BILL 59 – 2003
FINANCIAL ADMINISTRATION AMENDMENT ACT, 2003

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

1 Section 1 of the Financial Administration Act, R.S.B.C. 1996, c. 138, is amended by repealing the definition of "Minister of Finance and Corporate Relations" and substituting the following:

"Minister of Finance" means the minister who has administration of this Act; .

2 Sections 3, 5, 6, 9, 12, 14, 15, 22, 37, 39 to 41, 43 to 45, 47, 56.1, 57 to 62, 70, 72, 75 to 79, 79.2, 79.3, 80 and 82 are amended by striking out "Minister of Finance and Corporate Relations" wherever it appears and substituting "Minister of Finance".

3 Sections 5, 8, 13 and 47 are amended by striking out "Ministry of Finance and Corporate Relations" wherever it appears and substituting "Ministry of Finance".

4 Section 27 (2) (b) (i) is repealed and the following substituted:

(i) to honour an obligation of the government under a financial agreement described in Part 9, a commodity derivative as defined in Part 9.1, a security, a guarantee or an indemnity, or .

5 Section 45 (2) is amended by striking out "section 36 or 40." and substituting "section 36, 40 or 54."

6 Section 51 is repealed and the following substituted:

Borrowing money by the government

51 (1) Subject to subsection (5), the government may borrow money in any currency for the benefit of the government, including, without limitation, for all of the following purposes:

(a) the efficient management of the consolidated revenue fund;

(b) the investment of money for the benefit of the government in investments authorized under section 40 (6);

(c) repaying any securities issued or assumed by the government that are maturing, have been called for redemption, or are otherwise repayable;

(d) making a disbursement lawfully authorized to be made from the consolidated revenue fund.

(2) Subject to subsection (5), the government may borrow money in any currency for the purpose of lending money to government bodies.

(3) The Lieutenant Governor in Council may authorize the Minister of Finance to borrow money on behalf of the government under this or any other Act.

(4) In an authorization under subsection (3), the Lieutenant Governor in Council

(a) must establish a maximum amount in accordance with section 53.1, and

(b) may establish other restrictions, limits or conditions on borrowing money under the authorization.

(5) The government may not borrow money under the authority of this or another Act

(a) without an authorization of the Lieutenant Governor in Council under subsection (3),

(b) in excess of the maximum amount established under subsection (4) (a), or

(c) contrary to any restrictions, limits or conditions established under subsection (4) (b).

(6) If this or another Act authorizes the government to borrow money, the Minister of Finance may on behalf of the government, and subject to subsection (5), borrow the money, determine the currency and other terms and conditions of the borrowing, effect the issue and sale of any securities and make other arrangements for the borrowing, including, without limitation,

(a) make arrangements for any listing of securities on a securities or other exchange,

(b) make arrangements with depositories, custodians, their agents or any other persons for the delivery and holding of securities,

(c) effect the issue of warrants, receipts, coupons, talons or other rights or instruments attached or relating to securities,

(d) enter into any of the following agreements or instruments:

(i) underwriting, agency, loan, credit or other similar agreements with investment dealers, financial institutions or other persons;

(ii) agreements appointing or setting the terms and conditions and remuneration of fiscal agents, registrars and transfer agents as described in section 66 (2) and (3);

(iii) agreements appointing and setting the terms and conditions and remuneration of paying agents, exchange rate agents, calculation agents or other agents;

(iv) trust deeds, deed polls or other similar instruments constituting or relating to securities;

(v) agreements or instruments appointing agents to accept legal process in foreign jurisdictions in relation to borrowings by the government in those jurisdictions;

(vi) any other agreements or instruments related to the borrowing or the issue of securities,

(e) prepare, update, file or deliver any registration statement, prospectus, information memorandum, offering circular or other document necessary or advisable with respect to the borrowing or the issue of securities,

(f) apply for exemptions from registration, requirements of securities or other exchanges or other requirements,

(g) make arrangements for securities to be issued in physical, book-based, electronic or any other form acceptable to the Minister of Finance, and

(h) make other arrangements specified by the Lieutenant Governor in Council.

