Interpretation

1 The following definitions apply in these Regulations.

Act

Act means the Canada Business Corporations Act. (Loi)

end of the taxation year

end of the taxation year means the taxation year end as defined in subsection 1104(1) of the Income Tax Regulations and is the equivalent of the financial year end for the purposes of these Regulations. (fin de l’année d’imposition)

• 2 (1) For the purpose of the definition distributing corporation in subsection 2(1) of the Act and subject to subsections 2(6) and (7) of the Act and subsection (2) of this section, distributing corporation means

  • (a) a corporation that is a reporting issuer under any legislation that is set out in column 2 of an item of Schedule 1; or

  • (b) in the case of a corporation that is not a reporting issuer referred to in paragraph (a), a corporation

    • (i) that has filed a prospectus or registration statement under provincial legislation or under the laws of a jurisdiction outside Canada,

    • (ii) any of the securities of which are listed and posted for trading on a stock exchange in or outside Canada, or

    • (iii) that is involved in, formed for, resulting from or continued after an amalgamation, a reorganization, an arrangement or a statutory procedure, if one of the participating bodies corporate is a corporation to which subparagraph (i) or (ii) applies.

• (2) A corporation that is subject to an exemption under provincial securities legislation, or to an order of the relevant provincial securities regulator that provides that the corporation is not a reporting issuer for the purposes of the applicable legislation, is not a distributing corporation for the purpose of the definition of that expression in subsection (1).

• 3 (1) For the purpose of the definition going-private transaction in subsection 2(1) of the Act, going-private transaction means an amalgamation, arrangement, consolidation or other transaction involving a distributing corporation, other than an acquisition of shares under section 206 of the Act, that results in the interest of a holder of participating securities of the corporation being terminated without the consent of the holder and without the substitution of an interest of equivalent value in participating securities of the corporation or of a body corporate that succeeds to the business of the corporation, which participating securities have rights and privileges that are equal to or greater than the affected participating securities.

• (2) For the purpose of subsection (1), participating securities means securities of a body corporate that give the holder of the securities a right to share in the earnings of the body corporate and after the liquidation, dissolution or winding up of the body corporate, a right to share in its assets.

PART 1General

Forms

4 Any forms, procedures or policy guidelines that the Director establishes from time to time for the better administration of the Act shall be published in a publication generally available to the public.

• 5 (1) The annual return referred to in section 263 of the Act shall be sent to the Director within six months after the end of the corporation’s taxation year, and shall set out the required information as of the date of the taxation year end.

• (2) The annual return referred to in subsection (1) may be sent, with a T2 Corporation Income Tax Return , to the Canada Customs and Revenue Agency, as agent of the Director, on a form fixed by the Director.

Electronic Documents

6 For the purpose of section 252.2 of the Act, the prescribed notices, documents or other information are the notices, documents or other information referred to in sections 48 to 81 of the Act.

• 7 (1) For the purpose of paragraph 252.3(2)(a) of the Act, the consent shall be in writing.

• (2) For the purpose of paragraph 252.3(2)(b) of the Act, an electronic document need not be sent to the designated information system if

  • (a) the document is posted on or made available through a generally accessible electronic source, such as a web site; and

  • (b) the addressee is provided with notice in writing of the availability and location of that electronic document.

• (3) Subsection (2) does not apply to a notice, document or other information provided under section 10.

8 For the purposes of subsection 252.3(3) of the Act, an addressee shall revoke his or her consent in writing.

9 For the purpose of paragraphs 252.4(b) and 252.5(2)(b) of the Act, when a notice, document or other information is provided to several addressees, the notice, document or other information shall be provided to the addressees concurrently, regardless of the manner of provision.

10 For the purposes of Part XX.1 of the Act, when a notice, document or other information is required under the Act to be sent to a specific place, an electronic document may be sent instead to an information system designated for the receipt of the notice, document or other information.

11 For the purposes of Part XX.1 of the Act, an electronic document is considered to have been provided to a person when it leaves an information system within the control of the originator or another person who provided it on behalf of the originator.

12 For the purposes of Part XX.1 of the Act, an electronic document is considered to have been received

• (a) when it enters the information system designated by the addressee; or

• (b) if the document is posted on or made available through a generally accessible electronic source, when the notice referred to in paragraph 7(2)(b) is received by the addressee or, if sent electronically, when the notice enters the information system designated by the addressee.

“Resident Canadian” Class of Persons Prescribed

13 For the purpose of paragraph (b) of the definition resident Canadian in subsection 2(1) of the Act, the following classes of persons are prescribed:

• (a) persons who are full-time employees of the Government of Canada or of a province, of an agency of any of those governments or of a federal or provincial Crown corporation, if the principal reason for their residence outside Canada is to act as employees;

• (b) persons who are full-time employees, if the principal reason for their residence outside Canada is to act as employees, of a body corporate

  • (i) of which more than 50% of the voting shares is beneficially owned, or over which control or direction is exercised, by resident Canadians,

  • (ii) a majority of the directors of which are resident Canadians, or

  • (iii) that is a subsidiary of a body corporate described in subparagraph (i) or (ii);

• (c) persons who are full-time students at a university or other educational institution recognized by the educational authorities of a majority of the provinces of Canada and who have been resident outside Canada for fewer than 10 consecutive years;

• (d) persons who are full-time employees of an international association or organization of which Canada is a member; and

• (e) persons who were, at the time of reaching their 60th birthday, ordinarily resident in Canada and who have been resident outside Canada for fewer than 10 consecutive years.

Exemption Circumstances Prescribed

14 For the purpose of section 258.2 of the Act, the prescribed circumstances are that the exemption does not prejudice any of the shareholders or the public interest.

Retention of Records

15 For the purpose of subsection 267(3) of the Act, the prescribed period is six years after the day on which the Director receives the document.

Business Sectors

16 For the purpose of subsection 105(3.1) of the Act, the prescribed business sectors are

• (a) uranium mining;

• (b) book publishing or distribution; and

• (c) book sales, where the sale of books is the primary part of the corporation’s business; and

• (d) film or video distribution.

PART 2Corporate Names

Interpretation

17 The following definitions apply in this Part.

confusing

confusing, in relation to a corporate name, means a corporate name the use of which causes confusion with a trade-mark, an official mark or a trade-name in the manner described in section 18. (prête à confusion)

corporate name

corporate name means the name of a corporation. (Version anglaise seulement)

distinctive

distinctive, in relation to a trade-name, means a trade-name that distinguishes the business in association with which it is used by its owner from any other business or that is adapted so as to distinguish them from each other. (distinctive)

official mark

official mark means an official mark within the meaning of subparagraph 9(1)(n)(iii) of the Trade-marks Act.(marque officielle)

secondary meaning

secondary meaning, in relation to a trade-name, means a trade-name that has been used in Canada or elsewhere by an applicant or by their predecessors so as to have become distinctive in Canada as at the date of filing an application for a corporate name. (sens dérivé)

trade-mark

trade-mark has the same meaning as in section 2 of the Trade-marks Act. (marque de commerce)

trade-name

trade-name means the name under which a business is carried on, whether it is a corporate name or the name of a body corporate, a trust, a partnership, a sole proprietorship or an individual. (dénomination commerciale)

use

use means actual use by a person that carries on business in Canada or elsewhere. (emploi)

Confusion of Names

18 A corporate name is confusing with

• (a) a trade-mark or an official mark if the use of both the corporate name and either the trade-mark or the official mark, as the case may be, is likely to lead to the inference that the business carried on or intended to be carried on under the corporate name and the business connected with the trade-mark or the official mark, as the case may be, are one business, whether or not the nature of the business of each is generally the same; or

• (b) a trade-name if the use of both names is likely to lead to the inference that the business carried on or intended to be carried on under the corporate name and the business carried on under the trade-name are one business, whether or not the nature of the business of each is generally the same.

