Law:Air Canada Public Participation Act

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R.s.c., 1985, c. 35 (4th Supp.)

An Act to provide for the continuance of Air Canada under the Canada Business Corporations Act and for the issuance and sale of shares thereof to the public

(1988, c. 44, assented to 18th August, 1988)

Contents

Short Title

Short title

1. This Act may be cited as the Air Canada Public Participation Act.


Interpretation And Application

Definitions

2. (1) In this Act,

“Corporation”

« Société »

“Corporation” means Air Canada, a corporation continued by the Air Canada Act;

“Minister”

« ministre »

“Minister” means the President of the Queen’s Privy Council or such other member of the Queen’s Privy Council for Canada as may be designated by the Governor in Council as the Minister for the purposes of this Act.

Same meaning

(2) Unless a contrary intention appears, words and expressions used in this Act have the same meaning as in the Canada Business Corporations Act.

Operation of Canada Business Corporations Act

(3) In the event of any inconsistency between this Act and the Canada Business Corporations Act, or anything issued, made or established under that Act, this Act prevails to the extent of the inconsistency.

Operation of Competition Act

(4) Nothing in, or done under the authority of, this Act affects the operation of the Competition Act in respect of the acquisition of any interest in the Corporation.

R.S., 1985, c. 35 (4th Supp.), s. 2; 1994, c. 24, s. 34(F); 1996, c. 10, s. 206.

Binding on the Crown

3. This Act is binding on Her Majesty in right of Canada or a province.


Transfer Of Shares To Minister

Transfer of Air Canada shares

4. (1) Notwithstanding subsection 13(3) of the Air Canada Act, the shares of the Corporation held by the Minister of Transport in trust for Her Majesty in right of Canada are hereby transferred to the Minister, who is hereby authorized to acquire the shares.

Registration and holding of shares

(2) The shares transferred to the Minister pursuant to subsection (1) shall be registered in the books of the Corporation in the name of the Minister and shall be held by the Minister in trust for Her Majesty in right of Canada.


Continuance

Submission of draft application

5. (1) The Corporation shall submit an application for a certificate of continuance of the Corporation under section 187 of the Canada Business Corporations Act to the Minister for approval.

Submission to Director

(2) Forthwith after the Minister approves an application submitted pursuant to subsection (1), the Corporation shall submit the approved application to the Director.

Presumption

(3) An application submitted to the Director pursuant to this section is, subject to this Act, deemed for all purposes to have been made under subsection 187(1) of the Canada Business Corporations Act.

R.S., 1985, c. 35 (4th Supp.), s. 5; 1994, c. 24, s. 34(F).

Mandatory provisions in articles of continuance

6. (1) The articles of continuance of the Corporation shall contain

(a)�(Repealed, 2001, c. 35, s. 1)

(b) provisions imposing constraints on the issue, transfer and ownership, including joint ownership, of voting shares of the Corporation to prevent non-residents from holding, beneficially owning or controlling, directly or indirectly, otherwise than by way of security only, in the aggregate voting shares to which are attached more than 25%, or any higher percentage that the Governor in Council may by regulation specify, of the votes that may ordinarily be cast to elect directors of the Corporation, other than votes that may be so cast by or on behalf of the Minister;

(c) provisions respecting the counting or prorating of votes cast at any meeting of shareholders of the Corporation and attached to voting shares of the Corporation that are held, beneficially owned or controlled, directly or indirectly, by non-residents so as to limit the counting of those votes to not more than 25%, or any higher percentage specified for the purposes of paragraph (b), of the total number of votes cast by shareholders at that meeting;

(d) provisions requiring the Corporation to maintain operational and overhaul centres in the City of Winnipeg, the Montreal Urban Community and the City of Mississauga; and

(e) provisions specifying that the head office of the Corporation is to be situated in the Montreal Urban Community.

Enforcement of constraint provisions

(2) The regulations made pursuant to subsection 174(6) of the Canada Business Corporations Act apply, with any modifications that the circumstances require, in respect of the Corporation as if the constraints imposed pursuant to paragraph (1)(b) were a constraint referred to in paragraph 174(1)(a) of that Act.

Exceptions

(3) No provision imposing constraints pursuant to paragraph (1)(b) and no regulation referred to in subsection (2) apply in respect of voting shares of the Corporation that are held

(a) by the Minister in trust for Her Majesty in right of Canada;

(b) by one or more underwriters solely for the purpose of distributing the shares to the public; or

(c) by any person that is acting in relation to the shares solely in its capacity as an intermediary in the payment of funds or the delivery of securities, or both, in connection with trades in securities and that provides centralized facilities for the clearing of trades in securities.