(7) The Minister of Finance may, for the benefit of the government or government bodies, make arrangements with financial institutions for overdrafts and, for the purpose of securing any overdrafts under such an arrangement, may issue securities to the savings institution in a form, in an amount and on terms and conditions that the minister considers appropriate.

(8) The Minister of Finance may, for the purpose of facilitating the borrowing of money by the government under this or another Act,

(a) make arrangements with financial institutions, investment dealers or other persons for the establishment and maintenance of borrowing programs and credit facilities, or

(b) make application to, and comply with the requirements of, the applicable regulatory authorities for registration of securities in jurisdictions where registration of issues of securities by the government is necessary or advisable.

7 Section 52 is repealed.

8 Sections 53 and 54 are repealed and the following substituted:

Authority to lend money to government bodies

53 (1) Subject to subsection (4), the government may lend money in any currency to government bodies.

(2) The Lieutenant Governor in Council may authorize the Minister of Finance to make loans on behalf of the government to government bodies under this or another Act.

(3) In an authorization under subsection (2), the Lieutenant Governor in Council

(a) must establish a maximum amount in accordance with section 53.1, and

(b) may establish other restrictions, limits or conditions on the lending of money under the authorization.

(4) The government may not lend money to government bodies under the authority of this or another Act

(a) without an authorization of the Lieutenant Governor in Council under subsection (2),

(b) contrary to any restrictions, limits or conditions on the borrowing authority of government bodies unless permitted by section 53 (5) or 54 (6),

(c) in excess of the maximum amount established under subsection (3) (a), or

(d) contrary to any restrictions, limits or conditions established under subsection (3) (b).

(5) If a loan to a government body is authorized under subsection (2), any approval or determination by the Lieutenant Governor in Council or the Minister of Finance that any other Act requires respecting borrowing by the government body is not required with respect to that loan.

Specifying and calculating amounts

53.1 In establishing a maximum amount under section 51 (4) (a) or 53 (3) (a), the Lieutenant Governor in Council must specify

(a) the currency of the maximum amount,

(b) a method of calculating the borrowings or loans to be applied for the purpose of comparison with the maximum amount, which method may be based on

(i) the proceeds borrowed or loaned after any specified deductions,

(ii) the aggregate principal amount of securities issued in respect of the borrowings or loans,

(iii) the amount of borrowings or loans outstanding,

(iv) any combination of methods described in subparagraphs (i) to (iii), or

(v) any other specified basis, and

(c) if borrowings or loans are authorized in currencies other than the currency in which the maximum amount has been specified, a method of calculating the equivalent in the currency in which the maximum amount has been specified of any borrowings or loans made in other currencies.

Loans to government bodies

54 (1) In order to borrow money under this section, a government body must submit to the Minister of Finance a request to borrow that

(a) is in a form and contains information as required by the Minister of Finance,

(b) proposes the borrowing on terms that are within its authority to borrow and that are satisfactory to the Minister of Finance, and

(c) is made through a person who the Minister of Finance considers is authorized by the government body to make the request.

(2) If a government body submits a request in accordance with subsection (1), the Minister of Finance may, on behalf of the government, lend money to the government body substantially in accordance with the terms of the request.

(3) If this or another Act authorizes a loan by the government to a government body, the Minister of Finance may, on behalf of the government enter into agreements or make other arrangements for the loan including, without limitation,

(a) for the receipt and safekeeping of any securities issued by the government body, and

(b) as specified by the Lieutenant Governor in Council.

(4) The Minister of Finance may pay out of the consolidated revenue fund amounts to be lent under subsection (2).

(5) If a government body makes a request under subsection (1) and then fails to borrow money substantially in accordance with the terms of the request, as determined by the Minister of Finance, the government body must reimburse the minister for any losses, as determined by the minister, suffered by the government as a result of that failure.

(6) Despite any other Act, if money is lent to a government body under subsection (2), the government body may issue a security to the government that provides for repayment, redemption, extension or exchange on demand or otherwise.