Consideration of Whole Name

19 When determining whether a trade-name is distinctive, the name as a whole and not only its separate elements shall be considered.

Prohibited Names

20 For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited in respect of a request to reserve a name or in respect of an application for revival under section 209 of the Act, if it is the same as, or is confusing with, a corporate name that has, before the date of the request, been reserved by the Director for another person, unless

• (a) written consent has been obtained from the person for whom the corporate name was reserved; or

• (b) the 90-day reservation period referred to in subsection 11(1) of the Act has expired without the person for whom the corporate name was reserved having made a renewed request to reserve the corporate name.

21 For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if the name contains any of the following elements:

• (a) “Air Canada”;

• (b) “Canada Standard” or “CS”;

• (c) “cooperative”, “coopérative”, “co-op” or “pool” when it connotes a cooperative venture;

• (d) “Parliament Hill” or “Colline du Parlement”;

• (e) “Royal Canadian Mounted Police”, “Gendarmerie royale du Canada”, “RCMP” or “GRC”; or

• (f) “United Nations”, “Nations Unies”, “UN” or “ONU”.

22 For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if it connotes that the corporation

• (a) carries on business under royal, vice-regal or governmental patronage, approval or authority, unless the appropriate government department or agency consents in writing to the use of the name;

• (b) is sponsored or controlled by or is connected with the Government of Canada, the government of a province, the government of a country other than Canada or a political subdivision or agency of any such government, unless the appropriate government, political subdivision or agency consents in writing to the use of the name;

• (c) is sponsored or controlled by or is connected with a university or an association of accountants, architects, engineers, lawyers, physicians or surgeons or another professional association recognized by the laws of Canada or a province, unless the appropriate university or professional association consents in writing to the use of the name; or

• (d) carries on the business of a bank, a loan company, an insurance company, a trust company, another financial intermediary or a stock exchange that is regulated by a law of Canada or a province, unless the Superintendent of Financial Institutions or the relevant provincial securities regulator consents in writing to the use of the name.

23 For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if it contains a word or phrase, or connotes a business, that is obscene.

• 24 (1) For the purpose of paragraph 12(1)(a) of the Act and subject to subsection (2), a corporate name is prohibited if the corporate name is not distinctive because it

  • (a) is only descriptive, in any language, of the business of the corporation, of the goods and services in which the corporation deals or intends to deal, or of the quality, function or other characteristic of those goods and services;

  • (b) is primarily or only the name or surname, used alone, of an individual who is living or has died within 30 years before the date of the request to the Director for that name; or

  • (c) is primarily or only a geographic name, used alone.

• (2) Subsection (1) does not apply if a person requesting a corporate name establishes that it has, through use, acquired rights in the name and the name continues at the time of the request to have secondary meaning.

25 For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if it is confusing, having regard to all the circumstances, including

• (a) the inherent distinctiveness of the whole or any elements of any trade-mark, official mark or trade-name and the extent to which it has become known;

• (b) the length of time the trade-mark, official mark or trade-name has been in use;

• (c) the nature of the goods or services associated with a trade-mark or an official mark, or the nature of the business carried on under or associated with a trade-name, including the likelihood of any competition among businesses using such a trade-mark, official mark or trade-name;

• (d) the nature of the trade with which a trade-mark, an official mark or a trade-name is associated, including the nature of the products or services and the means by which they are offered or distributed;

• (e) the degree of resemblance between the proposed corporate name and a trade-mark, an official mark or a trade-name in appearance or sound or in the ideas suggested by them; and

• (f) the territorial area in Canada in which the proposed corporate name or an existing trade-name is likely to be used.

26 For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if an element of the name is the family name of an individual, whether or not preceded by their given name or initials, unless the individual or their heir or legal representative consents in writing to the use of their name and the individual has or had a material interest in the corporation.

27 For the purpose of paragraph 12(1)(a) of the Act,

• (a) a corporate name is prohibited if its use is likely to lead to the inference that the business carried on or intended to be carried on under it and the business of a body corporate that is dissolved are one business, whether or not the nature of their businesses is generally the same; and

• (b) the name of a corporation that is revived under section 209 of the Act is prohibited if it is confusing with a name acquired by another corporation during the period beginning on the date of dissolution and ending on the date of revival of the revived corporation.

28 For the purpose of paragraph 12(1)(a) of the Act, a corporate name that is confusing with the name of a body corporate that has not carried on business in the two years immediately before the date of a request for the corporate name is prohibited, unless the body corporate that has that name

• (a) consents in writing to the use of the name, and the name is not otherwise prohibited; and

• (b) undertakes in writing to dissolve immediately or to change its name before the corporation that proposes to use the name begins to use it, and the name is not otherwise prohibited.

29 For the purpose of paragraph 12(1)(a) of the Act, a corporate name that contains a word that is the same as or similar to the distinctive element of an existing trade-mark, official mark or trade-name and is confusing with one or another of the distinctive elements is prohibited, unless the person who owns the trade-mark, official mark, or trade-name consents in writing to the use of the corporate name, and the name is not otherwise prohibited.

• 30 (1) For the purpose of paragraph 12(1)(a) of the Act, a corporate name that is confusing with the name of a body corporate is prohibited unless

  • (a) the corporate name is the name of an existing or a proposed corporation that is the successor to the business of the body corporate and the body corporate has ceased or will, in the immediate future, cease to carry on business under that corporate name and undertakes in writing to dissolve or to change its corporate name before the successor corporation begins carrying on business under that corporate name;

  • (b) subject to subsection (2), the corporate name of the existing or proposed corporation sets out in numerals the year of incorporation, or the year of the most recent amendment to the corporate name, in parentheses, immediately before the word or expression “Limited”, “Limitée”, “Incorporated”, “Incorporée”, “Corporation”, “Société par actions de régime fédéral” or “Société commerciale canadienne” or the abbreviation “Ltd.”, “Ltée”, “Inc.”, “Corp.”, “S.A.R.F.” or “S.C.C.”; and

  • (c) the corporate name is not otherwise prohibited.

• (2) The reference in a corporate name to the year of incorporation or the year of the most recent amendment to the corporate name may be deleted two years after its use is introduced, if the corporate name so changed is not confusing.

• 31 (1) For the purpose of paragraph 12(1)(a) of the Act, if two or more corporations amalgamate, the name of the amalgamated corporation is prohibited if the name is confusing or is otherwise prohibited.

• (2) Despite subsection (1), the new corporate name may be the same as the name of one of the amalgamating corporations.

• (3) For the purpose of paragraph 12(1)(a) of the Act, if an existing corporation has acquired or will, in the immediate future, acquire all or substantially all of the property of an affiliated body corporate, the use by the corporation of the corporate name of the body corporate is prohibited unless

  • (a) the body corporate undertakes in writing to dissolve, or to change its name, before the corporation begins using the corporate name; and

  • (b) the name is not otherwise prohibited.

• (4) For the purpose of paragraph 12(1)(a) of the Act, if a proposed corporation will, in the immediate future, acquire all or substantially all of the property of a body corporate that is to be an affiliate of the proposed corporation, the use by the proposed corporation of the name of the affiliated body corporate is prohibited unless

  • (a) the body corporate undertakes in writing to dissolve, or to change its name, before the proposed corporation begins using the corporate name; and

  • (b) the name is not otherwise prohibited.

Deceptively Misdescriptive Names

32 For the purpose of paragraph 12(1)(a) of the Act, a corporate name is deceptively misdescriptive if it is likely to mislead the public, in any language, with respect to

• (a) the business, goods or services in association with which it is proposed to be used;

• (b) the conditions under which the goods or services will be produced or supplied or the persons to be employed in the production or supply of the goods or services; or

• (c) the place of origin of the goods or services.

