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The Energy Rate Stabilization Act
This is an unofficial archived version of The Energy Rate Stabilization Act
as enacted by SM 1987-88, c. 9 on July 17, 1987.

R.S.M. 1987, c. E115

The Energy Rate Stabilization Act

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

Definitions.

1

In this Act

"Canadian equivalent rate" where used to refer to the Canadian equivalent rate of a foreign debt means the interest rate that, in the opinion of the Minister of Finance, the issuer of the foreign debt would have been required to undertake to pay if the debt had been issued in Canada for the Canadian principal equivalent thereof on the day the foreign debt was issued repayable in Canadian dollars and, where the context requires, means the amount of interest in Canadian dollars that would have been required to be paid in a fiscal year if the Canadian principal equivalent of the foreign debt had been raised in Canada; ("taux équivalent canadien")

"Canadian principal equivalent" where used to refer to the Canadian principal equivalent of a foreign debt means, subject to subsections 2(3) and 4(3), the amount in Canadian dollars that, on the basis of the rate of exchange that applies to the foreign debt, equals the face value in the currency or unit of monetary value of the foreign debt; ("principal équivalent canadien")

"fiscal year" means the fiscal year of the government; ("exercice")

"foreign debt" means the bonds, debentures, notes and loans repayable in a foreign currency or a foreign unit of monetary value that were issued and sold or arranged

(a) by Manitoba Hydro, or

(b) by the government for the purposes of making or funding advances to Manitoba Hydro,

and includes any bond, debenture, note or loan repayable in a foreign currency or foreign unit of monetary value issued and sold or arranged by Manitoba Hydro or the government for the purpose of payment, refunding, refinancing or renewal in whole or in part of any bond, debenture, note or loan issued and sold or arranged by Manitoba Hydro, or by the government for the purpose of making or funding advances to Manitoba Hydro, and, where the context requires, means the amount in Canadian dollars of the debt due or accruing due under such bonds, debentures, notes and loans; ("dette extérieure")

"rate of exchange" means

(a) where the proceeds of a foreign debt are converted into Canadian dollars on or before the date of issue of the foreign debt, the value in Canadian dollars of the currency or unit of monetary value of the foreign debt as determined by the conversion, and

(b) where the proceeds of a foreign debt are not converted into Canadian dollars at any time or are not converted into Canadian dollars on or before the date of issue of the foreign debt, the value on the date of issue of the foreign debt in Canadian dollars of the currency of the foreign debt as published by an institution or agency which in the opinion of the Minister of Finance is reliable in respect of foreign monetary exchange matters, and includes the value on the date of issue of the foreign debt in Canadian dollars of the unit of monetary value of the foreign debt calculated on the basis of currency values published by such an institution or agency; ("taux de change" )

"refinance" where used to refer to the refinancing of a foreign debt, means the issue and sale of bonds, debentures and notes or the arranging of loans by the issuer of the foreign debt for the purpose of payment, refunding, refinancing or renewal of the foreign debt. ("refinancement")

Loss on principal of foreign debt by Hydro.

2(1)

Subject to subsection (2), where the amount required to be paid by Manitoba Hydro on the maturity of or to redeem a foreign debt issued by Manitoba Hydro is in excess of the Canadian principal equivalent of that foreign debt, the Minister of Finance shall pay to Manitoba Hydro an amount equal to that excess.

Refinancing in same foreign currency.

2(2)

Where foreign debt (hereinafter in this section referred to as "the original foreign debt") issued by Manitoba Hydro is refinanced, in whole or in part, by the issue of new foreign debt (hereinafter in this section referred to as "the new foreign debt") repayable in the same currency or unit of monetary value as the original foreign debt, the Minister of Finance shall defer, until the new foreign debt or any further foreign debt repayable in the same currency or unit of monetary value issued by Manitoba Hydro to refinance the new foreign debt is retired or refinanced in a different currency or unit of monetary value,

(a) where the whole of the original foreign debt is refinanced, the whole of the amount required to be paid under subsection (1) in respect of the original foreign debt; and

(b) where a part only of the original foreign debt is refinanced, a portion of the amount required to be paid under subsection (1) in respect of the original foreign debt that bears the same proportion to the whole of that amount as the portion of the original foreign debt that is refinanced bears to the whole of the original foreign debt;

and shall charge the Consolidated Fund with the amount so deferred.

