Transaction Exemptions for Trans Mountain Crown Corporations

Summary#

These final regulations (SOR/2024-78) amend the Crown Corporation General Regulations, 1995 to exempt certain Crown corporations from needing Governor in Council approval for specific corporate transactions tied to the Trans Mountain pipeline. The change took effect on registration on May 3, 2024 and names Canada Growth Fund Inc. and Canada Development Investment Corporation (for pipeline-related transactions) as exempted entities.

What it does#

• Replaces section 2.1 of the Crown Corporation General Regulations, 1995 to list two Crown corporations and their wholly owned subsidiaries as exempt from application of section 91 of the Financial Administration Act.
• The two exempted bodies are:
  • Canada Growth Fund Inc.
  • Canada Development Investment Corporation, but only for transactions done to operate or divest the Trans Mountain Pipeline System.
• Practically, that means these Crown corporations can, without separate Governor in Council authorization each time:
  • incorporate new subsidiaries;
  • buy or sell shares in other corporations;
  • carry out internal reorganizations (creation, amalgamation, transfer of ownership of subsidiaries) related to operating or divesting the pipeline.
• The government document specifically notes these powers would help with setting up subsidiaries for marketing spare pipeline capacity, expanding insurance arrangements, and creating a special purpose vehicle to support Indigenous economic participation.
• The rule does not remove normal reporting and oversight: the named Crown corporations must still submit quarterly financial reports, annual plans, and are subject to audits.

Who's affected#

• Directly affected: Canada Development Investment Corporation, its wholly owned subsidiary Canada TMP Finance Ltd (TMP Finance), Trans Mountain Corporation, and their present or future wholly owned subsidiaries.
• Also listed: Canada Growth Fund Inc. (as an exempted Crown corporation).
• Indirectly affected: Indigenous groups identified as eligible Indigenous groups (EIGs) along the pipeline corridor and marine shipping route, because one outcome could be creation of a vehicle to hold and transfer pipeline cash flows to participating communities.
• The government’s analysis says Canadian small businesses are not expected to be affected. It is unclear whether other private-sector parties (beyond insurers and pipeline customers mentioned as context) will notice direct changes from this rule itself.

Why it matters#

• It lets the government-owned pipeline entities act faster and more like private companies when they need to reorganize parts of the business. That can reduce delays for time-sensitive commercial moves (for example, creating a new marketing arm or adjusting insurance coverage).
• The change is intended to help operate and eventually divest the expanded Trans Mountain project — which the government says will increase pipeline capacity to 890,000 barrels per day from 300,000 — and to support a planned Indigenous economic participation arrangement.
• Oversight remains through standard reporting and audits, but decisions that previously required separate Governor in Council approval can now proceed more quickly for the named purposes.