Canadian Ownership and Control Determination Act (R.S.C., 1985, c. C-20)

Short Title

Marginal note:Short title

1 This Act may be cited as the Canadian Ownership and Control Determination Act.

Interpretation

Marginal note:Definitions

• 2 (1) In this Act,

  certificate

  certificate means a certificate issued by the Minister under this Act; (certificat)

  control status

  control status means, with respect to a person, whether or not the person is Canadian controlled as determined under this Act and the regulations; (état de contrôle)

  direct equity percentage

  direct equity percentage means, with respect to formal equity owned by a person in any particular person,

  • (a) where the particular person does not have more than one class of formal equity within the meaning of the regulations, the percentage of the formal equity of the particular person that is owned by the person, and

  • (b) where the particular person has more than one class of formal equity within the meaning of the regulations, subject to the regulations, the aggregate fair market value of the formal equity of the particular person that is owned by the person, expressed as a percentage of the aggregate fair market value of all the formal equity of the particular person; (pourcentage de participation directe)

  formal equity

  formal equity means,

  • (a) with respect to a corporation, any share of the corporation, other than a share excluded by the regulations, that is, or is deemed under the regulations to be, issued and outstanding,

  • (b) with respect to a partnership, any interest or right in the capital or income, or both, of the partnership,

  • (c) with respect to a trust, any beneficial interest in the property of the trust, and

  • (d) with respect to any other person, such interest or right in respect of that person as is prescribed; (participation ordinaire)

  informal equity

  informal equity means, subject to the regulations, any interest or right to participate in or benefit from, either currently or in the future, other than by way of formal equity, the assets, revenues or business activities of another person; (participation non ordinaire)

  investor

  investor means, with respect to an applicant for a certificate, a person who has a total equity percentage in the applicant that is greater than zero; (investisseur)

  Minister

  Minister means the Minister of Natural Resources; (ministre)

  owned

  owned means, subject to the regulations, beneficially owned, and the words owner and ownership have corresponding meanings; (posséder)

  person

  person means an individual, a corporation, a partnership, a trust, a government, an agency of government, a segregated fund within the meaning of the regulations and an organization that is prescribed as being a person or that falls into a class of organizations prescribed as being persons; (personne)

  prescribed

  prescribed means prescribed by the regulations, or with respect to the form and manner in which any application under this Act shall be filed or the information and documentation to be contained in or to accompany that application, means prescribed by order of the Minister. (Version anglaise seulement)

• Marginal note:Definition of non-eligible person

  (2) For the purposes of this Act, the expression non-eligible person has the same meaning as it has under subsection 3(1) of the Foreign Investment Review Act, chapter 46 of the Statutes of Canada, 1973-74, and the regulations made pursuant to that Act, with such modifications as the circumstances require, except that, until September 1, 1987,

  • (a) the definition non-eligible person in subsection 3(1) of that Act shall be read as if subparagraph (a)(ii) of that definition were deleted therefrom; and

  • (b) subsection 3(5) of that Act shall be read as if the words “and permanent residents who have been ordinarily resident in Canada for more than one year after the time at which they first became eligible to apply for Canadian citizenship”, wherever those words appear therein, were deleted therefrom.

• Marginal note:Trust property

  (3) For greater certainty, for the purposes of this Act, a separate trust exists with respect to all assets, investments or property held by a trustee under a trust instrument for the benefit of a person, group or class of persons, notwithstanding that under the same trust instrument different assets, investments or property are held for the benefit of a different person, group or class of persons.

• Marginal note:Total equity percentage

  (4) For the purposes of this Act, the total equity percentage of a person in any particular person shall be obtained by calculating the aggregate of

  • (a) the person’s direct equity percentage in respect of the particular person, and

  • (b) the aggregate of the percentages each of which is the product obtained when the person’s total equity percentage in respect of any other person is multiplied by that other person’s direct equity percentage in respect of the particular person.

• Marginal note:Indirect equity percentage

  (5) For the purposes of this Act, a person (in this subsection referred to as “the first person”) shall calculate the indirect equity percentage, in respect of an applicant, of any other person having a direct equity percentage in the first person by multiplying the direct equity percentage of the other person in the first person by the aggregate of the percentages, each of which is the first person’s direct equity percentage or indirect equity percentage in respect of the applicant.

