Budget Implementation Act, 2018, No. 2 (S.C. 2018, c. 27)

• 134 (1) Subsection 971(7) of the Act is amended by striking out “or” at the end of paragraph (b) and by adding the following after paragraph (c):

  • (d) subject to subsection (7.1), the insurance holding company is acquiring control of an entity (referred to in this paragraph as the “target entity”) referred to in paragraph (4)(b) or (c) and

    A/B < C

    where

    A

    is the aggregate of the values, as they would have been reported in the insurance holding company’s annual financial statements if those statements were prepared on the day of the acquisition of control of the target entity, of

    • (i) the target entity’s consolidated assets,

    • (ii) the assets of the insurance holding company and of any subsidiary of the insurance holding company that were acquired, at any time within the 12 months preceding the acquisition of control of the target entity, from any entity that, at that time, held any of the assets referred to in subparagraph (i), and

    • (iii) the consolidated assets of any entity referred to in paragraph (4)(b) or (c) the control of which is acquired by the insurance holding company at the same time as the acquisition of control of the target entity — or within the 12 months preceding the acquisition of control of the target entity if, at any time within those 12 months, that entity and the target entity were affiliates — excluding any assets referred to in subparagraph (i) or (ii) and the consolidated assets of an entity in respect of which no approval of the Superintendent is required under any of paragraphs (a) to (c),

    B

    is the value of the insurance holding company’s consolidated assets, as shown in its last annual statement prepared before the acquisition of control of the target entity, and

    C

    is

    • (i) 0.01, in the case of an insurance holding company with equity of 12 billion dollars or more, or

    • (ii) 0.02, in the case of any other insurance holding company; or

  • (e) the insurance holding company is acquiring or increasing a substantial investment in an entity (referred to in this paragraph as the “target entity”) without acquiring control of it, and

    A/B < C

    where

    A

    is the aggregate of the values, as they would have been reported in the insurance holding company’s annual financial statements if those statements were prepared on the day of the acquisition or increase of the substantial investment in the target entity, of

    • (i) the shares of, or other ownership interests in, the target entity that the insurance holding company or a subsidiary of the insurance holding company is acquiring in the transaction that results in the acquisition or increase of a substantial investment in the target entity, and the shares of, or other ownership interests in, the target entity that are held by an entity the control of which the insurance holding company is acquiring in the transaction that results in the acquisition or increase of a substantial investment in the target entity,

    • (ii) the shares of, or other ownership interests in, the target entity that are held by the insurance holding company or a subsidiary of the insurance holding company and that were acquired by the insurance holding company or the subsidiary within the 12 months preceding the transaction referred to in subparagraph (i), and

    • (iii) the shares of, or other ownership interests in, the target entity that are held by a subsidiary of the insurance holding company the control of which was acquired by the insurance holding company within the 12 months preceding the transaction referred to in subparagraph (i), excluding any shares or other ownership interests referred to in subparagraph (ii),

    B

    is the value of the insurance holding company’s consolidated assets, as shown in its last annual statement prepared before the transaction that results in the acquisition or increase of the substantial investment in the target entity, and

    C

    is

    • (i) 0.005, in the case of an insurance holding company with equity of 12 billion dollars or more, or

    • (ii) 0.01, in the case of any other insurance holding company.

• (2) Section 971 of the Act is amended by adding the following after subsection (7):

  • Marginal note:No exception for deemed acquisition

    (7.1) The exception in paragraph (7)(d) does not apply with respect to a deemed acquisition of control under subsection 969(6).

Business Growth Fund

1991, c. 45Trust and Loan Companies Act

135 Subsection 449(1) of the Trust and Loan Companies Act is amended by adding the following in alphabetical order:

136 The Act is amended by adding the following after section 450:

• 137 (1) Subsection 451(1) of the Act is replaced by the following:

  Marginal note:Restriction on control and substantial investments

  • 451 (1) Subject to subsections (2) to (4.4), no company shall acquire control of, or hold, acquire or increase a substantial investment in, any entity other than a permitted entity.

• (2) Section 451 of the Act is amended by adding the following after subsection (4):

  • Marginal note:Business growth fund

    (4.1) Subject to section 450.1, subsections (4.2) to (4.4) and Part XI, a company may hold, acquire or increase a substantial investment in the business growth fund or any entity that the business growth fund controls.

  • Marginal note:For greater certainty

    (4.2) For greater certainty, a company is prohibited from acquiring control of the business growth fund or any entity that the business growth fund controls.

  • Marginal note:Prohibition — entity

    (4.3) A company is prohibited from holding or acquiring a substantial investment in the business growth fund or any entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds or acquires shares of, or other ownership interests in, any of the following entities, or in any entity that controls any of the following entities:

    • (a) an entity referred to in any of paragraphs 453(1)(a) to (j);

    • (b) an entity that is primarily engaged in the leasing of motor vehicles in Canada for the purpose of extending credit to a customer or financing a customer’s acquisition of a motor vehicle;

    • (c) an entity that is primarily engaged in providing temporary possession of personal property, including motor vehicles, to customers in Canada for a purpose other than to finance the customer’s acquisition of the property;

    • (d) an entity that acts as an insurance broker or agent in Canada; or

    • (e) an entity that is engaged in any prescribed activity.

  • Marginal note:Prohibition — capital and loans

    (4.4) A company is prohibited from holding or acquiring a substantial investment in the business growth fund or any entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds shares of, or other ownership interests in, an entity or holds a loan made to an entity and, in respect of that entity and its affiliates, the aggregate value of the following exceeds $100,000,000:

    • (a) all ownership interests that are held by the company, the company’s subsidiaries, the business growth fund or the entities that the business growth fund controls, the value of those ownership interests as determined by the amount paid for them at the time each was first acquired by any of those entities; and

    • (b) the outstanding principal of all loans held by the business growth fund or the entities that the business growth fund controls.