Business Development Bank of Canada Act (S.C. 1995, c. 28)

Short Title

Marginal note:Short title

1 This Act may be cited as the Business Development Bank of Canada Act.

Interpretation

Marginal note:Definitions

2 In this Act,

Bank

Bank means the Business Development Bank of Canada continued by subsection 3(1); (Banque)

bill of lading

bill of lading has the same meaning as in subsection 425(1) of the Bank Act; (connaissement)

Board

Board means the Board of Directors of the Bank; (conseil)

by-law

by-law means a by-law of the Bank; (règlement administratif)

Chairperson

Chairperson means the Chairperson of the Board; (président du conseil)

Crown

Crown means Her Majesty in right of Canada; (Version anglaise seulement)

debt obligation

debt obligation means a bond, debenture, note, investment certificate or other evidence of indebtedness or a guarantee of a corporation, whether secured or unsecured; (titre de créance)

Designated Minister

Designated Minister means such 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; (ministre compétent)

director

director means a member of the Board; (administrateur)

enterprise

enterprise means an organized economic activity carried on by one or more persons; (entreprise)

Executive Committee

Executive Committee[Repealed, 2014, c. 39, s. 211]

goods, wares and merchandise

goods, wares and merchandise has the same meaning as in subsection 425(1) of the Bank Act; (effets, denrées ou marchandises)

joint venture

joint venture means an association of persons, when the relationship among those associated persons does not, under the laws of Canada, constitute a corporation, partnership or trust; (coentreprise)

person

person includes a trust, a partnership, a joint venture and an association of natural persons or corporations; (personne)

President

President means the President of the Bank; (président)

resolution

resolution means a resolution of the Board; (résolution)

securities

securities means the shares of any class or series of shares or the debt obligations of a corporation and includes certificates evidencing those shares or debt obligations; (valeurs mobilières)

subsidiary

subsidiary has the same meaning as in subsection 83(6) of the Financial Administration Act; (filiale)

warehouse receipt

warehouse receipt has the same meaning as in subsection 425(1) of the Bank Act. (récépissé d’entrepôt)

Establishment and Organization of the Bank

Status of the Bank

Marginal note:Continuation of Federal Business Development Bank

• 3 (1) The Federal Business Development Bank established by the Federal Business Development Bank Act is continued as a body corporate under the name “Business Development Bank of Canada”.

• Marginal note:Head office

  (2) The head office of the Bank must be at a place in Canada that the Governor in Council may designate.

• Marginal note:Capacity

  (3) The Bank has, in respect of its powers, all the rights, powers, privileges and capacity of a natural person.

• Marginal note:Agent of the Crown

  (4) The Bank is for all purposes an agent of the Crown.

Purpose

Marginal note:Purpose of Bank

• 4 (1) The purpose of the Bank is to support Canadian entrepreneurship by providing financial and management services and by issuing securities or otherwise raising funds or capital in support of those services.

• Marginal note:Consideration to small and medium-sized enterprises

  (2) In carrying out its activities, the Bank must give particular consideration to the needs of small and medium-sized enterprises.

Board of Directors

Marginal note:Membership of Board

• 5 (1) The Bank has a Board of Directors comprised of the Chairperson, the President and not fewer than three, but no more than 11, other directors.

• Marginal note:Limit on directors from public service

  (2) No more than two of the directors, excluding the Chairperson and President, may be appointed from the federal public administration.

Marginal note:Appointment of Chairperson

• 6 (1) The Chairperson is to be appointed by the Governor in Council to hold office during pleasure for a term that the Governor in Council considers appropriate.

• Marginal note:Absence or incapacity

  (1.1) If the Chairperson is absent or unable to act or the office of Chairperson is vacant, the Board may authorize one of the other directors to act as Chairperson, but that person is not authorized to act as Chairperson for a period of more than 180 days without the approval of the Governor in Council.

• Marginal note:Appointment of President

  (2) Notwithstanding subsection 105(5) of the Financial Administration Act, the President is to be appointed by the Governor in Council to hold office during good behaviour for a term that the Governor in Council considers appropriate and may be removed for cause.