• Marginal note:Power of Minister

  (6) For the purposes of this Act, where the Minister is empowered to make a determination or redetermination in respect of the Canadian ownership rate of a person, that power shall include the power to adjust the Canadian ownership rate of the person on the basis of informal equity to the extent that, in the opinion of the Minister, is appropriate in the circumstances.

• Marginal note:References

  (7) For the purposes of this Act, a reference in this Part to the Foreign Investment Review Act, chapter 46 of the Statutes of Canada, 1973-74, or to any regulation made pursuant to that Act or to any provision of that Act or any such regulation shall be construed as a reference to that Act, regulation or provision as it read immediately before the coming into force of section 46 of the Investment Canada Act, chapter 20 of the Statutes of Canada, 1985.

Marginal note:Binding on Her Majesty

3 This Act is binding on Her Majesty in right of Canada or a province.

Qualified Applicants

Marginal note:Who may apply

4 The following are qualified to apply for a certificate:

• (a) an individual other than a non-eligible person;

• (b) a corporation incorporated in Canada;

• (c) a partnership, if the relationship among the partners as such is governed by the laws of a province;

• (d) a trustee in respect of a trust, if the trustee and beneficiaries are, with respect to their status as such, governed by the laws of a province;

• (e) an insurance company incorporated in Canada in respect of any of its segregated funds within the meaning of the regulations; and

• (f) any person prescribed as being qualified to apply for a certificate or who falls into a class of persons prescribed as being qualified to apply for a certificate.

Canadian Ownership Rate and Control Status Determination

Marginal note:Applications

• 5 (1) Every application for a certificate shall be filed in the prescribed form and manner and shall contain or be accompanied by the prescribed information and documentation and, for the purposes of the application, the Canadian ownership rate and control status of a person shall be determined in accordance with this Act and the regulations.

• Marginal note:Control status

  (2) Subject to any regulations made under paragraph 20(f) or (g), a person is Canadian controlled if that person is not a non-eligible person and is not Canadian controlled if that person is a non-eligible person.

• Marginal note:Presumptions

  (3) For the purpose of determining whether a partnership or trust is a non-eligible person, the partnership or trust shall be deemed to be a corporation incorporated in Canada or elsewhere, and

  • (a) with respect to a partnership, the interests or rights in respect of its capital or income shall be deemed to be shares of the corporation, the beneficial owners of those interests or rights shall be deemed to be shareholders of the corporation and, with respect to a limited partnership, any general partner shall be deemed to be a member of the board of directors of the corporation; and

  • (b) with respect to a trust, the beneficial interests in the property of the trust shall be deemed to be shares of the corporation, the owners of those beneficial interests shall be deemed to be shareholders of the corporation and the trustees shall be deemed to be members of the board of directors of the corporation.

Marginal note:Determination by Minister under Foreign Investment Review Act

• 6 (1) Where the Minister designated to act as the Minister for the purposes of the Foreign Investment Review Act, chapter 46 of the Statutes of Canada, 1973-74, has reached the opinion under subsection 4(1) of that Act that a person is not a non-eligible person within the meaning of that Act, that person shall, subject to the regulations, be deemed to be Canadian controlled for the purposes of this Act for as long as the opinion is binding on that Minister.

• Marginal note:Idem

  (2) Where the Minister designated to act as the Minister for the purposes of the Foreign Investment Review Act, chapter 46 of the Statutes of Canada, 1973-74, has reached the opinion under subsection 4(1) of that Act that a person is a non-eligible person within the meaning of that Act, or demands notice under subsection 8(3) of that Act from a person he believes to be a non-eligible person, that person shall, subject to subsection (3) of this section, be deemed not to be Canadian controlled for the purposes of this Act for as long as the opinion under subsection 4(1) of that Act is binding on that Minister or the demand for notice under subsection 8(3) of that Act is binding on the recipient of the notice, and any certificate issued in respect of that person shall, if necessary, be revised accordingly.

