Canadian Telecommunications Common Carrier Ownership and Control Regulations (SOR/94-667)

Short Title

1 These Regulations may be cited as the Canadian Telecommunications Common Carrier Ownership and Control Regulations.

Interpretation

• 2 (1) In these Regulations,

  Act

  Act means the Telecommunications Act; (Loi)

  board

  board means the board of directors of a corporation; (conseil d’administration)

  carrier holding corporation

  carrier holding corporation means

  • (a) a corporation that beneficially owns and controls, in the aggregate and otherwise than by way of security only, not less than 66 2/3 per cent of the issued and outstanding voting shares of a Canadian carrier and that is not otherwise controlled by non-Canadians, or

  • (b) an acquiring corporation as defined in section 18; (société mère d’une entreprise ou société mère)

  depository

  depository means any person who provides centralized facilities for the clearing of trades in securities and is acting in relation to trades in voting shares solely in relation to the payment of funds or the delivery of securities, or both; (dépositaire)

  excess voting shares

  excess voting shares means issued and outstanding voting shares beneficially owned, or controlled, by non-Canadians in an amount greater than

  • (a) 20 per cent of the total issued and outstanding voting shares, in the case of a corporation referred to in subsection 16(1) of the Act, or

  • (b) the percentage of the total issued and outstanding voting shares that were beneficially owned, and controlled, by non-Canadians as at July 22, 1987, in the case of a corporation referred to in subsection 16(2) of the Act; (actions avec droit de vote excédentaires)

  holdco excess voting shares

  holdco excess voting shares means issued and outstanding voting shares of a carrier holding corporation beneficially owned, or controlled, by non-Canadians

  • (a) in the case of a carrier holding corporation that purports to be a qualified corporation, in an amount greater than 33 1/3 per cent of the total issued and outstanding voting shares of the carrier holding corporation, or

  • (b) in the case of a carrier holding corporation that is an acquiring corporation as defined in section 18, in an amount greater than the percentage of the total issued and outstanding voting shares of the carrier as defined in that section that were beneficially owned, and controlled, by non-Canadians as at July 22, 1987; (actions avec droit de vote excédentaires de la société mère)

  holdco principal stock exchange

  holdco principal stock exchange means, at any given time, the stock exchange in Canada on which the highest volume of voting shares of a carrier holding corporation is traded; (marché boursier principal de la société mère)

  intermediary

  intermediary means a person or entity, excluding a depository and trustee, that holds a security on behalf of another person or entity; (intermédiaire)

  non-Canadian

  non-Canadian means a person or entity that is not a Canadian; (non-Canadien)

  principal stock exchange

  principal stock exchange means, at any given time, the stock exchange in Canada on which the highest volume of voting shares of a Canadian carrier is traded; (marché boursier principal)

  qualified corporation

  qualified corporation means a corporation in which those of its shareholders who are Canadians beneficially own, and control, in the aggregate and otherwise than by way of security only, not less than 66 2/3 per cent of the issued and outstanding voting shares, and which is not otherwise controlled by non-Canadians; (personne morale qualifiée)

  qualified mutual insurance company

  qualified mutual insurance company means a mutual insurance company the head office and principal place of business of which are in Canada, and not less than 80 per cent of the board and of each committee of its directors of which are individual Canadians; (société mutuelle d’assurance qualifiée)

  qualified partnership

  qualified partnership means a partnership in which those of its partners who are Canadians beneficially own, and control, in the aggregate and otherwise than by way of security only, not less than 66 2/3 per cent of the beneficial interest in the partnership, and which is not otherwise controlled by non-Canadians; (société de personnes qualifiée)

  qualified pension fund society

  qualified pension fund society means a pension fund society the majority of whose members of its board of directors are individual Canadians, and that is established under An Act to Incorporate the Pension Fund Society of the Dominion Bank, S.C. 1887, c. 55; S.C. 1956, c. 66, An Act to Incorporate the Pension Fund Society of the Bank of Montreal, S.C. 1885, c. 13, the Pension Fund Society Act or any provincial legislation relating to the establishment of pension fund societies; (société de caisse de retraite qualifiée)

  qualified trust

  qualified trust means a trust in which Canadians have not less than 66 2/3 per cent of the beneficial interest, and of which a majority of the trustees are Canadians; (fiducie qualifiée)

  voting share

  voting share means a share of any class of shares of a corporation carrying voting rights under all circumstances or by reason of an event that has occurred and is continuing or by reason of a condition that has been fulfilled, and includes

  • (a) a security that is convertible into such a share at the time a calculation of the percentage of shares owned and controlled by Canadians is made, and

  • (b) an option or a right to acquire such a share, or the security referred to in paragraph (a), that is exercisable at the time the calculation referred to in that paragraph is made. (action avec droit de vote)

• (2) In these Regulations and for the purposes of section 16 of the Act,

  Canadian

  Canadian means

  • (a) a citizen within the meaning of subsection 2(1) of the Citizenship Act who is ordinarily resident in Canada,

  • (b) a permanent resident within the meaning of subsection 2(1) of the Immigration Act who is ordinarily resident in Canada, and has been ordinarily resident in Canada for not more than one year after the date on which that person first became eligible to apply for Canadian citizenship,

  • (c) a Canadian government, whether federal, provincial or local, or an agency thereof,

  • (d) a corporation without share capital, where a majority of its directors or officers, as the case may be, are appointed or designated, either by their personal names or by their names of office, by one or more of

    • (i) a federal or provincial statute or regulations made under a federal or provincial statute,

    • (ii) the Governor in Council or the lieutenant governor in Council of a province, or

