Law:Petro-Canada Public Participation Act

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S.c. 1991, c. 10

Assented to 1991-02-01

An Act respecting the privatization of the national petroleum company of Canada

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:


Contents

Short Title

Short title

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


Interpretation And Application

Definitions

2. (1) In this Act,

“Minister”

« ministre »

“Minister” means such member of the Queen’s Privy Council for Canada as is designated by the Governor in Council as the Minister for the purposes of this Act or, if no member is so designated, the Minister of State (Privatization and Regulatory Affairs);

“Petro-Canada”

« Petro-Canada »

“Petro-Canada” means the corporation given that name by subsection 4(1);

“Petro-Canada Limited”

« Petro-Canada Limitée »

“Petro-Canada Limited” means the corporation given that name by subsection 4(2).

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 Petro-Canada.

1991, c. 10, s. 2; 1994, c. 24, s. 34(F).


Her Majesty

Binding on Her Majesty

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


Changes Of Names

Change of name of Petro-Canada Inc.

4. (1) The articles of Petro-Canada Inc., a corporation incorporated under the Canada Business Corporations Act, are hereby amended to change its name from “Petro-Canada Inc.” in English and French to “Petro-Canada” in both languages.

Change of name of Petro-Canada

(2) The name of Petro-Canada, a corporation established by the Petro-Canada Act, chapter P-11 of the Revised Statutes of Canada, 1985, is hereby changed to “Petro-Canada Limited” in English and “Petro-Canada Limitée” in French.

Rights preserved

(3) For greater certainty, the changes of names effected by this section do not affect an existing cause of action or claim or liability to prosecution in favour of or against a corporation whose name was so changed or its directors or officers or any civil, criminal or administrative action or proceeding to which the corporation or its directors or officers are parties.

1991, c. 10, s. 4; 1994, c. 24, s. 34(F).


Transfer Of Shares To Minister

Transfer of Petro-Canada shares

5. The shares of Petro-Canada held by Petro-Canada Limited are hereby transferred to the Minister.

Dealing with shares

6. (1) The Minister is hereby authorized to

(a) acquire, hold, dispose of and otherwise deal with shares and debt obligations of, and security interests in, Petro-Canada; and

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

Registration of shares

(2) Shares of Petro-Canada acquired by the Minister shall be registered in the name of the Minister in the books of Petro-Canada and shall be held by the Minister in trust for Her Majesty in right of Canada.


Sale Of Shares By Petro-canada

Issue and disposal of shares

7. Petro-Canada is hereby authorized to issue and sell or otherwise dispose of shares of Petro-Canada.


Reorganization Of Petro-canada

Articles of amendment

8. (1) Forthwith after this section comes into force, Petro-Canada shall submit to the Minister for approval articles of amendment prepared in accordance with section 9.

Submission to Director

(2) Forthwith after the Minister approves articles of amendment submitted pursuant to subsection (1), Petro-Canada shall send the approved articles to the Director.

Presumption

(3) Articles of amendment sent to the Director pursuant to this section are, subject to this Act, deemed for all purposes to have been sent under section 177 of the Canada Business Corporations Act.

1991, c. 10, s. 8; 1994, c. 24, s. 34(F).

Mandatory provisions in articles of amendment

9. (1) The articles of amendment for Petro-Canada shall contain

(a) provisions imposing constraints on the issue, transfer and ownership, including joint ownership, of voting shares of Petro-Canada to prevent any one person, together with the associates of that person, 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 twenty per cent of the votes that may ordinarily be cast to elect directors of Petro-Canada, other than votes that may be so cast by or on behalf of the Minister;

(b) and (c)�(Repealed, 2001, c. 18, s. 2)

(d) provisions preventing Petro-Canada from selling, transferring or otherwise disposing of, whether by one transaction or event or several related transactions or events, all or substantially all of its assets to any one person or group of associated persons or to non-residents, otherwise than by way of security only in connection with the financing of Petro-Canada;

(e) provisions requiring Petro-Canada to ensure that any member of the public can, in either official language, communicate with and obtain available services from

(i) its head office, and

(ii) any of its other offices or facilities, and the head office and any other office or facility of any of its wholly-owned subsidiaries, where Petro-Canada determines that there is significant demand for communications with and services from that office or facility in that language having regard to the public served and the location of the office or facility;

(f) provisions respecting the enforcement of the constraints imposed pursuant to paragraph (a); and

(g) provisions specifying that the head office of Petro-Canada is to be situated in Calgary, Alberta.

Enforcement provisions

(2) Without limiting the generality of paragraph (1)(f), the provisions referred to therein may provide for the filing of declarations, the suspension of voting rights, the forfeiture of dividends, the refusal of the issue or registration of voting shares and the sale of voting shares held contrary to the constraints and payment of the net proceeds of the sale to the person entitled thereto.

