Canadian Ownership and Control Determination Regulations, 1984 (SOR/84-431)

Effective Periods of Certificates

• 31 (1) For the purposes of subsection 42(2) of the Act, all certificates issued pursuant to applications

  • (a) that, according to acknowledgements sent by the Minister pursuant to subsection 39(1) of the Act, were received by the Minister in the same month, and

  • (b) that are from any class of applicants selected by the Minister,

  may be assigned an additional effective period not exceeding six months, unless the applicant for the certificate requests that an additional effective period of less than six months, or that no additional effective period, be assigned to the certificate, in which case the certificate may be assigned such lesser additional effective period as the applicant specifies or no additional effective period, as the case may be.

• (2) For the purposes of subsection 42(1) of the Act, a certificate issued to a person in any class of persons shall continue to be effective for the period ending on the day that is twenty-four months after the date that is acknowledged by the Minister pursuant to subsection 39(1) of the Act as the date of receipt of the application by the Minister.

Decrease in Canadian Ownership Rate

• 32 (1) For the purposes of paragraph 43(1)(b) of the Act, the following events and transactions are prescribed circumstances:

  • (a) the death of an investor who is equity-related to the holder;

  • (b) any transaction, including the issue redemption, purchase or sale of a unit of a class of formal equity or of a class of forward equity, other than the issue of a share deemed to be issued and outstanding under section 22 or subsection 23(1) for the purposes of the determination of the Canadian ownership rate stated in a certificate, in which any of the following persons have participated directly or indirectly:

    • (i) the holder,

    • (ii) any officer, director, partner other than a limited partner, trustee or administrator of the holder,

    • (iii) any person that is equity-related to the holder, or

    • (iv) any person that becomes equity-related to the holder as a result of the transaction;

  • (c) units ceasing to be deemed to be issued and outstanding pursuant to subsections 22(17) and (18) or the expiry of the period referred to in subsection 23(1);

  • (d) the discharge of an agreement referred to in subsection 20(1) where any vendor or purchaser that is a party to the agreement of purchase and sale is equity-related to the holder;

  • (e) the acquisition of control in fact of the holder if the holder is a small applicant by a person or a change in the membership of a group of persons that controls the holder that is a small applicant; or

  • (f) if the holder is an individual and becomes a non-eligible person.

• (2) For the purposes of paragraph 43(1)(b) of the Act, the prescribed number of percentage points is, the lesser of

  • (a) 10 percentage points; and

  • (b) the number of percentage points that would result in a Canadian ownership rate of less than 50% or in a Canadian ownership rate that would, in any year prior to the day on which the holder’s current certificate would expire but for section 43 of the Act, fall within a range of Canadian ownership rates for that year described in

    • (i) paragraph 10(a) or (b) of the Petroleum Incentives Program Act, if the Canadian ownership rate set out in the certificate fell within a range for that year described in paragraph 10(c) of that Act, or

    • (ii) paragraph 10(a) of the Petroleum Incentives Program Act, if the Canadian ownership rate set out in the certificate fell within a range described in paragraph 10(b) of that Act.

• (3) For the purposes of determining whether a Canadian ownership rate of the holder has decreased as stated in paragraph 43(1)(b) of the Act, the Canadian ownership rate of the holder of a certificate upon the occurrence of a prescribed circumstance is the Canadian ownership rate that would be determined for the purposes of an application by the holder based on information and documentation that are current as of the day or days determined as follows:

  • (a) subject to paragraph (b), all information and documentation that would be relevant if such information and documentation were required to be current for the purposes of that application immediately after the occurrence of the prescribed circumstance and which result from any prescribed event, shall be current as of the day immediately following the day on which the prescribed event occurs;

  • (b) information and documentation referred to in paragraph (a) that consist of all information and documentation required to determine, pursuant to section 16, the Canadian ownership rate of an investor that is an entity may be current as of the day or days permitted to be chosen by section 30 reads as though the words “and that is not more than 180 days after the occurrence of the circumstance referred to in section 32” were inserted at the end of paragraph 30(1)(c), for the purposes of an application filed in substantial compliance with the Act and these Regulations and on the day next following the day on which the prescribed circumstance occurs;

  • (c) subject to paragraph (d), all information and documentation other than information and documentation referred to in paragraph (a) shall be current as of the day or days referred to in section 30 for the purposes of the application or amended application pursuant to which the certificate was issued; and

  • (d) the applicant may elect that all information and documentation relevant for the purposes of the calculation of the beneficial Canadian ownership of a class of formal equity shall be current as of the day or days referred to in paragraph (b).

• (4) The beneficial Canadian ownership of a class of formal equity to which paragraph (3)(a) does not apply may, at the election of the applicant, be calculated in accordance with the Act and Regulations that applied to the application pursuant to which the certificate was issued.

33 For the purposes of subsection 60(4) of the Act, the prescribed period after the Act comes into force is 5 years.

Consent of Investors to Audit or Examination

• 34 (1) The consent of any investor with which an applicant is required to provide the Minister by subsection 48(1) of the Act shall, subject to subsection (2), be completed by the investor as follows:

  • (a) where the investor is an individual, in the form set out in Schedule III; or

  • (b) where the investor is not an individual, in the form set out in Schedule IV.

• (2) Where a nominee of an investor provides the Minister with a consent referred to in subsection (1) on behalf of the investor, the consent shall be completed by the nominee in the form set out in Schedule V.

• (3) The consent of an investor or a nominee of an investor completed in accordance with the subsection (1) or (2) shall be set out on and form part of the form completed by the investor or nominee.

