from a person referred to in subsection (1) whether or not the person is qualified by law to enter into contracts; and

  (b)  pay all or part of the principal of the deposit and all or part of the interest earned on the deposit to or to the order of that person.

Exception

   (3)  Clause (2) (b) does not apply if, before the payment is made, the money deposited with the credit union is claimed by another person,

  (a)  in an action or proceeding to which the credit union is a party and in respect of which service of a claim or other process originating that action or proceeding has been made on the credit union; or

  (b)  in an action or proceeding pursuant to which an injunction or order made by the court requiring the credit union not to make payment of that money or to make payment of it to some person other than the depositor has been served on the credit union.

Same

   (4)  In the case of a claim referred to in subsection (3), the money may be paid to the depositor only with the consent of the claimant or to the claimant only with the consent of the depositor.

RRSPs for employees of a member

   (5)  Despite subsection (1), a credit union may accept deposits for RRSPs for employees of a member if the member was involved in the establishment of the RRSPs at the credit union and the member makes payments into the RRSPs on behalf of the employees.

Application of other provisions

   (6)  Subsections (2), (3) and (4) apply, with necessary modifications, with respect to employees referred to in subsection (5).

Definition

   (7)  In subsection (5),

“RRSPs” means registered retirement savings plans within the meaning of subsection 146 (1) of the Income Tax Act (Canada).

   102.  Sections 181, 182, 183, 184 and 185 of the Act are repealed and the following substituted:

Not bound by trust

   181.  (1)  A credit union is not bound to see to the execution of any trust to which any deposit is subject.

Application, payment when credit union has notice of trust

   (2)  Subsection (1) applies whether the trust is express, implied or constructive and applies even when the credit union has notice of the trust if the credit union acts on the order of or under the authority of the holder or holders of the account into which the deposit is made.

Unclaimed deposits

   182.  (1)  If 10 years have elapsed since the day on which the last transaction by a depositor took place on the depositor’s account or a statement of account was last requested or acknowledged by the depositor, whichever is latest, the credit union shall pay the amount on deposit to the Minister.

Obligation discharged

   (2)  Payment to the Minister discharges the credit union from all liability in respect of the amounts paid.

Payment by Minister

   (3)  The Minister shall pay the amount received under subsection (1) to a person claiming to be entitled to it upon being furnished with satisfactory evidence of the person’s entitlement.

Two-year notice

   (4)  If two years have elapsed since the day on which the last transaction by a depositor took place on the depositor’s account or a statement of account was last requested or acknowledged by the depositor, whichever is latest, the credit union shall mail a notice to the depositor, at the depositor’s last known address, notifying the depositor that the deposit remains unpaid.

Five-year notice

   (5)  If five years have elapsed since the day on which the last transaction by a depositor took place on the depositor’s account or a statement of account was last requested or acknowledged by the depositor, whichever is latest, the credit union shall mail a notice to the depositor, at the depositor’s last known address, notifying the depositor that the deposit remains unpaid.

Application despite other Act

   (6)  This section applies despite the provisions of any other Act that would apply with respect to the disposition of an unclaimed and unpaid amount on deposit and the provisions of any such other Act shall not apply with respect to such an amount.

Debt Obligations

Borrowing

   183.  (1)  A credit union may borrow only if authorized to do so by its by-laws.

Scope of authority

   (2)  The by-laws may authorize the credit union to borrow money at such rates of interest and on such conditions as the board may determine.

Limit on amount

   (3)  A credit union shall not borrow an aggregate amount exceeding 50 per cent of its regulatory capital and deposits or such lesser amount as may be established by its by-laws.

Security interests in credit union property

   184.  A credit union may create a security interest in property of the credit union only as prescribed.

Notice re acquisitions subject to security interests

   185.  A credit union shall notify the Corporation in writing if it acquires, other than by way of realization on the security for a loan, a beneficial interest in property that is subject to a security interest.

   103.  Sections 187 to 196 of the Act are repealed and the following substituted:

Limit on borrowing

   187.  (1)  The Corporation may inquire into the borrowing by a credit union and may, by order, limit the credit union’s authority to borrow money.

Reasons to be given

   (2)  The Corporation shall set out the reasons for its decision in the order.

Effect

   (3)  The credit union shall not exercise its borrowing power in excess of any limit set out in the order of the Corporation.

Procedural rules

   (4)  Section 240.1 applies with respect to an order under this section.

Appeal to Tribunal

   (5)  The credit union that is subject to an order under this section may appeal the order to the Tribunal in accordance with section 240.4.

Restriction on borrowing from another credit union

   188.  No credit union shall borrow money from another credit union without the written approval of the Corporation.

Investment and lending policies

   189.  (1)  A credit union shall establish investment and lending policies for the credit union and the credit union shall adhere to those policies.