    • (iii) a minister of the Crown in right of Canada or of a province,

  • (e) a qualified corporation,

  • (f) a qualified trust,

  • (g) a qualified mutual insurance company,

  • (h) a qualified partnership, or

    • (i) a qualified pension fund society. (Canadien)

General

3 For the purposes of these Regulations,

• (a) where one or more joint beneficial owners of, or persons or entities jointly controlling, voting shares of a corporation are non-Canadians, the voting shares shall be considered to be beneficially owned, or controlled, as the case may be, by non-Canadians;

• (b) the beneficial interest of a beneficiary in a trust shall be calculated

  • (i) if such interest is vested, in the proportion that the fair market value of such interest in the trust’s business, property and assets bears to the fair market value of all of the trust’s business, property and assets that is vested in beneficiaries thereof, and

  • (ii) if such interest is discretionary, in the proportion of the fair market value of all of the trust’s business, property and assets the disposition of which is discretionary, that the beneficiary bears to the total number of beneficiaries whose interests in the trust are discretionary;

• (c) the beneficial interest of a partner in a partnership shall be calculated as the proportion that the fair market value of such interest in the partnership bears to the fair market value of all of the interests in the partnership; and

• (d) where a person or entity who was a Canadian ceases to be a Canadian on any day, or is considered to be a non-Canadian pursuant to subsection 7(5) or 19(5), the day of registration of the voting shares beneficially owned, or controlled, by the person or entity shall be considered to be the earliest of the day on which

  • (i) the person or entity amends its address in the security register or other applicable book or record referred to in these Regulations, to an address outside Canada,

  • (ii) a director or officer of the corporation acquires knowledge that the person or entity is no longer a Canadian, or

  • (iii) the person or entity is considered to be a non-Canadian pursuant to subsection 7(5) or 19(5).

Determination of Voting Shares Held by Canadians

• 4 (1) For the purpose of determining whether voting shares are beneficially owned by a person or entity who is a Canadian, and the number of such shares, there may included in the determination, without requiring further evidence that the person or entity is a Canadian,

  • (a) subject to subsection (3), voting shares registered in the name of a shareholder, other than a depository, whose latest address as shown in the security register or on the books or records of the corporation or the corporation’s transfer agent or registrar is in Canada;

  • (b) subject to subsection (2), voting shares held by a depository, whose head office and principal place of business are in Canada, on behalf of the person or entity and in respect of which the depository has filed an affidavit or declaration, at any time within the 12 months preceding the determination, that states the number of voting shares that are held by the depository on behalf of the person or entity and that the latest address of the person or entity, as shown on the books or records of the depository, is in Canada; and

  • (c) subject to subsection (3), voting shares of a shareholder who has established, by way of an affidavit or declaration that is filed within the 12 months preceding the determination, that the shareholder is a Canadian.

• (2) Where the directors of a corporation have information concerning the beneficial ownership of shares that are held by a depository referred to in paragraph (1)(b) that causes the directors to believe that, at the time of the determination referred to in subsection (1), the shareholder who is the beneficial owner of the voting shares is not a Canadian or is considered to be a non-Canadian pursuant to these Regulations, the directors shall not include those voting shares in the determination until the directors have received an affidavit or declaration that establishes that the beneficial owner thereof is a Canadian and continues to be considered by these Regulations to be a Canadian.

• (3) Where the directors of a corporation have information concerning the beneficial ownership of the voting shares by a shareholder referred to in paragraph (1)(a) or (c), that causes the directors to believe that, at the time of the determination referred to in subsection (1), the shareholder who is the beneficial owner of the voting shares is not a Canadian or is considered to be a non-Canadian pursuant to these Regulations, the directors shall not include the voting shares of the shareholder in the determination until the directors have received an affidavit or declaration that establishes that the beneficial owner thereof is a Canadian and continues to be considered by these Regulations to be a Canadian.

Qualified Corporation Status

• 5 (1) During the six-month period immediately following the coming into force of these Regulations,

  • (a) any corporation that does not have actual knowledge that those of its shareholders who are non-Canadians beneficially own, and control, in the aggregate and otherwise than by way of security only, more than 33 1/3 per cent of its issued and outstanding voting shares, shall be considered to be a qualified corporation for that period; and

  • (b) any corporation referred to in subsection 17(4) that does not have actual knowledge that those of its shareholders who are non-Canadians beneficially own, and control, in the aggregate and otherwise than by way of security only, more than the appropriate maximum percentage of its issued and outstanding voting shares that is authorized pursuant to that subsection, shall be considered, for that period, to satisfy the criteria respecting the ownership and control of the corporation that are set out in that subsection.

• (2) Where a corporation that has established, by affidavit or declaration filed within the previous twelve-month period, that it is a qualified corporation, acquires knowledge that those of its shareholders who are Canadians beneficially own, and control, in the aggregate and otherwise than by way of security only, less than 66 2/3 per cent of its issued and outstanding voting shares, the corporation shall be considered to be a qualified corporation for a period of 12 months from the date it first acquires knowledge of the decrease in the proportion of voting shares below that percentage, notwithstanding that the affidavit or declaration would otherwise be valid for a longer period pursuant to subsection 7(4), if

  • (a) at no time during that 12-month period the proportion of voting shares beneficially owned, and controlled, by Canadians decreases more than five per cent from 66 2/3 per cent; and

  • (b) the corporation, immediately on becoming aware that it is deemed to be a qualified corporation pursuant to this section, so advises in writing the Canadian carrier.

• (3) A corporation referred to in subsection (2), immediately on becoming aware that it is no longer deemed to be a qualified corporation pursuant to that subsection, shall so advise in writing the Canadian carrier.