Prescription of Persons Required to Consent to Audit or Examination and of the Forms of Such Consent

• 35 (1) For the purposes of subsection 48(2) and (4) of the Act,

  • (a) where an applicant that is an entity would be a non-eligible person as that term is defined in subsection 3(1) of the Foreign Investment Review Act if another entity was a non-eligible person within the meaning of that subsection, that other entity is a prescribed person; and

  • (b) where an applicant that is an entity would be deemed to be a non-eligible person by reason of the application of paragraph 3(2)(b) of the Foreign Investment Review Act on the grounds that another entity not referred to in paragraph (a) was a non-eligible person, unless the contrary is established, that other entity is a prescribed person unless the Minister specifies otherwise.

• (2) For the purposes of subsection 48(5) of the Act, a prescribed person is any entity referred to in paragraph (1)(a) that owns formal equity in respect of an applicant that is an entity and that has carried on business for less than twelve months prior to the day the application is filed in substantial compliance with the Act and these Regulations and, unless the Minister specifies otherwise, any entity referred to in paragraph (1)(b) in respect of that applicant.

• (3) Where an applicant is required to provide the Minister with the consent of any person prescribed by subsection (1) or (2), the consent shall accompany the application or shall be filed after the application on the demand of the Minister and shall be in the form set out in Schedule VI.

PART VCanadian Ownership Rates of Insurance Companies

Interpretation

36 In this Part,

Canadian oil or gas investment

Canadian oil or gas investment means

• (a) a right, licence or privilege to

  • (i) explore for,

  • (ii) drill for,

  • (iii) take, or

  • (iv) store

  underground petroleum, natural gas or other related hydrocarbons in Canada,

• (b) an oil or gas well situated in Canada,

• (c) a rental or royalty computed by reference to the amount or value of production from an oil or gas well situated in Canada,

• (d) a right to or interest in any property described in paragraphs (a) to (c) including a right to receive the proceeds of disposition of that property, or

• (e) a direct equity percentage that is not less than one-half of one per cent in any entity or that represents an investment with a current market value of $1,000,000 or more, if the entity is a principal-business entity, is Canadian controlled and has a Canadian ownership rate of not less than 50%; (investissement dans le pétrole et le gaz canadiens)

fraternal benefit society

fraternal benefit society has the same meaning as in subsection 2(1) of the Canadian and British Insurance Companies Act; (société de bénéfices mutuels)

gross actuarial reserves

gross actuarial reserves has the same meaning as in subsection 82.1(1) of the Canadian and British Insurance Companies Act; (réserves actuarielles brutes)

life insurance company

life insurance company means a company registered, licensed or otherwise authorized to carry on the business of life insurance under the laws of Canada or a province and includes a fraternal benefit society; (compagnie d’assurance-vie)

life insurance policy

life insurance policy means any written contract of life insurance, other than a policy in respect of which a segregated fund is maintained, whether contained in one or more documents, an annuity contract and, in the case of insurance in a fraternal benefit society, includes any contract whether or not evidenced in writing and any certificate of membership relating in any way to life insurance; (police d’assurance-vie)

life policy in Canada

life policy in Canada means a life insurance policy issued or effected by a life insurance company on the life of a person who according to the records of the insurer had an address in Canada at the time the policy was issued or effected; (police d’assurance-vie au Canada)

mutual company

mutual company means a life insurance company without share capital or a property and casualty insurance company without share capital; (société mutuelle)

non-participating policy

non-participating policy means a life insurance policy other than a participating policy; (police d’assurance-vie sans participation)

participating policy

participating policy means a life insurance policy under which the policyholder is entitled to share, other than by way of an experience rating refund, in the profits of the insurer, other than profits in respect of property in a segregated fund; (police d’assurance-vie avec participation)

participating policyholder in Canada

participating policyholder in Canada means a policyholder in Canada of a participating policy; (titulaire de police d’assurance-vie avec participation au Canada)

policyholder in Canada

policyholder in Canada means a person shown on the records of an insurer as having an address in Canada and as being the owner of a life policy in Canada or a property and casualty policy in Canada; (assuré au Canada)

principal-business entity

principal-business entity means an entity the principal business of which is

• (a) producing, refining or marketing petroleum, petroleum products or natural gas, or exploring or drilling for petroleum or natural gas or other related hydrocarbons, or

• (b) operating a pipeline for the transmission of oil or natural gas; (entité exploitant une entreprise principale)

property and casualty insurance company

property and casualty insurance company means a company, other than a life insurance company, that is registered, licensed or otherwise authorized to carry on the business of property and casualty insurance under the laws of Canada or a province and includes a fraternal benefit society; (compagnie d’assurance contre les accidents et les dommages à la propriété)

property and casualty insurance policy

property and casualty insurance policy means any written contract of insurance, other than life insurance or a policy in respect of which a segregated fund is maintained, whether contained in one or more documents and, in the case of insurance in a fraternal benefit society, includes any contract whether or not evidenced in writing and any certificate of membership relating in any way to insurance other than life insurance; (police d’assurance contre les accidents et les dommages à la propriété)

property and casualty policy in Canada

property and casualty policy in Canada means a property and casualty insurance policy issued or effected by a property and casualty insurance company where the persons or property at risk covered by the policy were ordinarily resident or located, as the case may be, within Canada at the time the policy was issued or effected; (police d’assurance contre les accidents et les dommages à la propriété au Canada)

segregated fund

segregated fund has the same meaning as in subsection 138.1(1) of the Income Tax Act; (fonds réservé)

stock company

stock company means a life insurance company with share capital or a property and casualty insurance company with share capital. (société par actions)