BRITISH COLUMBIA RAILWAY FINANCE ACT

[RSBC 1996] CHAPTER 37

Contents

Section 1 – Definition

1 In this Act, "company" means the British Columbia Railway Company.

Section 2 – Negotiation of loan

2 (1) The Lieutenant Governor in Council may appoint the minister or another person as the agent of the company for the purpose of negotiating any loans under this Act.

(2) The minister or other appointed person may arrange all details and do, transact and execute all deeds, matters and things required during the conduct of negotiations or to place a loan.

Section 3 – Power of company to borrow

3 (1) With the approval of the Lieutenant Governor in Council, and within the borrowing limitation established by section 15, the company, for any of its purposes, may do one or more of the following:

(a) borrow the money it requires;

(b) issue notes, bonds, debentures and other securities bearing interest at a rate and payable as to principal and interest in a currency, at a place, at a time and in a manner it determines;

(c) provide that the notes, bonds, debentures and other securities may be made redeemable in advance of maturity at a time and at a price it determines at the time of issue.

(2) The purposes of the company, without limiting their generality, include all of the following:

(a) repayment on account of advances by the government to the company;

(b) repayment, refunding or renewal of any part of a loan raised or securities issued by the company under this Act, except to the extent that a sinking fund is available for the payment of a loan or securities and a recital or declaration in the resolution or minutes of the board of directors of the company authorizing the issue of securities as to the amount of any sinking fund available is conclusive evidence of the fact;

(c) payment of any part of a loan, liability, bond, debenture or other securities, payment of which is guaranteed or assumed by the company;

(d) payment of any other liability or indebtedness of the company;

(e) constructing, reconstructing, extending, bettering, maintaining, equipping and operating the railway of the company and providing the necessary ancillary works.

Section 4 – Exercise of borrowing authority

4 (1) The board of directors may, by resolution, delegate any of their powers or the powers of the company under this section to any director or officer of the company.

(2) A resolution under this section approved by the required number of directors by telex, telegraph, telephone or any other similar means of communication confirmed in writing or other graphic communication, is as valid and effectual as if it had been passed at a meeting of the directors properly called and constituted.

Section 5 – Authorization to borrow from Canada Pension Plan

5 Despite anything in this Act, the company may, in the bylaw or resolution under section 3, authorize the minister or, with the concurrence of the minister, authorize the Minister of Finance of Canada to determine any matter required to be determined under section 3 for

(a) borrowing money from the Canada Pension Plan Investment Fund established under the Canada Pension Plan, and

(b) issuing and selling to the Receiver General and Minister of Finance of Canada for the credit of the Canada Pension Plan Investment Fund debentures as security for the loans.

Section 6 – Amount of securities to be borrowed

6 (1) With the approval of the Lieutenant Governor in Council, the company may borrow and may issue securities in amounts that will realize the net sum required for its purposes.

(2) A recital or declaration in the resolution or minutes of the board of directors of the company authorizing the issue of securities to the effect that the amount of the securities so authorized is necessary to realize the net sum required for the purposes of the company is conclusive evidence of the fact.

Section 7 – Disposal of securities

7 With the approval of the Lieutenant Governor in Council, and on terms and conditions as may be advisable,

(a) the minister or a person appointed by the minister for the purpose, on behalf of the company, may dispose of any notes, bonds, debentures and other securities, at par value or at less or more than par value, and

(b) the company may charge, pledge, deposit or otherwise deal with any securities as collateral security.

Section 8 – Collateral securities

8 (1) Securities disposed of under section 7 and dealt with as collateral securities, if redelivered to the company or its nominees on or after payment, satisfaction, release or discharge, in whole or in part, of any of the indebtedness or obligation for which the securities may have been given as collateral, or if the company again becomes entitled to the securities, may

(a) be treated by the company as unissued,

(b) with the approval of the Lieutenant Governor in Council, be issued, reissued, charged, pledged, deposited, dealt with as collateral security, sold or otherwise disposed of on the terms and conditions that the company may consider advisable, or

(c) at its option, be cancelled and fresh securities for the same amount and in the same form issued instead with the same consequences.

(2) For the purposes of subsection (1), on the issue or reissue of the securities, a person entitled to them has the same rights and remedies as if they had not been issued previously.

(3) The company may engrave, lithograph, print or otherwise mechanically reproduce the seal of the company on any security which is to be sealed with the company seal.

(4) The seal of the company when mechanically reproduced has the same effect as if manually sealed, and any mechanically reproduced signature or signatures is for all purposes valid and binding on the company even if the person whose signature is reproduced has ceased to hold office before the date of the security or before its issue.

Section 9 – Form of securities

9 The notes, bonds, debentures and other securities authorized and issued by the company under this Act must be in a form determined by the company or by the minister as agent for the company.

Section 10 – Securities to be signed and sealed

10 The bonds, debentures and other securities must bear the seal of the company and, together with any coupons attached, must bear the signatures in writing of

(a) the president and another director or officer, or

(b) other directors or officers as the company may determine.

