Bill C-44

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	Initial Port Authorities
Continued or deemed incorporated	10. (1) The port authorities set out in the schedule on the day on which this section comes into force are automatically continued or deemed to be incorporated on that day under section 6 and the Minister shall issue to them letters patent that set out the information required by subsection 6(2).
Rights and obligations preserved - harbour commissions	(2) The rights and obligations of a port authority referred to in subsection (1) that was, immediately before the coming into force of this subsection, a harbour commission are governed by subsection 8(3).
Rights and obligations preserved - local port corporations	(3) The rights and obligations of a port authority referred to in subsection (1) that was, immediately before the coming into force of this subsection, a local port corporation estab lished under the Canada Ports Corporation Act are as follows:
	(a) the corporate name of the port authority is substituted for that of the local port corporation in every contract, collective agreement, lease, licence, permit or other document entered into or granted by the local port corporation, the Canada Ports Corporation or any of their predecessors in respect of the port;
	(b) the real property, and any rights related to the property, that the local port corpora tion administers, or the title to which it holds, on behalf of Her Majesty in right of Canada, whether or not in its own name, remain the property and rights of Her Majesty;
	(c) the management of the federal real property set out in the letters patent, and any rights related to the property, is conferred on the port authority;
	(d) the personal property, and any rights related to the property, that the local port corporation administers, or the title to which it holds, on behalf of Her Majesty in right of Canada, whether or not in its own name, become the property and rights of the port authority;
	(e) an existing cause of action, proceeding or claim by or against the local port corporation or liability or other obligation of the local port corporation is unaffected except that any judgment or order is to be satisfied first by the port authority;
	(f) a civil, criminal or administrative action or proceeding pending by or against the local port corporation may be continued only by or against the port authority; and
	(g) subject to paragraph (e), a conviction against, or a ruling, order or judgment in favour of or against, the local port corpora tion may be enforced only by or against the port authority.
Rights and obligations preserved - non- corporate ports	(4) The rights and obligations of a port authority referred to in subsection (1) that was, immediately before the coming into force of this subsection, a non-corporate port within the meaning of the Canada Ports Corporation Act are as follows:
	(a) the corporate name of the port authority is substituted for that of the Canada Ports Corporation or any of its predecessors in every contract, collective agreement, lease, licence, permit or other document entered into or granted by the Canada Ports Corpo ration or any of its predecessors in respect of the port;
	(b) the real property, and any rights related to the property, that form part of the port and that the Canada Ports Corporation adminis ters, or the title to which it holds, on behalf of Her Majesty in right of Canada, whether or not in its own name, remain the property and rights of Her Majesty;
	(c) the management of the federal real property set out in the letters patent, and any rights related to the property, is conferred on the port authority;
	(d) the personal property, and any rights related to the property, that relate to the port and that the Canada Ports Corporation administers, or the title to which it holds, on behalf of Her Majesty in right of Canada, whether or not in its own name, become the property and rights of the port authority;
	(e) an existing cause of action, proceeding or claim by or against the Canada Ports Corporation in respect of the port or a liability or other obligation of that Corpora tion in respect of the port is unaffected except that any judgment or order is to be satisfied first by the port authority;
	(f) a civil, criminal or administrative action or proceeding pending by or against the Canada Ports Corporation in respect of the port may be continued only by or against the port authority; and
	(g) subject to paragraph (e), a conviction against, or a ruling, order or judgment in favour of or against, the Canada Ports Corporation in respect of the port may be enforced only by or against the port author ity.
Fixing limits of port	(5) For the purposes of subsection (4), the Minister may fix the limits of a non-corporate port that is to be managed by a port authority and settle any question that arises in respect of the property, rights or obligations of the port authority.
Consequences for former directors and commissioner s	11. (1) The directors or commissioners of the bodies that become port authorities under section 10 cease to hold office on the day referred to in section 16 and have no right to claim or receive any compensation, damages, indemnity or other form of relief from Her Majesty in right of Canada or from any servant or agent of Her Majesty for ceasing to hold office by virtue of this Part.
Consequences for officers	(2) Neither the port authority nor Her Majesty in right of Canada is bound by any severance agreement entered into between a predecessor of the port authority and any of its officers after December 1, 1995.
