Canadian Telecommunications Common Carrier Ownership and Control Regulations (SOR/94-667)
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Regulations are current to 2024-10-14
PART ICanadian Carriers (continued)
Role and Powers of the Commission
16 (1) Where the Commission has information that causes it to believe that a Canadian carrier may not be eligible to operate pursuant to section 16 of the Act, the Commission may
(a) request the carrier to provide, within a specified time, information that will assist the Commission in determining whether the carrier is so eligible to operate; and
(b) where the carrier fails to provide the information within the specified time in accordance with paragraph (a), exercise the powers of a director of the Canadian carrier under section 7 to obtain the information by way of affidavit or declaration.
(2) Where a Canadian carrier does not exercise any of its powers pursuant to these Regulations in order to remain eligible to operate pursuant to section 16 of the Act, the Commission may, subject to subsection (3), exercise the powers of the carrier with the same authority and effect as if the powers had been exercised by the carrier.
(3) The Commission may exercise the relevant powers referred to in subsection (2), where
(a) the Commission has given the Canadian carrier notice of the Commission’s intention to exercise the carrier’s powers, and the reasons therefor;
(b) the Commission has provided the Canadian carrier with at least 30 days after the Canadian carrier receives the notice to exercise the powers referred to in subsection (2);
(c) the Canadian carrier has not exercised the powers within the period specified by the Commission in the notice; and
(d) the Commission has reason to believe that the Canadian carrier continues to be not eligible to operate pursuant to section 16 of the Act.
(4) Not later than 90 days after its annual general meeting or the issuance of its annual financial statement, whichever is the earlier, every Canadian carrier shall file with the Commission a report that includes
(a) an outline of the measures, if any, that it has taken since the annual general meeting or annual financial statement immediately preceding the meeting or financial statement referred to in this subsection, in order to ensure or confirm compliance with these Regulations;
(b) the status, as of the date of the report, of the carrier’s Canadian ownership and control, including the percentages of voting shares beneficially owned, and controlled, by Canadians;
(c) the identity of directors and whether each is a Canadian;
(d) an affidavit or a declaration affirming whether the Canadian carrier is eligible to operate pursuant to section 16 of the Act; and
(e) any other information that the Commission requests in order to determine whether the Canadian carrier is eligible to operate pursuant to section 16 of the Act.
Grandfathered Telecommunications Common Carriers
17 (1) For the purposes of this section, a corporation is a subsidiary of another corporation or person if it is controlled by that corporation or person.
(2) For the purposes of this section and subsection 16(2) of the Act, successor means
(a) a corporation that, after July 22, 1987, acquires direct control of a person that was acting as a telecommunications common carrier in Canada on July 22, 1987, whether as a result of an amalgamation, transfer or exchange of property, assets or securities, or other form of arrangement;
(b) a corporation that is a subsidiary of the person referred to in paragraph (a); or
(c) a corporation that is a subsidiary of the corporation referred to in paragraph (a), but does not include any person referred to in that paragraph that was acting as a telecommunications common carrier in Canada on July 22, 1987.
(3) For the purposes of subsections (4) to (12),
- carrier
carrier means a person that was acting as a telecommunications common carrier in Canada on July 22, 1987 (entreprise);
- acquiring corporation
acquiring corporation means a successor that is a corporation referred to in paragraph (2)(a) and that acquires direct control of a carrier. (acquéreur)
(4) For the purposes of paragraph 16(2)(c) of the Act,
(a) where the carrier is a corporation, the carrier shall, subject to paragraph (d), satisfy the following criteria respecting continuous ownership, and control, by Canadians since July 22, 1987, namely, that at no time since July 22, 1987, and while it was operating as a telecommunications common carrier, has
(i) the percentage of the members of its board represented by the aggregate of the members of its board who are individual Canadians and the members of its board who, on July 22, 1987 were individual Canadians but are no longer individual Canadians and continue to be members of the board of the carrier been lower than the lesser of
(A) the percentage of its board who were individual Canadians as at July 22, 1987, and
(B) eighty per cent, and
(ii) the percentage of its voting shares that are beneficially owned, and controlled, by Canadians decreased, for a period of more than one year, by more than five per cent from the percentage of its voting shares beneficially owned, and controlled, by Canadians as at July 22, 1987;
(b) where the carrier is not a corporation, the carrier shall, subject to paragraph (d), satisfy the following criterion respecting continuous ownership and control by Canadians since July 22, 1987, namely, that at no time since July 22, 1987, and while it was operating as a telecommunications common carrier, has the percentage of its beneficial ownership by Canadians decreased, for a period of more than one year, by more than five per cent from the percentage of its beneficial ownership by Canadians as at July 22, 1987;
