BACKGROUND
- Canadian National (CN) was originally incorporated pursuant to a special act, the Canadian National (CN) Railways Act, and was authorized to conduct its affairs pursuant to the Railway Act, the former National Transportation Act of 1987.
- The Government’s decision to privatize CN was formally announced in February 1995 as part of the federal Budget. The commercialization of CN provided an opportunity for the Government to continue CN under a modern corporate statute. With the repeal of the CN Railways Act, CN was continued under the Canadian Business Corporations Act (CBCA).
- The CN Commercialization Act was enacted in July 1995, and by November 1995, the Government completed an initial public offering and transferred all of its shares to private investors.
- The CN Commercialization Act included several unique mandatory provisions, including:
- The Official Languages Act (OLA) continues to apply to CN as if it continued to be a federal institution under the OLA;
- Voting share restrictions (initially 15%, and later amended to 25%) that promote a broad distribution of ownership and prevent control of CN from falling into the hands of any single investor; and,
- A requirement that the head office of CN is to be situated within the Montreal Urban Community in Quebec.
- While CN is subject to the provisions of the CBCA regarding the appointment of its board of directors, which stipulates requirements around Canadian residency as well as director duties and liabilities, CN also must adhere to its unique provisions under the CN Commercialization Act.
- There are no provisions within the CN Commercialization Act or the Official Languages Act that specifically require CN to have bilingual of Francophone representation on their board of directors.