Grandfathered Telecommunications Common Carriers

  •  (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.

 
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