Canadian principal equivalent of new foreign debt.

2(3)

For the purposes of the records of the government and Manitoba Hydro, where an amount required to be paid under subsection (1) in respect of an original foreign debt is deferred under subsection (2),

(a) if the whole of the amount required to be paid under subsection (1) in respect of the foreign debt is deferred, the Canadian principal equivalent of the new foreign debt shall be equal to the Canadian principal equivalent of the original foreign debt; and

(b) if a part only of the amount required to be paid under subsection (1) in respect of the original foreign debt is deferred under subsection (2), the Canadian principal equivalent of the new foreign debt shall be equal to that portion of the Canadian principal equivalent of the original foreign debt that bears the same proportion to the Canadian principal equivalent of the whole of the original foreign debt as the portion of the amount required to be paid under subsection (1) in respect of the original foreign debt that is deferred bears to the whole of the amount required to be paid under subsection (1) in respect of the original foreign debt.

Loss on payment of interest on foreign debt by Hydro.

3

Where the amount required to be paid by Manitoba Hydro in any fiscal year during the term of a foreign debt issued by Manitoba Hydro by way of interest on the foreign debt is in excess of the Canadian equivalent rate of that foreign debt, the Minister of Finance shall pay to Manitoba Hydro in that fiscal year an amount equal to that excess.

Gain on payment of principal of foreign debt by Hydro.

4(1)

Subject to subsection (2), where the amount required to be paid by Manitoba Hydro on the maturity of or to redeem a foreign debt issued by Manitoba Hydro is less than the Canadian principal equivalent of that foreign debt, Manitoba Hydro shall pay to the government an amount equal to the difference between the amount in Canadian dollars that Manitoba Hydro was required to pay on the maturity of or to redeem the foreign debt and the Canadian principal equivalent of the foreign debt.

Refinancing in same foreign currency.

4(2)

Where foreign debt (hereinafter in this section referred to as "the original foreign debt") issued by Manitoba Hydro is refinanced, in whole or in part, by the issue of new foreign debt (hereinafter in this section referred to as "the new foreign debt") repayable in the same currency or unit of monetary value as the original foreign debt, Manitoba Hydro shall defer, until the new foreign debt or any further foreign debt repayable in the same currency or unit of monetary value issued by Manitoba Hydro to refinance the new foreign debt is retired or refinanced in a different currency or unit of monetary value,

(a) where the whole of the original foreign debt is refinanced, the whole of the amount required to be paid under subsection (1) in respect of the original foreign debt; and

(b) where a part only of the original foreign debt is refinanced, a portion of the amount required to be paid under subsection (1) in respect of the original foreign debt that bears the same proportion to the whole of that amount as the portion of the original foreign debt that is refinanced bears to the whole of the original foreign debt.

Canadian principal equivalent of new foreign debt.

4(3)

For the purposes of the records of the government and Manitoba Hydro, where an amount required to be paid under subsection (1) in respect of an original foreign debt is deferred under subsection (2),

(a) if the whole of the amount required to be paid under subsection (1) in respect of the foreign debt is deferred, the Canadian principal equivalent of the new foreign debt shall be equal to the Canadian principal equivalent of the original foreign debt; and

(b) if a part only of the amount required to be paid under subsection (1) in respect of the original foreign debt is deferred under subsection (2), the Canadian principal equivalent of the new foreign debt shall be equal to that portion of the Canadian principal equivalent of the original foreign debt that bears the same proportion to the Canadian principal equivalent of the whole of the original foreign debt as the portion of the amount required to be paid under subsection (1) in respect of the original foreign debt that is deferred bears to the whole of the amount required to be paid under subsection (1) in respect of the original foreign debt.

Gain on payment of interest on foreign debt by Hydro.