Policies to be prudent

   (2)  The investment and lending policies of a credit union shall consist of policies, standards and procedures that a reasonable and prudent person would apply in respect of a portfolio of investments and loans in order to avoid undue risk of loss and obtain a reasonable return.

Approval and review by board

   (3)  The investment and lending policies of a credit union are subject to the approval of the board and the board shall review the policies at least once each year.

Order if policies inadequate, etc.

   (4)  If the Corporation considers the investment and lending policies of the credit union to be inadequate or imprudent, the Corporation may order the credit union to cease investing or lending as specified in the order until the policies are amended in accordance with the order.

Procedural rules

   (5)  Section 240.1 applies with respect to an order under this section.

Appeal to Tribunal

   (6)  The credit union that is subject to an order under this section may appeal the order to the Tribunal in accordance with section 240.4.

Loans

Loans to members only

   190.  (1)  A credit union shall loan money only,

  (a)  to its members; or

  (b)  by participating in a loan syndication in which the borrower is a member of a credit union that is one of the lenders in the loan syndicate.

Exception – loans acquired by purchase

   (2)  If a credit union acquires a loan as a result of a purchase of all or part of the business of another financial institution, the credit union may continue that loan, despite subsection (1), for one year after the loan is acquired or, if the loan is for a specified term, until the end of that term.

Prescribed lending limits

   191.  (1)  A credit union shall not make loans in excess of such lending limits as may be prescribed or as may be ordered under subsection (2) or (5).

Lowering lending limits

   (2)  The Corporation may, by order, lower a credit union’s lending limits if the Corporation believes on reasonable grounds that the credit union’s current lending limits may adversely affect the interests of the credit union’s members, depositors or shareholders.

Procedural rules

   (3)  Section 240.1 applies with respect to an order under subsection (2).

Appeal to Tribunal

   (4)  The credit union that is subject to an order under subsection (2) may appeal the order to the Tribunal in accordance with section 240.4.

Raising lending limits

   (5)  On application by a credit union, the Corporation may, by order on terms specified in the order, raise the credit union’s lending limits if the Corporation is satisfied there are reasonable grounds for doing so.

   104.  Subsection 197 (2) of the Act is repealed and the following substituted:

Divestment if not in compliance with investment and lending policies

   (2)  If the securities acquired by a credit union because of a default on a loan are not an investment permitted by the credit union’s investment and lending policies, the credit union shall divest itself of the securities within two years after their acquisition or within such further time as the Corporation may authorize.

   105.  The Act is amended by adding the following section immediately before the heading “Cost of Borrowing”:

Order for call of unauthorized loans

   197.0.1  (1)  The Corporation may order a credit union to call any loan it has made that is not authorized by this Act, the regulations or the by-laws of the credit union.

Time to comply

   (2)  Despite section 240.3, an order under this section shall allow the credit union at least 60 days to comply with the order.

Procedural rules

   (3)  Section 240.1 applies with respect to an order under this section.

Appeal to Tribunal

   (4)  The credit union that is subject to an order under this section may appeal the order to the Tribunal in accordance with section 240.4.

   106.  Sections 198, 199, 200 and 201 of the Act are repealed and the following substituted:

Eligible investments

   198.  A credit union shall invest only in such types of securities or property and on such conditions as are prescribed for its class.

Exception to restriction re single investment

   199.  (1)  A credit union may directly or indirectly invest, by way of purchase from or loans to a single person or to two or more connected persons, more than the amount prescribed for its class only if,

  (a)  the investment is in the form of deposits with or loans to,

           (i)  a financial institution that is not a credit union or a securities dealer,

          (ii)  the Corporation, or

         (iii)  a prescribed person or entity; or

  (b)  the investment is in securities issued or guaranteed by the Government of Canada, including mortgages insured under the National Housing Act (Canada), by the government of any province of Canada or by any municipality in Canada.

Connected persons

   (2)  For the purposes of this section, two or more persons are connected persons if they satisfy the prescribed conditions.

Establishing or acquiring subsidiary

   200.  (1)  A credit union may establish or acquire a subsidiary only if the subsidiary is prescribed and only with the approval of the Corporation and the establishment or acquisition of a subsidiary is subject to such restrictions as may be prescribed and to such additional conditions as the Corporation may, by order, impose.

Deemed prescribed subsidiary

   (2)  On written application by a credit union, the Corporation may, by order and on such conditions as are specified in the order, deem a body corporate named in the order to be, for all purposes of this Act, a prescribed subsidiary if its activities are substantially similar to those of a body corporate identified as a prescribed subsidiary.

Refusal of approval to be by order

   (3)  If the Corporation refuses to approve the establishment or acquisition of a subsidiary, the Corporation shall do so by order.

Anti-avoidance

   (4)  The Corporation shall issue an order refusing to approve the establishment or acquisition of a subsidiary if it considers that the establishment or acquisition is primarily for the purpose of allowing the credit union to avoid the limits under this Act or the regulations on its investments.