Certain Names Not Prohibited

33 A corporate name is not prohibited only because it contains alphabetic or numeric characters, initials, punctuation marks or any combination of those elements.

Criteria for English and French Forms

34 For the purpose of subsection 10(3) of the Act, a combined English and French form of the name of a corporation shall include only the expression “Inc.”.

PART 3Corporate Interrelationships

Interpretation

35 The following definitions apply in this Part.

delivery shares

delivery shares means shares issued by a corporation to a particular subsidiary for the purpose of an acquisition made under subsection 31(4) of the Act. (actions remises)

particular subsidiary

particular subsidiary means a subsidiary body corporate referred to in subsection 31(4) of the Act. (filiale donnée)

Prescribed Conditions

36 For the purpose of subsection 31(4) of the Act, the prescribed conditions are that

• (a) the consideration received by the corporation for the delivery shares is equal to the fair market value of those shares at the time of their issuance;

• (b) the class of shares of which the delivery shares are a part is widely held and shares of that class are actively traded on any of the following stock exchanges in Canada, namely,

  • (i) the Canadian Venture Exchange,

  • (ii) The Montreal Exchange, or

  • (iii) the Toronto Stock Exchange;

• (c) the sole purpose of effecting the acquisition by the particular subsidiary of delivery shares is to transfer them, as set out in paragraph 37(b), to the shareholders of another body corporate;

• (d) immediately before the acquisition of the delivery shares by the particular subsidiary, the other body corporate and its shareholders deal at arm’s length, to be determined in accordance with the Income Tax Act, with the corporation and the particular subsidiary; and

• (e) immediately before the acquisition of the delivery shares by the particular subsidiary, the particular subsidiary and the other body corporate are not resident in Canada, for the purposes of the Income Tax Act.

37 For the purposes of subsection 31(5) of the Act, the prescribed conditions are that

• (a) the particular subsidiary does not acquire a beneficial interest in the delivery shares as a result of its acquisition of those shares and the beneficial interest is acquired by the shareholders of the other body corporate;

• (b) the acquisition by the particular subsidiary of the delivery shares is followed immediately by a transfer of the delivery shares by the particular subsidiary to shareholders of the other body corporate;

• (c) immediately after the transfer of the delivery shares to the shareholders of the other body corporate, the particular subsidiary and the other body corporate are not resident in Canada, for the purposes of the Income Tax Act; and

• (d) after the transfer of the delivery shares to the shareholders of the other body corporate, the other body corporate is a subsidiary body corporate of the particular subsidiary.

38 For the purpose of subsection 31(6) of the Act, the prescribed consequences are that within 30 days after one of the conditions described in section 36 or 37 is not met or ceases to be met, the corporation shall

• (a) cancel the delivery share, on condition that if the articles of the corporation limit the number of authorized shares, the delivery shares may be restored to the status of authorized but unissued shares;

• (b) return the consideration received by the corporation for the delivery shares to the particular subsidiary; and

• (c) cancel the entry for the consideration in the corporation’s stated capital account.

PART 4Insider Trading

39 For the purpose of paragraph 126(2)(a) of the Act, the prescribed percentage of voting rights is 10%.

40 For the purpose of paragraph 131(1)(d) of the Act, the prescribed percentage of voting rights is 10%.

41 For the purpose of subsection 131(3) of the Act, take-over bid means take-over bid under any legislation that is set out in column 2 of an item of Schedule 2.

42 For the purpose of paragraph 131(4)(c) of the Act, the prescribed circumstances are that the insider

• (a) entered into the purchase or sale as an agent pursuant to a specific unsolicited order to purchase or sell;

• (b) made the purchase or sale pursuant to participation in an automatic dividend reinvestment plan, share purchase plan or other similar automatic plan that the insider entered into before the acquisition of the confidential information;

• (c) made the purchase or sale to fulfil a legally binding obligation that the insider entered into before the acquisition of the confidential information; or

• (d) purchased or sold the security as agent or trustee in the circumstances described in paragraph (b) or (c).

PART 5Meetings of Shareholders

Record Date

• 43 (1) Subject to subsection (3), for the purposes of paragraphs 134(1)(a), (b) and (e) of the Act, the prescribed period for the directors to fix the record date is not more than 60 days before the particular action to be taken.

• (2) For the purposes of paragraphs 134(1)(c) and (d) of the Act, the prescribed period for the directors to fix the record date is not less than 21 days and not more than 60 days before the date of the meeting.

• (3) For the purpose of subsection 134(3) of the Act, the prescribed period for the directors to provide notice of the record date shall begin not less than seven days before the date fixed.

Notice of Meetings

44 For the purpose of subsection 135(1) of the Act, the prescribed period for the directors to provide notice of the time and place of a meeting of shareholders is not less than 21 days and not more than 60 days before the meeting.

Communication Facilities

• 45 (1) For the purpose of subsection 141(3) of the Act, when a vote is to be taken at a meeting of shareholders, the voting may be carried out by means of a telephonic, electronic or other communication facility, if the facility

  • (a) enables the votes to be gathered in a manner that permits their subsequent verification; and

  • (b) permits the tallied votes to be presented to the corporation without it being possible for the corporation to identify how each shareholder or group of shareholders voted.

• (2) For the purpose of subsection 141(4) of the Act, a person who is entitled to vote at a meeting of shareholders may vote by means of a telephonic, electronic or other communication facility, if the facility

  • (a) enables the vote to be gathered in a manner that permits its subsequent verification; and

  • (b) permits the tallied vote to be presented to the corporation without it being possible for the corporation to identify how the shareholder voted.

PART 6Shareholder Proposals

46 For the purpose of subsection 137(1.1) and paragraph 261(1)(c.1) of the Act,

• (a) the prescribed number of shares is the number of voting shares

  • (i) that is equal to 1% of the total number of the outstanding voting shares of the corporation, as of the day on which the shareholder submits a proposal, or

  • (ii) whose fair market value, as determined at the close of business on the day before the shareholder submits the proposal to the corporation, is at least $2,000; and

• (b) the prescribed period is the six-month period immediately before the day on which the shareholder submits the proposal.

47 For the purpose of subsection 137(1.4) of the Act,

• (a) a corporation may request that a shareholder provide the proof referred to in that subsection within 14 days after the corporation receives the shareholder’s proposal; and

• (b) the shareholder shall provide the proof within 21 days after the corporation’s request.

48 For the purpose of subsection 137(3) of the Act, a proposal and a statement in support of it shall together consist of not more than 500 words.

49 For the purpose of paragraph 137(5)(a) of the Act, the prescribed number of days for submitting a proposal to the corporation is at least 90 days before the anniversary date.

50 For the purpose of paragraph 137(5)(c) of the Act, the prescribed period before the receipt of a proposal is two years.

• 51 (1) For the purpose of paragraph 137(5)(d) of the Act, the prescribed minimum amount of support for a shareholder’s proposal is

  • (a) 3% of the total number of shares voted, if the proposal was introduced at an annual meeting of shareholders;

  • (b) 6% of the total number of shares voted at its last submission to shareholders, if the proposal was introduced at two annual meetings of shareholders; and

  • (c) 10% of the total number of shares voted at its last submission to shareholders, if the proposal was introduced at three or more annual meetings of shareholders.

• (2) For the purpose of subsection (1), the prescribed period within which an annual meeting of shareholders must be held is five years before the receipt of a proposal.

52 For the purpose of subsection 137(5.1) of the Act, the prescribed period during which the corporation is not required to set out a proposal in a management proxy circular is two years.