9 Sections 55 and 56 are repealed and the following substituted:

Report respecting borrowings

56 As soon as practicable after March 31 of each year, the Minister of Finance must lay before the Legislative Assembly a statement respecting the following:

(a) the amounts borrowed under section 51 (1) and (2) since March 31 of the previous year, together with the rate of interest or yield to the investor, and the term and currency, of each borrowing;

(b) the amounts lent to government bodies under section 54 (2) since March 31 of the previous year, together with the rate of interest or yield to the government, and the term and currency, of each loan.

10 The following sections are added:

Bankers' acceptances and other forms of credit

56.2 (1) The Minister of Finance may make arrangements with financial institutions for the government to raise money, other than by borrowing, through the issue and sale of bankers' acceptances or other prescribed credit instruments.

(2) Any money raised or to be raised by the government under subsection (1) is deemed to be money borrowed or to be borrowed by the government for the purposes of section 51, 53.1 or 56.

Assumption of government body debt obligations

56.3 (1) Subject to the approval of the Lieutenant Governor in Council, the government may assume debt obligations of a government body with the agreement of the government body.

(2) On the assumption by the government of debt obligations under subsection (1),

(a) the debt obligations become enforceable against the government,

(b) the government body is released from all liability for the debt obligations, and

(c) the assets of any sinking fund for the repayment of the debt obligations become the assets of the government.

(3) In this section, "debt obligations" includes parts of "debt obligations".

Debt services fees

56.4 (1) The Minister of Finance may by directive set debt services fees to be paid by a government body relating to any of the following services provided by the government to the government body:

(a) the making or guaranteeing of loans to the government body and the management of those loans;

(b) the making and management of agreements under section 77 (1) (b);

(c) the making and management of commodity derivatives under section 79.3 (2);

(d) the management of sinking funds for repayment of loans to the government body;

(e) the provision of advice or assistance to the government body respecting the matters described in paragraphs (a) to (d) and other matters relating to the obtaining and management of credit or financing, or the acquisition or disposition of assets, by the government body;

(f) any other services provided by the Minister of Finance under Part 8, 9 or 9.1 for which no fee is payable under any other section of this Act or any other enactment.

(2) The Minister of Finance may set different debt services fees under subsection (1) for different government bodies based on their creditworthiness or other factors.

(3) If a debt services fee set under subsection (1) is for services in relation to a loan, agreement or other arrangement under which the government is to make payments to a government body, the Minister of Finance may deduct from those payments some or all of the fee then due.

Management of borrowings and loans

56.5 (1) The Minister of Finance may do all things necessary or advisable to manage the borrowings of the government and the loans of the government made to government bodies, including, without limitation,

(a) purchase securities, in the open market or otherwise, issued by the government,

(b) retain, resell, lend or otherwise dispose or arrange for the cancellation of securities purchased under paragraph (a),

(c) acquire, in the open market or otherwise, securities issued by the government by exchanging them for securities of equivalent value or amount, as determined by the Minister of Finance, issued by the government for that purpose,

(d) issue securities on behalf of the government for the purpose of paragraph (c),

(e) if securities acquired by the government under paragraph (a) or (c) are cancelled and relate to money borrowed by the government that was loaned to government bodies, cancel or agree to amend any securities issued by government bodies and held by the government in relation to those loans,

(f) issue securities on behalf of the government to replace lost, stolen, destroyed, damaged, defaced or mutilated securities previously issued by the government, or

(g) any borrowing or loan management activities specified by the Lieutenant Governor in Council.

(2) The Minister of Finance must arrange for cancellation of securities acquired under subsection (1) (c).

11 Sections 57 to 63 are repealed and the following substituted:

Sinking funds

63 (1) The Minister of Finance may provide for the creation, management, application and dissolution of sinking funds, including the setting and changing of terms and conditions that will apply to those sinking funds, with respect to securities issued by the government.