• Marginal note:Reappointment

  (3) The President is eligible for reappointment on the expiration of his or her term of office.

• Marginal note:Appointment of directors

  (4) The other directors are to be appointed by the Designated Minister, with the approval of the Governor in Council, for a term not exceeding four years that will ensure, as far as possible, the expiration in any one year of the terms of office of not more than half of the directors.

• Marginal note:Acting directors

  (5) The Governor in Council may appoint an individual to act as a director if a director is absent or unable to act.

• Marginal note:Eligibility

  (6) No individual is eligible to be appointed or to continue as President, Chairperson or a director if the individual is

  • (a) neither a Canadian citizen nor a permanent resident within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act;

  • (b) a Canadian citizen who is not ordinarily resident in Canada;

  • (c) a permanent resident, within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act, who has been ordinarily resident in Canada for more than one year after first becoming eligible to apply for Canadian citizenship;

  • (d) a member of the Senate or House of Commons or a member of the legislature of a province; or

  • (e) employed in the public service of a province.

Marginal note:Functions of Board

• 7 (1) The Board shall direct and manage the business and affairs of the Bank.

• Marginal note:By-laws

  (2) The Board may, by resolution, make by-laws to regulate the business and affairs of the Bank.

• Marginal note:Committees of Board

  (3) The Board may establish any committee of the Board that it considers advisable and may determine the committee’s composition and duties and the tenure of its members.

• Marginal note:Delegation of powers and specification of duties

  (4) The Board may delegate power to, and specify the duties and authority of, any committee of the Board to act in all matters that are not by this Act or any by-law or resolution specifically reserved to be done by the Board.

Officers and Employees

Marginal note:Duties of Chairperson

8 The Chairperson shall carry out the duties determined by by-law.

Marginal note:Duties of President

• 9 (1) The President is the chief executive officer of the Bank and has, on behalf of the Board, responsibility for the direction and management of the business and affairs of the Bank with authority to act in all matters that are not by this Act or any by-law or resolution specifically reserved to be done by the Board or a committee of the Board.

• Marginal note:Absence or incapacity

  (2) If the President is absent or unable to act or the office of President is vacant, the Board may authorize an officer or employee of the Bank to act as President, but that person is not authorized to act as President for a period of more than 180 days without the approval of the Governor in Council.

Marginal note:Officers and employees

10 The Bank may employ the officers and employees, and may hire the agents or mandataries, advisers and consultants, it considers necessary to carry out the purpose of this Act and for the proper conduct of its business and the Bank may fix the terms and conditions of their employment or hiring.

Marginal note:Delegation of powers and specification of duties

11 The Board may delegate power to, and specify the duties and authority of, any officer, employee or agent or mandatary of the Bank to act in all matters that are not by this Act or any by-law or resolution specifically reserved to be done by the Board or a committee of the Board.

Marginal note:Confidentiality

12 All directors, officers and employees of the Bank or of any subsidiary, and all agents or mandataries, advisers and consultants whose services are engaged by the Bank or any subsidiary, must, before commencing their duties, take an oath or make a solemn affirmation of office and confidentiality in the form set out in the schedule before a commissioner of oaths or other person having authority to administer the oath or solemn affirmation in the place where it is taken or made.

Remuneration and Benefits

Marginal note:Remuneration of directors

• 13 (1) The Chairperson and each director, except the President and any director employed in the federal public administration, are entitled to be paid by the Bank the remuneration fixed by the Governor in Council for their time to attend meetings of the Board or any committee of the Board and to perform their duties under this Act.

• Marginal note:Remuneration of President

  (2) The President is entitled to be paid by the Bank the remuneration fixed by the Governor in Council.

• Marginal note:Expenses of directors

  (3) Directors are entitled to be paid by the Bank reasonable travel and living expenses incurred in connection with the performance of their duties under this Act while absent from their ordinary places of residence.

• Marginal note:Other remuneration and expenses

  (4) Officers, employees, agents or mandataries, advisers and consultants are entitled to be paid by the Bank the remuneration, expenses and benefits that the Bank may determine.