53 For the purpose of subsection 137(7) of the Act, the prescribed period for giving notice is 21 days after the receipt by the corporation of the proposal or of proof of ownership under subsection 137(1.4) of the Act, as the case may be.

PART 7Proxies and Proxy Solicitation

Form of Proxy

• 54 (1) A form of proxy required by subsection 150(2) of the Act to be sent to the Director shall indicate, in bold-face type,

  • (a) the meeting at which it is to be used; and

  • (b) whether the proxy is solicited by or on behalf of the management of the corporation.

• (2) A form of proxy shall contain a designated blank space for a date and shall state that, if it is not dated in the space, it is deemed to bear the date on which it is mailed by the person making the solicitation.

• (3) A form of proxy, an accompanying management proxy circular or a dissident’s proxy circular shall state, in bold-face type, that the shareholder may appoint a proxyholder, other than a person designated in the form of proxy, to attend and act on their behalf at the meeting, and shall contain instructions on the manner in which the shareholder may make the appointment.

• (4) If a form of proxy designates a person as proxyholder, it shall provide a means for the shareholder to designate some other person as proxyholder.

• (5) A form of proxy shall provide a means for the shareholder to specify that the shares registered in their name are to be voted for or against each matter or group of related matters identified in the notice of meeting or in a management proxy circular, dissident’s proxy circular or proposal under section 137 of the Act, other than the appointment of an auditor and the election of directors.

• (6) A form of proxy may confer authority with respect to matters for which a choice is not provided in accordance with subsection (5) if the form of proxy, the management proxy circular or the dissident’s proxy circular states, in bold-face type, how the proxyholder will vote the shares in respect of each matter or group of related matters.

• (7) A form of proxy shall provide a means for the shareholder to specify that the shares registered in their name are to be voted or withheld from voting in respect of the appointment of an auditor or the election of directors.

• (8) A form of proxy, an accompanying management proxy circular or a dissident’s proxy circular shall state that the shares represented by the proxy will be voted or withheld from voting, in accordance with the instructions of the shareholder, on any ballot that may be called for and that, if the shareholder specified a choice under subsection (5) or (7) with respect to any matter to be acted on, the shares will be voted accordingly.

• (9) If a document referred to in subsection (1), (3) or (6) is sent in electronic form, the requirement in those subsections that certain information be set out in bold-face type is satisfied if the information in question is set out in some other manner so as to draw the attention of the addressee to the information.

55 A form of proxy may confer discretionary authority in respect of amendments to matters identified in the notice of meeting or other matters that may properly come before the meeting if

• (a) the person by whom or on whose behalf the solicitation is made is not aware within a reasonable time before the solicitation that the amendments or other matters are to be presented for action at the meeting; and

• (b) the form of proxy, the management proxy circular or the dissident’s proxy circular specifically confers discretionary authority.

56 A form of proxy shall not confer authority to vote in respect of the appointment of an auditor or the election of a director unless a bona fide proposed nominee for the appointment or election is named in the form of proxy, management proxy circular, dissident’s proxy circular or proposal under section 137 of the Act.

Contents of Management Proxy Circular

57 A management proxy circular shall contain the following information:

• (a) a statement of the right of the shareholder to revoke a proxy under subsection 148(4) of the Act and of the method by which the shareholder may exercise that right;

• (b) a statement that the solicitation is made by or on behalf of the management of the corporation;

• (c) the name of any director of the corporation who has informed the management, in writing, that he or she intends to oppose any action intended to be taken by the management and the nature of the action that the director intends to oppose;

• (d) the method of solicitation, if otherwise than by mail, and if the solicitation is to be made by specially engaged employees or agents, the material features of any contract or understanding for the solicitation, the parties to the contract or understanding and the cost or anticipated cost of the solicitation;

• (e) the name of the person by whom the cost of the solicitation has been or will be borne, directly or indirectly;

• (f) the number of shares of each class entitled to be voted at the meeting and the number of votes to which each share is entitled;

• (g) the record date as of which the shareholders entitled to vote at the meeting will be determined or particulars as to the closing of the security transfer register, as the case may be, and, if the right to vote is not limited to shareholders of record as at a specified record date, any conditions in respect of that right to vote;

• (h) if indemnification under section 124 of the Act is paid or becomes payable in the financial period,

  • (i) the amount paid or payable,

  • (ii) the name and title of the individual indemnified or to be indemnified, and

  • (iii) the circumstances that gave rise to the indemnity;

• (i) if insurance referred to in subsection 124(6) of the Act is purchased,

  • (i) the amount or, if there is a comprehensive liability policy, the approximate amount of premiums paid by the corporation in respect of directors as a group and officers as a group or for both groups on an aggregate basis,

  • (ii) the aggregate amount of premiums, if any, paid by the individuals in each group,

  • (iii) the total amount of insurance purchased in respect of each group or for both groups on an aggregate basis, and

  • (iv) a summary of any deductibility or co-insurance clause or other provision in the insurance contract that exposes the corporation to liability in addition to the payment of the premiums;

• (j) the name of each person who, to the knowledge of the directors or officers of the corporation, beneficially owns, directly or indirectly, or exercises control or direction over, shares carrying more than 10% of the votes attached to any class of shares entitled to vote in connection with any matters being proposed for consideration at the meeting, the approximate number of the shares so owned, controlled or directed by each person and the percentage of the class of voting shares represented by the number of shares so owned, controlled or directed;

• (k) the percentage of votes required for the approval of any matter that is to be submitted to a vote of shareholders at the meeting, other than the election of directors;

• (l) if action is to be taken with respect to the appointment of an auditor, the name of the proposed auditor, the name of each auditor appointed within the preceding five years and the date on which each auditor was first appointed;

• (m) if directors are to be elected, a statement of the right of any class of shareholders to elect a specified number of directors or to cumulate their votes and of any conditions precedent to the exercise of the right;

• (n) in tabular form, if directors are to be elected, so far as practicable with respect to each person proposed to be nominated by management for election as a director and each director whose term of office will continue after the meeting,

  • (i) the name of each person, the time when their term of office or the term of office for which they are a proposed nominee will expire and the last major position or office with the corporation or the corporation’s holding body corporate held by them, indicating whether the person is a proposed nominee for election as a director at the meeting,

  • (ii) the present principal occupation or employment of each person, giving the name and principal business of any body corporate or other organization in which the occupation or employment is carried on, and the same information in respect of all principal occupations or employments held by them within the five preceding years, unless the person is now a director and was elected to the present term of office by a vote of shareholders at a meeting the notice of which was accompanied by a proxy circular containing that information,

  • (iii) if the person is or has been a director of the corporation, the period or periods during which they have so served,

  • (iv) the number of shares of each class of voting shares of the corporation and the corporation’s holding body corporate and any of the corporation’s subsidiaries beneficially owned, directly or indirectly, or over which control or direction is exercised, by each person, and

  • (v) if the voting shares are equal to more than 10% of the votes attached to all voting shares of the corporation, the corporation’s holding body corporate or any of the corporation’s subsidiaries, the approximate number of each class of shares, and the name of each associate;

• (o) whether the corporation has an executive committee of its board of directors or is required to have an audit committee and, if so, the names of the directors who are members of each committee;

• (p) the details of any contract or understanding between any proposed management nominee and any other person, except the directors and officers of the corporation acting solely in their capacity as such, under which the nominee is to be elected, including the name of the other person;

• (q) the Statement of Executive Remuneration in the form fixed by the Director or, if the corporation is required by the laws of a jurisdiction set out in column 1 of an item of Schedule 3 to file the form or information with respect to executive remuneration that is set out in column 2 of that item, that form or information, when action is to be taken with respect to