(4) and (5) (Repealed, 2001, c. 35, s. 1)

Control

(6) For the purposes of this section,

(a) a body corporate is controlled by a person if

(i) securities of the body corporate to which are attached more than fifty per cent of the votes that may be cast to elect directors of the body corporate are held, otherwise than by way of security only, by or for the benefit of that person, and

(ii) the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate; and

(b) a partnership or unincorporated organization is controlled by a person if an ownership interest therein representing more than fifty per cent of the assets of the partnership or organization is held, otherwise than by way of security only, by o for the benefit of that person.

Specified percentage

(6.1) The Governor in Council may make regulations specifying a percentage greater than 25% for the purposes of paragraph (1)(b).

Definitions

(7) In this section,

“corporation”

« société »

“corporation” includes a body corporate, partnership and unincorporated organization;

“non-resident”

« non-résident »

“non-resident” means

(a) an individual, other than a Canadian citizen, who is not ordinarily resident in Canada,

(b) a corporation incorporated, formed or otherwise organized outside Canada,

(c) a foreign government or an agency thereof,

(d) a corporation controlled by non-residents as defined in any of paragraphs (a) to (c),

(e) a trust

(i) established by a non-resident as defined in any of paragraphs (b) to (d), other than a trust for the administration of a pension fund for the benefit of individuals a majority of whom are residents, or

(ii) in which non-residents as defined in any of paragraphs (a) to (d) have more than fifty per cent of the beneficial interest, or

(f) a corporation that is controlled by a trust described in paragraph (e),

but does not include

(g) a mutual company within the meaning of the Insurance Companies Act, if its head office and chief place of business are situated in Canada and at least three quarters of its board of directors and each committee of its directors are Canadian citizens who are ordinarily resident in Canada, or

(h) a company within the meaning of that Act that is a subsidiary of a foreign institution within the meaning of that Act or a foreign company within the meaning of that Act, where the company or the foreign company is acquiring shares to form part of the assets of a segregated fund maintained pursuant to section 451 or 593 of that Act that has been established with respect to one or more policies or amounts for the administration of a pension fund for the benefit of individuals a majority of whom are residents;

“person”

« personne »

“person” includes an individual, corporation, government or agency thereof, trustee, executor, administrator and other legal representative;

“resident”

« résident »

“resident” means an individual, corporation, government or agency thereof or trust that is not a non-resident;

“voting share”

« action avec droit de vote »

“votinghare” means a share carrying voting rights under all circumstances or under some circumstances that have occurred and are continuing, and includes a security currently convertible into such a share and currently exercisable options and rights to acquire such a share or such a convertible security.

R.S., 1985, c. 35 (4th Supp.), s. 6; 1993, c. 34, s. 3; 1994, c. 24, s. 34(F), c. 47, s. 220; 2000, c. 15, s. 17; 2001, c. 35, s. 1.

Restriction on amendment

7. The Corporation and its shareholders and directors shall not

(a) apply for continuance of the Corporation in another jurisdiction; or

(b) make any articles or by-laws that are inconsistent with the provisions included in its articles of continuance pursuant to subsection 6(1).


Share Transactions

Dealing with shares, etc., by Minister

8. (1) The Minister is hereby authorized to

(a) acquire, hold, dispose of and otherwise deal with shares or debt obligations of, or any security interest in, the Corporation; and

(b) enter into any agreement or arrangement necessary or incidental to any activity referred to in paragraph (a).

Issue and disposal of shares by Corporation

(2) The Corporation is hereby authorized to issue and sell or otherwise dispose of shares of the Corporation.


General

Name

9. Notwithstanding subsection 10(1) of the Canada Business Corporations Act, the Corporation may continue to use and be legally designated by the name “Air Canada” on and after the day on which it becomes a corporation to which that Act applies.

R.S., 1985, c. 35 (4th Supp.), s. 9; 1994, c. 24, s. 34(F).

Official Languages Act

10. (1) The Official Languages Act applies to the Corporation.

Duty re subsidiaries

(2) Subject to subsection (5), if air services, including incidental services, are provided or made available by a subsidiary of the Corporation, the Corporation has the duty to ensure that any of the subsidiary’s customers can communicate with the subsidiary in respect of those services, and obtain those services from the subsidiary, in either official language in any case where those services, if provided by the Corporation, would be required under Part IV of the Official Languages Act to be provided in either official language.