• Marginal note:Application

  (3) Subsection (2) does not apply where the opinion of the Minister referred to in that subsection would have been otherwise, or where the demand for notice referred to in that subsection would not have been made, had the definition non-eligible person in subsection 3(1) of the Foreign Investment Review Act, chapter 46 of the Statutes of Canada, 1973-74, been read in accordance with subsection 2(2) of this Act.

Applications and Certificates

Marginal note:Acknowledgment of receipt of application

• 7 (1) Where the Minister is satisfied that an application for a certificate has been made by a person qualified to apply, has been filed in the form and manner prescribed and contains or is accompanied by the information and documentation prescribed, he shall send to the applicant, by personal delivery or registered mail, an acknowledgment as to the date of receipt of the application by the Minister.

• Marginal note:Determination by Minister

  (2) The Minister shall examine each application for a certificate the receipt of which has been acknowledged under subsection (1) and any supplementary information or documentation provided pursuant to section 8 and shall, in accordance with this Act and the regulations, determine the Canadian ownership rate or the Canadian ownership rate and control status in respect of which a certificate was applied for.

• Marginal note:Issue of certificate

  (3) Subject to section 8, the Minister shall, not later than ninety days after the acknowledged date of receipt of the application, issue a certificate to the applicant stating the Canadian ownership rate or the Canadian ownership rate and control status of the applicant, as determined under subsection (2), and the effective period of the certificate.

• Marginal note:Saving

  (4) Nothing in this section prevents the Minister, on application therefor, from issuing a certificate stating the control status of a person to whom there has been issued a certificate stating only his Canadian ownership rate, where the latter certificate is in effect at the time the application is made.

• Marginal note:Statement of reconciliation

  (5) Where the Canadian ownership rate stated in a certificate differs from that submitted with the application for the certificate, the Minister shall provide the applicant with a statement of reconciliation.

Marginal note:Supplementary information and documentation

• 8 (1) Where the Minister, after acknowledging receipt of an application for a certificate, is unable to determine the Canadian ownership rate or control status of the applicant or make any other relevant determination, he shall, as often as is required, give notice to the applicant in writing, by personal delivery or registered mail, requesting any supplementary information or documentation that the Minister considers necessary in order to enable him to make the determination.

• Marginal note:Suspension of period for issuing certificate

  (2) Where supplementary information or documentation is requested by notice in writing under subsection (1) or an audit or examination is begun after notice in writing under section 15, the period for issuing a certificate ceases to run from the giving of the relevant notice, resumes running on the day the Minister receives all the supplementary information and documentation requested or the day the audit or examination is completed, as the case may be, and continues to run for a period after that day that is the greater of

  • (a) thirty days, and

  • (b) the balance of the period for issuing a certificate that remained on the giving of the relevant notice.

Marginal note:Currency of information and documentation

9 All information and documentation relating to the Canadian ownership rate on which an application for a certificate is based shall, subject to such exemptions as the Minister may allow, be current as of a day or days determined in the manner prescribed.

Marginal note:Effective period of certificate

• 10 (1) A certificate is effective as of the acknowledged date of receipt of the application for it and, subject to subsections (2) and (3), it continues to be effective for a period of twelve months from that date or for such longer period or periods, not exceeding twenty-four months from that date, as may be prescribed in respect of such classes of persons as are prescribed.

• Marginal note:Additional effective period

  (2) The Minister may, in the manner prescribed, allocate among any persons or classes thereof to whom certificates are to be issued effective for the period referred to in subsection (1) an additional effective period not exceeding six months.

• Marginal note:Other effective periods

  (3) The Minister may

  • (a) on request by an applicant for a certificate, issue a certificate effective for a period less than the effective period under subsection (1) or (2); and

  • (b) on request by a person to whom a certificate was issued, reduce the effective period of the certificate and revise the certificate accordingly.

• Marginal note:New certificate

  (4) Where the holder of a current certificate has, in substantial compliance with this Act and the regulations, applied for a new certificate prior to the expiration of the current certificate, the Minister may issue a new certificate effective as of the day the current certificate expires.