An Act to establish the Canada Pension Plan Investment Board and to amend the Canada Pension Plan and the Old Age Security Act and to make consequential amendments to other ActsCanada Pension Plan Investment Board ActCanada Pension Plan Investment Board199712
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C-8.3401997Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:Short Title
Short titleThis Act may be cited as the Canada Pension Plan Investment Board Act.
Interpretation
DefinitionsThe definitions in this section apply in this Act.appropriate provincial Minister, in respect of a province, means the province’s minister of the Crown who has primary responsibility for that province’s finances. (ministre provincial compétent)Board means the Canada Pension Plan Investment Board established by section 3. (Office)by-law means a by-law of the Board. (Version anglaise seulement)court meansin the Province of Ontario, the Ontario Court (General Division);in the Province of Quebec, the Superior Court of the Province;in the Provinces of Nova Scotia and British Columbia, the Supreme Court of the Province;in the Provinces of New Brunswick, Manitoba, Saskatchewan and Alberta, the Court of Queen’s Bench for the Province;in the Provinces of Prince Edward Island and Newfoundland, the trial division of the Supreme Court of the Province; andthe Supreme Court of Yukon, the Supreme Court of the Northwest Territories and the Nunavut Court of Justice. (tribunal)designated security meansan obligationthat, before April 1, 1998, was held to the credit of the Canada Pension Plan Investment Fund, as established under subsection 109(1) of the Canada Pension Plan,that, as applied to Canada, is an obligation of the Government of Canada and, as applied to a province, is an obligation of the government of the province or an obligation of any agent of Her Majesty in right of the province that is guaranteed as to principal and interest by that government, andthat complies with the conditions that were set out in section 111 of the Canada Pension Plan as that section read immediately before April 1, 1998; oran obligation thaton or after April 1, 1998, was purchased by the Minister of Finance under section 110 of the Canada Pension Plan or is purchased by the Board under section 6.1, andis an obligation of the government of a province or an obligation of any agent of Her Majesty in right of a province that is guaranteed as to principal and interest by that government. (titre désigné)entity means a body corporate, a trust, a partnership, a fund, an unincorporated association or organization, Her Majesty in right of Canada or of a province or an agency of Her Majesty in right of Canada or of a province and the government of a foreign country or any political subdivision or agency of the government of a foreign country. (entité)Minister means the Minister of Finance. (ministre)participating province means a province other thana territory; anda province providing a comprehensive pension plan as defined in subsection 3(1) of the Canada Pension Plan. (province participante)subsidiary means a corporation that is wholly owned by the Board directly or indirectly through any number of subsidiaries each of which is wholly owned directly or indirectly by the Board. (filiale)1997, c. 40, s. 2; 1999, c. 3, s. 19; 2002, c. 7, s. 112(E); 2003, c. 5, s. 12
Constitution of the Board
Board establishedThere is established a corporation to be known as the Canada Pension Plan Investment Board.Not agent of Her MajestyThe Board is not an agent of Her Majesty.Not part of federal public administrationDirectors, officers, employees and agents of the Board are not part of the federal public administration.Act not applicable to BoardThe Canada Not-for-profit Corporations Act does not apply to the Board.1997, c. 40, s. 3; 2003, c. 22, s. 224(E); 2009, c. 23, s. 317
Capital and Shares
CapitalThe capital of the Board is $100. The Minister shall pay the capital of the Board out of the Consolidated Revenue Fund.SharesThe capital is divided into 10 shares having a par value of $10 each. The shares shall be issued to the Minister to be held on behalf of Her Majesty in right of Canada.RegistrationThe shares issued to the Minister shall be registered by the Board in the name of the Minister.
Objects and Powers
ObjectsThe objects of the Board areto assist the Canada Pension Plan in meeting its obligations to contributors and beneficiaries under the Canada Pension Plan;to manage any amounts transferred to it under sections 108.1 and 108.3 of the Canada Pension Plan, and its right, title or interest in any designated securities, in the best interests of the contributors and beneficiaries under that Act; andto invest its assets with a view to achieving a maximum rate of return, without undue risk of loss, having regard to the factors that may affect the funding of the Canada Pension Plan and the ability of the Canada Pension Plan to meet its financial obligations on any given business day.1997, c. 40, s. 5; 2003, c. 5, s. 13; 2016, c. 14, s. 57
Powers of BoardThe Board has the capacity and, subject to this Act, the rights, powers and privileges of a natural person.No inconsistent business or activityThe Board and its subsidiaries shall not, directly or indirectly, carry on any business or activity or exercise any power that is inconsistent with the Board’s objects, or that the Board is restricted by this Act from carrying on or exercising, and shall not, directly or indirectly, exercise any of its powers in a manner contrary to this Act.No invalidityNo act of the Board, including a transfer of property, is invalid by reason only that the Board was without the capacity or power to so act.