Section 11 – Temporary borrowings

11 (1) With the approval of the Lieutenant Governor in Council and within the borrowing limitation established by section 15, the company may borrow, by way of temporary loans, sums on terms and conditions that the company determines.

(2) Any cheques, promissory notes or other instruments that may be necessary or desirable in connection with the borrowing of money and the obtaining of advances by way of temporary loans may be executed in the manner the company determines.

Section 12 – Guarantee by the government

12 (1) In this section, "subsidiary" has the same meaning as in the British Columbia Railway Act.

(2) On the terms and in the manner and form the Lieutenant Governor in Council determines, the Lieutenant Governor in Council may guarantee

(a) payments under leases entered into, and

(b) the payment of principal and interest of any notes, bonds, debentures or other securities issued

by the company or a subsidiary of the company and of any loans, temporary or otherwise, raised by the company or a subsidiary of the company.

(3) On the terms and in the manner and form the Lieutenant Governor in Council determines, the Lieutenant Governor in Council may

(a) guarantee payment of, or give an indemnity with respect to payment by any subsidiary of, any amount of money relating to shares issued by the subsidiary, and

(b) to facilitate the issue or sale of shares in respect of which the guarantee or indemnity is given, enter into any agreement relating to the shares or to the status or ownership of the subsidiary.

(4) The guarantee, indemnity or agreement under subsection (2) or (3) must bear the manual, engraved, lithographed or printed signature of the minister, or the manual, engraved, lithographed or printed signature of another officer of the ministry designated by the Lieutenant Governor in Council.

(5) The engraved, lithographed or printed signature of the minister or of any other officer is for all purposes the signature of that person, and is binding on the government even though the person whose signature is reproduced may not have held office at the date of the notes, bonds, debentures or other securities or at the date of the delivery, and despite any change in any of the persons holding office between the time when the signature is affixed and the date of delivery of the notes, bonds, debentures or other securities.

(6) If a guarantee, indemnity or agreement given or entered into under subsection (2) or (3) is signed, the government is bound by the agreement and liable for

(a) the lease payments guaranteed,

(b) the payment of the principal and interest of the notes, bonds, debentures, securities and loans guaranteed, according to their tenor, and

(c) payment in accordance with the terms of the guarantee or indemnity given with respect to any shares.

(7) Money payable under the guarantee or indemnity referred to in subsection (6) must be paid out of the consolidated revenue fund.

(8) The guarantee, indemnity or agreement signed is conclusive evidence that the requirements of this section have been complied with.

Section 13 – Sinking fund

13 (1) If required by the minister, the company must establish a sinking fund, on terms and conditions approved by the Lieutenant Governor in Council, for the repayment of any part of any securities issued by the company.

(2) A sinking fund established under the section replaced by this section is continued and must be maintained.

Section 14 – Continuing grant, debt charges

14 (1) The minister must in each year, on or before the fiscal year end of the company, review the debt and capital expenditures of the company and determine the amount of a grant to be paid in respect of the company's debt charges and capital expenditures.

(2) The minister must, subject to an appropriation of the Legislature, pay the amount of the grant to the company for the purpose the minister specifies under subsection (1).

Section 15 – Borrowing limit

15 The amount of the unredeemed securities issued by the company less the value, as determined by the minister, of sinking funds established for the retirement of those securities must not exceed $1.2 billion.

Section 16 – Calculations in Canadian and U.S. dollars

16 (1) For computing the amount referred to in section 15, $1 in lawful money of the United States of America is deemed to be the equivalent of $1 in lawful money of Canada in respect of all borrowings made by the Lieutenant Governor in Council or by the company under the authority of this Act.

(2) For calculating the sum to be set aside in each year for a sinking fund under the provisions of section 13 in respect of securities payable in United States dollars, $1 in lawful money of Canada may be deemed to be the equivalent of $1 in lawful money of the United States of America.

Section 17 – Investment of surplus funds

17 The minister may invest any funds raised under this Act in the hands of the company which it certifies are not immediately required for its purposes in investments permitted for a trust fund under section 36 (2) of the Financial Administration Act, and may sell the securities as and when the minister thinks expedient, but the authority does not extend to sinking funds provided under this Act.

Section 18 – Power of company and directors

18 Despite any other Act, any order of the Lieutenant Governor in Council or any resolution or bylaw of the company or the board of directors of the company, the company may perform, execute and carry out every act, deed, matter and thing necessary for carrying out and giving effect to this Act, and the board of directors of the company is authorized, with the approval of the Lieutenant Governor in Council, to exercise all the powers of the company.

Section 19 – Interest in case of default

19 If the company defaults in the payment of any costs which it is required to pay to the government under this Act, the company must pay the interest that the Lieutenant Governor in Council may determine on the sum in default.

Section 20 – Audit

20 The minister may direct the Comptroller General to examine and report to the Treasury Board on any or all of the financial and accounting operations of the company.