BILL 4 – 2004
BUSINESS PRACTICES AND CONSUMER PROTECTION AUTHORITY ACT

Contents

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

Part 1 -- Definitions

Definitions

1 In this Act:

"authority" means the Business Practices and Consumer Protection Authority established under section 2;

"chief executive officer" means the chief executive officer appointed under section 21;

"senior officer" has the same meaning as in the Business Corporations Act.

Part 2 -- Authority Established

Business Practices and Consumer Protection Authority established

2 (1) The Business Practices and Consumer Protection Authority is established as a not for profit corporation without share capital and consisting of a board of directors appointed under section 6.

(2) The authority has the power and capacity of a natural person of full capacity.

(3) The authority may have a corporate seal, which may be engraved, lithographed, printed or otherwise mechanically reproduced.

(4) The authority is not an agent of the government.

(5) For its purposes, the authority may carry on any necessary or advisable activities both inside and outside of British Columbia.

Status of assets if authority is dissolved

3 If the authority is dissolved, after payment of all debts and liabilities, its remaining property must be distributed to a not for profit successor corporation with similar purposes.

Purposes of authority

4 The purposes of the authority are to deliver consumer protection services throughout British Columbia, to promote fairness and understanding in the marketplace and to administer in the public interest any Act, the administration of which is delegated to the authority.

Revenue, borrowing and expenditure

5 (1) The authority may fund its operating costs and capital expenditures from the following:

(a) fees for certificates, licences or permits under the Business Practices and Consumer Protection Act and other permissions authorized by regulation under that Act;

(b) fees or charges for the performance of any duty by the authority;

(c) charges for other services performed by the authority;

(d) money, to which the authority is entitled, that is recovered from investigations and seizures;

(e) money borrowed for operating costs and capital expenditures;

(f) any other revenue of the authority other than monetary penalties.

(2) All money paid to the authority must be used for the purposes of the authority.

(3) Any monetary penalties under the Business Practices and Consumer Protection Act collected by or paid to the authority must be held in a separate fund by the authority and expended to advance consumer protection.

Part 3 -- Governance of Authority

Appointment of directors

6 (1) The board of directors is to consist of up to 9 directors appointed as follows:

(a) the minister may appoint one director;

(b) the directors may appoint other directors, to a maximum of 9 directors on the board, from among eligible candidates recommended under section 7;

(c) the directors may appoint any director, other than a director appointed under paragraph (a), as the chair of the board.

(2) The term of office of the chair is 5 years.

(3) The term of office of a director other than the chair is 3 years.

(4) A director may not serve as a director for more than 6 consecutive years unless the additional service is as the chair.

(5) A director may not serve as the chair for more than 10 consecutive years.

(6) A person who has served the maximum number of consecutive years under this section is not eligible to be reappointed as a director until after a break in service of at least 3 years.

(7) The authority must

(a) pay the remuneration of the chair and of the directors other than directors who are employees as defined in the Public Service Act, and

(b) reimburse the directors for reasonable travelling and out of pocket expenses necessarily incurred in carrying out their duties.

(8) A vacancy on the board of directors does not impair the power and capacity of the authority.

Nominating process

7 (1) The board must appoint a nominating committee from among its members.

(2) The nominating committee must

(a) prepare a list of qualified nominees to fill vacancies on the board, and

(b) from that list make a reasonable attempt to submit to the board at least one more nominee than the number required to fill the vacancies on the board.

(3) In preparing the list of nominees, the nominating committee must base its selection on the principle of merit and must use a process designed to appraise the knowledge, skills and abilities of the nominees.

(4) The board may make appointments only from the list of nominations submitted to the board by the nominating committee.

Persons qualified to be directors

8 (1) A person must not become a director or act as a director of the authority unless that person is an individual who is qualified to do so.

(2) An individual is not qualified to become a director or to act as a director of the authority if that individual is

(a) under the age of 18 years,

(b) found by a court, in Canada or elsewhere, to be incapable of managing the individual's own affairs,

(c) an undischarged bankrupt, or

(d) convicted inside or outside of British Columbia of an offence in connection with the promotion, formation or management of a corporation or an unincorporated business, or of an offence involving fraud, unless

(i) the court orders otherwise,

(ii) 5 years have elapsed since the last to occur of

(A) the expiration of the period set for suspension of the passing of sentence without a sentence having been passed,

(B) the imposition of a fine,

(C) the conclusion of the term of any imprisonment, and

(D) the conclusion of the term of any probation imposed, or

(iii) a pardon was granted or issued under the Criminal Records Act (Canada).

(3) A director who ceases to be qualified to act as a director of the authority must promptly resign.