Revocation of approval

   (5)  The Corporation may, by order, revoke its approval if,

  (a)  the credit union has failed to comply with the conditions and restrictions applicable to the investment; or

  (b)  the body corporate is no longer a prescribed subsidiary.

Effect of revocation

   (6)  Upon a revocation of an approval, the credit union shall divest itself of the investment in accordance with the order effecting the revocation.

Restriction on investments in subsidiaries

   (7)  A credit union shall ensure that the total book value of investments held by the credit union in subsidiaries of the credit union and of guarantees by the credit union of the obligations of such subsidiaries does not exceed the prescribed percentage of the regulatory capital of the credit union.

Procedural rules

   (8)  Section 240.1 applies with respect to an order under this section.

Appeal to Tribunal

   (9)  The credit union that is subject to an order under this section may appeal the order to the Tribunal in accordance with section 240.4.

Variation of requirements

   201.  (1)  A credit union may apply to the Corporation for a variation of the requirements under section 198, subsection 199 (1) or subsection 200 (7).

Application

   (2)  An application must be in a form approved by the Corporation.

Variation

   (3)  The Corporation may grant the variation subject to any terms it considers appropriate if it considers that granting the variation is in the interest of the members of the credit union.

Investment in another credit union

   201.1  (1)  A credit union shall not invest in another credit union without the approval of the Corporation.

Refusal of approval to be by order

   (2)  If the Corporation refuses to approve an investment in another credit union, the Corporation shall do so by order.

Procedural rules

   (3)  Section 240.1 applies with respect to an order under this section.

Appeal to Tribunal

   (4)  The credit union that is subject to an order under this section may appeal the order to the Tribunal in accordance with section 240.4.

   107.  (1)  Subsection 202 (1) of the Act is amended by striking out the portion before clause (a) and substituting the following:

Status of investments upon amalgamation, etc.

   (1)  The Corporation may authorize the acceptance by a credit union of securities or other assets not fulfilling the requirements of this Act,

.     .     .     .     .

   (2)  Subsections 202 (2) and (3) of the Act are repealed and the following substituted:

Divestment

   (2)  The credit union shall divest itself of the securities or other assets within two years after their acquisition or within such further time as the Corporation may authorize.

Exception

   (3)  The Corporation may relieve the credit union of the obligation to divest itself of the securities or other assets if the Corporation is satisfied that they are not inferior in status or value to the securities for which they have been substituted.

   108.  The Act is amended by adding the following section immediately before the heading “Transfer of Assets”:

Order for disposal of unauthorized investments

   202.1  (1)  The Corporation may order a credit union to dispose of any investment that was not made or is not held in accordance with this Act, the regulations, the Corporation’s by-laws or the credit union’s investment and lending policies.

Time to comply

   (2)  Despite section 240.3, an order under this section shall allow the credit union at least 60 days to comply with the order.

Procedural rules

   (3)  Section 240.1 applies with respect to an order under this section.

Appeal to Tribunal

   (4)  The credit union that is subject to an order under this section may appeal the order to the Tribunal in accordance with section 240.4.

Directors’ liability

   (5)  Subject to subsection (8), if the amount realized from the disposal of the investment is less than the amount paid by the credit union for it, the directors of the credit union are jointly and severally liable for the payment to the credit union of the amount of the difference.

Objection to investment

   (6)  A director who is present at a directors’ meeting at which an investment to which the director objects is authorized may,

  (a)  immediately deliver or send to the credit union by registered mail a protest against the investment; and

  (b)  within 30 days after delivering or sending the protest referred to in clause (a), send a copy of the protest by registered mail to the Corporation.

Same

   (7)  A director who is absent from a meeting at which an investment to which the director objects is authorized may,

  (a)  within 14 days after he or she becomes aware of the investment and is able to do so, deliver or send to the credit union by registered mail a protest against the investment; and

  (b)  within 30 days after delivering or sending the protest referred to in clause (a), send a copy of the protest by registered mail to the Corporation.

Exoneration

   (8)  A director who takes the steps set out in subsection (6) or (7) has no liability with respect to an investment to which he or she objected.

   109.  The heading immediately before section 203 and sections 203, 204, 205 and 206 of the Act are repealed and the following substituted:

Purchase and Sale of Assets

Interpretation

   203.  For the purposes of section 204, a sale of property includes a sale, lease, exchange or other disposition of property and a purchase of property includes a lease, exchange of property or other acquisition of property.

Purchase or sale of substantial assets

   204.  (1)  A credit union shall not do any of the following unless authorized to do so by special resolution of the members of the credit union:

    1.  Sell assets if the market value of the assets is 15 per cent or more of the value of the credit union’s total assets.

    2.  Purchase assets of a financial institution if the market value of the assets is 15 per cent or more of the value of the credit union’s total assets.

