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O. Reg. 609/06: CITY SERVICES CORPORATIONS

filed December 27, 2006 under City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A

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ontario regulation 609/06

made under the

City of Toronto Act, 2006

Made: December 21, 2006
Filed: December 27, 2006
Published on e-Laws: December 29, 2006
Printed in The Ontario Gazette: January 13, 2007

City Services Corporations

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CONTENTS

1.

Definitions

2.

Exercise of s. 148 (1) powers

General Powers in Relation to Corporations for the City

3.

Power to establish corporations

4.

Powers in relation to incorporators, members, directors, officers

5.

Powers in relation to securities of corporations

Duties of City

6.

Business case study

7.

Asset transfer policies

8.

Public participation

9.

Economic development corporations

10.

Holding corporations

Rules for City

11.

Prohibited use of powers in relation to corporations

12.

Conditions for incorporation

13.

No assignment

14.

Debt instruments

15.

Assistance to corporation

Rules for Corporations

16.

Territorial operation of corporation

17.

Amendments to corporate documents

18.

Limitations on actions of corporation

19.

Deemed members

20.

Deemed institutions

21.

Status of corporation

22.

Result of non-compliance

23.

Commencement

 

Definitions

1. (1) In this Regulation,

“private person” means a person who is not a municipality, the Province of Ontario, Canada or an agent of any of them;

“public sector entity” means,

(a) the City,

(b) one or more other municipalities,

(c) the Crown in right of Ontario,

(d) the Crown in right of Canada, or

(e) a combination of them;

“wholly-owned corporation” means,

(a) a corporation all of whose shares are owned by the City or by the City and one or more other public sector entities, and

(b) a corporation in which the City, by itself or together with one or more other public sector entities, has an entitlement to all of the voting rights allocated to the members of the corporation.

Exercise of s. 148 (1) powers

2. (1) The City in exercising the powers referred to in subsection 148 (1) of the Act in relation to a corporation shall do so in accordance with this Regulation.

(2) Sections 7, 12, 13, 14 and 15 apply to the City in relation to a corporation only if the City uses or expects to use a power referred to in section 3 or in subsection 4 (2), (3) or 5 (1) in relation to the corporation.

(3) Sections 17 to 22 apply to a corporation only if the City uses or expects to use a power referred to in section 3 or in subsection 4 (2), (3) or 5 (1) in relation to the corporation.

General Powers in Relation to Corporations for the City

Power to establish corporations

3. The City may use the power to referred to in paragraph 1 of subsection 148 (1) of the Act to establish a corporation only if the City by itself, or together with one or more other public sector entities, establishes the corporation and,

(a) the corporation’s purpose is to provide a system, service or thing that the City itself could provide; or

(b) the establishment of the corporation is expressly authorized by this Regulation.

Powers in relation to incorporators, members, directors, officers

4. (1) The City may use the powers referred to in paragraph 2 of subsection 148 (1) of the Act to nominate or authorize a person to act as a director or officer of a corporation in relation to any corporation whether incorporated under this or any other Act.

(2) The City may use the power referred to in paragraph 2 of subsection 148 (1) of the Act to nominate or authorize a person to act as an incorporator of a corporation only if the corporation is one the City may establish under this Regulation.

(3) The City may use the power referred to in paragraph 3 of subsection 148 (1) of the Act to nominate or authorize a person to act as a member of a corporation only if the corporation is established by a public sector entity and it carries on business in the City or in the City and another municipality.

Powers in relation to securities of corporations

5. (1) Subject to section 14 of this Regulation, the City may use the powers referred to in paragraphs 4 and 5 of subsection 148 (1) of the Act to acquire, hold, dispose of, guarantee and otherwise deal with securities of a corporation only if the corporation is established by a public sector entity and the corporation carries on business in the City or in the City and another municipality.

(2) Nothing in this Regulation restricts the powers of the City to provide assistance under an exception to subsections 82 (1) and (2) of the Act, make a grant under section 83 of the Act, or make an investment or undertake other financial activities under Part VIII of the Act.

Duties of City

Business case study

6. The City shall adopt a business case study before it uses the powers referred to in section 3, 4 or 5 to,

(a) establish a corporation either alone or with one or more other public sector entities;

(b) purchase securities in a corporation established by one or more public sector entities other than the City;

(c) become a member of a corporation established by one or more public sector entities other than the City; or

(d) submit, with respect to a corporation for which a study was undertaken under clause (a), (b) or (c), or cause a corporation for which a study was undertaken under clause (a), (b) or (c) to submit, articles of amendment or any other articles or supplementary letters patent.