Standard of conduct of director or officer

9 (1) A director or an officer of the authority, when exercising the powers and performing the duties and functions of a director or an officer of the authority, must do all of the following:

(a) act honestly and in good faith;

(b) act with a view to the best interests of the authority;

(c) exercise the care, diligence and skill that a reasonably prudent individual would exercise in comparable circumstances;

(d) act in accordance with this Act and the Business Practices and Consumer Protection Act;

(e) act in accordance with any other Act, the administration of which is delegated to the authority;

(f) subject to paragraphs (a) to (e), act in accordance with any provisions of the Business Corporations Act that apply to the authority.

(2) The appointment of a director appointed under section 6 (1) (b) may be rescinded only by a resolution of more than 2/3 of all the directors, stating that they consider the director to have failed to adhere to a standard of conduct under subsection (1).

(3) This section is in addition to, and not in derogation of, any enactment or rule of law or equity relating to the duties or liabilities of directors and officers of a corporation.

(4) No provision in a contract relieves a director from

(a) the duty to act in accordance with this Act, the Business Practices and Consumer Protection Act and the regulations under them or any applicable provision of the Business Corporations Act,

(b) the duty to act in accordance with any Act, the administration of which is delegated to the authority, or

(c) liability that by virtue of any enactment or rule of law or equity would otherwise attach to that director in respect of any negligence, default, breach of duty or breach of trust of which the director may be guilty in relation to the authority.

How person ceases to be a director

10 (1) A director ceases to hold office when the director's term of office expires or when the director dies or resigns.

(2) A director's resignation becomes effective at the time a written resignation is delivered to the authority or at the time specified in the resignation, whichever is later.

Meetings and quorum

11 (1) A simple majority of all the directors constitutes a quorum of the board.

(2) If there is a tie vote of the directors present at a meeting of the board, the chair must cast a second and deciding vote.

Powers and duties of board

12 (1) The directors must manage the affairs of the authority or supervise the management of those affairs and may exercise the powers conferred on the authority under this Act or any other enactment.

(2) The directors must appoint an audit committee as provided in the regulations.

(3) A limitation or restriction on the powers or functions of the directors is not effective against a person who does not have knowledge of the limitation or restriction.

Decisions of board by resolution

13 All decisions of the board must be made by resolution.

Resolution of directors in writing

14 (1) A resolution of the directors or of any committee of them may not be passed without a meeting, except as permitted by subsection (3).

(2) A meeting of directors or of a committee of directors may be held by

(a) telephone, or

(b) other communications facilities

so long as all participants in the meeting are able to hear each other, and a director who participates in the meeting by that means must be counted as present at the meeting.

(3) A resolution of the directors may be passed without a meeting if all the directors consent to the resolution in writing and the consent is filed with the minutes of proceedings of the directors.

(4) The authority must keep minutes of all proceedings at meetings of the board and its committees.

Part 4 -- Conflict of Interest

Disclosable interests

15 (1) For the purposes of this Part, a director, the chief executive officer or a senior officer holds a disclosable interest in a contract or transaction if

(a) the contract or transaction is material to the authority,

(b) the authority has entered, or proposes to enter, into the contract or transaction, and

(c) either of the following applies to the director, chief executive officer or senior officer:

(i) the director, chief executive officer or senior officer has a material interest in the contract or transaction;

(ii) the director, chief executive officer or senior officer is a director or senior officer of, or has a material interest in, a person who has a material interest in the contract or transaction.

(2) For the purposes of subsection (1) and this Part, the director, the chief executive officer or a senior officer does not hold a disclosable interest in a contract or transaction merely because

(a) the contract or transaction relates to the remuneration of the director, chief executive officer or senior officer in that person's capacity as director, officer, employee or agent of the authority or of an affiliate of the authority, or

(b) the contract or transaction has been or will be made with or for the benefit of a corporation that is affiliated with the authority and the director, chief executive officer or senior officer is also a director or senior officer of that corporation or an affiliate of that corporation.

(3) A director who has a disclosable interest in a contract or transaction is not entitled to vote on any director's resolution to approve that contract or transaction.

Obligation to account for profits

16 (1) Subject to subsection (2), a director, the chief executive officer or a senior officer is liable to account to the authority for any profit that accrues to that individual under or as a result of a contract or transaction in which that individual has a disclosable interest.

(2) A director, the chief executive officer or a senior officer is not liable to account for and may retain the profit referred to in subsection (1) in any of the following circumstances:

(a) before the contract or transaction is entered into and after the nature and extent of the conflict of interest is disclosed to the board, the contract or transaction is approved by the board;

(b) the contract or transaction was reasonable and fair to the authority at the time it was entered into and, after full disclosure of the nature and extent of the conflict of interest, the contract or transaction is approved by the board.

