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

Short Title

1 These Regulations may be cited as the Canadian Ownership and Control Determination Regulations, 1984.

PART IInterpretation and Application

Definitions

• 2 (1) In these Regulations,

  Act

  Act means the Canadian Ownership and Control Determination Act; (Loi)

  active member

  active member means

  • (a) in relation to a defined benefit pension plan or a combined defined benefit defined contribution pension plan, an individual who is currently earning current service benefits in that plan, and

  • (b) in relation to a defined contribution pension plan or a deferred profit sharing plan, an individual in respect of whom contributions are currently being made to the plan as a result of current service; (membre actif)

  applicant

  applicant means a person who has submitted an application for a certificate under the Act; (demandeur)

  bearer unit

  bearer unit means a unit of a class of formal equity or a unit of a class of forward equity of an entity in respect of which no records of unit holders are maintained by or on behalf of the entity; (unité au porteur)

  block

  block[Revoked, SOR/85-847, s. 1]

  Canadian stock exchange

  Canadian stock exchange means The Alberta Stock Exchange, the Montreal Exchange, The Toronto Stock Exchange, the Vancouver Stock Exchange or the Winnipeg Stock Exchange; (bourse de valeurs canadienne)

  dealer

  dealer means a person registered to trade or deal in security pursuant to the laws of a province; (courtier)

  defined benefit pension plan

  defined benefit pension plan means a pension plan where the benefits under the plan are determined in accordance with a formula set forth in the plan and where the employer contributions under the plan are not so determined; (régime de pension à prestations fixes)

  defined contribution pension plan

  defined contribution pension plan means a pension plan where the employer contributions and the employee contributions, if any, under the plan are determined in accordance with a formula set forth in the plan; (régime de pension à cotisations fixes)

  entity

  entity means a corporation, partnership or trust; (entité)

  forward equity

  forward equity means a right to acquire formal equity; (participation à terme)

  holding

  holding[Revoked, SOR/85-847, s. 1]

  inquiry

  inquiry means a request made by an entity that is an applicant or an investor, to a person that owns formal equity of that entity, for information in respect of the Canadian ownership rate of that person for the purposes of determining, in whole or in part, the Canadian ownership rate of that entity; (examen)

  market-maker

  market-maker means a registered trader or a registered arbitrage trading member within the meaning of the rules of the Toronto Stock Exchange or a person acting in a substantially similar capacity in connection with any other Canadian stock exchange; (contrepartiste)

  market-maker shares

  market-maker shares means units owned by a market-maker that constitute units of the stock of responsibility of that market-maker and that constitute one-half of one per cent or less of a publicly traded class of formal equity; (actions de contrepartiste)

  measured block

  measured block means a number of units of a class of formal equity that are owned by a person and that are equal to or greater than the number of units that constitute the measured block threshold for that class of formal equity; (tranche mesurée)

  measured block threshold

  measured block threshold, in respect of a particular class of formal equity, means

  • (a) where the particular class is that of an applicant or of an investor that is equity-related to the applicant, one per cent, and

  • (b) where the particular class is that of an investor other than an investor referred to in paragraph (a), 5 per cent,

  of the units of the particular class or, where the particular class is one of two or more classes of formal equity the units of which would form part of the same class of formal equity if they were actually issued and outstanding, of the units of such one of those two or more classes as has the greatest number of units; (seuil d’une tranche mesurée)

  primary investor

  primary investor means, with respect to an applicant, an investor

  • (a) of whom an inquiry is made by an applicant or by an investor that is equity-related to the applicant,