  • (i) the election of directors,

  • (ii) any bonus, profit-sharing or other plan of remuneration, contract or understanding in which a director or an officer of the corporation will participate,

  • (iii) any pension or retirement plan of the corporation in which a director or an officer of the corporation will participate, or

  • (iv) the granting to a director or an officer of the corporation of any option or right to purchase securities, other than rights issued rateably to all shareholders or to all shareholders resident in Canada;

• (r) if action is to be taken with respect to any of the matters referred to in subparagraphs (q)(i) to (iv),

  • (i) a statement setting out the largest aggregate amount of debt, except for indebtedness that has been entirely repaid on or before the date of the management proxy circular and routine indebtedness, that has been outstanding since the beginning of the corporation’s last completed financial year, the nature of the indebtedness, the amount of debt that is currently outstanding, details of the transaction in which it was incurred, and the rate of interest paid or charged on it, in respect of the following persons who are or have been indebted to the corporation or any of its subsidiaries since the beginning of the last completed financial year in an aggregate amount that exceeds $25,000, namely,

    • (A) a director or an officer of the corporation,

    • (B) a person proposed by management as a nominee for election as a director of the corporation, and

    • (C) an associate of any person referred to in clause (A) or (B),

    and for the purpose of this subparagraph, routine indebtedness means indebtedness described in any of the following, namely,

    • (D) if a corporation makes loans to employees of the corporation generally, whether or not in the ordinary course of business, the loans are considered routine indebtedness if made on terms, including those as to interest rate and security, no more favourable to the borrower than the terms on which loans are made by the corporation to employees generally, but the amount of any remaining unpaid loans to any one director, officer or person proposed as a nominee, and their associates, that is considered as routine indebtedness under this clause during the last completed financial year must not exceed $25,000,

    • (E) whether or not the corporation makes loans in the ordinary course of business, a loan made by it to one of its directors or officers is considered routine indebtedness if

      • (I) the borrower is a full-time employee of the corporation,

      • (II) the loan is fully secured against the borrower’s residence, and

      • (III) the amount of the loan does not exceed the borrower’s annual salary,

    • (F) if the corporation makes loans in the ordinary course of business, a loan is considered routine indebtedness if it is made to a person other than a full-time employee of the corporation or to any other body corporate and

      • (I) is made on substantially the same terms, including those as to interest rate and security, as loans made to other customers of the corporation with comparable credit ratings, and

      • (II) involves no more than usual risks of collectibility, or

    • (G) indebtedness arising from purchases made on usual trade terms or from ordinary travel or expense advances, or for similar reasons, is considered routine indebtedness if the repayment provisions are in accordance with usual commercial practice, or

  • (ii) if the corporation is required by the laws of a jurisdiction set out in column 1 of an item of Schedule 4 to file the form or information with respect to indebtedness of directors and officers that is set out in column 2 of that item, that form or information;

• (s) subject to section 58, in any transaction since the beginning of the corporation’s last completed financial year or in any proposed transaction that has materially affected or could materially affect the corporation or any of its subsidiaries,

  • (i) if not previously disclosed, the details, including, when practicable, the approximate amount of any material interest, direct or indirect, of

    • (A) a director or an officer of the corporation,

    • (B) a director or an officer of a body corporate that is itself an insider or a subsidiary of the corporation,

    • (C) a person proposed by management as a nominee for election as a director of the corporation,

    • (D) a shareholder required to be named under paragraph (j), and

    • (E) an associate or affiliate of any of the persons referred to in clauses (A) to (D),

  • (ii) the amounts and other details of transactions that are not required under subparagraph (i) and that involve remuneration paid, directly or indirectly, to any of the persons referred to in clauses (i)(A) to (E) for services in any capacity, unless the interest of the person arises solely from the beneficial ownership, direct or indirect, of less than 10% of any class of voting shares of another body corporate, or one of its subsidiaries, that provides services to the corporation, and

  • (iii) an interest arising from the ownership of securities of the corporation, if the security holder receives an advantage not shared rateably by all holders of the same class of security or all holders of the same class of security who are resident in Canada;

• (t) details of each transaction referred to in paragraph (s), the name and address of each person whose interest in the transaction is disclosed and the nature of the relationship by reason of which the interest is required to be disclosed;

• (u) when a transaction referred to in paragraph (s) involves the purchase or sale of assets by the corporation or any of its subsidiaries or holding bodies corporate otherwise than in the ordinary course of business, the cost of the assets to the purchaser and the cost of the assets to the seller, if the assets were acquired by the seller within two years before the transaction;

• (v) details of a material underwriting discount or commission with respect to the sale of securities by the corporation if any person referred to in paragraph (s) has contracted or will contract with the corporation in respect of an underwriting or is an associate or affiliate of a person that has so contracted or will so contract;

• (w) if a person other than the directors or officers of the corporation or any of its subsidiaries or holding bodies corporate manages the corporation or any of its subsidiaries, subject to the requirements of subparagraph (vi), the following information:

  • (i) details of the management agreement, including the name and address of every person who is a party to the agreement or who is responsible for its performance,

  • (ii) the name and full address, or, alternatively, solely the municipality of residence or postal address, of each insider of every body corporate with which the corporation or any of its subsidiaries has a management agreement,

  • (iii) the amounts paid or payable by the corporation and any of its subsidiaries to each person named under subparagraph (i) since the beginning of the corporation’s last completed financial year,

  • (iv) details of any debt owed to the corporation or any of its subsidiaries by a person referred to in this paragraph, or by that person’s associates or affiliates, that was outstanding at any time since the beginning of the corporation’s last completed financial year,

  • (v) details of any transaction, other than one referred to in subparagraphs (i) to (iv), entered into with the corporation or any of its subsidiaries or holding bodies corporate since the beginning of the corporation’s last completed financial year, in which a person referred to in subparagraph (i) or (ii) has a material interest that would otherwise be required to be disclosed under subparagraphs (i) to (iv), and

  • (vi) for the purpose of this paragraph,

    • (A) details of debt include the largest aggregate amount of debt outstanding at any time during the corporation’s last completed financial year, the nature of the indebtedness, details of the transaction in which it was incurred, the amount at present outstanding and the rate of interest paid or charged on it,

    • (B) an amount owing for purchases, subject to usual trade terms, for ordinary travel and expense advances or for other transactions in the ordinary course of business may be omitted in determining debt, and

    • (C) any matter that is not material may be omitted;

• (x) in any matter to be acted on at the meeting, other than the election of directors or the appointment of an auditor, details of any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, of

  • (i) each director or officer of the corporation at any time since the beginning of its last completed financial year,

  • (ii) each person proposed by management as a nominee for election as a director of the corporation, and

  • (iii) each affiliate or associate of any of the persons referred to in subparagraph (i) or (ii);

• (y) if action is to be taken with respect to the authorization or issue of securities, except to exchange the securities for other securities of the corporation,

  • (i) the designation and number or amount of securities to be authorized or issued,

  • (ii) a description of the securities, but

    • (A) if the terms of securities to be authorized cannot be stated because no issue of securities is contemplated in the immediate future, and if no further authorization by shareholders for their issue is to be obtained, a statement that the terms of the securities to be authorized, including dividend or interest rates, conversion prices, voting rights, redemption prices, maturity dates and other matters, will be determined by the directors, and

    • (B) if the securities are shares of an existing class, the description required, except for a statement of any pre-emptive rights, may be omitted,

  • (iii) details of the transaction in which the securities are to be issued, including the nature and approximate amount of the consideration received or to be received by the corporation and the purpose for which the consideration has been or is to be used,

  • (iv) if it is impracticable to furnish the details required under subparagraph (iii), a statement indicating the reason why it is impracticable, the purpose of the authorization and whether shareholders’ approval for the issue of the securities will be sought, and