Exemption for small transactions

(3) Where the directors of Petro-Canada are of the reasonable opinion, from the central securities register of Petro-Canada or otherwise, that a subscriber for or a transferee of voting shares of Petro-Canada would, on acquiring the shares, hold, beneficially own or control voting shares to which are attached not more than the lesser of two one-hundredths of one per cent of the votes that may ordinarily be cast to elect directors of Petro-Canada and ten thousand such votes, the directors are entitled to assume that the subscriber or transferee is not and will not be an associate of anyone else and, unless the address to be recorded in the register for the subscriber or transferee is outside Canada, that the shares will not be held, beneficially owned or controlled in contravention of the articles of amendment for Petro-Canada.

Exceptions

(4) No provision imposing constraints pursuant to paragraph (1)(a) applies in respect of voting shares of Petro-Canada that are held

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

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

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

Associates

(5) For the purposes of this section, a person is an associate of another person if

(a) one is a corporation of which the other is an officer or director;

(b) one is a corporation that is controlled by the other or by a group of persons of which the other is a member;

(c) one is a partnership of which the other is a partner;

(d) one is a trust of which the other is a trustee;

(e) both are corporations controlled by the same person;

(f) both are members of a voting trust that relates to voting shares of Petro-Canada;

(g) both, in the reasonable opinion of the directors of Petro-Canada, are parties to an agreement or arrangement a purpose of which is to require them to act in concert with respect to their interests, direct or indirect, in Petro-Canada or are otherwise acting in concert with respect to those interests; or

(h) both are at the same time associates, within the meaning of any of paragraphs (a) to (g), of the same person.

Exceptions

(6) Notwithstanding subsection (5), for the purposes of this section,

(a) where a person who, but for this paragraph, would be an associate of another person submits to Petro-Canada a statutory declaration stating that

(i) no voting shares of Petro-Canada held or to be held by the declarant are or will be, to the declarant’s knowledge, held in the right of, for the use or benefit of or under the control of, any other person of which, but for this paragraph, the declarant would be an associate, and

(ii) the declarant is not acting and will not act in concert with any such other person with respect to their interests, direct or indirect, in Petro-Canada,

the declarant and that other person are not associates so long as the directors of Petro-Canada are satisfied that the statements in the declaration are being complied with and that there are no other reasonable grounds for disregarding the declaration;

(b) two corporations are not associates pursuant to paragraph (5)(h) by reason only that under paragraph (5)(a) each is an associate of the same individual; and

(c) where the directors of Petro-Canada are of the reasonable opinion, from the central securities register of Petro-Canada or otherwise, that any person holds, beneficially owns or controls voting shares to which are attached not more than the lesser of two one-hundredths of one per cent of the votes that may ordinarily be cast to elect directors of Petro-Canada and ten thousand such votes, that person is not an associate of anyone else and no one else is an associate of that person.

Control

(7) For the purposes of this section, “control” means control in any manner that results in control in fact, whether directly through the ownership of securities or indirectly through a trust, an agreement or arrangement, the ownership of any body corporate or otherwise, and, without limiting the generality of the foregoing,

(a) a body corporate is deemed to be controlled by a person if

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

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

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

Definitions

(8) In this section,

“corporation”

« société »

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

“downstream assets”

« biens de commercialisation »

“downstream assets” means assets used in the refining of crude oil or in the distribution and marketing of refined petroleum products and related goods and services;

“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 anyndividual, 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;

“upstream assets”

« biens de production »

“upstream assets” means assets used in the exploration for, or in the development, production and marketing of, crude oil, natural gas, natural gas liquids, bitumen, synthetic oils and sulphur;

“voting share”

« action avec droit de vote »

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

1991, c. 10, s. 9; 1993, c. 34, s. 101; 1994, c. 47, s. 220; 2001, c. 18, s. 2.

Restriction on amendment

10. Petro-Canada and its shareholders and directors shall not

(a) make any articles or by-laws inconsistent with this Act or the provisions included in its articles of amendment pursuant to subsection 9(1); or

(b) apply for continuance of Petro-Canada in another jurisdiction.


Financial Arrangements

Discharge

11. The Minister of Finance, on behalf of Her Majesty in right of Canada, may

(a) enter into an agreement or other arrangement with Petro-Canada Limited, Petro-Canada or any other person respecting the service or discharge of any debt or obligation incurred by Petro-Canada Limited; and

(b) pay out of the Consolidated Revenue Fund such amounts as are necessary to service or discharge any such debt or obligation.

Adjustment of accounts of Canada

12. The Minister, after consultation with the President of the Treasury Board, shall cause such adjustments to be made in the accounts of Canada as are required as a result of any transaction authorized or required by this Act.


Petro-canada International Assistance Corporation

Transfer of shares

13. (1) Petro-Canada Limited is hereby authorized to transfer, and on the direction of the Governor in Council shall transfer, all the shares of Petro-Canada International Assistance Corporation held by Petro-Canada Limited to such member of the Queen’s Privy Council for Canada as the Governor in Council may designate as the Minister for the purposes of this section.