Designated Securities
Replacement securityOn the maturity of a designated security of a province that was issued before January 1, 1998, the Board shall purchase another security issued by that province if the Board is requested to do so, in writing, by the appropriate provincial Minister of that province at least 30 days before the date of maturity.Principal amountThe principal amount of the replacement security shall be not more than the principal outstanding under the maturing designated security.Term to maturityThe replacement security shall be for a term of 20 years.InterestThe replacement security shall bear interest at a rate fixed by the Board, in accordance with any agreement entered into between the Board and the Minister. The rate shall be substantially the same as the interest rate that the province would be required to pay if it were to borrow the same amount for the same term through the issuance of a security on the public capital market.Features of replacement securityThe replacement security shall be issued to or payable to the Board and shall be expressed to be not negotiable and not transferable or assignable.Redemption at request of provinceThe Board shall redeem a designated security in whole or in part before maturity ifthe Board is requested to do so, in writing, by the appropriate provincial Minister of a province at least 30 days before the proposed redemption date; andthe appropriate provincial Minister has agreed to pay on the proposed redemption dateany payments of principal or interest due on or before the proposed redemption date but not yet paid,interest on the principal amount being redeemed accrued to the proposed redemption date, andan amount equal to the present value of the remaining instalments of principal being redeemed and interest on that principal.Calculation of present valueFor the purposes of subparagraph (6)(b)(iii), the present value shall be calculated by discounting the instalments of principal being redeemed and interest on that principal using an interest rate fixed by the Board, in accordance with any agreement entered into between the Board and the Minister of Finance. In fixing that rate, the Board shall choose a rate thatif the designated security to be redeemed was issued before January 1, 1998, is substantially the same as the rate that the Government of Canada would be required to pay if it were to borrow the principal amount being redeemed for a term equal to the remaining term of that designated security through the issuance of a security on the public capital market; orif the designated security to be redeemed was issued on or after January 1, 1998, is substantially the same as the rate that the province would be required to pay if it were to borrow the principal amount being redeemed for a term equal to the remaining term of that designated security through the issuance of a security on the public capital market.Consolidation of securitiesAt the request of the provincial treasurer or other similar officer of a province, the Board may accept in the place of any series of designated securities of that province acquired during any consecutive period of not more than twelve months, on payment of any interest then accrued on the securities, another security of that province that is in an amount equal to the aggregate amount then outstanding of the designated securities of that series, and that bears interest at a rate determined by the Board.Obligation guaranteed by the provincial governmentAny security purchased by the Board under this section must be an obligation of the government of a province or an obligation of an agent of Her Majesty in right of a province that is guaranteed as to principal and interest by that government.2003, c. 5, s. 14
ManagementBoard of Directors
Board of directorsThe Board shall be managed by a board of directors of 12 directors, including the Chairperson.
Principal dutiesSubject to this Act, the board of directors shall manage or supervise the management of the business and affairs of the Board.Specific dutiesWithout limiting the generality of subsection (1), the board of directors shallestablish written investment policies, standards and procedures in accordance with section 35;establish procedures for the identification of potential conflicts of interest and procedures to resolve those conflicts;establish a code of conduct for officers and employees of the Board; anddesignate a committee of the board of directors to monitor application of the conflict of interest procedures and the code of conduct.
Power to delegateSubject to subsection (2) and the by-laws, the board of directors may delegate to the Chairperson, to a committee of the board of directors or to any officer of the Board any of the powers or duties of the board of directors.Limits on powerThe board of directors may not delegate the power toadopt, amend or repeal by-laws;establish the Board’s investment policies, standards and procedures;fill a vacancy in a committee of directors or in the office of auditor of the Board;appoint officers to the Board or fix their remuneration; orapprove the annual financial statements of the Board and any other financial statements issued by the Board.
Directors
Appointment of directorsEach director shall be appointed by the Governor in Council, on the recommendation of the Minister, to hold office during good behaviour for such term, not exceeding three years, as will ensure, as far as possible, the expiration in any one year of the terms of office of not more than one half of the directors.Committee to advise MinisterThe Minister may establish a committee to advise the Minister on the appointment of directors. The committee shall consist of a representative designated by the Minister and a representative of each participating province designated by the appropriate provincial Minister for that province.Consultation with participating provincesThe Minister shall consult with the appropriate provincial Ministers of the participating provinces before making any recommendation to the Governor in Council with respect to the appointment of directors and before making an appointment under subsection (8).Appointment factorsBefore making a recommendation to the Governor in Council with respect to the appointment of directors and before making an appointment under subsection (8), the Minister shallhave regard to the desirability of having on the board of directorsdirectors who are representative of the various regions of Canada, anda sufficient number of directors with proven financial ability or relevant work experience to enable the Board to effectively achieve its objects; andendeavour to ensure that no more than three of the 12 directors reside outside Canada.ReappointmentA director is eligible for reappointment for one or more additional terms of office.RemovalThe Governor in Council may remove a director for cause.Continuation in officeIf no person is appointed to take office as a director on the expiration of the term of an incumbent director, the incumbent director continues in office until a successor is appointed.VacancyWhere a person ceases to be a director during the term for which the person was appointed, the Minister shall appoint a qualified person to hold office as a director for the remainder of the term.Disqualified personsThe following persons are disqualified from being directors:a person who is less than 18 years of age;a person who is of unsound mind and has been so found by a court in Canada or elsewhere;a person who has the status of a bankrupt;a person who is not a natural person;a person who is an agent or employee of Her Majesty in right of Canada or in right of a province;a person who is a member of the Senate or House of Commons of Canada or a member of a provincial legislature; anda person who is an agent or employee of the government of a foreign country or any political subdivision of a foreign country.[Repealed, 2013, c. 40, s. 277]Remuneration and benefits of directorsA director is entitled to receive from the Board such remuneration and benefits as may be fixed by the by-laws, which remuneration and benefits shall be fixed having regard to the remuneration and benefits received by persons having similar responsibilities and engaged in similar activities.1997, c. 40, s. 10; 2013, c. 40, s. 277
ResignationThe resignation of a director becomes effective at the time the Board receives a written resignation or at the time specified in the resignation, whichever is later.Copy of resignationThe Board shall send a copy of a director’s resignation to the Clerk of the Privy Council within 15 days after receiving it.
Chairperson
ChairpersonThe Governor in Council shall, on the recommendation of the Minister made after the Minister has consulted with the board of directors and the appropriate provincial Ministers of the participating provinces, designate one of the directors as Chairperson to hold office during good behaviour for such term as the Governor in Council deems appropriate.RemovalThe Governor in Council may remove the Chairperson for cause.Presiding at meetingsThe Chairperson shall preside at all meetings of the board of directors and may exercise such powers and perform such duties and functions as are specified by the board of directors.Replacement of ChairpersonWhere the Chairperson is absent at any meeting of the board of directors, one of the directors present who is chosen to so act by the directors present shall preside and have all the powers, duties and functions of the Chairperson.Remuneration of ChairpersonThe Chairperson is entitled to receive from the Board such remuneration and benefits as may be fixed by the by-laws, which remuneration and benefits shall be fixed having regard to the remuneration and benefits received by persons having similar responsibilities and engaged in similar activities.