  • (v) if the securities are to be issued other than in a general public offering for money or other than rateably to all holders of the same class of securities or all holders of the same class of securities who are resident in Canada, the reasons for the proposed authorization or issue and its effect on the rights of present security holders;

• (z) if action is to be taken under section 173 or 174 of the Act to modify the rights, privileges, restrictions or conditions attached to any class of securities of the corporation or to authorize or issue securities in order to exchange them for other securities of the corporation,

  • (i) the designation and number or amount of outstanding securities that are to be modified, and, if securities are to be issued in exchange, the designation and number or amount of securities to be exchanged and the basis of the exchange,

  • (ii) details of material differences between the outstanding securities and the modified or new securities,

  • (iii) the reasons for the proposed modification or exchange and the general effect on the rights of existing security holders,

  • (iv) a brief statement of arrears in dividends or of defaults in principal or interest in respect of the outstanding securities that are to be modified or exchanged, and

  • (v) all other information material to the proposed modification or exchange, including, if the corporation is a distributing corporation, information required to be included in a prospectus or other similar document under the securities laws of any of the provinces of Canada, unless an exemption from the laws is available or a waiver of the laws or similar relief is granted by the relevant provincial securities regulator;

• (z.1) the material features of a plan, including the reasons for it and its general effect on the rights of existing security holders, if action is to be taken with respect to that plan and the plan is for

  • (i) an amalgamation with another corporation otherwise than under section 184 of the Act,

  • (ii) a continuance under the laws of another jurisdiction under section 188 of the Act,

  • (iii) a sale, lease or exchange of all or substantially all of the property of the corporation under subsection 189(3) of the Act, or

  • (iv) the liquidation or dissolution of the corporation;

• (z.2) if action is to be taken with respect to a plan referred to in subparagraph (z.1)(i), a statement that contains, with respect to the corporation and the other body corporate,

  • (i) a brief description of the business,

  • (ii) the location and general character of the plants and other important physical properties,

  • (iii) a brief description of arrears in dividends or defaults in principal or interest in respect of securities of the corporation or body corporate and of the effect of the plan,

  • (iv) the existing and pro forma share and loan capital, in tabular form,

  • (v) a historical summary of earnings, in tabular form, for each of the last five fiscal years, including per-share amounts of net earnings, dividends declared for each year and book value per share at the end of the most recent fiscal year,

  • (vi) a combined pro forma summary of earnings, in tabular form, for each of the last five fiscal years that indicates the aggregate and per-share earnings for each year and the pro forma book value per share at the end of the most recent fiscal year, but if the transaction will establish a new basis of accounting for the assets of the corporation or body corporate, the pro forma summary of earnings may be provided only for the most recent fiscal year and interim period and shall reflect appropriate pro forma adjustments resulting from the new basis of accounting,

  • (vii) the high and low sale prices for each quarterly period within the previous two years for each class of securities of the corporation and of the other body corporate that is traded on a stock exchange and that will be materially affected by the plan, and

  • (viii) an introductory summary, not more than six pages long, of the contents of the proxy circular that highlights the salient features of the transaction, including a summary of the financial information, with appropriate cross-references to the more detailed information in the circular;

• (z.3) if action is to be taken with respect to a plan referred to in paragraph (z.1), unless an exemption from the applicable laws is available or a waiver of the laws or similar relief is granted by the relevant securities regulator, the financial statements of the corporation that would be required to be included in a prospectus under the laws of

  • (i) Ontario,

  • (ii) Quebec,

  • (iii) Manitoba,

  • (iv) British Columbia,

  • (v) Saskatchewan,

  • (vi) Alberta, or

  • (vii) the United States;

• (z.4) if action is to be taken as described in paragraph (z.2), unless an exemption from the applicable laws is available or a waiver of the laws or similar relief is granted by the relevant securities regulator, the financial statements of the other corporation that would be required to be included in a prospectus under the laws of

  • (i) Ontario,

  • (ii) Quebec,

  • (iii) Manitoba,

  • (iv) British Columbia,

  • (v) Saskatchewan,

  • (vi) Alberta, or

  • (vii) the United States;

• (z.5) a statement of the right of a shareholder to dissent under section 190 of the Act with respect to any matter to be acted on at the meeting and a brief summary of the procedure to be followed;

• (z.6) if action is to be taken with respect to any matter other than the approval of financial statements, including alterations of share capital, amendments to articles, property disposition, amalgamation, arrangements or reorganizations, the substance of each matter or group of related matters, to the extent that it has not been described in paragraphs (a) to (z.5) in sufficient detail to permit shareholders to form a reasoned judgment concerning the matter, and if any of the matters is not required to be submitted to a vote of the shareholders, the reasons for submitting it and the action intended to be taken by management in the event of a negative vote by the shareholders;

• (z.7) if the giving of any financial assistance was material to the corporation or any of its affiliates or to the recipient of the assistance, details of that financial assistance by the corporation since the beginning of its last completed financial year in relation to

  • (i) a shareholder of the corporation or any of its affiliates who is not a director, officer or employee thereof, or to an associate of any such shareholder, or

  • (ii) any person, in connection with a purchase of shares issued or to be issued by the corporation.

• (z.8) a statement, signed by a director or an officer of the corporation, that the contents and the sending of the circular have been approved by the directors; and

• (z.9) a statement indicating the final date by which the corporation must receive a proposal for any matter that a person entitled to vote at an annual meeting proposes to raise at the next annual meeting.

58 An interest may be omitted from a management proxy circular if

• (a) the rate or charges involved are fixed by law or determined by competitive bids;

• (b) the interest of the person in the transaction is solely that of a director of another body corporate that is a party to the transaction;

• (c) the transaction involves services as a bank or other depository of funds, transfer agent, registrar or trustee under a trust indenture or other similar services; or

• (d) the transaction does not involve, directly or indirectly, remuneration for services and the interest of the person results from the beneficial ownership, direct or indirect, of less than 10% of any class of voting shares of another body corporate that is a party to the transaction, the transaction is in the ordinary course of business of the corporation or one of its subsidiaries and the amount of the transaction or series of transactions is less than 10% of the total sales or purchases, as the case may be, of the corporation and its subsidiaries for their last completed financial year.

59 A management proxy circular sent to the Director shall be submitted with a statement, signed by a director or an officer of the corporation, that a copy of the circular has been sent to each director, each shareholder whose proxy is solicited and the auditor of the corporation.

Dissident’s Proxy Circular

60 For the purpose of section 61, dissident means a person, other than the management of the corporation and its affiliates and associates, by or on behalf of whom a solicitation is made, and includes a committee or group that solicits proxies, any member of the committee or group and any person whether or not named as a member who, acting alone or with one or more other persons, directly or indirectly takes the initiative or engages in organizing, directing or financing the committee or group, except

• (a) a person who contributes not more than $250 and who is not otherwise a person by whom or on whose behalf the solicitation is made;

• (b) a bank or other lending institution or a broker or dealer that, in the ordinary course of business, lends money or executes orders for the purchase or sale of shares and is not otherwise a person by whom or on whose behalf the solicitation is made;

• (c) a person retained or employed by a person by whom or on whose behalf the solicitation is made to solicit proxies and who is not otherwise a person by whom or on whose behalf the solicitation is made;

• (d) a person who only transmits proxy soliciting material or performs administrative or clerical duties in connection with the solicitation;

• (e) a person employed or retained by a person by whom or on whose behalf the solicitation is made in the capacity of lawyer, accountant, publicity agent or financial or public relations adviser, and whose activities are limited to the performance of duties in the course of the employment or retainment;

• (f) a person who is regularly employed as an officer or employee of the corporation or any of its affiliates and who is not otherwise a person by whom or on whose behalf the solicitation is made; and

• (g) an officer or a director of, or a person employed by, a person by or on behalf of whom the solicitation is made, if the officer, director or employee is not otherwise a person by whom or on whose behalf the solicitation is made.