	Directors
Appointment of directors	12. (1) The directors of a port authority shall be appointed as follows:
	(a) the Governor in Council appoints one individual nominated by the Minister;
	(b) the municipalities mentioned in the letters patent appoint one individual;
	(c) the province or provinces mentioned in the letters patent appoint one or two indi viduals as mentioned in the letters patent; and
	(d) the Governor in Council appoints the remaining individuals nominated by the Minister in consultation with users selected by the Minister or the classes of users mentioned in the letters patent.
Tenure of office	(2) The directors are appointed to hold office for such term of not more than 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, the terms being renewable once only.
Not eligible	(2.1) No person is eligible to be appointed as a director within twelve months after the expiration of their term or renewed term.
Part-time	(3) The directors are appointed to serve part-time.
Remuneration	(4) The board of directors shall fix the remuneration of the directors, the chairperson and the chief executive officer.
Quorum	(5) Subject to the letters patent or by-laws, a majority of the number of directors required by the letters patent constitutes a quorum at any meeting of directors, and, notwithstand ing any vacancy among the directors, a quorum of directors may exercise all the powers of the directors.
Knowledge or experience	13. Directors of a port authority shall have generally acknowledged and accepted stature within the transportation industry or the business community and relevant knowledge and extensive experience related to the man agement of a business, to the operation of a port or to maritime trade.
Persons excluded	14. The following individuals may not be directors of a port authority:
	(a) an individual who is a mayor, councillor, officer or employee of a municipality mentioned in the letters patent;
	(b) an individual who is a member of the legislature of a province, or an officer or employee of the public service or of a Crown corporation of a province, men tioned in the letters patent;
	(c) a Senator or a member of Parliament or an officer or employee of the federal public service or of a federal Crown corporation;
	(d) an individual who is not a resident Canadian, as defined in subsection 2(1) of the Canada Business Corporations Act;
	(e) an individual who is a director, officer or employee of a user that has a material contract with the port authority, or an individual user who has such a contract;
	(f) an individual who is under eighteen years of age;
	(g) an individual who has been declared mentally incompetent by a court in Canada or elsewhere; or
	(h) an undischarged bankrupt.
Election of chairperson	15. The board of directors shall elect a chairperson from among their number for a term not exceeding two years, the term being renewable.
Term of office	16. Subject to subsection 17(1), where a port authority is continued under section 8 or 10, the directors or commissioners of the former local port corporation or harbour commission, respectively, continue to hold office as provisional directors of the port authority until the earlier of the day on which they are replaced or removed and ninety days after the date of the continuance.
Ceasing to hold office	17. (1) A director of a port authority ceases to hold office when the director
	(a) dies or resigns;
	(b) is removed for cause by the authority that made the appointment, namely, the Governor in Council, the municipalities, the province or provinces or the other directors, as the case may be; or
	(c) is no longer qualified under section 14.
Effective date of resignation	(2) The resignation of a director becomes effective on the day on which a written resignation is received by the port authority or on the day specified in the resignation, whichever is later.
Power to manage	18. The board of directors is responsible for the management of the activities of a port authority.
Appointment of officers	19. (1) The board of directors of a port authority shall appoint a chief executive officer and may appoint other officers that they consider appropriate.
Chief executive officer	(2) The chief executive officer is not a member of the board of directors.
Personnel	(3) A port authority may appoint the personnel that it considers necessary for the operation of the port.
Duty of care of directors and officers	19.1 (1) Every director and officer of a port authority shall, in exercising powers and discharging duties,
	(a) act honestly and in good faith with a view to the best interests of the port authority; and
	(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
Duty to comply	(2) Every director and officer of a port authority shall comply with this Part, the regulations made under subsection 23(2) and the letters patent and by-laws of the port authority.
No exculpation	(3) No provision in a contract or resolution relieves a director or officer from the duty to act in accordance with this Part, the regula tions made under subsection 23(2), the letters patent or the by-laws or relieves them from liability for a breach of any of them.
	Legal Regime Applicable to Port Authorities
Obligations of port authority	20. Notwithstanding section 3 of the Crown Liability and Proceedings Act and subsection 5.1(1), an obligation or liability arising by operation of law or in respect of the exercise of, or the failure to exercise, a power or right by a port authority is the obligation or liability of the port authority and not Her Majesty.