Officers
Appointment of officersThe board of directors may, subject to the by-laws, designate the offices of the Board, appoint officers of the Board and specify their duties.Directors not officersA director is not eligible to be appointed an officer of the Board.Two or more officesA person may hold two or more offices of the Board.
Duty of Care
Duty of careEvery director and officer of the Board in exercising any of the powers of a director or an officer and in discharging any of the duties of a director or an officer shallact honestly and in good faith with a view to the best interests of the Board; andexercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.Special knowledge or skillA director or officer of the Board who in fact possesses, or by reason of profession or business ought to possess, a particular level of knowledge or skill relevant to the director’s or officer’s powers or duties shall employ that particular level of knowledge or skill in the exercise of those powers or the discharge of those duties.Reliance on statementsA director or an officer of the Board is deemed to comply with subsections (1) and (2) if they rely in good faith onfinancial statements of the Board represented by an officer of the Board, or represented in a written report of the Board’s auditor, to be a fair reflection of the financial condition of the Board; ora report of an accountant, lawyer, notary or other professional person whose profession lends credibility to a statement made by the person.
Duty to complyEvery director, officer and employee of the Board shall comply with this Act and the by-laws.No exculpationNo provision in any contract, in any resolution of the Board or in the by-laws relieves any director, officer or employee of the Board from the duty to act in accordance with this Act or relieves a director, officer or employee from liability for a breach of the Act.
Indemnification
IndemnificationExcept in respect of an action by or on behalf of the Board to procure a judgment in its favour, the Board may indemnify a director or officer of the Board, a former director or officer of the Board, or any person who acts or acted at the Board’s request as a director or officer of an entity of which the Board is or was a shareholder or in which the Board has or had a financial interest, against all costs and expenses reasonably incurred by the person, including amounts paid in settlement or to satisfy a judgment, in respect of any civil, criminal or administrative action or proceeding to which the person is made a party by reason of being or having been such a person, ifthe person acted honestly and in good faith with a view to the best interests of the Board or the entity; andin the case of a criminal or administrative action or proceeding enforced by a monetary penalty, the person had reasonable grounds for believing that the impugned conduct was lawful.Indemnification in derivative actionThe Board may, with the approval of a court, indemnify a person referred to in subsection (1), in respect of an action by or on behalf of the Board or an entity referred to in that subsection to procure a judgment in its favour to which the person is made a party by reason of being or having been a director or an officer of the Board or entity, against all costs and expenses reasonably incurred by the person, including an amount paid in settlement or to satisfy a judgment, in respect of that action if the person fulfils the conditions set out in paragraphs (1)(a) and (b).Right to indemnityNotwithstanding the other subsections of this section, a person referred to in subsection (1) is entitled to indemnity from the Board in respect of all costs and expenses, including an amount paid in settlement or to satisfy a judgment, reasonably incurred by the person in respect of the defence of any civil, criminal or administrative action or proceeding to which the person is made a party by reason of being or having been a director or an officer of the Board or of an entity referred to in that subsection, if the person seeking indemnitywas substantially successful on the merits in the defence of the action or proceeding; andfulfils the conditions set out in paragraphs (1)(a) and (b).Personal representativesWhere the Board could indemnify a person under any of subsections (1) to (3), the Board may to the same extent indemnify the heirs or personal representatives of the person.Definition of proceedingFor the purposes of this section, proceeding includes an investigation thatpertains to the administration or enforcement of an Act of Parliament or of the legislature of a province;is authorized by or pursuant to an Act of Parliament or of the legislature of a province; oris within a class of investigations prescribed in the regulations.
Directors’ and officers’ insuranceThe Board may purchase and maintain insurance for the benefit of any person referred to in subsection 16(1) and the personal representatives of that person against any liability incurred by the personin the capacity of a director or officer of the Board, except where the liability relates to a failure to act honestly and in good faith with a view to the best interests of the Board; orin the capacity of a director or officer of another entity where the person acts or acted in that capacity at the Board’s request, except where the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity.
Application to court for indemnificationA court may order an indemnity under section 16 on the application of the Board or a person referred to in subsection 16(1) or (4) and may make any further order that it thinks fit.Notice of applicationWhere an application is made for an order under subsection (1), the court may order notice to be given to any interested person, and that person is entitled to appear and be heard in person or by counsel.
Meetings
Resolution in lieu of meetingA resolution in writing, signed by all the directors entitled to vote on that resolution at a meeting of the board of directors or of one of its committees, is as valid as if it had been passed at a meeting of the board of directors or of one of its committees.Filing resolutionA copy of every resolution referred to in subsection (1) shall be kept with the minutes of the proceedings of the board of directors or its committees.
Participation by telephoneA director may, subject to the by-laws, participate in a meeting of the board of directors or of one of its committees by means of any telephone or other communications facilities that permit all persons participating in the meeting to communicate with each other, and a director who participates in that way is deemed for the purposes of this Act to be present at the meeting.
DissentA director who is present at a meeting of the board of directors or of one of its committees is deemed to have consented to any resolution passed or action taken at the meeting unlessthe director’s dissent is entered in the minutes of the meeting or the director requests that the director’s dissent be entered in the minutes of the meeting;the director sends a written dissent to the secretary of the meeting before the meeting is adjourned; orthe director sends a dissent by registered mail or delivers it to the head office of the Board immediately after the meeting is adjourned.Loss of right to dissentA director who votes for or consents to a resolution is not entitled to dissent under subsection (1).Dissent of absent directorA director who was not present at a meeting at which a resolution was passed or an action was taken is deemed to have consented to the resolution or the action unless, within seven days after becoming aware of the resolution or the action, the directorcauses a dissent to be placed with the minutes of the meeting; orsends a dissent by registered mail or delivers it to the head office of the Board.