Contents of Dissident’s Proxy Circular

61 A dissident’s proxy circular shall contain the following information:

• (a) the name of the corporation to which it relates;

• (b) the information required by paragraphs 57(a), (d) and (e);

• (c) details of the identity and background of each dissident, including

  • (i) their name and address,

  • (ii) their present principal occupation or employment and the name, principal business and address of any body corporate or other person in which the occupation or employment is carried on, and

  • (iii) all convictions in connection with violations of any corporate or securities laws or criminal convictions in a matter of an economic nature, such as fraud or market manipulation, during the preceding 10 years, for which a pardon has not been granted, and the date and nature of each conviction, the name and location of the court and the sentence imposed;

• (d) details of any material interest of the dissident, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted on and the interest of the dissident in the securities of the corporation to which the solicitation relates, including

  • (i) the number of shares in each class of the corporation and of its affiliates and associates that the dissident beneficially owns or over which they exercise control or direction,

  • (ii) the dates on which securities of the corporation were purchased or sold during the preceding two years, the amount purchased or sold on each date and the price at which they were purchased or sold,

  • (iii) if any part of the purchase price or market value of any of the securities specified in subparagraph (ii) is represented by funds borrowed or otherwise obtained for the purpose of acquiring or holding the securities, the amount of the indebtedness as of the latest practicable date and a brief description of the transaction, including the names of the parties other than a bank, broker or dealer acting in the transaction in the ordinary course of business,

  • (iv) whether the dissident is, or was within the preceding year, a party to a contract or an understanding with any person in respect of securities of the corporation, including joint ventures, loans or option provisions, puts or calls, guarantees against loss or guarantees of profit, division of losses or profits and the giving or withholding of proxies and, if so, the names of the parties and the details of the contract or understanding, and

  • (v) the number of shares in each class of the corporation or one of its affiliates that any associate of the dissident beneficially owns, directly or indirectly, or over which they exercise control or direction, as well as the name and address of each associate;

• (e) if directors are to be elected, the information required by paragraphs 57(n), (p), (s) and (x) in respect of each nominee proposed by the dissident for election as a director and in respect of the associates of each nominee;

• (f) the information required by paragraphs 57(s) and (x) in respect of each dissident and each dissident’s associate; and

• (g) the details of any contract or understanding, including the names of the parties, between a dissident, or any of the dissident’s associates, and any other person with respect to

  • (i) future employment by the corporation or any of its affiliates, or

  • (ii) future transactions to which the corporation or any of its affiliates will or may be a party.

62 If a dissident is a partnership, a body corporate, an association or another organization, the information required by paragraphs 61(c) and (d) to be included in a dissident’s proxy circular shall be given in respect of each partner, officer and director of, and each person who controls, the dissident but who is not a dissident.

63 Information that is not known to a dissident and that cannot be ascertained by them on reasonable inquiry may be omitted from a dissident’s proxy circular, but the circumstances that render the information unavailable shall be disclosed in the proxy circular.

• 64 (1) A dissident’s proxy circular shall contain a statement signed by the dissident or a person authorized by them that the contents and the sending of the circular have been approved by the dissident.

• (2) A dissident’s proxy circular that is sent to the Director under subsection 150(2) of the Act shall be accompanied by a statement signed by a dissident or a person authorized by them that

  • (a) the circular complies with these Regulations; and

  • (b) a copy of the circular has been sent to each director, to each shareholder whose proxy has been solicited and to the auditor of the corporation.

Date of Proxy Circular and Information

65 A proxy circular shall be dated as of a date not more than 30 days before the date on which it is first sent to a shareholder of the corporation and the information, other than financial statements, required to be contained in it shall be given as of the date of the circular.

Financial Statements in Proxy Circular

• 66 (1) If financial statements accompany or form part of a management proxy circular, the statements shall be prepared in the manner described in Part 8.

• (2) The financial statements referred to in subsection (1), if not reported on by the auditor of the corporation, shall be accompanied by a report of the chief financial officer of the corporation stating that the financial statements have not been audited but have been prepared in the manner described in Part 8.

Proxy Circular Exemptions

67 For the purpose of subparagraph (b)(v) of the definition solicit or solicitation in section 147 of the Act, a solicitation does not include a public announcement that is made by

• (a) a speech in a public forum; or

• (b) a press release, an opinion, a statement or an advertisement provided through a broadcast medium or by a telephonic, electronic or other communication facility, or appearing in a newspaper, a magazine or other publication generally available to the public.

• 68 (1) For the purpose of subparagraph (b)(vii) of the definition solicit or solicitation in section 147 of the Act, the prescribed circumstances are circumstances in which the communication is made to shareholders

  • (a) by one or more shareholders and concerns the business and affairs of a corporation — including its management or proposals contained in a management proxy circular — and no form of proxy is sent to those shareholders by the shareholder or shareholders making the communication or by a person acting on their behalf;

  • (b) by one or more shareholders and concerns the organization of a dissident’s proxy solicitation, and no form of proxy is sent to those shareholders by the shareholder or shareholders making the communication or by a person acting on their behalf;

  • (c) as clients, by a person who gives financial, corporate governance or proxy voting advice in the ordinary course of business and concerns proxy voting advice if

    • (i) the person discloses to the shareholder any significant relationship with the corporation and any of its affiliates or with a shareholder who has submitted a proposal pursuant to subsection 137(1) of the Act and any material interests the person has in relation to a matter on which advice is given,

    • (ii) the person receives any special commission or remuneration for giving the proxy voting advice only from the shareholder or shareholders receiving the advice, and

    • (iii) the proxy voting advice is not given on behalf of any person soliciting proxies or on behalf of a nominee for election as a director; or

  • (d) by a person who does not seek directly or indirectly, the power to act as proxy for a shareholder.

• (2) The circumstances described in paragraph (1)(a) are not prescribed circumstances if the communication is made by

  • (a) a shareholder who is an officer or director of the corporation, or who serves in a similar capacity, if the communication is financed directly or indirectly by the corporation;

  • (b) a shareholder who is a nominee or who proposes a nominee for election as a director, if the communication relates to the election of directors;

  • (c) a shareholder whose communication is in opposition to an amalgamation, arrangement, consolidation or other transaction recommended or approved by the board of directors of the corporation and who is proposing or intends to propose an alternative transaction to which the shareholder or an affiliate or associate of the shareholder is a party;

  • (d) a shareholder who, because of a material interest in the subject-matter to be voted on at a shareholders meeting, is likely to receive a benefit from its approval or non-approval, which benefit would not be shared pro rata by all other holders of the same class of shares, unless the benefit arises from the shareholder’s employment with the corporation; or

  • (e) any person acting on behalf of a shareholder described in any of paragraphs (a) to (d).

• 69 (1) For the purpose of subsection 150(1.2) of the Act, the prescribed circumstances are circumstances in which the solicitation conveyed by public broadcast, speech or publication contains the information required under paragraphs 61(a) to (d) and (f).

• (2) A person making a solicitation referred to in subsection (1) shall send the required information and a copy of any related written communication to the Director and to the corporation before soliciting proxies.