Dealing with shares

(2) The Minister designated pursuant to subsection (1) is hereby authorized to

(a) acquire, hold, dispose of and otherwise deal with shares and debt obligations of, and security interests in, Petro-Canada International Assistance Corporation; and

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

Registration of shares

(3) The shares transferred pursuant to subsection (1) shall be registered in the name of the designated Minister in the books of Petro-Canada International Assistance Corporation and shall be held by that Minister in trust for Her Majesty in right of Canada.

Provision not applicable

(4) Section 91 of the Financial Administration Act does not apply in respect of the transfer of shares pursuant to subsection (1).

Procurement of dissolution

(5) The Minister designated pursuant to subsection (1) is hereby authorized to procure, with the approval of the Governor in Council, the dissolution of Petro-Canada International Assistance Corporation and, for that purpose, may do and perform all acts and things necessary for or incidental to that dissolution.


Dissolution Of Petro-canada Limited

Dissolution of Petro-Canada Limited

14. (1) Petro-Canada Limited is hereby dissolved.

Ministerial powers

(2) The Minister of Natural Resources may do and perform all acts and things necessary for or incidental to the dissolution of Petro-Canada Limited.

1991, c. 10, s. 14; 1994, c. 41, s. 37.

15. (Repeal)


Transitional, Consequential And Coming Into Force Provisions

Transitional

Definition of “issuance date”

16. (1) In this section, “issuance date” means the date on which shares of Petro-Canada are first issued after the coming into force of section 7 to any person, other than the Minister.

Appointment

(2) Before the issuance date, the Minister may, with the approval of the Governor in Council, appoint the chairperson, chief executive officer and other directors of Petro-Canada to hold office during pleasure for a term not exceeding one year.

Re-appointment

(3) A director of Petro-Canada, including a director holding office on the coming into force of this section, is eligible for re-appointment under subsection (2) to the board of directors in the same or another capacity.

Termination of office

(4) The directors of Petro-Canada holding office on the coming into force of this section cease to hold office when the directors first appointed under subsection (2) take office, unless re-appointed under that subsection.

Idem

(5) Notwithstanding subsection (2), the term of office of a director who holds office on the issuance date ends at the close of the first annual meeting of shareholders of Petro-Canada held after that date, which meeting shall be held not later than six months after the end of Petro-Canada’s financial year in which that date falls.

Inconsistency

(6) In the event of any inconsistency between this section and the Financial Administration Act, this section prevails to the extent of the inconsistency.

Presumption

(7) In the period between the issuance date and the first annual meeting of shareholders of Petro-Canada held thereafter, Petro-Canada shall be deemed not to be a parent Crown corporation within the meaning and for the purposes of the Financial Administration Act.

Pension rights

17. (1) In the manner and to the extent provided by the regulations made under subsection (3), the Public Service Superannuation Act, the Supplementary Retirement Benefits Act and the regulations made under those Acts apply to any person who meets all of the following criteria:

(a) the person, on the coming into force of section 5, was employed by Petro-Canada Limited and was a contributor under the Public Service Superannuation Act and, immediately before the coming into force of this section, was employed by that corporation or Petro-Canada;

(b) the President of the Treasury Board has not made a payment to Petro-Canada Limited pursuant to section 40 of the Public Service Superannuation Act in respect of the pensionable service to that person’s credit under that Act immediately before the coming into force of this section;

(c) the person has not received or opted to receive any annuity or other benefit under section 12 or 13 of the Public Service Superannuation Act in respect of the pensionable service to that person’s credit under that Act immediately before the coming into force of this section; and

(d) the person elects, within one year after the coming into force of this section and in such form and manner as the President of the Treasury Board may direct, to have the Public Service Superannuation Act, the Supplementary Retirement Benefits Act and the regulations made under those Acts apply to the person in the manner and to the extent provided by the regulations made under subsection (3).

Election irrevocable

(2) An election referred to in paragraph (1)(d) is irrevocable.

Regulations

(3) The Governor in Council may, on the recommendation of the President of the Treasury Board, make regulations

(a) respecting the manner in which and the extent to which provisions, as amended, of the Acts and regulations referred to in subsection (1) apply to persons who make an election under paragraph (1)(d);

(b) adapting provisions of those Acts and regulations for the purposes of this section; and

(c) generally for carrying out the purposes and provisions of this section.

Retroactive application of regulations

(4) Regulations made under subsection (3) may, if they so provide, be retroactive and have effect with respect to any period before they were made.


Consequential

18. (Amendments)

19. (1) (Amendment)

Idem

(2) A reference to “Petro-Canada” in any regulation, order, rule, contract, instrument or document shall, unless the context otherwise requires, be read as a reference to “Petro-Canada Limited” in the English version and “Petro-Canada Limitée” in the French version.

20. (Amendments)


Coming into Force

Coming into force

Idem

(2) Subsection 18(1), section 20 in relation to item 4 of the schedule and item 4 of the schedule shall come into force on a day or days to be fixed by order of the Governor in Council.

1991, c. 10, s. 21; 1994, c. 41, s. 37.

Schedule

(Amendments)


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