Conflicts of Interest
Disclosure of director’s interestA director or officer of the Board shall disclose in writing to the Board or request to have entered in the minutes of a meeting of the board of directors or one of its committees the nature and extent of the director’s or officer’s interestas a party to a transaction or proposed transaction with the Board; oras a director or an officer of any entity that is a party to a transaction or proposed transaction with the Board or as a person who holds a material interest in any such entity.Time of disclosure for directorThe disclosure must be made, in the case of a director,at the meeting at which a proposed transaction is first considered;if the director was not at the time of that meeting interested in a proposed transaction, at the first meeting after the director becomes so interested;if the director becomes interested after a transaction is made, at the first meeting after the director becomes so interested; orif a person who is interested in a transaction later becomes a director, at the first meeting after the person becomes a director.Time of disclosure for officerThe disclosure must be made, in the case of an officer,without delay after the officer becomes aware that the transaction or proposed transaction is to be considered or has been considered at a meeting of the board of directors or one of its committees;if the officer becomes interested after a transaction is made, without delay after the officer becomes so interested; orif a person who is interested in a transaction later becomes an officer, without delay after the person becomes an officer.Time of disclosure for director or officerIf a transaction or proposed transaction is one that, in the ordinary course of the Board’s business, would not require approval by the board of directors, a director or officer shall disclose in writing to the Board or request to have entered in the minutes of a meeting of the board of directors or one of its committees the nature and extent of the interest of the director or officer without delay after the director or officer becomes aware of the transaction or proposed transaction.VotingA director referred to in subsection (1) shall not vote on a resolution or participate in a discussion to approve the transaction mentioned in that subsection unless the transaction isone relating primarily to the director’s remuneration as a director of the Board or one of its subsidiaries;one for indemnity or insurance under section 16 or 17; orone with a subsidiary.Continuing disclosureFor the purposes of this section, a general notice to the board of directors or to one of its committees by a director or officer, declaring that the director or officer is a director or officer of, or has a material interest in, an entity and is to be regarded as interested in any transaction made with that entity, is a sufficient declaration of interest in relation to any transaction so made.Avoidance standardsA transaction between the Board and one or more of its directors or officers, or between the Board and another entity of which a director or officer of the Board is a director or officer or in which a director or officer of the Board has a material interest, is neither void nor voidable by reason only of that relationship or by reason only that a director with an interest in the transaction is present at or is counted to determine the presence of a quorum at a meeting of the board of directors or on one its committees that authorized the transaction, ifthe director or officer disclosed the interest in accordance with subsection (2), (3), (4) or (6), as the case may be;the transaction was approved by the directors; andthe transaction was reasonable and fair to the Board at the time it was approved.Application to courtWhere a director or officer of the Board fails to disclose an interest in a transaction in accordance with this section, a court may, on the application of the Board, set aside the transaction on any terms that it thinks fit.Meaning of transactionIn this section, transaction includes a contract, a guarantee and an investment.
General
No constructive noticeNo person dealing with the Board or with any person who has acquired rights from the Board is deemed to have notice or knowledge of the contents of a document, other than an Act of Parliament or any instrument required to be published in the Canada Gazette pursuant to the Statutory Instruments Act, concerning the Board by reason only that the document is available at the head office of the Board or has been made public.
Validity of actsAn act of the Chairperson or other director of the Board, or of the chief executive officer or other officer of the Board, is not invalid by reason only of an irregularity in that person’s appointment or a defect in that person’s qualifications.
AssertionsThe Board may not assert against a person dealing with the Board or with any person who has acquired rights from the Boardthat this Act or the by-laws have not been complied with, orthat a document issued by any director, officer or agent of the Board having apparent authority to issue the document is not valid or genuine by reason only that the person who issued the document lacked actual authority to issue the document,except where the person has knowledge that the facts asserted are true.
Corporate sealThe Board may, but need not, have a corporate seal, and an instrument or agreement executed on behalf of the Board is not invalid merely because a corporate seal is not affixed to it.
By-laws
By-lawsThe board of directors may make by-laws that are consistent with this Act to govern the conduct and management of the Board’s business and affairs, including by-lawsfor the administration, management and control of the Board’s property;governing the calling of meetings of the board of directors and its committees, the time and place of those meetings and the quorum and procedure in all matters relating to those meetings;respecting the functions, duties and remuneration of the officers and employees of the Board; andrespecting the establishment of committees of the board of directors and the appointment of members to those committees.Effective dateA by-law is effective as soon as it is made or on such later date as may be stated in the by-law to be its effective date.
Copy to MinisterThe board of directors shall provide a copy of every by-law and every amendment to or repeal of any by-law to the Minister and the appropriate provincial Ministers within 14 days after its effective date.By-laws available to the publicA copy of every by-law shall be kept at the head office of the Board. Anyone is entitled, during the usual business hours of the Board, to examine the by-laws and, on payment of a reasonable fee, to make copies of or take extracts from them.
Statutory Instruments Act does not applyThe Statutory Instruments Act does not apply in respect of by-laws.
CommitteesEstablishment
Audit and investment committeesThe board of directors shall establish an audit committee and an investment committee.Other committeesThe board of directors may establish other committees as it deems necessary and assign to them such duties as it considers appropriate.
Audit Committee
Duties of audit committeeThe audit committee shallrequire the Board’s management to implement and maintain appropriate internal control procedures;review, evaluate and approve those internal control procedures;review and approve the Board’s annual financial statements and report to the board of directors before those statements are approved by the board of directors;meet with the Board’s auditor to discuss the Board’s annual financial statements and the auditor’s report;review all investments and transactions that could adversely affect the return on the Board’s investments that are brought to the committee’s attention by the Board’s auditor or officers; andmeet with the chief internal auditor of the Board, or with the person acting in any similar capacity, and with the Board’s management, to discuss the effectiveness of the internal control procedures.