Subsidiary body corporate

(3) For the purposes of this section, a body corporate is a subsidiary of the Corporation if

(a) it is controlled by

(i) the Corporation,

(ii) the Corporation and one or more bodies corporate each of which is controlled by the Corporation, or

(iii) two or more bodies corporate each of which is controlled by the Corporation; or

(b) it is a subsidiary of a body corporate that is a subsidiary of the Corporation.

Control

(4) For the purposes of subsection (3), a body corporate is controlled by another body corporate if

(a) securities of the body corporate to which are attached more than 50% of the votes that may be cast to elect directors of the body corporate are held, other than by way of security only, by or for the benefit of the other body corporate; and

(b) the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate.

Application of subsection (2)

(a) in respect of air services, including incidental services, provided or made available by a subsidiary of the Corporation at a facility or office in Manitoba, British Columbia, Saskatchewan, Alberta, the Yukon Territory, the Northwest Territories or Nunavut or on a route wholly within those provinces, one year after that subsection comes into force if it had been a subsidiary of the Corporation on that coming into force; and

(b) in respect of a person that becomes a subsidiary of the Corporation only after that subsection comes into force, or in respect of Canadian Airlines International Ltd. or Canadian Regional Airlines Ltd. if that airline becomes a subsidiary of the Corporation before that subsection comes into force, three years after the person or airline becomes a subsidiary.

Extension

(6) The Governor in Council may, by order made on the recommendation of the Minister of Transport, increase the three years referred to in paragraph (5)(b) to a maximum of four years in respect of a route served, or an office or facility from which service is provided, by a subsidiary.

Duties of replacements

(7) If Canadian Airlines International Ltd., Canadian Regional Airlines Ltd. or a subsidiary of the Corporation replaces the Corporation or one of its subsidiaries in providing an air service including incidental services, that the Corporation or the subsidiary provided on or after December 21, 1999, the Corporation has the duty to ensure that any of the customers of the person who replaces the Corporation or the subsidiary can communicate with that person in respect of those services, and obtain those services from that person, in either official language in any case where those services, if provided by the Corporation or the subsidiary, would be required under Part IV of the Official Languages Act or under subsection (2) to be provided in either official language.

For greater certainty

(8) For greater certainty, subsections (2) and (7) do not affect any duty that the Corporation may have under section 25 of the Official Languages Act.

Deemed duty

(9) For the purposes of Parts VIII, IX and X of the Official Languages Act, the duties referred to in subsections (2) and (7) are deemed to be duties under Part IV of that Act.

Definitions

(10) The definitions in this subsection apply in this section.

“air service”

« service aérien »

“air service” has the same meaning as in subsection 55(1) of the Canada Transportation Act.

“customer”

« client »

“customer” means, in respect of a subsidiary referred to in subsection (2) or (7), a passenger, shipper or consignee using or intending to use an air service, including incidental services, provided or made available by that subsidiary.

“incidental services”

« services connexes »

“incidental services” include, in respect of a subsidiary referred to in subsection (2) or (7),

(a) ticketing and reservation services;

(b) information, including notices and announcements, that it publishes or causes to be published to inform its customers in respect of its routes or tariffs;

(c) services provided or made available to customers at an airport, including the control of passengers embarking and disembarking aircraft, announcements directed at customers and counter services; and

(d) services related to baggage or freight claims and client relations.

“route”

« trajet »

“route” means, in respect of a subsidiary of the Corporation, a route on which the subsidiary provides a two-way air service between the starting and finishing points of that service by a single conveyance, with or without intermediate stops.

“shipper”

« expéditeur »

“shipper” has the same meaing as in section 6 of the Canada Transportation Act.

R.S., 1985, c. 35 (4th Supp.), s. 10; 2000, c. 15, s. 18.

Deemed approval

10.1 (1) The proposed acquisition described in a letter dated December 21, 1999 from 853350 Alberta Ltd. and Air Canada to the Minister of Transport is deemed to be a transaction that has been approved by the Governor in Council under subsection 53.2(7) of the Canada Transportation Act on the day on which that subsection comes into force.

Deemed terms and conditions

(2) The undertakings provided by 853350 Alberta Ltd. and Air Canada to the Minister of Transport in the letter referred to in subsection (1) are deemed to be terms and conditions specified in an approval by the Governor in Council under subsection 53.2(7) of the Canada Transportation Act that relate to national transportation concerns, and the undertakings provided by 853350 Alberta Ltd. and Air Canada to the Commissioner of Competition that are set out in Annex A to a letter from the Commissioner dated December 21, 1999 in respect of the acquisition referred to in that subsection are deemed to be terms and conditions of an approval under subsection 53.2(7) of the Canada Transportation Act that relate to potential prevention or lessening of competition.