(c) a successor that is a corporation referred to in paragraph (2)(b) and that operates as a telecommunications common carrier shall satisfy the following criteria respecting continuous ownership and control by Canadians since July 22, 1987, namely,
(i) the carrier of which it is a subsidiary continues to satisfy the criteria set out in paragraph (a) or (b), as the case may be,
(ii) not less than eighty per cent of the members of its board of directors are individual Canadians,
(iii) where any of its voting shares are not controlled by the carrier, not less than eighty per cent of those shares are beneficially owned, and controlled, by Canadians, and
(iv) the corporation continues to be a subsidiary of the carrier;
(d) where control of a carrier has been acquired by an acquiring corporation, the carrier shall satisfy the following criteria respecting continuous ownership and control by Canadians since July 22, 1987, namely, from and after the time of the acquisition,
(i) the carrier continues to be controlled by the acquiring corporation that first acquired it and the acquiring corporation satisfies the criteria set out in paragraph (e),
(ii) the percentage of the members of its board represented by the aggregate of the members of its board who are Canadians and the members of its board who, on July 22, 1987 were individual Canadians but are no longer individual Canadians and continue to be members of the board of the carrier has not been lower than the lesser of
(A) the percentage of its board who were individual Canadians as at July 22, 1987, and
(B) eighty per cent, and
(iii) where any of its voting shares are not controlled by the acquiring corporation, not less than eighty per cent of those shares are beneficially owned, and controlled, by Canadians;
(e) an acquiring corporation shall satisfy the following criteria respecting continuous ownership and control by Canadians since July 22, 1987, namely, that at no time since acquiring control of the carrier has
(i) the percentage of the members of the acquiring corporation’s board of directors represented by the aggregate of the members of its board who are individual Canadians and the members of its board who, on July 22, 1987, were individual Canadians and members of the board of the carrier, but are no longer individual Canadians and continue to be members of the board of the carrier been lower than the lesser of
(A) the percentage of the members of the board of the carrier who were individual Canadians as at July 22, 1987, and
(B) eighty per cent, and
(ii) the percentage of the acquiring corporation’s voting shares that are beneficially owned, and controlled, by Canadians decreased, for a period of more than one year, by more than five per cent from the percentage of the voting shares of the carrier that were beneficially owned, and controlled, by Canadians as at July 22, 1987; and
(f) a successor that is a corporation referred to in paragraph (2)(c) and that operates as a telecommunications common carrier shall satisfy the following criteria respecting continuous ownership and control by Canadians since July 22, 1987, namely,
(i) the acquiring corporation of which it is a subsidiary continues to satisfy the criteria set out in paragraph (e),
(ii) not less than eighty per cent of the members of its board of directors are individual Canadians, and
(iii) where any of its voting shares are not controlled by the acquiring corporation, not less than eighty per cent of those shares are beneficially owned, and controlled, by Canadians.
(5) Where the percentage of the voting shares of a carrier that are beneficially owned, and controlled, by Canadians decreases from the percentage of those shares that were beneficially owned, and controlled, by Canadians as at July 22, 1987, the carrier may exercise the powers set out in subsection 8(1) and sections 9 to 14, in relation to those voting shares.
(6) Where the percentage of the voting shares of an acquiring corporation that are beneficially owned, and controlled, by Canadians decreases from the percentage of the voting shares of the carrier that were beneficially owned, and controlled, by Canadians as at July 22, 1987, the acquiring corporation may exercise the powers set out in sections 20 to 26, in relation to its voting shares.
(7) For the purpose of determining whether voting shares of the carrier were beneficially owned by persons who were Canadians as at July 22, 1987, and the number of such shares, the directors may include in their determination, without requiring further evidence that the persons are Canadian,
(a) subject to subsection (8), voting shares registered in the name of a shareholder who is an individual whose address, as shown in the security register or books and records compiled as of the date closest to July 22, 1987 within a six-month period, is in Canada;
(b) subject to subsection (8), voting shares registered in the name of a shareholder who is not an individual, whose holdings were not greater than ten per cent of the voting shares of the carrier issued and outstanding as at that date and whose address as shown in the security register or books and records compiled as of the date closest to July 22, 1987 within a six-month period, is in Canada;
(c) voting shares held by a depository that maintained its head office and principal place of business in Canada, where the address of the person on whose behalf the depository held the shares is in Canada, as shown on the books and records of the depository compiled as of a date closest to July 22, 1987 within a six-month period; and
(d) voting shares held by a shareholder who establishes by affidavit or declaration filed pursuant to subsection (8) or (9) that the shareholder is a Canadian.