(2) Where money has been or will be borrowed by a government body, the Minister of Finance may, with the prior approval of the government body, direct that

(a) a sinking fund be established for repayment of the borrowing on terms and conditions specified by the minister,

(b) no sinking fund be established for repayment of the borrowing, or

(c) if a sinking fund has already been established for repayment of the borrowing,

(i) the terms and conditions of the sinking fund be changed as specified by the minister, or

(ii) the sinking fund be dissolved and, unless this or another Act requires otherwise, the assets in the sinking fund be paid over to the government body in proportion to payments made into the fund by the government body.

(3) The Minister of Finance may certify that the assets of a sinking fund with respect to which the minister acts as trustee are sufficient to meet all payment obligations at maturity or on early redemption under the securities with respect to which the sinking fund was established.

(4) When the Minister of Finance makes a certification under subsection (3) in respect of a sinking fund

(a) all obligations to make further payments into the sinking fund are extinguished except the crediting of any earnings to the fund, and

(b) unless another Act requires otherwise, any surplus assets in the sinking fund as of the date of certification, as determined by the Minister of Finance, must be paid to the entity or entities that made the sinking fund payments in proportion to the respective amounts of their payments.

(5) When the Minister of Finance applies the assets of a sinking fund that has been certified under subsection (3) to the payments at maturity or on early redemption under the securities with respect to which the sinking fund was established,

(a) if the value of the assets in the sinking fund is greater than the amount of the payments to be made in respect of the securities, the government is entitled to the surplus, and

(b) if the value of the assets in the sinking fund is less than the amount of the payments to be made in respect of the securities, the government must pay out of the consolidated revenue fund the amount of the deficiency and apply it to making the payments required by the securities.

(6) Subsections (2) to (5) and (7) apply despite any other Act but are subject to the provisions of any securities requiring payments into a sinking fund.

(7) The assets in a sinking fund established under this or any other Act for repayment of a borrowing by a government body from the government are not subject to any process of garnishment, attachment, execution or seizure by a creditor of the government body.

12 Section 64 is repealed.

13 Section 65 is repealed and the following is substituted:

Execution of government securities

65 (1) Subject to subsection (2), securities issued by the government must be signed by the Minister of Finance, the Deputy Minister of Finance or another person designated by the Lieutenant Governor in Council, and the securities must be countersigned by

(a) an officer of the Ministry of Finance, or

(b) another person

designated by the Lieutenant Governor in Council.

(2) The following rights or instruments issued by the government must be signed in accordance with subsection (1) but are not required to be countersigned:

(a) coupons, talons, receipts or warrants;

(b) any other rights or instruments attached or relating to securities that are designated by the Lieutenant Governor in Council for the purposes of this section.

(3) If a designation is made under subsection (1), it may be a designation of a person by the person's name or it may be a designation of a title or office and, if a title or office is designated, the designation applies to every person holding or appointed to that title or office while the person holds that title or office, including in an acting capacity.

(4) The engraved, lithographed, printed or electronic signature of a person required to execute a security under this section 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 securities or at the date of the delivery of them.

(5) Securities issued by the government are not required to bear the seal of the ministry described in section 5.

(6) For the purposes of this Part, the rights and instruments described in subsection (2) are deemed to be securities.

14 Section 66 is repealed and the following substituted:

Fiscal agent, registrar and transfer agent

66 (1) The Minister of Finance is the fiscal agent of the government for the purpose of borrowing by the government under this or another Act and for the purpose of all other activities of the government described in this Part, and as fiscal agent that minister may arrange all details and do, transact and execute all deeds, matters and things necessary or advisable for the government to borrow or engage in those activities.

(2) The Minister of Finance may appoint additional persons to act as fiscal agents for the purposes referred to in subsection (1) and may enter into agreements setting their remuneration and containing the terms and conditions of their appointment.

(3) The Minister of Finance may appoint one or more registrars or transfer agents to perform services in respect of the registration or transfer of securities issued by the government and may enter into agreements setting their remuneration and containing the terms and conditions of their appointment.