Alternative for certain sales

   (2)  A credit union may proceed with a sale described in paragraph 1 of subsection (1) without a special resolution of the members if the sale is in the ordinary course of business and the purchaser pays the purchase price by paying cash.

Determination of value of total assets

   (3)  For the purposes of subsection (1), the value of the credit union’s total assets shall be as set out in the audited financial statements placed before the members at the most recent annual meeting.

If more than one class of shares

   (4)  If the credit union has more than one class of issued shares, the special resolution referred to in subsection (1) shall be in the form of a special resolution passed by the holders of each class of shares.

Agreement and Corporation approval required

   (5)  A credit union shall not proceed with a sale or purchase described in subsection (1), including a sale to which subsection (2) applies, unless there is an agreement for the sale or purchase and that agreement has been approved by the Corporation.

Corporation approval required before authorization of members, etc.

   (6)  A credit union shall not seek the authorization of the members and shareholders required under subsection (1) until the Corporation has approved the agreement under subsection (5).

Refusal of approval to be by order

   (7)  If the Corporation refuses to approve an agreement under subsection (5), the Corporation shall do so by order.

Procedural rules

   (8)  Section 240.1 applies with respect to an order under subsection (7).

Appeal to Tribunal

   (9)  The credit union that is subject to an order under subsection (7) may appeal the order to the Tribunal in accordance with section 240.4.

Purchase price if transaction is between credit unions

   (10)  In a purchase or sale described in subsection (1) in which both the purchaser and the seller are credit unions, the purchaser may pay the purchase price only in one or more of the following ways:

    1.  By assuming liabilities of the seller.

    2.  By paying cash.

    3.  By issuing shares that are not membership shares or patronage shares.

    4.  By issuing promissory notes.

No splitting to avoid requirements

   (11)  A credit union shall not structure a sale or purchase as two or more sales or purchases for the purpose of avoiding a requirement under this section.

   110.  Section 208 of the Act is repealed and the following substituted:

Loans to officers and directors

   208.  (1)  A credit union may lend to an officer or a director an amount in excess of the aggregate of deposits of the officer or director pledged as collateral for the loan only if the board approves the loan before it is made.

Delegation of authority to approve loan to committee

   (2)  The board may delegate its authority to grant an approval under subsection (1) to a committee of the board on such terms and with such restrictions as may be specified by the board.

Committee to report

   (3)  A committee referred to in subsection (2) shall report details of the loans approved by the committee to the board at the first meeting of the board after the approval is given.

   111.  The Act is amended by adding the following section:

Setting aside transactions

   209.1  (1)  If a transaction with a restricted person that is prohibited or restricted by this Act or the regulations takes place, any interested person, including the Superintendent or Corporation, may apply to the court for an order,

  (a)  setting aside the transaction and directing that the restricted party account to a credit union for any profit or gain realized; and

  (b)  that each person who participated in or facilitated the transaction pay to the credit union on a joint and several basis the damages suffered, the face value of the transaction or the amount expended by the credit union in the transaction.

Order

   (2)  The court may make the order applied for or such other order as it thinks appropriate.

Same

   (3)  An order under subsection (2) may order compensation for a loss or damage suffered by the credit union and punitive damages from the restricted party.

Exemption

   (4)  A person who is not a director is not liable under clause (1) (b) unless the person knew or ought reasonably to have known that the transaction was made in contravention of a restricted party provision.

   112.  Sections 211 and 212 of the Act are repealed and the following substituted:

Members’ and Shareholders’ Meetings

Notice of meetings

   211.  (1)  Notice of the time and place for holding a meeting of the members of a credit union shall be given at the time and in the manner specified in the by-laws of the credit union to each member of the credit union who, on the record date for the notice, appears in the records of the credit union as a member.

Same

   (2)  Despite the by-laws of the credit union, notice of the time and place for holding a meeting shall be given at least 10 days before the date of the meeting but not more than 50 days before the date of the meeting.

Notice to include summary of special resolution

   (3)  Notice of a meeting at which a special resolution is to be voted on shall include a summary of the special resolution, including, for a special resolution to confirm a by-law, a summary of the by-law.

Interpretation

   (4)  For the purposes of subsection (1), the record date means the record date as established by the by-laws of the credit union.

Shareholder meetings

   (5)  This section applies with necessary modifications to meetings of holders of shares of the credit union other than patronage shares.

Annual meeting

   212.  (1)  Subject to the by-laws, an annual meeting of the members of a credit union shall be held at such time and place in Ontario as the board determines.

Time of meeting

   (2)  Unless otherwise authorized by the Superintendent, the annual meeting of the members of a credit union must be held no later than 120 days after the end of the credit union’s last completed financial year.

Extension of time limit for holding annual meeting

   (3)  On application by a credit union, the Superintendent may authorize the credit union to hold its annual meeting of members on a day that is more than 120 days after the end of the last completed financial year if the Superintendent considers the extension of time to be reasonable in the circumstances, and the Superintendent may impose such conditions as the Superintendent considers appropriate.

