1. The purpose of this circular is to inform departments, Mixed Enterprise Corporations (MECs) and Joint Enterprise Corporations (JECs) of a new Treasury Board policy respecting the accountability of such corporations and the roles of Ministers responsible.

2. This policy applies to all Mixed and Joint Enterprise corporations as may be listed in Volume III of the Public Accounts of Canada. Such enterprises are corporations with voting shares held by, on behalf of or in trust for the Crown jointly with another level of government (Joint Enterprise Corporations) or with the private sector (Mixed Enterprise Corporations). The above exclude Crown corporations listed in Schedules to or named in Section 96 of the Financial Administration Act, their successor corporations, subsidiaries and shareholdings.

3. Section 5(1) of the Financial Administration Act (FAA).

4. In the past, concerns have been expressed by the Auditor General of Canada, the Public Accounts Committee and the Lambert Royal Commission about the quantity and quality of information available to Parliament on the purpose, nature and extent of the government's participation in Mixed and Joint Enterprise corporations, as well as on the government's expenditures and the ongoing operations, financial position and operating results of such corporations.

5. The Treasury Board has concluded that a policy strengthening the reporting relationship to Parliament and to Treasury Board Ministers, should be implemented. The policy, as outlined below, ensures that Parliament will receive adequate and timely information concerning all major investments of public monies in Mixed and Joint Enterprise corporations while at the same time ensuring that the rights of other shareholders in these corporations are protected. The reporting policy is consistent with federal and provincial companies legislation.

6. Ministers responsible for any corporation defined by Treasury Board to be a MEC or JEC shall table in Parliament, in both official languages, a copy of that corporation's annual report, including a copy of the corporation's financial statement for its last completed fiscal year and the auditors report thereon within fifteen days after such annual report is made available to shareholders or, if Parliament is not then sitting, within the next five days thereafter that Parliament is sitting.

7. Where legal authority exists, Ministers shall ensure that, for any MECs/JECs for which they are responsible, at least one government nominee serves as a director of that corporation at all times except in those cases where Canada's voting interest is less than 10.0%.

8. Ministers responsible for any MECs or JECs shall provide to Treasury Board on a quarterly basis an interim financial report prepared in accordance with CICA guidelines. Along with such reports, Ministers shall include a confidential separate report signed by them which advises Treasury Board on any material changes in the corporation's operations or outlook which has an impact on Canada's investment. Such report should indicate whether the operations of the corporation are consistent, where applicable, with Canada's policy objectives for its own participation. Guidelines respecting timing, form and content of such advisory statements are to be established by Treasury Board Secretariat after consultation with departmental officials.

9. The appropriate Minister responsible for a MEC or a JEC which seeks any new equity investment, federal loan or loan guarantee, recoverable contribution, grant or contribution not generally available on the same terms and conditions to private sector corporations shall, in the year such assistance is given, ensure that a five-year corporate plan is submitted for review by Treasury Board before any related drawdowns are made. The application of this paragraph and the form and content of the corporate plan is to be established on a case-by-case basis by Treasury Board Secretariat after consultation with departmental officials.

10. Reporting requirements commence as of December 31, 1987.

11. Enquiries concerning this circular should be directed to:

Asst/Director
Corporate Information and Systems Division
Crown Corporations Directorate
Program Branch
Treasury Board Secretariat
Ottawa, Ontario
K1A 0R5
Tel.: (613)957-0110