Asset transfer policies

7. (1) The City shall adopt and maintain policies on asset transfers to corporations.

(2) The City shall not transfer any of its assets to a corporation before the City adopts the policies referred to in subsection (1).

Public participation

8. Before establishing a corporation under section 3, the City shall consult with the public about the proposal to establish the corporation.

Economic development corporations

9. (1) If the City establishes a corporation for the sole purpose of providing one or more economic development services, the City may also designate the corporation as a “designated economic development corporation”.

(2) Despite section 21 of this Regulation, if the City designates a corporation under subsection (1), the corporation is a local board of the City for the purposes of section 287 of the Act.

(3) Economic development services provided by and for the purposes of a corporation designated by the City under subsection (1) are prescribed as special services for the purposes of clause 287 (1) (a) of the Act.

(4) In this section,

“economic development services” means,

(a) the promotion of the City for any purpose, including by the collection and dissemination of information and the development of economic development strategic plans,

(b) the acquisition, development and disposal of sites in the City for residential, industrial, commercial and institutional uses,

(c) provision of public transportation systems,

(d) provision of residential housing,

(e) provision of general parking facilities,

(f) providing a counselling service to or encouraging the establishment and initial growth of small businesses operating or proposing to operate in the City,

(g) undertaking community improvement consistent with a community improvement plan approved by the City under subsection 28 (4) of the Planning Act,

(h) improvement, beautification and maintenance of municipally-owned land, buildings and structures in an area designated by the City beyond the standard provided at the expense of the City generally, and promotion of any area of the City as a business or shopping area,

(i) provision of facilities for amusement or for conventions and visitors’ bureaus,

(j) provision of culture and heritage systems.

Holding corporations

10. (1) The City may use the powers referred to in paragraphs 1 to 5 of subsection 148 (1) of the Act in relation to a corporation incorporated for the purpose of holding shares in one or more other corporations only if,

(a) the corporation is established by the City or the City and one or more other municipalities;

(b) the articles of incorporation of the corporation restrict the ownership of any and all voting and non-voting shares in the corporation to the City or to the City and one or more other municipalities; and

(c) the articles of incorporation of the corporation restrict the powers of the corporation to those necessary to acquire, hold, dispose of and otherwise deal with,

(i) shares of one or more corporations established under any Act by the City,

(ii) shares of one or more corporations established under any Act by another municipality that the City has agreed to allow to carry on business in the City, or

(iii) any combination of shares described in subclauses (i) and (ii).

(2) In subclauses (1) (c) (i) and (ii),

“corporation” means a corporation other than a corporation established by a municipality for the purpose of holding shares in one or more other corporations.

Rules for City

Prohibited use of powers in relation to corporations

11. (1) Despite section 3 and subsections 4 (2), (3) and 5 (1) of this Regulation, the City shall not use any of the powers referred to in paragraphs 1 to 5 of subsection 148 (1) of the Act in relation to a corporation if the business or activities of the corporation include doing anything that the City or any of its local boards may do or are required to do under any of the following Acts:

1. Ambulance Act.

2. Child and Family Services Act.

3. Fire Protection and Prevention Act, 1997.

4. Health Protection and Promotion Act.

5. Homes for the Aged and Rest Homes Act.

6. Police Services Act.

7. Provincial Offences Act.

8. Public Libraries Act.

9. Ontario Works Act, 1997.

(2) Despite subsection (1), the City may use the powers referred to in paragraphs 1 to 5 of subsection 148 (1) of the Act in relation to a corporation that carries on business or activities in connection with a municipality, local board, public hospital, university, college or school board operating under any of the Acts listed in that subsection, but only if the business or activities of the corporation in connection with those entities are restricted to the provision of administrative services to them.

(3) Despite section 3 and subsections 4 (2), (3) and 5 (1) of this Regulation, the City shall only use the powers referred to in paragraphs 1 to 5 of subsection 148 (1) of the Act in relation to a corporation that carries on any business or activities in connection with a nursing home under the Nursing Homes Act or a charitable home for the aged under the Charitable Institutions Act if,

(a) the business or activities of the corporation are restricted to the construction, operation, maintenance and ownership, including ownership of land, of facilities that are new when the corporation first carries on its business with respect to them; and

(b) in the case of a charitable home for the aged, it is approved under the Charitable Institutions Act.