Business to be dealt with

   (4)  At an annual meeting, the board shall place before the members,

  (a)  the audited financial statements of the credit union;

  (b)  the report of the auditor;

   (c)  the report of the audit committee; and

  (d)  such further information respecting the financial position of the credit union and the results of its operations as the by-laws require.

Information to be provided

   (5)  The notice of an annual meeting of the members must,

  (a)  specify that copies of the audited financial statements, the auditor’s report and the audit committee report will be available for inspection, by any member, at the meeting and at the offices of the credit union at least 10 days before the meeting; and

  (b)  set out any matters to be dealt with at the annual meeting in addition to the business described in subsection (4) in sufficient detail to permit members to form a reasonable judgment on the matter.

   113.  (1)  Subsections 213 (1), (2) and (3) of the Act are repealed and the following substituted:

Financial statements

   (1)  The financial statements to be placed before the members must show the prescribed matters relating separately to the prescribed time periods.

   (2)  Subsections 213 (6) and (7) of the Act are repealed and the following substituted:

Available to members

   (6)  The credit union shall make copies of the audited financial statements, the auditor’s report and the audit committee report available for inspection, by any member, at the meeting at which the statements and reports are to be placed before the members and at the offices of the credit union at least 10 days before the meeting.

Filed with the Corporation

   (7)  The credit union shall send to the Corporation the audited financial statements, the auditor’s report and the audit committee report at least 10 days before the day of the annual meeting at which the statements and reports are to be placed before the members.

   114.  Subsections 217 (2) to (9) of the Act are repealed.

   115.  The Act is amended by adding the following sections:

Voting rights at members’ meetings

   217.1  Each member of a credit union has one vote at a meeting of the members of the credit union.

Different ways of member voting

   217.2  (1)  A member of a credit union may vote in person or, unless the articles or by-laws of the credit union provide otherwise, by mail or by telephone or electronic means.

Conditions in by-laws

   (2)  The by-laws may set out conditions that apply to voting in the different ways allowed under subsection (1).

Regulations

   (3)  The Lieutenant Governor in Council may make regulations governing voting in the different ways allowed under subsection (1).

Proxies, members

   217.3  (1)  No member of a credit union shall vote by proxy except when the member is Her Majesty the Queen in right of Ontario or in right of Canada, a corporation, including a municipality defined in the Municipal Affairs Act, an unincorporated association or a partnership registered under the Business Names Act or a predecessor of that Act.

Only one proxy vote

   (2)  A person may cast only one vote by proxy on a matter.

Member’s vote not affected

   (3)  For greater certainty, subsection (2) does not prevent a member who votes as a proxy holder from casting the member’s own vote.

Proxies, other shareholders

   217.4  (1)  Part VIII of the Business Corporations Act applies, with necessary modifications, with respect to proxies for voting by shareholders in respect of shares other than membership shares or patronage shares as if the credit union were incorporated under that Act.

Same

   (2)  For the purposes of subsection (1), any reference in Part VIII of the Business Corporations Act to “offering corporation” shall be deemed to be a reference to the “credit union” and, if the credit union is not an “offering corporation” as defined in section 1 of that Act, any reference in Part VIII of that Act to the “Commission” shall be deemed to be a reference to the “Superintendent”.

Exception, information circular

   (3)  Despite Part VIII of the Business Corporations Act, as made applicable by subsection (1), neither a credit union nor a dissident is required to deliver an information circular to holders of membership shares or patronage shares.

Telephone and electronic meetings

   217.5  Unless the articles or by-laws of a credit union provide otherwise, a meeting of the members may be held by telephonic or electronic means and a member who, through those means, votes at the meeting or establishes a communications link to the meeting shall be deemed for the purposes of this Act to be present at the meeting.

   116.  The Act is amended by adding the following heading immediately before section 218:

Directors’ Meetings

   117.  The French version of subsection 218 (1) of the Act is repealed and the following substituted:

Réunions par téléphone ou par un moyen électronique

   (1)  Sauf disposition contraire des règlements administratifs, si tous les administrateurs qui sont présents à la réunion ou qui y participent y consentent, une réunion du conseil ou d’un de ses comités peut se tenir par tout moyen téléphonique ou électronique ou par tout autre moyen permettant à tous les participants de communiquer entre eux de façon simultanée et instantanée.

   118.  Section 220 of the Act is repealed and the following substituted:

Meeting required by Superintendent or the Corporation

   220.  (1)  The Superintendent or the Corporation may, by written notice to the credit union and each director, require a credit union to hold a meeting of the directors to consider any matter set out in the notice.

Attendance by Superintendent or the Corporation

   (2)  The Superintendent or his or her designate and a representative of the Corporation may attend and be heard at the meeting.