Meeting of audit committeeThe Board’s auditor or any member of the audit committee may call a meeting of the committee.Meeting of directorsThe audit committee may call a meeting of the board of directors to consider any matter of concern to the committee.
Auditor’s right to attend meetingsThe Board’s auditor is entitled to receive notice of and to attend meetings of the board of directors and meetings of the audit committee, at the Board’s expense, and to be heard at those meetings on matters relating to the auditor’s duties.Requiring auditor’s attendanceThe Board’s auditor shall attend meetings of the audit committee, if requested to do so by a member of the audit committee, at the Board’s expense, and shall attend meetings of the board of directors, if requested to do so by a director.
Investment Committee
Duties of investment committeeThe investment committee shallperform the duties that are delegated to it by the board of directors;approve the engagement of investment managers empowered with discretionary authority to invest the assets of the Board;meet with the officers and employees of the Board to discuss the effectiveness of the Board’s investment policies and the achievement of the Board’s objects;require management to implement and maintain appropriate procedures tomonitor the application of the Board’s investment policies, standards and procedures, andensure that the Board’s agents comply with this Act and the Board’s investment policies, standards and procedures; andreview, evaluate and approve management’s procedures referred to in paragraph (d).
Investments
Investment policies, standards and proceduresSubject to the regulations, the board of directors shall establish, and the Board and its subsidiaries shall adhere to, investment policies, standards and procedures that a person of ordinary prudence would exercise in dealing with the property of others.
Duty of investment managersEvery investment manager who invests the assets of the Board shall do so in accordance with this Act and the Board’s investment policies, standards and procedures.
[Repealed, 2009, c. 31, s. 44]
Financial ManagementFinancial Year
Financial yearThe financial year of the Board is the period beginning on April 1 in one calendar year and ending on March 31 in the next calendar year.
Financial Statements
Books and systemsThe Board shall, in respect of itself and each of its subsidiaries, causebooks of account and records to be kept;financial and management control and information systems and management practices to be maintained; anda record of the investments held during the financial year to be kept, showingthe book value of each investment,the market value of each investment and such information as will permit the verification of that value, andsuch information as will permit the determination of whether the requirements of this Act and the investment policies, standards and procedures have been met.Manner in which books, etc., to be keptThe books, records, systems and practices required by subsection (1) shall be kept and maintained in such manner as will provide reasonable assurance thatthe Board’s assets and those of its subsidiaries are safeguarded and controlled;the Board’s transactions and those of its subsidiaries are in accordance with this Act and the by-laws, or the by-laws of the subsidiaries, as the case may be; andthe Board’s financial, human and physical resources and those of its subsidiaries are managed economically and efficiently and that the Board’s operations and those of its subsidiaries are carried out effectively.Internal auditThe Board shall cause internal audits to be conducted, in respect of itself and each of its subsidiaries, to assess compliance with subsections (1) and (2).Annual financial statementsThe Board shall cause financial statements to be prepared annually, in respect of itself and each of its subsidiaries, including, with respect to the financial year to which it relates,a balance sheet as at the end of the financial year;a statement of income for the financial year;a statement of change in net assets for the financial year; anda statement of investment portfolio.Contents of statementsThe annual financial statements shall show such information and particulars as in the opinion of the directors are necessary to present fairly, in accordance with generally accepted accounting principles, the primary source of which is the Handbook of the Chartered Professional Accountants of Canada, the Board’s financial position as at the end of the financial year to which it relates.Quarterly financial statementsDuring each financial year, the Board shall cause quarterly financial statements to be prepared for each three month period of the year. The quarterly statements shallshow the same information for the most recent three month period as is required to be set out in the Board’s annual financial statements, except that a balance sheet is not required; andshow the same information in respect of the part of the year up to the date of the statements in relation to the corresponding period in the preceding financial year.Approval by board of directorsThe board of directors shall approve the annual financial statements of the Board and of each of its subsidiaries and that approval shall be evidenced by the signature of at least one director of the Board.Jointly and separatelyThe financial statements required to be prepared under this section shall be prepared, as one set of statements, jointly and separately in relation to amounts managed by the Board for the purposes of the base Canada Pension Plan and the additional Canada Pension Plan, as defined in section 91 of the Canada Pension Plan.1997, c. 40, s. 39; 2016, c. 14, s. 58; 2017, c. 26, s. 62
Auditor’s Report
Annual auditor’s reportThe Board shall cause an annual auditor’s report to be prepared, in respect of itself and each of its subsidiaries, onthe annual financial statements referred to in section 39;any revised financial statement referred to in subsection 41(3); andthe record of investments referred to in paragraph 39(1)(c).ContentsA report under subsection (1) shall be addressed to the Board and shallinclude separate statements indicating whether, in the auditor’s opinion,the financial statements are presented fairly in accordance with generally accepted accounting principles applied on a basis consistent with that of the preceding year,the Board’s transactions and those of its subsidiaries that have come to the auditor’s notice in the course of the auditor’s examination for the report were in accordance with this Act and the by-laws, and the by-laws of the subsidiaries, as the case may be, andthe record of investments kept in accordance with paragraph 39(1)(c) fairly presents the information required by that paragraph; andcall attention to any other matter falling within the scope of the auditor’s examination for the report that, in the auditor’s opinion, should be brought to the attention of the Board.ExaminationAn auditor preparing a report under subsection (1) shall make such examination as the auditor considers necessary for the purpose.Auditing standardsAn auditor’s examination shall be conducted in accordance with generally accepted auditing standards, the primary source of which is the Handbook of the Chartered Professional Accountants of Canada.Reliance on internal auditIn conducting an audit under this Act, an auditor shall rely on any internal audit conducted under subsection 39(3), to the extent that the auditor considers that reliance to be practicable.1997, c. 40, s. 40; 2017, c. 26, s. 62
Notice of errors and omissionsA director or officer of the Board shall without delay notify the Board’s auditor and the audit committee of any error or omission of which the director or officer becomes aware in a financial statement that the auditor or a former auditor has reported on or in a report prepared by the auditor or a former auditor under section 40.Duty of auditorWhere the Board’s auditor, or a former auditor of the Board, is notified or becomes aware of any error or omission in a financial statement that the auditor or former auditor has reported on or in a report prepared by the auditor or former auditor under section 40, the auditor or former auditor shall without delay notify each director of the Board of the error or omission if the auditor or former auditor is of the opinion that the error or omission is material.CorrectionWhere the directors receive a notification under subsection (2) of an error or omission in a financial statement or a report, the Board shall prepare a revised financial statement or the auditor or former auditor shall issue a correction to the report, as the case may be, and a copy of it shall be given to the Minister and the appropriate provincial Ministers.