Powers of court

17 (1) In this section, "court" means the Supreme Court.

(2) On an application by the authority or by a director, the chief executive officer or a senior officer, the court may, if it determines that a contract or transaction in which a director, the chief executive officer or a senior officer has a disclosable interest was fair and reasonable to the authority,

(a) order that the director, the chief executive officer or a senior officer is not liable to account for any profit that accrues to the director, chief executive officer or senior officer under or as a result of the contract or transaction, and

(b) make any other order that the court considers appropriate.

(3) Unless a contract or transaction in which a director, the chief executive officer or a senior officer has a disclosable interest has been approved in accordance with section 16 (2), the court may, on an application by the authority or by a director, the chief executive officer or a senior officer, make one or more of the following orders if the court determines that the contract or transaction was not fair and reasonable to the authority:

(a) enjoin the authority from entering into the proposed contract or transaction;

(b) order that the director, chief executive officer or senior officer is liable to account for any profit that accrues to the director, chief executive officer or senior officer under or as a result of the contract or transaction;

(c) make any other order that the court considers appropriate.

Validity of contracts and transactions

18 A contract or transaction with the authority is not invalid merely because

(a) a director of the authority, the chief executive officer or a senior officer has an interest, direct or indirect, in the contract or transaction,

(b) a director of the authority, the chief executive officer or a senior officer has not disclosed an interest he or she has in the contract or transaction, or

(c) the directors have not approved the contract or transaction in which a director of the authority, the chief executive officer or a senior officer has an interest.

Limitation of obligations of director, chief executive officer or senior officer

19 Except as provided in this Part, a director, the chief executive officer or a senior officer has no obligation to

(a) disclose any direct or indirect interest that the director, chief executive officer or senior officer has in a contract or transaction, or

(b) account for any profit that accrues to the director, chief executive officer or senior officer under or as a result of a contract or transaction in which the director, chief executive officer or senior officer has a disclosable interest.

Disclosure of conflict of office or property

20 (1) If a director, the chief executive officer or a senior officer holds any office, or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual's duty or interest as director, chief executive officer or senior officer of the authority, the individual must disclose, in accordance with this section, the nature and extent of the conflict.

(2) The disclosure required under subsection (1)

(a) must be made to the directors promptly

(i) after that individual becomes a director, the chief executive officer or a senior officer, or

(ii) if that individual is already a director, the chief executive officer or a senior officer, after that individual begins to hold the office or possess the property, right or interest for which disclosure is required, and

(b) must be evidenced in a consent resolution, the minutes of a meeting or any other record deposited in the authority's records.

Part 5 -- Officers and Employees

Appointment of chief executive officer

21 The directors must appoint an individual as the chief executive officer of the authority to carry out the functions and duties that the board specifies and may set the remuneration of the chief executive officer.

Employees

22 (1) The chief executive officer, to the extent authorized by the board, may appoint officers and employees of the authority and may define their duties.

(2) The Public Service Act and the Public Service Labour Relations Act do not apply to the authority or to its employees.

Part 6 -- Financial Administration

Accounting records required

23 (1) The authority must keep adequate accounting records for each of its financial years and must retain the accounting records kept for a financial year for at least 7 years.

(2) On request, all books or records of account, documents and other financial records must be open for inspection by the minister or a person designated by the minister.

Fiscal year of authority

24 The fiscal year of the authority is the period of 12 months beginning on January 1 in each year and ending on December 31 of that year.

Financial statements

25 The authority must prepare annual financial statements in accordance with generally accepted accounting principles.

Annual reports

26 The authority must prepare and make publicly available within 6 months after the end of its fiscal year all of the following:

(a) a report on its operations for the preceding fiscal year, including a report of an independent auditor who was engaged to express an opinion on the authority's financial statements for the preceding fiscal year after an audit conducted in accordance with generally accepted auditing standards;

(b) a report on the operational programs of the authority showing a comparison of actual results with expected results for that fiscal year.

Business plan

27 Before each fiscal year, the authority must prepare and make publicly available a business plan for the next 3 fiscal years.

Appointment of auditor

28 (1) Unless the Auditor General is appointed in accordance with the Auditor General Act as the auditor of the authority, the authority must appoint an independent auditor authorized under section 205 (a) or (b) of the Business Corporations Act.

(2) Section 206 of the Business Corporations Act applies to the appointment of an auditor under subsection (1).

Part 7 -- General

Application of other Acts

29 (1) The following Acts do not apply to the authority:

(a) Budget Transparency and Accountability Act;

(b) Document Disposal Act;

(c) Financial Administration Act.