5

Where the amount required to be paid by Manitoba Hydro in any fiscal year during the term of a foreign debt issued by Manitoba Hydro by way of interest on the foreign debt is less than the Canadian equivalent rate of that foreign debt, Manitoba Hydro shall pay to the government in that fiscal year an amount equal to the difference between the amount that Manitoba Hydro was required to pay in that fiscal year by way of interest on the foreign debt and that Canadian equivalent rate of the foreign debt.

Payment by Hydro in respect of foreign debt issued by government.

6(1)

Notwithstanding any terms or conditions heretofore or hereafter fixed by the Lieutenant Governor in Council in respect of the repayment by Manitoba Hydro of the principal amount of advances made by the government to Manitoba Hydro and the payment by Manitoba Hydro of the interest thereon, where the government made or funded or makes or funds an advance to Manitoba Hydro from moneys raised by foreign debt issued by the government,

(a) the principal amount required to be repaid to the government by Manitoba Hydro in respect of the advance is the Canadian principal equivalent of the foreign debt, or the part thereof that was used for the making or funding of the advance to Manitoba Hydro: and

(b) subject to subsection (2), the rate of interest required to be paid to the government by Manitoba Hydro in respect of the advance is the Canadian equivalent rate of the foreign debt, or the part thereof that was used for the making or funding of the advance to Manitoba Hydro.

Term of Canadian equivalent rate.

6(2)

At the time the Canadian equivalent rate is established in respect of an advance for the purposes of clause (l)(b), the Lieutenant Governor in Council may fix a term for the rate and, where a term is so fixed, the rate established shall, notwithstanding anything herein to the contrary, remain applicable in respect of the advance during all of that term.

Records to be kept by Minister of Finance.

7

The Minister of Finance shall keep a separate record indicating

(a) the total from time to time of

(i) all moneys paid to Manitoba Hydro under sections 2 and 3, and

(ii) the deficiency in the amount paid by Manitoba Hydro under section 6 in respect of the principal of or interest on foreign debt issued by the government under the amount that the government is required to pay in Canadian dollars in respect of the principal of and interest on that foreign debt;

(b) the total from time to time of

(i) all moneys paid by Manitoba Hydro to the government under sections 4 and 5, and

(ii) the excess in the amount paid by Manitoba Hydro under section 6 in respect of the principal of and interest on foreign debt issued by the government over the amount that the government is required to pay in Canadian dollars in respect of the principal of and interest on that foreign debt;

(c) the total from time to time of the amounts of payments deferred under subsection 2(2); and

(d) the total from time to time of the amounts of payments deferred under subsection 4(2).

Subsec. 43(3) of Manitoba Hydro Act not to apply.

8

Subsection 43(3) of The Manitoba Hydro Act does not apply to or in respect of any payment made under this Act, whether the payment is made by Manitoba Hydro to the government or made by the Minister of Finance to Manitoba Hydro.

Payments without further appropriation.

9

Amounts required under this Act to be paid by the Minister of Finance to Manitoba Hydro shall be paid from the Consolidated Fund without any further or other appropriation by the Legislature.

Declarations of self-sustaining debt.

10

Where any foreign debt issued by the government is or has been declared under The Financial Administration Act to be self-sustaining debt, the declaration shall be conclusively deemed to be subject to the exception that the foreign debt is not self-sustaining debt to the extent that the amounts to be paid by Manitoba Hydro in respect of the principal of and interest on the foreign debt under section 6 are less than amounts that the government is required to pay in Canadian dollars in respect of the principal of and interest on the foreign debt.

Application of Act to old foreign debt.

11

Notwithstanding that this Act was not in force at the time that foreign debt was issued, it applies in respect of foreign debt whether it was issued before or after the coming into force of this Act.

Regulations.

12

The Lieutenant Governor in Council may make regulations

(a) respecting the manner of accounting in the records of the government and of Manitoba Hydro for foreign debt, for the payments and deferral of payments under this Act and for the gains and losses on transactions related to foreign debt; and

(b) the procedures for making payments under this Act.