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

20. A carrier holding corporation may refuse to accept any subscription for, issue, register the transfer of, purchase or otherwise acquire, any of its voting shares unless a declaration is submitted to the carrier holding corporation and the carrier holding corporation determines that the effect of the information appearing on the declaration, together with any other information in any books or records of the carrier holding corporation, or the Canadian carrier or either of their transfer agents or registrars is that the subscription, issue, transfer, purchase or acquisition would not result in

• (a) the percentage of the total voting shares of the carrier holding corporation that are beneficially owned and controlled by non-Canadians exceeding 33 1/3 per cent, in the case of a qualified corporation; or

• (b) the percentage of the total voting shares in the acquiring corporation that are beneficially owned and controlled by non-Canadians exceeding the percentage of voting shares in the carrier that were beneficially owned and controlled by non-Canadians as at July 22, 1987.

• 21. (1) The carrier holding corporation may, in accordance with section 22, suspend all rights of a shareholder to vote that would otherwise be attached to any voting shares beneficially owned, or controlled, or considered by these Regulations to be beneficially owned, or controlled, by non-Canadians, in the order referred to in subsection (2), so that the proportion of the voting shares beneficially owned, or controlled, or considered by these Regulations to be beneficially owned, or controlled, by non-Canadians and with respect to which voting rights are not suspended, is reduced to

  • (a) not more than 33 1/3 per cent of the total issued and outstanding voting shares of the carrier holding corporation, where the corporation wishes to regain its status as a qualified corporation; or

  • (b) a percentage that is equal to, or within five per cent of, the percentage of the voting shares of the carrier that were beneficially owned, and controlled, by non-Canadians as at July 22, 1987, where the corporation is an acquiring corporation.

• (2) The voting rights referred to in subsection (1) shall be suspended in an order inverse to the date of registration, which shall be considered to be

  • (a) the date of the registration of the voting shares on the security register of the carrier holding corporation or in the books or records of its transfer agent or registrar; or

  • (b) where the shares are held by an intermediary or a depository, the date of registration of the transfer of the voting shares on its books or records.

• 22. (1) Where the board of a carrier holding corporation has information concerning the beneficial ownership or control of the carrier holding corporation that causes the board to believe that some of the carrier holding corporation’s voting shares are holdco excess voting shares and the carrier holding corporation intends to take further action pursuant to these Regulations, the carrier holding corporation shall immediately send a notice to the registered holders of those voting shares that are chosen in the order referred to in subsection 21(2).

• (2) A carrier holding corporation shall, in the notice referred to in subsection (1),

  • (a) specify the reasons why the board of the carrier holding corporation believes that the voting shares referred to in that subsection are holdco excess voting shares;

  • (b) where the carrier holding corporation wishes the registered holder to sell or otherwise dispose of the holdco excess voting shares identified in the notice, specify a date, that is not earlier than 60 days and not later than 180 days after the date of the notice, by which the registered holder shall

    • (i) sell or otherwise dispose of the holdco excess voting shares in favour of Canadians and provide written evidence of the sale or other disposition, or

    • (ii) provide written evidence that no such sale or other disposition of holdco excess voting shares is required; and

  • (c) where the board wishes to suspend the voting rights with respect to the holdco excess voting shares identified in the notice, specify that, unless the registered holder complies with the requirement to sell or otherwise dispose of the shares or provide written evidence pursuant to subparagraph (b)(ii), the voting rights shall be suspended from the date on which the sale or other disposition should have taken place or the evidence should have been provided and that a sale of those voting shares by the carrier holding corporation in accordance with section 23 or a repurchase or redemption by the carrier holding corporation in accordance with section 24 may result, in each case without further notice to the registered holder.

• (3) Where, after the sending of a notice referred to in subsection (1), the registered holder provides the carrier holding corporation with written evidence that no sale or other disposition of excess voting shares is required, the board of the carrier holding corporation shall, within 10 days after the receipt of the evidence, assess the evidence and determine whether the registered holder’s voting shares are holdco excess voting shares.

• (4) Where the board of the carrier holding corporation determines that the shares are not holdco excess voting shares and that no sale or other disposition of voting shares is required, the carrier holding corporation shall so advise the registered holder immediately.

• (5) Where the board of the carrier holding corporation determines that the shares are holdco excess voting shares and that a sale or other disposition of holdco excess voting shares is required in order for the carrier holding corporation to be a qualified corporation, or, where the carrier holding corporation is an acquiring corporation, in order to reduce the total number of voting shares in the carrier holding corporation that are holdco excess voting shares to zero or to any percentage such that the percentage of the voting shares that is beneficially owned, and controlled by non-Canadians is within five per cent of the percentage of the voting shares of the carrier that were beneficially owned, and controlled, by non-Canadians as at July 22, 1987, the carrier holding corporation shall send a notification to the registered holder of the holdco excess voting shares,

  • (a) informing the registered holder of the board’s determination;

  • (b) confirming that the shares are to be sold by the date specified in the notification; and

  • (c) specifying therein a further date, that is not later than 60 days after the date of the notification, by which the registered holder shall provide written evidence to the carrier holding corporation of the sale or other disposition, failing which the rights of the shareholder to vote with respect to the excess voting shares will be suspended from that further date.