Auditor
Appointment of auditorThe auditor of the Board shall be appointed annually by the board of directors, and may be removed at any time by the board of directors.Re-appointmentOn the expiration of the appointment of the auditor of the Board, the auditor is eligible for re-appointment.Continuation in officeNotwithstanding subsection (1), if an auditor of the Board is not appointed to take office on the expiration of the appointment of an incumbent auditor, the incumbent auditor continues in office until a successor is appointed.
Definition of firm of accountantsIn this section, firm of accountants means a partnership, the members of which are accountants engaged in the practice of accounting, or a body corporate that is incorporated by or under an Act of the legislature of a province and engaged in the practice of accounting.Qualification of auditorA natural person or firm of accountants is qualified to be the auditor of the Board ifin the case of a natural person, the person is an accountant whois a member in good standing of an institute or association of accountants incorporated by or under an Act of the legislature of a province,has at least five years experience at a senior level in performing audits of a financial institution,is ordinarily resident in Canada, andis independent of the Board, each of its subsidiaries, and the directors and officers of the Board and those of each of its subsidiaries; andin the case of a firm of accountants, the member or officer of the firm jointly designated by the firm and the Board to conduct the audit of the Board on behalf of the firm meets the qualifications described in paragraph (a).IndependenceFor the purposes of this section,independence is a question of fact; anda person is deemed not to be independent if that person or any of that person’s business partnersis a business partner, director, officer or employee of the Board or of any of its subsidiaries, or a business partner of any director, officer or employee of the Board or of any of its subsidiaries, orhas been a liquidator, trustee in bankruptcy, receiver or receiver and manager of any of the Board’s subsidiaries within the two years before the natural person’s or the firm of accountants’ proposed appointment, as the case may be, as the Board’s auditor.Joint designationWithin 15 days after appointing a firm of accountants as its auditor, the Board and the firm shall jointly designate a member or officer of the firm who has the qualifications described in paragraph (2)(a) to conduct the audit of the Board on behalf of the firm.ResignationAn auditor of the Board who becomes disqualified under this section shall resign without delay after becoming aware of the disqualification.When resignation becomes effectiveA resignation of an auditor of the Board becomes effective at the time the Board receives a written resignation from the auditor or at the time specified in the resignation, whichever is later.Statement of auditorWhere the Board’s auditor resigns or receives a notice or otherwise learns of a meeting of the board of directors at which another auditor is to be appointed in place of the auditor and the auditor objects to being replaced, the auditor shall submit to the Board a written statement giving the reasons for the resignation or the reasons why the auditor objects to being replaced.Statement to be sent to MinistersWhere the Board receives a written statement referred to in subsection (7) that relates to a resignation of its auditor as a result of a disagreement with the directors or officers of the Board or that relates to a replacement or proposed replacement of the auditor, the Board shall without delay send a copy of the statement to the Minister and to the appropriate provincial Ministers of the participating provinces.
Right to Information
Right to informationOn the request of the Board’s auditor, the present or former directors, officers, employees or agents of the Board shall provide to the auditor all information and explanations, and all access to records, documents, books, accounts and vouchers of the Board and its subsidiaries, that the auditor considers necessary to prepare any report required by this Act and that they are reasonably able to furnish.Directors’ dutiesOn the request of the Board’s auditor, the directors shallobtain from the present or former directors, officers, employees or agents of any of its subsidiaries all information and explanations thatthe auditor considers necessary to enable the auditor to prepare any report required by this Act, andthe present or former directors, officers, employees or agents are reasonably able to furnish; andfurnish the auditor with the information and explanations so obtained.Reliance on reportsThe Board’s auditor may reasonably rely on any report of any other auditor of the Board.No civil liabilityA person who in good faith makes an oral or written communication under subsection (1) or (2) shall not be liable in any civil action arising from having made the communication.
Qualified Privilege
Qualified privilegeAny oral or written statement or report made under this Act by the Board’s auditor or a former auditor of the Board has qualified privilege.
Special Audit
Special auditThe Minister may, if the Minister considers it necessary, appoint an auditor to conduct a special audit of the Board or any of its subsidiaries.Costs of auditThe costs of a special audit are payable by the Board.Other sections to applySections 43 to 45 apply in respect of a special auditor, with any modifications that the circumstances require.
Special Examination
Special examinationThe Minister shall cause a special examination to be carried out at least once every six years in respect of the Board or any of its subsidiaries to determine if the systems and practices referred to in paragraph 39(1)(b) were, in the period under examination, maintained in a manner that provided reasonable assurance that they met the requirements of paragraphs 39(2)(a) and (c).Consultation requiredBefore causing a special examination to be carried out, the Minister shall consult with the appropriate provincial Ministers of the participating provinces.PlanBefore an examiner commences a special examination, the examiner shall survey the systems and practices of the Board or of the subsidiary being examined, as the case may be, and submit a plan to the audit committee for the examination, including a statement of the criteria to be applied in the examination.Resolution of disagreementsDisagreements, if any, between the examiner and the audit committee with respect to a plan referred to in subsection (3) may be resolved by the Minister.Reliance on internal auditAn examiner shall rely on any internal audit conducted under subsection 39(3), to the extent that the examiner considers that reliance to be practicable.