(4) Despite section 3 and subsections 4 (2), (3) and 5 (1) of this Regulation, the City shall not use any of the powers referred to in paragraphs 1 to 5 of subsection 148 (1) of the Act in relation to a corporation if the business or activities of the corporation include requiring a person to pay an administrative penalty in respect of the person’s failure to comply with any by-law of the City or any other municipality respecting the parking, standing or stopping of vehicles.

Conditions for incorporation

12. (1) If the City proposes to transfer an asset to a corporation and the Province of Ontario has contributed funds for the purchase or improvement of the asset, the City shall give notice of the proposal to every Minister that made all or part of the contribution on behalf of the Province.

(2) A Minister who receives a notice under subsection (1) may accept the valuation of the treasurer of the City or may otherwise determine the value of the contribution and shall notify the City in writing within six months of the receipt of the notice as to the requirement for repayment or to indicate the release of the Province’s interest in the asset being transferred or the proceeds of the transfer.

(3) The City may transfer an asset to which the notice requirement in subsection (1) applies if one of the following conditions is met:

1. Six months have passed since the City gave any notices required by this section and no response has been received from the Province within that period.

2. The Province has notified the City of its acceptance of the valuation by the treasurer and of any requirement for repayment.

3. The Province has notified the City of its rejection of the valuation by the treasurer, of its own valuation and of any requirement for repayment.

4. The Province has notified the City that it releases its interest in the asset being transferred or in the proceeds of the transfer.

No assignment

13. The City shall not assign or transfer any right granted to it in any agreement between the City and the Province of Ontario to a corporation without first obtaining the consent of the Minister responsible for the agreement.

Debt instruments

14. (1) The City may use the powers referred to in paragraphs 4 and 5 of subsection 148 (1) of the Act to acquire, hold, dispose of, guarantee and otherwise deal with bonds, debentures, promissory notes, mortgages and similar evidences of indebtedness of a corporation that may issue shares only if the debt would be incurred by reason of the transfer of a municipal property asset to the corporation.

(2) In this section,

“municipal property asset” means an asset of the City that is land, equipment or other goods.

Assistance to corporation

15. (1) Despite section 82 of the Act, the City may provide assistance to a corporation,

(a) if the corporation is a wholly-owned corporation and is limited by its articles or letters patent to providing services to the owners or members of the corporation; or

(b) if the purpose of the assistance is to subsidize the cost of public transportation facilities or services or public access to recreational and cultural facilities.

(2) The types of assistance that may be provided under subsection (1) are,

(a) giving, lending or selling any property of the City, including money;

(b) guaranteeing borrowing;

(c) providing the services of employees of or persons under contract with the City.

(3) The assistance provided under clause (2) (a), (b) or (c) need not be at fair market value.

(4) The treasurer shall prepare a statement of the value of any grant to a corporation or an estimate of the fair market value of any other assistance provided at less than fair market value to a corporation under this section.

Rules for Corporations

Territorial operation of corporation

16. (1) A corporation may only operate within the boundaries of a municipality with the agreement of the municipality.

(2) Despite subsection (1), a corporation may operate within the boundaries of an upper-tier municipality without the agreement of any lower-tier municipality that forms part of that upper-tier municipality for municipal purposes if the corporation’s purpose is to provide a system, service or thing that the upper-tier municipality itself could provide.

(3) Despite subsection (1), a corporation may operate within the boundaries of a lower-tier municipality that forms part of an upper-tier municipality for municipal purposes without the agreement of the upper-tier municipality if the corporation’s purpose is to provide a system, service or thing that the lower-tier municipality itself could provide.

(4) This section applies to a corporation established by,

(a) the City using the power referred to in paragraph 1 of subsection 148 (1) of the Act;

(b) one or more other municipalities using the power referred to in paragraph 1 of subsection 203 (1) of the Municipal Act, 2001;

(c) the Crown in right of Ontario together with one or more municipalities referred to in clause (a) or (b);

(d) the Crown in right of Canada together with one or more municipalities referred to in clause (a) or (b); or

(e) any combination of clauses (a), (b), (c) and (d).