   119.  The Act is amended by adding the following heading immediately before section 221:

Miscellaneous

   120.  (1)  Subsection 222 (2) of the Act is repealed and the following substituted:

Inspection of person’s own account

   (2)  A person may inspect, at all reasonable hours, the person’s own account.

   (2)  Section 222 of the Act is amended by adding the following subsection:

List of members and shareholders

   (5.1)  A member of a credit union may inspect, at all reasonable hours, a list, extracted from the register under section 230, of the names of the members and shareholders.

   121.  (1)  Subsection 223 (1) of the Act is repealed and the following substituted:

Financial statements of subsidiaries

   (1)  Copies of the latest financial statements of each subsidiary of a credit union,

  (a)  shall be kept by the credit union at such place in Ontario as is specified in the by-laws; and

  (b)  shall be open to examination by the members and shareholders of the credit union and their agents.

   (2)  The French version of subsections 223 (2) and (3) of the Act is repealed and the following substituted:

Extraits

   (2)  Quiconque a le droit d’examiner les exemplaires des états financiers peut en tirer gratuitement des extraits pendant les heures de bureau de la caisse.

Requête au tribunal

   (3)  La caisse peut, dans les quinze jours qui suivent la réception d’une demande d’examen d’exemplaires des états financiers, demander au tribunal, par voie de requête, une ordonnance visant à interdire cet examen. Si le tribunal est convaincu que celui-ci serait préjudiciable à la caisse ou à une de ses filiales, il peut l’interdire et rendre toute autre ordonnance qu’il estime appropriée.

   122.  Section 224 of the Act is repealed and the following substituted:

Branches and other member groups

   224.  (1)  A credit union may establish branches and such other member groups as may be specified in the by-laws, subject to such conditions as may be set out in the by-laws.

Branch and member group meetings

   (2)  A credit union may, by by-law, provide for the holding of branch and member group meetings for members of branches and member groups.

Election of delegates

   (3)  If a by-law of a credit union provides for a branch or member group meeting, the members of the branch or member group shall elect delegates, by a resolution passed by a majority of the votes cast at the meeting, to represent the members at general meetings of the members of the credit union.

Powers of delegates

   (4)  Delegates elected from a branch or member group shall exercise the powers of the members of the branch or member group at all general meetings of the members of the credit union.

When members lose vote

   (5)  Members of a branch or member group who are represented by elected delegates at a general meeting of the members of the credit union are entitled to attend the meeting but are not entitled to vote at the meeting.

Branch meeting procedure

   (6)  If a by-law of a credit union provides for branch or member group meetings, the by-laws of the credit union shall specify,

  (a)  the number of delegates and votes allowed to each branch and member group at a general meeting of the members of the credit union;

  (b)  the time, place and manner of calling branch and member group meetings;

   (c)  the number of members of a branch or member group that constitute a quorum; and

  (d)  the procedure to be followed in the conduct of branch and member group meetings.

Determination of number of delegates and votes

   (7)  The number of delegates and votes allowed to each branch and member group at a general meeting of the members of the credit union under clause (6) (a) shall be determined on a basis that is reasonable given the number of members in each branch or member group.

Majority

   (8)  The required majority vote for deciding an issue to be voted on at a branch or member group meeting is the same as that required for deciding a similar issue at a general meeting of the members of the credit union.

   123.  The heading immediately before section 225 and sections 225, 226, 227, 228 and 229 of the Act are repealed and the following substituted:

PART XI
RETURNS, Examinations and Records

Returns and Examinations

Information required by Superintendent

   225.  (1)  A credit union shall provide the Superintendent with such information relating to the credit union’s business as the Superintendent may require for the purpose of carrying out his or her powers and duties under this Act.

Time and form

   (2)  The credit union shall provide the information at such times and in such form as the Superintendent may require.

Information required by Corporation

   226.  (1)  A credit union shall provide the Corporation with such information relating to the credit union’s business as the Corporation may require for the purpose of carrying out its powers and duties under this Act.

Time and form

   (2)  The credit union shall provide the information at such times and in such form as the Corporation may require.

Annual return

   227.  (1)  A credit union shall file an annual return with the Corporation at such time, in such form and containing such information as the Corporation requires.

Review

   (2)  The Corporation shall review the annual return and, for that purpose, may require the credit union and any league of which it is a member to provide such additional information concerning the affairs of the credit union as the Corporation may require.

Same

   (3)  A credit union and league shall provide any additional information required by the Corporation under subsection (2).

Examination by Superintendent

   228.  The Superintendent may, at any reasonable time, visit the offices of any credit union and inspect the premises and examine the credit union’s affairs to determine whether the credit union is complying with this Act, the regulations, orders made by the Superintendent or the Corporation, the by-laws of the Corporation applicable to the credit union, the by-laws of the credit union or policies established by the board of the credit union.