15 Section 68 is repealed.

16 Section 69 is amended

(a) in paragraphs (a) to (e) by adding "or assumed" after "issued",

(b) in paragraph (e) by striking out "registrars and transfer agents" and substituting "registrars, transfer agents and other agents",

(c) by repealing paragraph (f) and substituting the following:

(f) for all costs, expenses and charges incurred in relation to borrowings by the government or in the issue, redemption, repurchase, servicing, payment and management of borrowings by the government and of securities issued in respect of those borrowings; , and

(d) by adding the following paragraphs:

(g) to purchase securities of the government under section 56.5 (1) (a);

(h) to make payments required by arrangements made for overdrafts under section 51 (7) or bankers' acceptances and other prescribed credit instruments under section 56.2;

(i) to pay the fees and other charges relating to registration with the applicable regulatory authorities or listing of securities of the government on securities or other exchanges.

17 Section 71 is repealed.

18 Section 83 is amended by striking out "Minister of Finance and Corporate Relations" wherever it appears and substituting "Minister of Provincial Revenue".

19 The following section is added to Part 11:

Delegation

87.1 The Lieutenant Governor in Council may, by order, delegate to an officer of the Ministry of Finance any or all of the powers, duties and functions of the Minister of Finance under Part 8, 9 or 9.1.

20 Section 88 (2) is repealed and the following substituted:

(2) Without limiting subsection (1), the Lieutenant Governor in Council may make the following regulations:

(a) prescribing pension funds for the purpose of the definition of pension fund in section 1;

(b) deeming an organization to be a government body for the purposes of Parts 8, 9 and 9.1 of this Act.

 
Consequential Amendments and Transitional

 
Home Owner Grant Act

21 Section 12 of the Home Owner Grant Act, R.S.B.C. 1996, c. 194, is amended

(a) in subsection (1) (b) by striking out "Minister of Finance and Corporate Relations" and substituting "Minister of Provincial Revenue", and

(b) by striking out "Minister of Municipal Affairs and Housing" wherever it appears and substituting "Minister of Provincial Revenue".

 
Hydro and Power Authority Act

22 Section 32 (7) (k) of the Hydro and Power Authority Act, R.S.B.C. 1996, c. 212, is repealed and the following substituted:

(k) sections 4.1, 53, 53.1, 54, 56, 56.3, 56.4, 63, 77 and 79 of the Financial Administration Act; .

 
Indian Self Government Enabling Act

23 Sections 5 (3), 31, 32 and 33 (1) of the Indian Self Government Enabling Act, R.S.B.C. 1996, c. 219, are amended by striking out "Minister of Finance and Corporate Relations" and substituting "Minister of Provincial Revenue".

 
Insurance Premium Tax Act

24 Sections 12 (3), 34 (3) and 40 (1) of the Insurance Premium Tax Act, R.S.B.C. 1996, c. 232, are amended by striking out "Ministry of Finance and Corporate Relations" and substituting "Ministry of Provincial Revenue".

 
Pension Agreement Act

25 Section 4 of the Pension Agreement Act, R.S.B.C. 1996, c. 351, is amended by striking out "Minister of Finance and Corporate Relations," and substituting "Minister of Finance".

 
Taxation (Rural Area) Act

26 Section 51 of the Taxation (Rural Area) Act, R.S.B.C. 1996, c. 448, is amended by striking out "Ministry of Finance and Corporate Relations" and substituting "Ministry of Provincial Revenue".

 
Schedules to this Act

27 (1) In the provisions set out in Schedule A "Minister of Finance and Corporate Relations" is struck out and "Minister of Finance" is substituted, and

(2) In the provisions set out in Schedule B "Ministry of Finance and Corporate Relations" is struck out and "Ministry of Finance" is substituted.

Transitional

28 Nothing in this Act impairs or prejudicially affects the rights of the holder of securities issued by the government before this Act comes into effect.

Commencement

29 This Act comes into force by regulation of the Lieutenant Governor in Council.

 
Schedule A

 
Schedule B