ReportAn examiner shall, on completion of the special examination, submit a report on the examiner’s findings to the Minister and the appropriate provincial Ministers.ContentsThe report of an examiner shall includea statement indicating whether, in the examiner’s opinion, with respect to the criteria established under subsection 47(3), there is reasonable assurance that there are no significant deficiencies in the systems and practices examined; anda statement of the extent to which the examiner relied on internal audits.
Who conducts examinationSubject to subsection (2), a special examination referred to in section 47 shall be carried out by the Board’s auditor or, where the Minister has consulted the board of directors and is of the opinion that it is necessary, by an auditor appointed by the Minister.Sections 43 to 45 applySections 43 to 45 apply in respect of an examiner as though the references in that section to an auditor were references to an examiner.
ReportingQuarterly Statements
Statements to go to MinistersThe Board shall send copies of the financial statements for the first, second and third quarters of the financial year, prepared in accordance with subsection 39(6), to the Minister and the appropriate provincial Ministers within 45 days after the end of the three-month period to which they relate.Statements to be made publicWithin seven days after the financial statements are sent as required under subsection (1), the Board shall make the statements available to the public.1997, c. 40, s. 50; 2003, c. 5, s. 16
Annual Report
Annual report requiredThe Board shall as soon as possible, but in any case within 60 days, after the end of each financial year provide the Minister and the appropriate provincial Ministers with an annual report on the operations of the Board in that year and the Board shall make copies of the report available to the public.Tabling in ParliamentAfter receiving the annual report, the Minister shall cause it to be laid before each House of Parliament on any of the next 15 days during which that House is sitting.ContentsThe annual report shall containthe financial statements for the previous year prepared as required under section 39;the Board’s auditor’s report for that year prepared as required under section 40;a certificate, signed by a director on behalf of the board of directors, stating that the investments of the Board held during that year were in accordance with this Act and the Board’s investment policies, standards and procedures;a statement of the Board’s objectives for that year and a statement on the extent to which the Board met those objectives;a statement of the Board’s objectives for the next year and for the foreseeable future;a statement of the Board’s investment policies, standards and procedures; andsuch other information as is required by the regulations.1997, c. 40, s. 51; 2003, c. 5, s. 17
Public Meetings
Public meetingsThe Board shall hold a public meeting once every two years in each participating province to discuss the Board’s most recent annual report and to give interested persons an opportunity to comment on it.Notice of meetingThe Board shall publish a notice of each meeting at least 10 days before the date of the meeting in at least one newspaper of general circulation in the province where the meeting will take place. The notice shall indicate the date, time and place of the meeting and where copies of the Board’s most recent annual report can be obtained.Directors and officers to attendThe Board shall require one or more directors or officers of the Board to be at the meeting to answer questions from the public and shall have copies of the Board’s most recent annual report available for distribution at the meeting.
Regulations
RegulationsThe Governor in Council may make regulationsspecifying which provisions of the Pension Benefits Standards Act, 1985 and any regulations made under that Act apply to the Board and its subsidiaries and adapting those provisions in the manner that the Governor in Council considers appropriate for the purpose of applying them to the Board and its subsidiaries;respecting the investments the Board and its subsidiaries may make; andprescribing anything that this Act provides is to be prescribed or is to be determined by regulation.ApplicationA regulation made under subsection (1) has no force or effect until the appropriate provincial Minister of each of at least two thirds of the participating provinces having in total not less than two thirds of the population of all of the participating provinces has approved the regulation.Approval of proposed regulationFor the purpose of subsection (2), the approval of a proposed regulation published in the Canada Gazette is deemed to be the approval of the regulation if the regulation is the same or substantially the same as the proposed regulation.Determination of populationFor the purposes of subsection (2), the population of a province at any time in a year in respect of which the determination of the province’s population is relevant means the province’s population on June 1 of that year, as estimated by the Chief Statistician of Canada.Publication of coming into force dateIf the approvals necessary to give force and effect to a regulation are given only after the regulation is made, the Minister shall, as soon as feasible, cause to be published in the Canada Gazette the date that the regulation came into force.1997, c. 40, s. 53; 2009, c. 31, s. 45
Offence
False statementsEvery director, officer, employee, agent or auditor of the Board or of any of its subsidiaries who, in carrying out a duty under this Act or the by-laws, prepares, signs, approves or concurs in any statement, report or other document respecting the affairs of the Board or the subsidiary that contains any false or deceptive information is guilty of an offence.PunishmentEvery person who commits an offence under subsection (1) is liable on summary convictionin the case of a natural person, to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 12 months, or to both; orin any other case, to a fine not exceeding $500,000.
Winding-up
Insolvency and winding-upNo Act relating to the insolvency or winding-up of any corporation applies to the Board and in no case shall the affairs of the Board be wound up unless Parliament so provides.