Deemed affiliates

(3) For the purposes of sections 45 and 61 of the Competition Act, Canadian Airlines Corporation, Canadian Airlines International Ltd. and Canadian Regional Airlines Ltd. are deemed to be affiliates of Air Canada in respect of any thing they do after December 21, 1999 and before the earlier of the coming into force of this subsection and the day on which the undertakings referred to in subsection (2) cease to have effect.

If undertakings cease to have effect

(4) The Governor in Council may, by order, declare that 853350 Alberta Ltd. and Air Canada are not subject to the terms and conditions referred to in subsection (2) if the undertakings cease to have effect and are not revived in the circumstances described in

(a) the paragraph entitled “Effective Date” in the letter referred to in subsection (1); and

(b) undertaking #15, set out in Annex A referred to in subsection (2).

Revocation of deemed approval

(5) If the Governor in Council makes an order under subsection (4), the deemed approval under subsection (1) is revoked and any certification under paragraph 94(c) of the Competition Act in respect of the acquisition referred to in that paragraph ceases to have effect.

2000, c. 15, s. 19; 2007, c. 19, s. 59.

Previous Version

Transitional, Consequential, Repeal And Coming Into Force Provisions

Transitional

Continuation in office

11. (1) Subject to subsection (2), the members of the Board of Directors of the Corporation who were appointed pursuant to the Air Canada Act and held office immediately prior to the day on which the Corporation becomes a corporation to which the Canada Business Corporations Act applies continue to hold office according to the terms of their appointment.

Directors cease to hold office

(2) The members of the Board of Directors of the Corporation cease to hold office at the close of the first annual meeting of shareholders of the Corporation held after the issuance date, which meeting shall be held not later than six months following the end of the Corporation’s financial year in which that date falls.

No right to compensation

(3) No person has any right to claim or receive any compensation, damages, indemnity or other form of relief from Her Majesty in right of Canada or any servant or agent thereof for ceasing to hold office pursuant to, or for the abolition of that office by, this Act.

Definition of “issuance date”

(4) In this section and section 12, “issuance date” means the date on which shares of the Corporation are first issued after the coming into force of those sections to any person, other than the Minister.

R.S., 1985, c. 35 (4th Supp.), s. 11; 1994, c. 24, s. 34(F).

Qualification of shares

12. (1) For the purpose of qualifying the shares of the Corporation

(a) as an authorized investment under paragraph 86(n) of the Canadian and British Insurance Companies Act, paragraph 61(1)(j) of the Loan Companies Act or paragraph 78(1)(j) of the Trust Companies Act,

(b) as a permitted investment under paragraph 1(n) of Schedule III to the Pension Benefits Standards Regulations, 1985, and

(c) as assets that may be vested in trust in Canada under paragraph 1(n) of Schedule II to the Canadian and British Insurance Companies Act or paragraph 1(n) of the schedule to the Foreign Insurance Companies Act,

the Corporation is deemed to have satisfied the requirements of those paragraphs with respect to each of the five years immediately preceding the issuance date.

Qualification of debt obligations

(2) For the purpose of qualifying the bonds, debentures or other evidences of indebtedness of the Corporation

(a) as an authorized investment under subparagraph 86(k)(i) of the Canadian and British Insurance Companies Act, paragraph 61(1)(g) of the Loan Companies Act or paragraph 78(1)(g) of the Trust Companies Act,

(b) as a permitted investment under paragraph 1(m) of Schedule III to the Pension Benefits Standards Regulations, 1985, and

(c) as assets that may be vested in trust in Canada under subparagraph 1(k)(i) of Schedule II to the Canadian and British Insurance Companies Act or subparagraph 1(k)(i) of the schedule to the Foreign Insurance Companies Act,

the Corporation is deemed to have satisfied the requirements of the paragraphs referred to in subsection (1) with respect to each of the five years immediately preceding the issuance date.


Consequential Amendments

13. (Amendments)


Repeal

Repeal of R.S., c. A-10

14. (1) The Air Canada Act is repealed on the day on which the Corporation becomes a corporation to which the Canada Business Corporations Act applies.

Director to give notice

(2) The Director is not required to comply with subsection 187(6) of the Canada Business Corporations Act in respect of the Corporation, but the Director shall, on issuing the certificate of continuance of the Corporation, cause a notice to be published in the Canada Gazette setting out the date on which the certificate was issued and on which the Air Canada Act was repealed.

R.S., 1985, c. 35 (4th Supp.), s. 14; 1994, c. 24, s. 34(F).


Coming into Force

Coming into force

Schedule

(Amendments)


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