• Marginal note:Pension fund

  (5) The Board may make by-laws respecting

  • (a) the establishment, management and administration of a pension fund for the officers and employees of the Bank and their dependants;

  • (b) the contributions to be made to the fund by the Bank;

  • (c) the provision of benefits under the fund;

  • (d) the payment of pensions; and

  • (e) the investment of the money of the fund.

Specific Powers of the Bank

Financial Services

Marginal note:Loans, investments, etc.

• 14 (1) The Bank may

  • (a) make loans to, or investments in, any person;

  • (b) give guarantees in relation to any person; or

  • (c) extend credit or provide liquidity to, or in relation to, any person through a category of transactions that is prescribed by the regulations.

• Marginal note:How services may be provided

  (2) The services referred to in subsection (1) may be

  • (a) provided directly;

  • (b) provided through arrangements with other persons; or

  • (c) provided by the Bank as a member of a financing syndicate.

• Marginal note:Criteria for making loans, etc.

  (3) The loans, investments and guarantees may be made or given only where, in the opinion of the Board or any committee or officer designated by the Board,

  • (a) the person is engaged, or is about to engage, in an enterprise in Canada;

  • (b) the amount invested, or to be invested, in the enterprise by persons other than the Bank and the character of the investment are such that the Bank may reasonably expect that those persons will have a continuing commitment to the enterprise; and

  • (c) the enterprise may reasonably be expected to prove successful.

• Marginal note:Enterprises outside Canada  — loans and guarantees

  (4) Despite paragraph (3)(a), loans may be made to, or guarantees given in relation to, a person that is engaged or about to be engaged in an enterprise outside Canada if

  • (a) the person is a corporation, trust, partnership or joint venture in which at least one third of the voting interests are held by Canadians or is an association of natural persons or corporations of which at least half the members are Canadians; and

  • (b) at least one of the Canadians referred to in paragraph (a) is also engaged or about to be engaged in an enterprise in Canada.

• Marginal note:Enterprises outside Canada — investments

  (5) Despite paragraph (3)(a), investments may be made in a person that is engaged or about to be engaged in an enterprise outside Canada if

  • (a) the person meets the requirements set out in paragraphs (4)(a) and (b); and

  • (b) the investment is of a category prescribed by the regulations.

• Marginal note:Funds outside Canada — investments

  (6) Despite paragraph (3)(a), investments may be made in a person outside Canada if, in the opinion of the Board or any committee or officer designated by the Board,

  • (a) the person is an investment fund or other investment vehicle of which at least one half of the investment managers reside in Canada; and

  • (b) that fund or vehicle has an investment strategy that reflects an ongoing commitment to invest in Canada.

• Marginal note:Limitation

  (7) Paragraph (3)(b) does not apply

  • (a) to a person that is a trust, a corporation as defined in subsection 2(1) of the Canada Not-for-profit Corporations Act or a corporation incorporated under a provincial statute equivalent to that Act; or

  • (b) in the case where a loan, investment or guarantee is made or given through an arrangement referred to in paragraph (2)(b).

• Marginal note:Complementary to other services

  (8) The services referred to in subsection (1) are to fill out or complete services available from commercial financial institutions.

• Marginal note:Acquiring and dealing with property

  (9) In any circumstances in which the Bank may provide a service to a person under this section, the Bank may

  • (a) purchase or otherwise acquire real or personal property or immovables or movables including accounts receivable; and

  • (b) subject to any right of redemption that may exist, hold, lease to the person or subsequently sell, dispose of or otherwise deal with the property or immovables or movables.

• Marginal note:Definitions

  (10) The following definitions apply in this section.

  Canadian

  Canadian has the same meaning as in paragraph (a), (b) or (d) of the definition Canadian in section 3 of the Investment Canada Act. (Canadien)

  voting interest

  voting interest

  • (a) with respect to a corporation with share capital, means a voting share;

  • (b) with respect to a corporation without share capital, means an ownership interest in the assets of the corporation that entitles the owner to rights similar to those enjoyed by the owner of a voting share; and

  • (c) with respect to a partnership, trust or joint venture, means an ownership interest in the assets of the partnership, trust or joint venture that entitles the owner to receive a share of the profits and to share in the assets on dissolution. (intérêt avec droit de vote)