Canada Cooperatives Regulations (SOR/99-256)

• 49 (1) Immediately on a sale of investment shares by a constrained share cooperative under subsection 131(1) of the Act, the cooperative shall

  • (a) register the transfer or a notice of the sale of the shares or cause the transfer or a notice of the sale of the shares to be registered in the securities register of the cooperative; and

  • (b) send a notice of the sale to the person shown in the securities register of the cooperative as the holder of the shares at the time of the sale.

• (2) The notice referred to in paragraph (1)(b) shall

  • (a) state the number of investment shares sold;

  • (b) identify the certificate evidencing the investment shares sold, by certificate number or otherwise;

  • (c) state the date and manner of sale;

  • (d) state the manner in which the person entitled to receive the net proceeds of the sale under subsection 131(1) of the Act may obtain the proceeds;

  • (e) state that the cooperative has concluded that the investment shares were owned, or that the directors determined that the investment shares may be owned, contrary to a constraint referred to in paragraph (c) of the definition constraint in section 39 and state the reason why the cooperative so concluded or the directors so determined, as the case may be; and

  • (f) contain a statement, if not all of the investment shares of the holder evidenced by a certificate were sold, that not all of the shares were sold and that a certificate evidencing the investment shares that were not sold will be issued on surrender for cancellation of the certificate evidencing the investment shares sold.

50 The proceeds of a sale by a constrained share cooperative under subsection 131(1) of the Act must be invested in an interest bearing account in a body corporate any of whose deposits are insured by the Canada Deposit Insurance Corporation or guaranteed by the Quebec Deposit Insurance Board or by any other similar entity created by the laws of another province.

Disclosure of Beneficial Ownership

51 Section 52 applies to a constrained share cooperative that has provisions in its articles imposing a constraint referred to in paragraph (a) or (b) of the definition constraint in section 39.

• 52 (1) In order to ascertain the beneficial ownership of investment shares of a constrained share cooperative, its directors may

  • (a) require any person in whose name the investment shares are registered to furnish a statutory declaration under the Canada Evidence Act

    • (i) declaring whether

      • (A) the shareholder is the beneficial owner of the investment shares or holds them for a beneficial owner,

      • (B) the shareholder is an associate of any other shareholder, and

      • (C) the shareholder or beneficial owner is a Canadian, and

    • (ii) setting out any further relevant facts; and

  • (b) require any person seeking to have a transfer of a voting investment share registered in their name or to have a voting investment share issued to them to furnish a statutory declaration as described in paragraph (a).

• (2) When a person is required to furnish a declaration under subsection (1), the directors may refuse to register a transfer of a voting investment share in the person’s name or to issue a voting investment share to the person until that person has furnished the declaration.

• (3) In administering the constrained investment share provisions set out in the articles of a constrained share cooperative, the directors of the cooperative may rely on a statement made in a declaration referred to in subsection (1) or (2).

• (4) If the directors are required to determine the total number of voting investment shares of a constrained share cooperative that are held by or on behalf of residents of Canada, the directors may rely on the latest address shown in the investment share register to conclude

  • (a) in respect of an address that is in Canada, that an individual is a resident of Canada; and

  • (b) in the case of an address that is outside Canada, that an individual is not a resident of Canada.

• (5) For the purpose of subsection (4), the directors may only rely on the investment share register of the constrained share cooperative as of any date after the day on which the cooperative became a constrained share cooperative, but that date shall not be more than four months before the day on which the determination is made.

References and Definitions for the Purposes of Section 130 of the Act

• 53 (1) For the purpose of paragraph 130(1)(b) of the Act,

  • (a) the following laws of Canada or a province are prescribed:

    • (i) the Canadian Aviation Regulations made under the Aeronautics Act,

    • (ii) the Canada Transportation Act and any regulations made under it,

    • (iii) the Canada Oil and Gas Land Regulations and the Canada Oil and Gas Drilling and Production Regulations,

    • (iv) the Broadcasting Act,

    • (v) the Northern Mineral Exploration Assistance Regulations,

    • (vi) section 19 of the Income Tax Act,

    • (vii) the Securities Act (Ontario), R.S.O. 1990, c. S.5, and any regulations made under it, as amended from time to time,

    • (viii) the Securities Act (Quebec), CQRL c. V-1.1, and any regulations made under it, as amended from time to time, and

    • (ix) any other law of Canada that has requirements in relation to Canadian ownership, or any other law of a province, as amended from time to time, that has requirements in relation to Canadian ownership; and

  • (b) financial intermediary means a bank, a trust company, a loan company, an insurance company, an investment company, an association and a body corporate carrying on business as a securities broker, a dealer or an underwriter.

• (2) For the purpose of paragraph 130(1)(c) of the Act, the following laws of Canada are prescribed:

  • (a) the Canada Petroleum Resources Act and any regulations made under it; and

  • (b) the Canada Transportation Act and any regulations made under it.

• (3) For the purpose of paragraph 130(1)(d) of the Act, the following laws are prescribed:

  • (a) the Insurance Companies Act and any regulations made under it; and

  • (b) the Trust and Loan Companies Act and any regulations made under it.