(8) Where the directors of a corporation have information that causes them to believe that a shareholder referred to in paragraph (7)(a) or (b) was not the beneficial owner of the shares or that a person who was the beneficial owner of the shares was not a Canadian or would be considered to be a non-Canadian pursuant to these Regulations, the directors shall not include the voting shares of the shareholder or person in the determination referred to in subsection (7) unless the directors receive an affidavit or a declaration requested pursuant to section 7 that establishes
(a) where the shareholder was not the beneficial owner, the identity of the beneficial owner at the relevant time and that the beneficial owner at the relevant time was a Canadian; or
(b) where the shareholder was the beneficial owner at the relevant time, that the shareholder was a Canadian at the relevant time.
(9) Where a shareholder, other than a depository that maintains its head office and principal place of business in Canada, owned or controlled shares consisting in the aggregate, on July 22, 1987 or the date closest to July 22, 1987 within a six-month period, of more than ten per cent of the issued and outstanding voting shares on that date, the shareholder shall, within six months after the coming into force of these Regulations, file with the Commission an affidavit or a declaration setting out the identity of the beneficial owner of the shares as at that date, and indicating whether the beneficial owner was a Canadian as at that date.
(10) The shareholder referred to in subsection (9) shall send a copy of an affidavit or declaration to the carrier at the same time as the affidavit or declaration is sent to the Commission.
(11) Where a shareholder fails to file an affidavit or declaration pursuant to subsection (8), the shares of the shareholder shall be considered to have been beneficially owned, and controlled, by a non-Canadian as at the relevant date.
(12) Where the directors of a carrier or acquiring corporation determine the number of voting shares of the carrier pursuant to subsection (7), no further determination of the voting shares of that carrier or of the acquiring corporation shall be required for any period before the coming into force of these Regulations.
PART IICarrier Holding Corporations
Interpretation
18 In this Part,
- acquiring corporation
acquiring corporation means a successor that is a corporation referred to in paragraph 17(2)(a) and that acquires direct control of a carrier; (acquéreur)
- carrier
carrier means a person that was acting as a telecommunications common carrier in Canada on July 22, 1987; (entreprise)
- registered holder
registered holder means the person or entity in whose name shares of a carrier holding corporation are registered in the corporation’s security register or on the books or records of its transfer agent or registrar. (détenteur inscrit)
Affidavits or Declarations
19 (1) A director of a carrier holding corporation who requires information for the purposes of determining whether the carrier holding corporation is a qualified corporation, or an acquiring corporation that meets the criterion set out in subparagraph 17(4)(e)(ii), may, with the authorisation of the board, make a written request in accordance with subsection (2) to
(a) a shareholder of the carrier holding corporation for an affidavit or a declaration that sets out any or all of the following information, namely,
(i) subject to subparagraph (v), the identity of the beneficial owner of all of the voting shares in that corporation of which the shareholder is the registered holder,
(ii) whether the beneficial owner is a Canadian,
(iii) the date of registration or acquisition of the voting shares,
(iv) any other information that the director requests in order to determine whether the carrier holding corporation is a qualified corporation or an acquiring corporation that meets the criteron set out in subparagraph 17(4)(e)(ii), and
(v) where the shareholder is unable, for reasons of confidentiality, to disclose the identity of the beneficial owner referred to in subparagraph (i), that the shareholder is unable to so disclose the identity but has determined that the beneficial owner is or is not a Canadian;
(b) a shareholder of a corporation that is, directly or indirectly, a shareholder of the carrier holding corporation, for an affidavit or a declaration that sets out any or all of the following information, namely,
(i) subject to subparagraph (v), the identity of the beneficial owner of all of the voting shares in the corporation of which the shareholder is the holder of record,
(ii) whether the beneficial owner is a Canadian,
(iii) the date of registration or acquisition of the voting shares,
(iv) any other information that the director requests in order to determine whether the carrier holding corporation is a qualified corporation or an acquiring corporation that meets the criterion set out in subparagraph 17(4)(e)(ii), and
(v) where the shareholder is unable, for reasons of confidentiality, to disclose the identity of the beneficial owner referred to in subparagraph (i), that the shareholder is unable to so disclose the identity but has determined that the beneficial owner is or is not a Canadian;
(c) a trustee of a trust that is, directly or indirectly, a shareholder of the carrier holding corporation, for an affidavit or declaration that sets out any or all of the following information, namely,
(i) subject to subparagraph (vi), the identity of each trustee,
(ii) the beneficial interest of each beneficiary in the trust,
(iii) whether each beneficiary and trustee is a Canadian,
(iv) the date of registration or acquisition of the voting shares held by the trust,
(v) any other information that the director requests in order to determine whether the carrier holding corporation is a qualified corporation or an acquiring corporation that meets the criterion set out in subparagraph 17(4)(e)(ii), and
(vi) where the trustee is unable, for reasons of confidentiality, to disclose the identity of a trustee referred to in subparagraph (i), that the trustee is unable to so disclose the identity but has determined that the trustee is or is not a Canadian;