Canada Pension Plan Account and Additional Canada Pension Plan Account
Duty of Board — Canada Pension Plan AccountThe Board shall pay into the Consolidated Revenue Fund, for credit to the Canada Pension Plan Account established under subsection 108(1) of the Canada Pension Plan,any amount required under subsection 108.1(2) of that Act; andany amount required under subsection 113(1.1) of that Act in relation to the base Canada Pension Plan, as defined in section 91 of that Act.Duty of Board — Additional Canada Pension Plan AccountThe Board shall pay into the Consolidated Revenue Fund, for credit to the Additional Canada Pension Plan Account established under subsection 108.2(1) of the Canada Pension Plan,any amount required under subsection 108.3(2) of that Act; andany amount required under subsection 113(1.1) of that Act in relation to the additional Canada Pension Plan, as defined in section 91 of that Act.Transfer of securitiesThe Board shall transfer to the Minister any designated securities of a province or of Canada that the Minister requires under subsection 113(1.1) of the Canada Pension Plan.1997, c. 40, s. 56; 2003, c. 5, s. 18; 2016, c. 14, s. 60
Administration costs — Canada Pension Plan AccountIf the Minister is of the opinion that the Board cannot pay its administration costs in relation to the base Canada Pension Plan, as defined in section 91 of the Canada Pension Plan, the Minister shall pay those costs out of the Consolidated Revenue Fund and the payment shall be charged to the Canada Pension Plan Account established under subsection 108(1) of that Act.1997, c. 40, s. 57; 2016, c. 14, s. 61
Administration costs — Additional Canada Pension Plan AccountIf the Minister is of the opinion that the Board cannot pay its administration costs in relation to the additional Canada Pension Plan, as defined in section 91 of the Canada Pension Plan, the Minister shall pay those costs out of the Consolidated Revenue Fund and the payment shall be charged to the Additional Canada Pension Plan Account established under subsection 108.2(1) of that Act.2016, c. 14, s. 61
Amendments to the Canada Pension Plan
[Amendments]
Amendments to the Old Age Security Act
[Amendments]
Consequential Amendments
[Amendments]
Coming into Force
Coming into forceSections 1 to 59, 61, 69 to 71, 74 and 76, subsection 77(1) and sections 81, 83, 89 to 94, 96 to 98, 108 and 109 come into force, in accordance with subsection 114(4) of the Canada Pension Plan, on a day or days to be fixed by order of the Governor in Council.Coming into forceSection 84, subsection 90(3) of the Canada Pension Plan as enacted by section 86, section 90.1 of the Canada Pension Plan as enacted by section 87, sections 100 and 101, subsection 44(4) of the Old Age Security Act as enacted by section 106 and section 44.1 of the Old Age Security Act as enacted by section 107 come into force on a day or days to be fixed by order of the Governor in Council.[Note: Sections 58, 59, 61, 69 to 71, 74 and 76, subsection 77(1) and sections 81, 83, 92 to 94 and 96 to 98 in force January 1, 1998, sections 1 to 57, 89 to 91 and 108 and 109 in force April 1, 1998, see SI/98-24; section 84, subsection 90(3) and section 90.1 of the Canada Pension Plan as enacted by sections 86 and 87, respectively, sections 100 and 101, subsection 44(4) and section 44.1 of the Old Age Security Act as enacted by sections 106 and 107 in force April 1, 2010, see SI/2010-16.]
[Amendment]RELATED PROVISIONS — 1998, c. 30, s. 11(1)
Transitional — cross-referencesIn any Act of Parliament, other than in a provision amended by sections 12 to 16, or in any proclamation, regulation, order, instrument or other document, a reference to the Ontario Court (General Division) or the Ontario Court (Provincial Division) shall be construed, with respect to any transaction, matter or event occurring after the coming into force of this section, as a reference toin the case of the Ontario Court (General Division), the Superior Court of Justice or the Superior Court of Justice in and for the Province of Ontario, as the case may require; andin the case of the Ontario Court (Provincial Division), the Ontario Court of Justice.
 — 2003, c. 5, s. 19
On the first day of each month after the coming into force of this section, 1/36 of the right, title or interest of the Minister of Finance in each security that was purchased by the Minister under section 110 of the Canada Pension Plan, and that is held by that Minister on the first day of the first month following the coming into force of this section, is transferred to the Canada Pension Plan Investment Board established under section 3 of the Canada Pension Plan Investment Board Act (“the Board”).Transfer of replacement securitiesIf a security referred to in subsection (1) is replaced within the 36-month period beginning on the first day of the first month following the coming into force of this section,the Board is deemed to have acquired a right, title or interest in the replacement security in the same proportion as the right, title or interest it had acquired in the security being replaced; andon the first day of each month after the day on which the replacement security is purchased, for each month then remaining in the 36-month period, an equal portion of the right, title or interest of the Minister of Finance in the replacement security is transferred to the Board, so that the replacement security is fully transferred to the Board on the same day as the security that it replaced would have been fully transferred.Rights extinguishedIf a security referred to in subsection (1) is redeemed during the 36-month period referred to in subsection (2) and is not replaced, any right, title or interest of the Board in the security is extinguished.
 — 2016, c. 14, s. 62
DefinitionsThe following definitions apply in sections 63 and 64.additional Canada Pension Plan has the same meaning as in section 91 of the Canada Pension Plan. (régime de pensions supplémentaire du Canada)Additional Canada Pension Plan Account means the account established under subsection 108.2(1) of the Canada Pension Plan. (compte supplémentaire du régime de pensions du Canada)Canada Pension Plan Account means the account established under subsection 108(1) of the Canada Pension Plan. (compte du régime de pensions du Canada)Minister means the Minister of Employment and Social Development. (ministre)
 — 2016, c. 14, s. 64
Initial administration costs  —  Investment BoardDespite section 57.1 of the Canada Pension Plan Investment Board Act, until the date determined under subsection 63(1), the administration costs referred to in that section 57.1 must be paid out of the Consolidated Revenue Fund and charged to the Canada Pension Plan Account.InterestThe Minister of Finance must calculate interest, at rates determined by that Minister, on any amount paid out of the Consolidated Revenue Fund under subsection (1). Interest must be calculated for the period beginning on the day on which the amount is paid out of the Consolidated Revenue Fund under subsection (1) and ending on the day on which the amount is credited to the Canada Pension Plan Account under subsection (3).Amounts credited to Canada Pension Plan AccountAfter the date referred to in subsection (1) but before March 31, 2021, all amounts charged to the Canada Pension Plan Account under subsection (1) and all interest calculated under subsection (2) must be credited to the Canada Pension Plan Account and charged to the Additional Canada Pension Plan Account.