CITY SERVICES CORPORATIONS

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 10.1 Athletic or aquatic facility corporation Rules for City 11. Prohibited use of powers in relation to corporations 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 Definitions 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; (“personne privée”) “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; (“entité du secteur public”) “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. (“personne morale en propriété exclusive”) O. Reg. 609/06, s. 1. 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. O. Reg. 609/06, s. 2 (1). (2) Sections 7, 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. O. Reg. 609/06, s. 2 (2); O. Reg. 26/15, s. 1. (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. O. Reg. 609/06, s. 2 (3). General Powers in Relation to Corporations for the City Power to establish corporations 3. The City may use the power 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. O. Reg. 609/06, s. 3. 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. O. Reg. 609/06, s. 4 (1). (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. O. Reg. 609/06, s. 4 (2). (3) 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 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. O. Reg. 609/06, s. 4 (3). 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. O. Reg. 609/06, s. 5 (1). (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. O. Reg. 609/06, s. 5 (2). 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. O. Reg. 609/06, s. 6. Asset transfer policies 7. (1) The City shall adopt and maintain policies on asset transfers to corporations. O. Reg. 609/06, s. 7 (1). (2) The City shall not transfer any of its assets to a corporation before the City adopts the policies referred to in subsection (1). O. Reg. 609/06, s. 7 (2). Public participation 8. Before establishing a corporation under section 3, the City shall consult with the public about the proposal to establish the corporation. O. Reg. 609/06, s. 8. 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. O. Reg. 609/06, s. 9 (1). (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. O. Reg. 609/06, s. 9 (2). (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. O. Reg. 609/06, s. 9 (3). (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. O. Reg. 609/06, s. 9 (4). 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). O. Reg. 609/06, s. 10 (1). (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. O. Reg. 609/06, s. 10 (2). Athletic or aquatic facility corporation 10.1 (1) The City and The Governing Council of the University of Toronto may together establish a corporation whose purposes are restricted to managing and operating the athletic or aquatic fieldhouse or centre constructed and initially used in connection with an international athletic competition to be held in the City in 2015. O. Reg. 158/13, s. 1. (2) This Regulation applies to the City and to a corporation incorporated under subsection (1) as if the corporation were established under clause 3 (b) and, for that purpose, any reference in this Regulation to a corporation established by a public sector entity, by the City alone or with one or more public sector entities or by one or more public sector entities other than the City shall be read as referring to a corporation established by the City and The Governing Council of the University of Toronto under subsection (1). O. Reg. 158/13, s. 1. (3) Despite subsection 18 (6), a corporation established under subsection (1) may, (a) if it is a share corporation, issue shares or give voting rights attached to the shares to The Governing Council of the University of Toronto; (b) if it is a non-share corporation and The Governing Council of the University of Toronto is a member of the corporation, allocate voting rights to The Governing Council of the University of Toronto. O. Reg. 158/13, s. 1. (4) A corporation established under subsection (1) is deemed to be a wholly-owned corporation for the purposes of clause 15 (1) (a), section 20 and subsection 21 (3) if, (a) all of the shares of the corporation are owned by the City and The Governing Council of the University of Toronto; or (b) the City, together with The Governing Council of the University of Toronto, has an entitlement to all of the voting rights allocated to the members of the corporation. O. Reg. 158/13, s. 1. 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, Youth and Family Services Act, 2017. 2.1 Community Safety and Policing Act, 2019. 3. Fire Protection and Prevention Act, 1997. 4. Health Protection and Promotion Act. 5. Fixing Long-Term Care Act, 2021 in respect of long-term care homes under Part IX of that Act. 6. Revoked: O. Reg. 107/24, s. 1 (2). 7. Provincial Offences Act. 8. Public Libraries Act. 9. Ontario Works Act, 1997. O. Reg. 609/06, s. 11 (1); O. Reg. 92/10, s. 1 (1); O. Reg. 164/18, s. 1; O. Reg. 277/22, s. 1 (1); O. Reg. 107/24, s. 1. (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. O. Reg. 609/06, s. 11 (2). (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 long-term care home under the Fixing Long-Term Care Act, 2021 in respect of long-term care homes under Part IX of that Act if 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. O. Reg. 92/10, s. 1 (2); O. Reg. 277/22, s. 1 (2). (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. O. Reg. 609/06, s. 11 (4). 12. Revoked: O. Reg. 26/15, s. 2. 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. O. Reg. 609/06, s. 13. Debt instruments 14. 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 to the corporation of land, equipment or other goods belonging to the City. O. Reg. 80/16, s. 1. 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; (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; or (c) if, (i) the purpose of the assistance is to facilitate the provision by the corporation of affordable housing, as defined in a by-law made by the City respecting provision of assistance to the corporation for this purpose, and (ii) the by-law contains policies regarding public eligibility for the housing units provided as part of the affordable housing. O. Reg. 609/06, s. 15 (1); O. Reg. 153/16, s. 1. (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. O. Reg. 609/06, s. 15 (2). (3) The assistance provided under clause (2) (a), (b) or (c) need not be at fair market value. O. Reg. 609/06, s. 15 (3). (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. O. Reg. 609/06, s. 15 (4). 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. O. Reg. 609/06, s. 16 (1). (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. O. Reg. 609/06, s. 16 (2). (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. O. Reg. 609/06, s. 16 (3). (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). O. Reg. 609/06, s. 16 (4). 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 do 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). O. Reg. 609/06, s. 17 (1); O. Reg. 80/16, s. 2. (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. O. Reg. 609/06, s. 17 (2). 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. O. Reg. 609/06, s. 18 (1). (2) A corporation may only invest in securities that on December 31, 2017, are prescribed under section 256 of the Act and, for the purpose of this subsection, any regulation made under that section of the Act as that regulation read on December 31, 2017 applies to the corporation as if it were the City. O. Reg. 361/15, s. 1; O. Reg. 153/16, s. 2 (2). (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). O. Reg. 609/06, s. 18 (3). (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. O. Reg. 609/06, s. 18 (4). (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. O. Reg. 609/06, s. 18 (5). (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. O. Reg. 609/06, s. 18 (6). (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. O. Reg. 609/06, s. 18 (7). 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. O. Reg. 609/06, s. 19. 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. O. Reg. 609/06, s. 20. Status of corporation 21. (1) A corporation is not a local board for the purposes of any Act. O. Reg. 609/06, s. 21 (1). (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. O. Reg. 609/06, s. 21 (2). (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. O. Reg. 609/06, s. 21 (3). 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. Revoked: O. Reg. 26/15, s. 3. O. Reg. 609/06, s. 22; O. Reg. 26/15, s. 3. 23. Omitted (provides for coming into force of provisions of this Regulation). O. Reg. 609/06, s. 23.