Financial Administra- tion Act	20.1 The Financial Administration Act, other than subsection 9(3) and sections 155, 155.1 and 156, does not apply to a port authority.
No appropriation	21. Notwithstanding subsection 5.1(1) and any authority given under any other Act, other than the Emergencies Act, any other Act in respect of emergencies and any Act of general application providing for grants, no payment to a port authority may be made under an appropriation by Parliament to enable the port authority to discharge any obligation or liabil ity.
No guarantee	22. Notwithstanding subsection 5.1(1), no guarantee may be given under the authority of Parliament by or on behalf of Her Majesty for the discharge of any obligation or liability of a port authority.
Canada Business Corporations Act	23. (1) Subject to this Part and any regula tions made under subsection (2), the Canada Business Corporations Act applies to port authorities.
Regulations	(2) The Governor in Council may, by regulation, adapt the Canada Business Corpo rations Act and any regulations made under that Act, including provisions imposing pun ishment, in the manner the Governor in Council considers appropriate for the pur poses of applying that Act or those regulations to port authorities, or exclude provisions of that Act and those regulations from applying to port authorities.
	Capacity and Powers
Capacity and powers	24. (1) A port authority is incorporated for the purpose of operating the port in respect of which its letters patent are issued and, for that purpose and for the purposes of this Act, has the powers of a natural person.
Port activities	(2) Unless the letters patent provide other wise, the power of a port authority to operate a port is limited to the power to engage in the port activities of shipping, navigation, trans portation of passengers and goods and han dling and storage of goods, as well as activities necessary to support port operations.
Restricted business or powers	(3) A port authority shall not carry on any activity or exercise any power that it is restricted by its letters patent from carrying on or exercising, nor shall it exercise any of its powers in a manner contrary to its letters patent or this Act.
Contracts	(3.1) A port authority may contract only in its own name.
Existing uses	(4) Except for a use authorized under this Act, a port authority may continue to use any real property that it manages, holds or occu pies for any purpose for which the property was used on June 1, 1996 in the case of a port authority referred to in section 10, or the date of issuance of its letters patent in any other case, but, if the port authority ceases to use it for that purpose at any time, the port authority may not reinstitute the use.
Restrictions - subsidiaries	(5) The directors of a port authority shall take all necessary measures to ensure that its wholly-owned subsidiaries carry on only the activities and exercise only the powers that the port authority is authorized by its letters patent to carry on or exercise, and that they do not exercise any power in a manner contrary to the letters patent or this Act.
Existing activities	(6) A wholly-owned subsidiary of a port authority may continue to carry on any activity or exercise any power that it carried on or exercised before December 1, 1995 but, if the subsidiary ceases to carry on the activity or exercise the power at any time, it may not recommence it unless the activity or power is authorized in the letters patent.
Powers of port authority re railways	25. (1) Subject to any other Act and to any regulations made under any other Act, a port authority may
	(a) construct, purchase, lease, operate and maintain railways on lands it manages, holds or occupies;
	(b) enter into agreements with any person for the maintenance of the railways referred to in paragraph (a) and for their operation, in a manner that will provide all railway companies whose lines reach the port with the same facilities for traffic as those enjoyed by that person; and
	(c) enter into arrangements with any person for facilitating traffic to, from or within the limits of the port.
Port authority not railway company	(2) A railway referred to in paragraph (1)(a) is subject to the Railway Safety Act but is not subject to Part III of the Canada Transporta tion Act.
Power to make by-laws	26. Unless the letters patent provide other wise, the directors of a port authority may, by resolution, make, amend or repeal by-laws that regulate the affairs of the port authority or the duties of its officers and employees.
Borrowing powers	27. (1) Subject to the letters patent, a port authority may borrow money on the credit of the port authority for port purposes.
Delegation of borrowing powers	(2) Unless the letters patent or by-laws of a port authority provide otherwise, the board of directors may, by resolution, delegate the powers referred to in subsection (1) to a committee established by the directors.
No pledge of property	(3) A port authority may not mortgage, hypothecate, pledge or otherwise create a security interest in the federal real property it manages in any way other than to pledge the revenues of that property, but it may create such a security interest in fixtures on federal real property to the extent authorized in the letters patent.
Definition of ``security interest''	(4) For the purposes of subsection (3), ``security interest'' means an interest in or charge on property of a port authority to secure the discharge of an obligation or liability of the port authority.

Bill C-44

Initial Port Authorities

Directors

Legal Regime Applicable to Port Authorities

Capacity and Powers