(d) a mutual insurance company that is, directly or indirectly, a shareholder of the carrier holding corporation, for an affidavit or a declaration that sets out any or all of the following information, namely,
(i) the location of its head office and principal place of business,
(ii) the identity of each member of its board and of each member of each committee of directors,
(iii) which members of the board are Canadians,
(iv) the date of registration or acquisition of the voting shares held by the mutual insurance company, and
(v) any other information that the director requests in order to determine whether the carrier holding corporation is a qualified corporation or an acquiring corporation that meets the criterion set out in subparagraph 17(4)(e)(ii);
(e) a partnership, that is, directly or indirectly, a shareholder of the carrier holding corporation, for an affidavit or a declaration that sets out any or all of the following information, namely,
(i) subject to subparagraph (vi), the identity of each partner,
(ii) which partners are Canadians,
(iii) the beneficial interest of each partner,
(iv) the date of registration or acquisition of the voting shares held by the partnership,
(v) any other information that the director requests in order to determine whether the carrier holding corporation is a qualified corporation or an acquiring corporation that satisfies the criterion set out in subparagraph 17(4)(e)(ii), and
(vi) where the partnership is unable, for reasons of confidentiality, to disclose the identity of a partner referred to in subparagraph (i), that the partnership is unable to so disclose the identity but has determined that the partner is or is not a Canadian;
(f) a pension fund society that is, directly or indirectly, a shareholder of the carrier holding corporation, for an affidavit or a declaration that sets out any or all of the following information, namely,
(i) the location of its head office and principal place of business,
(ii) the identity of each member of its board and of each member of each committee of directors,
(iii) which members of the board are Canadians;
(iv) the date of the registration or acquisition of the voting shares held by the pension fund society, and
(v) any other information that the director requests in order to determine whether the carrier holding corporation is a qualified corporation or an acquiring corporation that satisfies the criterion set out in subparagraph 17(4)(e)(ii);
(g) a depository, for an affidavit or declaration that sets out any or all of the following information, namely,
(i) subject to subparagraph (vi), the identity and latest address on the books or records of the depository of each person or entity on whose behalf the depository holds voting shares in the carrier holding corporation,
(ii) the number of voting shares that the depository holds on behalf of each person or entity,
(iii) whether each person or entity is a Canadian,
(iv) the date of registration of the transfer of the voting shares of the carrier holding corporation on the books or records of the depository,
(v) any other information that the director requests in order to determine whether the carrier holding corporation is a qualified corporation or an acquiring corporation that meets the criterion set out in subparagraph 17(4)(e)(ii), and
(vi) where the depository is unable, for reasons of confidentiality, to disclose the identity of a person or entity referred to in subparagraph (i), that the depository is unable to so disclose the identity, but has determined that the person or entity is or is not a Canadian; and
(h) an intermediary, for an affidavit or declaration that sets out any or all of the following information, namely,
(i) subject to subparagraph (vi), the identity and latest address on the records of the intermediary of each person or entity on whose behalf it holds voting shares in the carrier holding corporation,
(ii) the number of the voting shares that the intermediary holds on behalf of each person or entity,
(iii) whether each person or entity is a Canadian,
(iv) the date of registration of the transfer of the voting shares of the carrier holding corporation on the books or records of the intermediary,
(v) any other information that the director requests in order to determine whether the carrier holding corporation is a qualified corporation or an acquiring corporation that meets the criterion set out in subparagraph 17(4)(e)(ii), and
(vi) where the intermediary is unable, for reasons of confidentiality, to disclose the identity of a person or entity referred to in subparagraph (i), that the intermediary is unable to so disclose the identity but has determined that the person or entity is or is not a Canadian.
(2) A request for an affidavit or a declaration made pursuant to subsection (1) shall
(a) be given by mail or personal service; and
(b) specify a date that is not earlier than 30 days and not later than 60 days after the giving of the request by which the shareholder, trustee, mutual insurance company, partnership, pension fund society, depository or intermediary shall comply with the request.
(3) A person or entity to whom a request for an affidavit or declaration is made pursuant to subsection (1) shall file the affidavit or declaration no later than the date specified pursuant to paragraph (2)(b).
(4) An affidavit or a declaration filed pursuant to subsection (3) shall be valid for a period of 12 months from the date of filing with the carrier holding corporation.
(5) Where a director of a carrier holding corporation requests an affidavit or a declaration from a person or entity under this section and the person or entity does not file the affidavit or declaration by the date set out in the request, the voting shares of the person or entity in the carrier holding corporation or in the corporation that is, directly or indirectly, a shareholder of the carrier holding corporation shall, effective the day following the date set out in the request until the affidavit or declaration is filed, be considered to be beneficially owned by a non-Canadian.
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