  • (b) who is not equity-related to the applicant, and

  • (c) who owns formal equity of the applicant or the investor referred to in paragraph (a); (investisseur primaire)

  public entity

  public entity means an entity with one or more publicly traded classes of formal equity, all the units of which would, if owned by one person, represent a direct equity percentage of 15% or more in respect of the entity; (entité publique)

  publicly traded class of formal equity

  publicly traded class of formal equity or publicly traded class of forward equity means a class of formal equity or a class of forward equity, as the case may be, any unit of which is traded in the open market in the manner in which a unit thereof would normally be traded in the open market by a member of the public; (catégorie de participation ordinaire librement négociable or catégorie de participation à terme librement négociable)

  published market

  published market means a Canadian stock exchange on which units of a publicly traded class of formal equity are listed or any other market on which such units are traded, if the prices at which they have been traded on that other market are regularly published in a bona fide newspaper or in a business or financial publication of general distribution and regular paid circulation; (cours affiché du marché)

  recorded owner

  recorded owner means the owner of record of formal equity of an entity; (possesseur inscrit)

  revised unit holders list

  revised unit holders list means a revised unit holders list prepared pursuant to section 4; (liste révisée des détenteurs d’unités)

  secondary investor

  secondary investor means, with respect to an applicant, an investor

  • (a) of whom an inquiry is made by another investor that is not equity-related to the applicant, and

  • (b) who owns formal equity of the investor making the inquiry; (investisseur secondaire)

  significant holding

  significant holding[Revoked, SOR/85-847, s. 1]

  small applicant

  small applicant means an applicant that is an entity

  • (a) that has total assets calculated in accordance with section 9 of less than $50,000,000,

  • (b) [Revoked, SOR/85-847, s. 1]

  • (c) that has no knowledge or reason to believe that the Canadian ownership rate of the entity that would be determined under the Act and these Regulations, if section 14 did not apply, is less than 75%, and

  • (d) that has no units listed, registered or qualified for trading on a stock exchange or other trading facility, other than a Canadian stock exchange or Canadian trading facility, as a consequence of an application for such listing, registration or qualification made by the entity or in which the entity has participated directly or indirectly; (petit demandeur)

  stock of responsibility

  stock of responsibility means all or part of a publicly traded class of formal equity designated as the stock of responsibility of a market-maker in accordance with the rules of The Toronto Stock Exchange or substantially similar rules of any other Canadian stock exchange; (charge de contrepartiste)

  unit

  unit means

  • (a) in relation to a class of formal equity of an entity, subject to subsection 5(3) and Part VI, any particular share, right or interest that is formal equity of that entity, and

  • (b) in relation to a class of forward equity of an entity, any instrument other than an agreement described in section 23, that confers a right to acquire units of a class of formal equity of that entity, other than a right that may be terminated prior to the commencement of the period during which the right may be exercised; (unité)

  unit holders list

  unit holders list means a record kept by or on behalf of an entity that identifies the recorded owners of units of a class of formal equity or units of a class of forward equity of that entity; (registre)

  unit trust

  unit trust means a trust under which the interest of a beneficiary is measured by reference to one or more defined shares, whether of one or more classes, in the property of the trust. (fiducie d’investissement à participation unitaire)

• (2) Subject to subsection (2.1), for the purpose of determining whether a person has a number of units of a class of formal equity equal to or greater than the number of units thereof that constitute the measured block threshold therefor, two or more entries on an entity’s unit holders list that show units of the class of formal equity as being registered in the name of a particular person, or in the name of a particular member of a class of persons referred to in Schedule I, shall be deemed to be registered in substantially the same manner and considered to be one entry if

  • (a) the entries show substantially the same address and there is no account identification number or other feature that distinguishes the entries from each other;

  • (b) the entries show different addresses but the entity has knowledge or reason to believe that the units are owned by the same person; or

  • (c) the entries show different account identification numbers or other features that distinguish the entries from each other but show the same or substantially the same address and the entity has knowledge or reasons to believe that the units are owned by the same person.

• (2.1) An entry in a unit holders list of units of a class of formal equity shall not be taken into account for the purpose of subsection (2) unless the entry relates to a number of units equal to or greater than 10 per cent of the number of units that constitute the measured block threshold for that class of formal equity.

• (3) Notwithstanding the definition measured block threshold in subsection (1), where an applicant or an investor has two or more classes of formal equity to which are attached rights, other than voting rights, that are substantially similar, the measured block threshold for each such class shall be deemed to be the number of units that constitute the measured block threshold for such one of those two or more classes as, apart from this subsection, would have the largest number of units in its measured block threshold.