(2) The Lieutenant Governor in Council, by regulation, may direct that provisions of the Business Corporations Act apply to the authority.

Appointment of temporary administrator

30 (1) The Lieutenant Governor in Council may appoint an administrator to temporarily discharge the powers, duties and functions of the board if the Lieutenant Governor in Council identifies an immediate and direct threat to the ability of the board to function which could significantly compromise the public interest.

(2) On the appointment of an administrator, the members of the board cease to hold office unless otherwise ordered by the Lieutenant Governor in Council.

(3) During the term of the administrator, the powers of any members of the board who continue to hold office are suspended unless otherwise ordered by the Lieutenant Governor in Council.

(4) The Lieutenant Governor in Council may specify one or more of the following:

(a) the powers, duties and functions of an administrator appointed under this section;

(b) the terms and conditions for management of the property and affairs of the authority during the transition period preceding the ending of the appointment of the administrator;

(c) that the administrator must use the nominating process in accordance with sections 6 to 8 to fill any vacancies on the board and that the members appointed take office at the termination of the administrator's appointment.

Power to make regulations

31 (1) The Lieutenant Governor in Council may make regulations referred to in section 41 of the Interpretation Act.

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

(a) directing that provisions of the Business Corporations Act apply to the authority;

(b) specifying requirements for the composition of the audit committee and specifying the procedures and obligations of the members of the committee for the purposes of section 12 (2);

(c) extending the time for compliance with section 27.

Part 8 -- Transitional Provisions

Initial board appointments

32 (1) Despite section 6, the minister may establish the initial board of the authority by appointing the chair of the initial board and setting the terms of office and the initial remuneration for the chair.

(2) The chair of the initial board must appoint 2 other directors from a list of candidates selected on the principle of merit using a process designed to appraise the knowledge, skills and abilities of candidates, and may set their terms of office and initial remuneration.

(3) Section 7 does not apply to the appointment of the initial board.

Powers and duties of initial board

33 (1) The initial board has all the powers of the board of the authority.

(2) Section 6 (3) does not apply to appointments to the board made by the initial board.

(3) Section 21 does not apply to the initial board, but the board may appoint a chief executive officer or may exercise all the powers of the chief executive officer.

(4) Sections 25 and 26 do not apply to the initial board, but the board must prepare a financial statement for the period of its administration and deliver a copy to the minister.

(5) Section 27 does not apply to the initial board.

(6) If the initial board appoints any of its members to the board, those persons may be appointed for a term of only one year.

Transitional business plan

34 (1) Within 3 months of taking office, the first board appointed under section 6 must prepare and make publicly available a business plan for the remainder of that fiscal year and the next 2 fiscal years.

(2) Section 27 does not apply during the year in which the business plan under subsection (1) is prepared and made publicly available.

Start-up loans by government to the authority

35 (1) The government may lend money to the authority to establish its operations.

(2) The authority is deemed to be a government body for the purposes of Part 8 of the Financial Administration Act in relation to a loan made under subsection (1).

Appropriation for start-up grants by government to the authority

36 (1) The government may pay out of the consolidated revenue fund to the authority grants of up to $500 000 during the fiscal year of the government starting April 1, 2004.

(2) The government may pay out of the consolidated revenue fund to the authority grants of up to $500 000 during the fiscal year of the government starting April 1, 2005.

Appropriation for allocation of long term fees to the authority

37 (1) In this section, "long term fees" means

(a) that portion of any fees that are collected by the government in respect of licences, permits or other permissions under any of the Cemetery and Funeral Services Act, Debt Collection Act and Travel Agents Act during the fiscal year of the government beginning April 1, 2003 and that relate to a licence period, permit period or other period that extends beyond that fiscal year, and

(b) any fees that are collected by the government in respect of licences, permits or other permissions under any of the Cemetery and Funeral Services Act, Debt Collection Act, Travel Agents Act, Business Practices and Consumer Protection Act and Cremation, Interment and Funeral Services Act during the fiscal year of the government beginning April 1, 2004.

(2) Despite the Financial Administration Act, revenue collected by the government as long term fees must be considered to have been collected by the government as agent for the authority under this Act and must be paid into the consolidated revenue fund.

(3) Despite the Financial Administration Act, money paid into the consolidated revenue fund under subsection (2) may be paid by the government out of the consolidated revenue fund to the authority under this Act without an appropriation other than this section.

Part repealed

38 Part 8 is repealed by regulation of the Lieutenant Governor in Council.

Consequential Amendment

Freedom of Information and Protection of Privacy Act

39 Schedule 2 of the Freedom of Information and Protection of Privacy Act, R.S.B.C. 1996, c. 165, is amended by adding the following:

Commencement

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