Examination by Corporation

   229.  A person authorized by the Corporation for the purposes of this section may, at any reasonable time, visit the offices of any credit union and inspect the premises and examine the credit union’s affairs to determine whether the credit union is complying with this Act, the regulations, orders made by the Superintendent or the Corporation, the by-laws of the Corporation applicable to the credit union, conditions imposed on the deposit insurance of the credit union under subsection 270 (4), the by-laws of the credit union or policies established by the board of the credit union.

Examination powers

   229.1  (1)  This section applies with respect to examinations under sections 228 and 229.

Access to records and documents, etc.

   (2)  The person conducting the examination is entitled to access to all records and documents of a credit union, wherever located, including information held by a provider of data processing services to the credit union.

Answering questions

   (3)  Every director, officer and employee of a credit union shall answer such questions during the course of the examination as may be necessary for the person conducting the examination to determine if the credit union has complied with this Act, the regulations, orders made by the Superintendent or the Corporation, the by-laws of the Corporation applicable to the credit union, the by-laws of the credit union or policies established by the board of the credit union.

Material to be furnished on examination

   (4)  For the purposes of an examination,

  (a)  a credit union shall prepare and submit to the person conducting the examination such statements with respect to its business, finances or other affairs as the person requires; and

  (b)  the person conducting the examination may require the directors, officers and auditor of a credit union to provide information and explanations, to the extent that they are reasonably able to do so, in respect of the condition and affairs of the credit union and any entity in which the credit union has made an investment.

Copies

   (5)  If a record or document has been examined or produced under this section, the person conducting the examination may make, or cause to be made, one or more copies of it and, if necessary, may temporarily remove the record or document for the purposes only of making the copy or copies.

   124.  The heading immediately before section 230 and sections 230 and 231 of the Act are repealed and the following substituted:

Records and Documents

Register of members, shareholders, etc.

   230.  (1)  Every credit union shall keep a register of members, shareholders and other security holders.

Contents of register

   (2)  The register shall contain,

  (a)  the name and address of each member, shareholder or other security holder;

  (b)  the number of shares of each class held by each member or shareholder and the number and type of the securities held by each of the other security holders;

   (c)  the date on which the name of any person or entity was entered in the register as a member, shareholder or other security holder; and

  (d)  the date on which any person or entity ceased to be a member.

Certificate as evidence

   (3)  A copy of all or part of the register, or a statement as to the contents of all or part of the register, purporting to be certified by the secretary is, without proof of the office or signature of the secretary, receivable in evidence as proof, in the absence of evidence to the contrary, of the facts stated in it for all purposes in any action, proceeding or prosecution.

Requirement to maintain records and documents, etc.

   231.  (1)  Every credit union shall keep and maintain at its head office or at such other place in Ontario as may be specified in its by-laws such books, registers and other records and documents in either English or French as may be required by the regulations.

Superintendent’s order re location

   (2)  The Superintendent may order a credit union to keep its books, registers and other records and documents at a place in Ontario, specified in the order, instead of at the credit union’s head office or any other place specified in the credit union’s by-laws.

Procedural rules

   (3)  Section 240.1 applies with respect to an order under this section.

Appeal to Tribunal

   (4)  The credit union that is subject to an order under this section may appeal the order to the Tribunal in accordance with section 240.4.

   125.  (1)  Subsection 232 (1) of the Act is amended by striking out the portion before clause (a) and substituting the following:

Form of records and documents

   (1)  Any record or document required or authorized by this Act to be prepared and kept by a credit union may be,

.     .     .     .     .

   (2)  Subsection 232 (2) of the Act is repealed and the following substituted:

Conversions

   (2)  Any record or document kept in one form may be converted to any other form.

   126.  The heading immediately before section 234 and sections 234, 235, 236, 237, 238 and 239 of the Act are repealed and the following substituted:

PART XII
ENFORCEMENT

Certain Orders

Superintendent’s order – general

   234.  (1)  The Superintendent may make an order under this section against,

  (a)  any person if, in the Superintendent’s opinion, the person is doing anything that contravenes this Act or the regulations or might reasonably be expected, if continued, to result in a contravention of this Act or the regulations; or

  (b)  a credit union or a director, officer or employee of a credit union if, in the Superintendent’s opinion, the credit union, director, officer or employee is doing anything that constitutes a practice that might prejudice or adversely affect the interest of a member, depositor or shareholder of the credit union.

What order may require

   (2)  An order under this section may require a person,

  (a)  to stop doing any act or pursuing any course of conduct; or

  (b)  to do any act or pursue any course of conduct.

Procedural rules

   (3)  Section 240.1 applies with respect to an order under this section.

Appeal to Tribunal

   (4)  The person who is subject to an order under this section may appeal the order to the Tribunal in accordance with section 240.4.

Appeal to court

   (5)  A party to the proceedings before the Tribunal may appeal the decision of the Tribunal, within 30 days after the party received notice of the decision, to the court upon a question of law only.