Application

3 These Regulations apply for the purpose of determining or calculating the Canadian ownership rate in respect of any application filed on or after June 1, 1984.

Revised Unit Holders List

• 4 (1) An entity may prepare a revised unit holders list and may include therein the following:

  • (a) any entry on the entity’s unit holders list relating to units of a class of formal equity with respect to which the entity has no knowledge or reason to believe that they are owned by a person other than the recorded owner;

  • (b) any entry on the entity’s unit holders list relating to units of a class of formal equity that are not referred to in paragraph (a) if the number of units to which the entry relates is less than the number of units that constitute the measured block threshold for that class of formal equity;

  • (c) any entry consisting of a statement of the number of units of a class of formal equity owned by any person;

  • (d) any entry consisting of a statement of a number of units of a class of formal equity held for persons with addresses in Canada if each such person has a number of units thereof that is less than the number of units that constitute the measured block threshold for that class of formal equity; and

  • (e) any other entry that the entity demonstrates to the Minister that it is necessary to include in order to show accurately the ownership of any units.

• (2) and (3) [Revoked, SOR/85-847, s. 2]

• (4) For the purposes of paragraph (1)(a) an entity shall be deemed to have reason to believe that units shown on its records are owned by a person other than the recorded owner of those units if the recorded owner is a person or a member of a class of persons referred to in Schedule I.

Classes of Formal Equity and Classes of Forward Equity

• 5 (1) For the purposes of these Regulations,

  • (a) a class of formal equity of a partnership or trust, subject to subsections (2) and (3), comprises all substantially similar units; and

  • (b) a class of formal equity of a corporation comprises all shares that are part of the same class of the corporation or, if the class consists of more than one series, of the same series.

• (2) For the purposes of these Regulations, an applicant or investor may elect that additional units of a class of formal equity issued on or after any day selected by that applicant or investor in respect of that class under paragraph 30(1)(c) shall constitute a separate class of formal equity.

• (3) For the purposes of these Regulations,

  • (a) all rights expressed as a fixed percentage of income or revenue that in the aggregate represent 100% of that income or revenue at a particular time,

  • (b) all rights expressed as a fixed percentage of capital that in the aggregate represent 100% of that capital at a particular time, or

  • (c) all rights expressed as a fixed percentage of income and capital or revenue and capital that in the aggregate represent 100% of that income and capital or revenue and capital at a particular time

  in respect of all or a specified portion of the property of a partnership constitute a class of formal equity that shall be deemed to compromise 100 units owned by the owners of interests in the class of formal equity in the proportions that their interests represent of that class of formal equity.

• (4) For the purposes of these Regulations, a class of forward equity comprises all units the attributes of which are identical and that were issued on the same day and at the same price if any.

Exclusions from Formal Equity

• 6 (1) There shall, for the purpose of determining the Canadian ownership rate of any person or class of persons, be excluded from the formal equity of a corporation,

  • (a) during a 60 day period from the day on which the underwriting agreement was signed, any share of a publicly traded class of formal equity that a dealer, acting as an underwriter pursuant to an underwriting agreement, owns;

  • (b) any unit that was a bearer unit on February 9, 1982; and

  • (c) any unit that has a fixed or determinable yield not exceeding a reasonable yield in relation to the market yield of a comparable unit on the date of issue of the unit.

• (2) For the purposes of paragraph (1)(c), the calculation of the yield shall take into consideration any incentive that the person or class of persons referred to in that subsection would, based on a Canadian ownership rate determined as if the unit and all other units of the same class of formal equity were included in formal equity, be qualified to receive pursuant to the Petroleum Incentives Program Act in respect of the consideration paid on the issue of the units.

• (3) Where, in respect of units of a class of formal equity of an entity, the entity would have a total equity percentage of 100% calculated as if those units constituted all the formal equity of the entity, those units shall be excluded from formal equity for the purpose of determining the Canadian ownership rate of that entity.