• (4) For the purpose of subsection 131(1) and paragraph 183(5)(b) of the Act, the following laws are prescribed:

  • (a) the Insurance Companies Act and any regulations made under it;

  • (b) the Trust and Loan Companies Act and any regulations made under it; and

  • (c) the Income Tax Act and any regulations made under it.

PART 6Rules of Procedure for Applications for Exemptions

Application

54 This Part applies to every application for an exemption under subsection 4(4) or 167(1), section 248 or subsection 263(2) or 267(2) of the Act.

Time of Filing Applications

• 55 (1) An application for an exemption under

  • (a) subsection 4(4) of the Act may be made at any time;

  • (b) subsection 167(1) of the Act shall be made before the date of the notice referred to in subsection 165(1) of the Act;

  • (c) section 248 of the Act shall be made at least 60 days before the documents in respect of which the exemption is requested are to be sent to the Director;

  • (d) subsection 263(2) of the Act may be made at any time; and

  • (e) subsection 267(2) of the Act shall be made at least 30 days before the cooperative is required to comply with Part 8 of the Act.

• (2) Despite subsection (1), the Director shall extend the time for making an application for an exemption if the applicant establishes that no prejudice will result from the extension.

Notice by Director of Decision

56 The Director shall, within 30 days after receipt of an application for an exemption, grant the exemption requested or send to the applicant written notice of the refusal together with reasons for the refusal.

General

57 The Director may request that an applicant for an exemption furnish the Director with further information or that any other person furnish the Director with information in writing that is relevant to the application.

58 The Director shall furnish the applicant for an exemption with a copy of any information received from any other person under section 57 and shall allow the applicant a reasonable opportunity to respond in writing.

59 If an applicant for an exemption or a person from whom the Director has requested information under section 57 does not provide the information within the time specified by the Director, the Director may deal with the application without regard to the information.

60 For the purpose of section 345 of the Act, the Director is deemed to have refused to grant an exemption if the exemption is not granted or the written notice of the refusal is not sent within the time specified in section 56.

PART 6.1Value of Total Financial Interest

60.1 For the purpose of paragraph 337.5(1)(b) of the Act, the prescribed amount of the value of the plaintiff’s total financial interest is $20,000.

PART 6.2Cancellation of Articles and Certificates

• 60.2 (1) For the purpose of subsection 376.2(1) of the Act, the prescribed circumstances are that

  • (a) there is an obvious error in the articles or in the related certificate;

  • (b) there is an error in the articles or in the related certificate that was made by the Director;

  • (c) the cancellation of the articles and related certificate is ordered by a court; or

  • (d) the Director lacked the authority to issue the articles and related certificate.

• (2) For the purpose of subsection 376.2(3) of the Act, the prescribed circumstances are that there is no dispute among the directors, members or shareholders as to the circumstances of the request for cancellation and

  • (a) the cooperative has not used the articles and related certificate; or

  • (b) if it has used them, anyone dealing with the cooperative on the basis of the articles and related certificate has consented to the cancellation.

PART 7Prescribed Fees

• 61 (1) The fee payable in respect of a service set out in column 1 of Schedule 3 is the applicable fee set out in column 2.

• (2) There is no fee payable in respect of the following services:

  • (a) the receipt and examination by the Director of articles of amendment sent under subsection 291(1) of the Act, if the only purpose of the amendment is to do one or more of the following:

    • (i) add an English or French version to the cooperative’s name, or

    • (ii) change the cooperative’s name as directed by the Director under subsection 24(1) or (3) of the Act;

  • (b) receipt and examination by the Director of documents sent under subsection 376.1(1) of the Act or a request for correction referred to in subsection 376.1(3) of the Act, if the correction relates solely to an error made by the Director;

  • (c) receipt and examination by the Director of a request for a cancellation referred to in subsection 376.2(1) of the Act, in the circumstance referred to in paragraph 60.2(1)(b) of these Regulations; or

  • (d) provision by the Director of

    • (i) an uncertified copy or uncertified extract under subsection 377(2) of the Act, if it is requested by a department or agency of the government of Canada or of the government of a province, by a municipality in Canada or by a police or law enforcement agency in Canada, or

    • (ii) an uncertified copy or uncertified extract of a profile of a cooperative generated by the Director.

61.1 On April 1, 2024 and every five years after that date, the fees set out in column 2 of Schedule 3 are to be increased by one per cent and rounded down to the nearest multiple of five dollars.

PART 8Prescribed Interest

62 For the purpose of subsection 302(25) of the Act,

• (a) the rate of interest for any month is the rate per annum that is the aggregate of 3% per annum and the Bank of Canada rate in effect on the third Wednesday of the month before the month in respect of which the interest is computed; and

• (b) the interest shall be calculated on a monthly basis for each month or part of a month, beginning on the day on which the resolution is adopted and ending on the day on which full payment is made.

Coming into Force

63 These Regulations come into force on December 31, 1999.