Order, if assets shown at more than fair value

   235.  (1)  If it appears to the Corporation from an examination of the condition and affairs of a credit union that assets are shown in the books and records of the credit union at an amount greater than the fair value, the Corporation may, by order, require the credit union to set aside such additional provisions as it considers necessary.

Procedural rules

   (2)  Section 240.1 applies with respect to an order under this section.

Appeal to Tribunal

   (3)  The credit union that is subject to an order under this section may appeal the order to the Tribunal in accordance with section 240.4.

   127.  Subsection 240 (2) of the Act is repealed and the following substituted:

Procedural rules

   (2)  Section 240.1 applies with respect to an order under this section.

Reasons

   (3)  The Superintendent shall set out the reasons for his or her decision in the order.

Appeal to Tribunal

   (4)  The credit union that is subject to an order under this section may appeal the order to the Tribunal in accordance with section 240.4.

   128.  Part XII of the Act is amended by adding the following sections:

General Provisions Relating to Orders

Procedural rules for certain orders

   240.1  (1)  This section applies with respect to an order by the Superintendent or the Corporation under this Act if the section under which the order is made provides for this section to apply.

Notice before order made

   (2)  Before making an order, the Superintendent or Corporation shall give notice of their intention to do so to the person who would be subject to the order and, if the Superintendent or Corporation would be relying on information not provided by the person, the Superintendent or Corporation shall inform the person of that information and give the person an opportunity to explain or refute it.

Written submissions

   (3)  The Superintendent or Corporation is not required to hold a hearing but shall, before making an order, allow the person who would be subject to the order, and any other person who would be affected by the order, to make written submissions.

Notice not required other than to person subject to order

   (4)  The Superintendent or Corporation is not required to give notice to persons who would be affected by an order other than the person who would be subject to the order as required under subsection (2).

Rules for practice and procedure

   (5)  The Superintendent may make rules for the practice and procedure to be observed in relation to orders made by the Superintendent and the Corporation may make rules for the practice and procedure to be observed in relation to orders made by the Corporation.

Inquiries can be made before order made

   (6)  Before making an order under this Act, the Superintendent or Corporation may inquire into the affairs of a person as the Superintendent or Corporation considers necessary to determine whether the order should be made.

Order made without opportunity to make submissions

   (7)  The Superintendent or Corporation may make an order to which a person is subject without giving notice or allowing the person or any other person to make submissions if the Superintendent or Corporation is of the opinion that the interests of the members, depositors or shareholders of any credit union may be prejudiced or adversely affected by a delay in making the order.

Special procedures if no opportunity to make submissions

   (8)  The following apply with respect to an order under subsection (7):

    1.  The person who is subject to the order or any other person affected by the order may request an opportunity to make written submissions by giving written notice to the person who made the order, within 15 days after the person who is subject to the order received it.

    2.  If the person who is subject to the order or any other person affected by the order requests an opportunity to make written submissions, the person who made the order may defer compliance with the order until the submissions have been considered or any appeal is concluded and the order is confirmed, varied or revoked.

    3.  After considering the submissions, the person who made the order may confirm, vary or revoke the order.

Variation of orders

   (9)  Subject to subsections (2) and (3),

  (a)  the Superintendent may reconsider and vary or revoke an order made by the Superintendent if the Superintendent considers it advisable to do so; and

  (b)  the Corporation may reconsider and vary or revoke an order made by the Corporation if the Corporation considers it advisable to do so.

Copies of orders to be given

   240.2  (1)  The Superintendent or Corporation shall give a copy of an order they make under this Act to the person who is subject to the order and, if the person who is subject to the order is a credit union, to each director of the credit union.

Copies to Superintendent, Corporation

   (2)  The Superintendent shall give the Corporation a copy of every order the Superintendent makes under this Act and the Corporation shall give the Superintendent a copy of every order the Corporation makes under this Act.

When orders take effect

   240.3  An order by the Superintendent or Corporation under this Act comes into effect when it is made or at such later time as the order provides.

Appeals of orders to Tribunal

   240.4  (1)  This section applies with respect to an appeal to the Tribunal of an order by the Superintendent or the Corporation under this Act if the section under which the order is made provides for such an appeal in accordance with this section.

How appeal is made

   (2)  The appeal shall be made by filing a written notice of appeal with the Tribunal and serving a copy of the notice on the Superintendent, in the case of an appeal of an order by the Superintendent, or the Corporation, in the case of an appeal of an order by the Corporation.

Time for filing and serving notice

   (3)  The notice of appeal must be filed and served, as required under subsection (2), within 15 days after the order was received by the person appealing the order.

No stay of decision unless granted

   (4)  An appeal from an order does not stay the order but the Tribunal may grant a stay until it disposes of the appeal.

Exception

   (5)  Despite subsection (4), an appeal of an order under section 301, 310, 331.2 or 331.3 stays the order.

Hearing

   (6)  The Tribunal shall hold a hearing of the appeal.