Amendments to corporate documents

17. (1) A corporation shall not make an amendment to its articles of incorporation or letters patent or to any subsequent articles or supplementary letters patent if the amendment would permit the corporation,

(a) to carry on a purpose other than a purpose that would be permitted by section 3;

(b) to carry on any business or activities that would include doing anything that the City or any of its local boards could do or be required to under any of the Acts mentioned in subsection 11 (1), except the business or activity of providing administrative services permitted by subsection 11 (2); or

(c) to carry on any business or activities that would include doing anything inconsistent with subsection 11 (3) or (4).

(2) A corporation shall not submit articles of amendment or any other articles or supplementary letters patent under any Act unless the City has first adopted a business case study in relation to the proposed amendment, articles or supplementary letters patent.

Limitations on actions of corporation

18. (1) A corporation shall not act as an incorporator of another corporate body that is incorporated under any Act.

(2) A corporation may only invest in securities prescribed under section 256 of the Act and, for the purpose of this subsection, any regulation made under that section of the Act applies to the corporation as if it were the City.

(3) Despite section 10 and subsection (2), to expand or otherwise carry on its purposes, a corporation may acquire all of the voting and non-voting shares of,

(a) another corporation established by one or more municipalities; or

(b) a body corporate incorporated under any Act if the articles of incorporation of the body corporate restrict the powers or limit the objects of the body corporate to carrying on one or more of the purposes set out in clause 3 (a).

(4) A body corporate, the shares of which have been acquired under subsection (3), must be dissolved and its remaining assets and liabilities transferred to the acquiring corporation within one year of the date of the acquisition of the shares.

(5) If any purpose or business of a corporation includes the provision of a public utility for water or sewage,

(a) the corporation shall not issue shares or give voting rights attached to the shares to a private person if it is a share corporation or, if it is a non-share corporation, it shall allocate voting rights to a member of the corporation only if the member is not a private person; and

(b) the corporation shall not transfer to a private person any asset that is part or all of a municipal drinking-water system or of a sewage works unless the board of directors of the corporation has declared, by resolution, that the asset is no longer needed for the purposes of the system.

(6) If any purpose or business of a corporation includes a program for the supervision, encouragement and guidance of recreational activity for persons under the age of 18, the corporation shall not issue shares or give voting rights attached to the shares to a private person if it is a share corporation or, if it is a non-share corporation, it shall allocate voting rights to a member of the corporation only if the member is not a private person.

(7) In this section,

“municipal drinking-water system” has the same meaning as in the Safe Drinking Water Act, 2002;

“sewage works” has the same meaning as in the Ontario Water Resources Act.

Deemed members

19. The directors and officers of a corporation shall be deemed to be members for the purposes of the Municipal Conflict of Interest Act.

Deemed institutions

20. A corporation that is a wholly-owned corporation or a corporation whose business or activities include the provision of administrative services to any municipality, local board, public hospital, university, college or school board is deemed to be an institution for the purposes of the Municipal Freedom of Information and Protection of Privacy Act.

Status of corporation

21. (1) A corporation is not a local board for the purposes of any Act.

(2) Despite subsection (1), a corporation shall be deemed to be a local board for purposes of subsection 212 (2) of the Act, and for the purposes of the Environmental Assessment Act, the Municipal Conflict of Interest Act, the Emergency Management and Civil Protection Act, and subsection 56.2 (3) of the Capital Investment Plan Act, 1993.

(3) Despite subsection (1), if a corporation is wholly-owned, it shall be deemed to be a local board for the purposes of the Development Charges Act, 1997.

Result of non-compliance

22. Any of the following matters may be considered sufficient cause under any Act to cancel the certificate of incorporation of a corporation or the letters patent or supplementary letters patent of a corporation:

1. The corporation does not meet the requirements of this Regulation.

2. A certificate is issued under the Business Corporations Act or any other Act under which the City establishes a corporation that is inconsistent with this Regulation.

3. Letters patent or supplementary letters patent are granted under any Act that are inconsistent with this Regulation.

4. The corporation acts outside the purposes to which it is restricted by its articles or letters patent.

5. The fact that the City did not comply with the requirements of section 12 in relation to the incorporation.

Commencement

23. This Regulation comes into force on the later of the day section 148 of the City of Toronto Act, 2006 comes into force and the day this Regulation is filed.