PART 8Financial Disclosure

Interpretation

70 The following definitions apply in this Part.

Canadian GAAP

Canadian GAAP means generally accepted accounting principles as set out in the Handbook of the Canadian Institute of Chartered Accountants, as amended from time to time. (PCGR canadiens)

Canadian GAAS

Canadian GAAS means generally accepted auditing standards as set out in the Handbook of the Canadian Institute of Chartered Accountants, as amended from time to time. (PVGR canadiens)

NI 52-107

NI 52-107 means National Instrument 52-107 of the Canadian Securities Administrators, entitled Acceptable Accounting Principles, Auditing Standards and Reporting Currency and published January 16, 2004, as amended from time to time. (Règlement 52-107)

SEC

SEC means the United States Securities and Exchange Commission. (SEC)

SEC registrant

SEC registrant means a corporation that

• (a) has securities registered under section 12 of the Securities Exchange Act of 1934 of the United States, as amended from time to time, or is required to file reports under section 15(d) of that Act; and

• (b) is not registered or required to be registered as an investment company under the Investment Company Act of 1940 of the United States, as amended from time to time. (société inscrite auprès de la SEC)

US GAAP

US GAAP means the generally accepted accounting principles established by the Financial Accounting Standards Board of the United States, as amended from time to time. (PCGR américains)

US GAAS

US GAAS means the generally accepted auditing standards established by the Public Company Accounting Oversight Board of the United States, as amended from time to time. (PVGR américains)

Financial Statements

• 71 (1) Subject to subsection (2), the annual financial statements referred to in paragraph 155(1)(a) of the Act shall be prepared in accordance with Canadian GAAP.

• (2) For an SEC registrant, the financial statements may be prepared in accordance with US GAAP.

• (3) For the first financial year in which the change from Canadian GAAP to US GAAP takes place, and for the following financial year, the notes to the financial statements shall

  • (a) explain the material differences between Canadian GAAP and US GAAP that relate to recognition, measurement and presentation;

  • (b) quantify the effect of the material differences between Canadian GAAP and US GAAP that relate to recognition, measurement and presentation, including a tabular reconciliation between the net income reported in the financial statements and the net income computed in accordance with Canadian GAAP; and

  • (c) provide information consistent with disclosure requirements of Canadian GAAP to the extent not already reflected in the financial statements.

• (4) If the financial statements of an SEC registrant were prepared in accordance with both Canadian GAAP and US GAAP for two years or more before the first financial year in which the statements were prepared in accordance with US GAAP only, for the first financial year in which the change from Canadian GAAP to US GAAP takes place, a note shall accompany the financial statements that

  • (a) explains the material differences between Canadian GAAP and US GAAP that relate to recognition, measurement and presentation; and

  • (b) quantifies the effect of the material differences between Canadian GAAP and US GAAP that relate to recognition, measurement and presentation, including a tabular reconciliation between the net income as previously reported in the most recent financial statements, annual or otherwise, prepared in accordance with Canadian GAAP and the net income as restated and presented in accordance with US GAAP.

• (5) If the financial statements of an SEC registrant were prepared in accordance with both Canadian GAAP and US GAAP for less than two years before the first financial year in which the statements were prepared in accordance with US GAAP only, for the first financial year in which the change from Canadian GAAP to US GAAP takes place, the following shall be presented with the financial statements:

  • (a) the financial information as previously reported under provincial securities legislation in the most recent financial statements, annual or otherwise, in accordance with Canadian GAAP;

  • (b) the financial information referred to in paragraph (a) as restated and presented in accordance with US GAAP; and

  • (c) an accompanying note supporting the comparative information required under paragraphs (a) and (b) that

    • (i) explains the material differences between Canadian GAAP and US GAAP that relate to recognition, measurement and presentation, and

    • (ii) quantifies the effect of the material differences between Canadian GAAP and US GAAP that relate to recognition, measurement and presentation, including a tabular reconciliation between the net income as previously reported in the most recent financial statements, annual or otherwise, prepared in accordance with Canadian GAAP and the net income as restated and presented in accordance with US GAAP.

• (6) The comparative information required under paragraphs (5)(a) and (b) shall be presented either on the face of the financial statements or in the note to those statements referred to in paragraph (5)(c).

• (7) The financial statements shall contain a note stating whether the statements have been prepared in accordance with Canadian GAAP or US GAAP.

• (8) For greater certainty, subsections (3) to (6) do not apply to the financial statements of an SEC registrant that was incorporated after March 15, 2005, and that, since that date, has prepared its financial statements in accordance with US GAAP only.

Auditor's Report

• 71.1 (1) Subject to subsection (2), the auditor's report referred to in section 169 of the Act shall be prepared in accordance with Canadian GAAS.

• (2) For an SEC registrant that has prepared its financial statements in accordance with US GAAP and subsections 71(3) to (6), and whose auditors are in compliance with the professional practice standards established or adopted by the Public Company Accounting Oversight Board of the United States, the auditor's report may be prepared in accordance with US GAAS.

• (3) If the auditor's report referred to in subsection (2) is prepared in accordance with US GAAS, it shall comply with section 4.2 of NI 52-107, but for the purpose of applying that section,

  • (a) the expression US GAAS has the meaning assigned to that expression by section 70 of these Regulations; and

  • (b) the expression SEC issuer has the meaning assigned to the expression SEC registrant by section 70 of these Regulations.

Contents of Financial Statements

• 72 (1) The financial statements referred to in section 155 of the Act shall include at least

  • (a) a balance sheet;

  • (b) a statement of retained earnings;

  • (c) an income statement; and

  • (d) a statement of changes in financial position.

• (2) Financial statements need not be designated by the names set out in paragraphs (1)(a) to (d).

PART 9Constrained Share Corporations

Interpretation

73 The following definitions apply in this Part.

Canadian

Canadian means

• (a) a resident Canadian;

• (b) a partnership of which a majority of the members are resident Canadians and in which interests representing more than 50% of the total value of the partnership property are owned by resident Canadians;

• (c) a trust established by a resident Canadian

  • (i) a majority of the trustees of which are resident Canadians, or

  • (ii) in which beneficial interests representing more than 50% of the total value of the trust property are owned by resident Canadians;

• (d) Her Majesty in right of Canada or of a province or territory of Canada or a municipal corporation or public board or commission in Canada; or

• (e) a body corporate

  • (i) incorporated under the laws of Canada or a province,

  • (ii) of which a majority of the directors are resident Canadians, and

  • (iii) over which persons described in any of paragraphs (a) to (d) or in this paragraph exercise control or direction or of which the persons beneficially own shares or securities currently convertible into shares carrying more than 50% of the voting rights under all circumstances or by reason of the occurrence of an event that has occurred and that is continuing, including currently exercisable options or rights to acquire the shares or convertible securities. (Canadien)

constrained class

constrained class means the class of persons specified in the articles of a constrained share corporation as being ineligible to hold, as a class, more than the maximum aggregate holdings. (catégorie restreinte)

constrained share corporation

constrained share corporation means a corporation that has provisions in its articles imposing a constraint. (société par actions à participation restreinte)

constraint

constraint means a restriction on

• (a) the issue or transfer of shares of any class or series to persons who are not resident Canadians;

• (b) the issue or transfer of shares of any class or series to enable a corporation or any of its affiliates or associates to qualify under a law referred to in paragraph 87(1)(a)

  • (i) to obtain a licence to carry on any business,

  • (ii) to become a publisher of a Canadian newspaper or periodical, or

  • (iii) to acquire shares of a financial intermediary as defined in paragraph 87(1)(b); or

• (c) the issue, transfer or ownership of shares of any class or series in order to assist a corporation or any of its affiliates or associates to qualify under a law referred to in subsection 87(2) to receive licences, permits, grants, payments or other benefits by reason of attaining or maintaining a specified level of Canadian ownership or control. (restriction)

control

control means control in any manner that results in control in fact, whether directly through the ownership of shares or indirectly through a trust, a contract, the ownership of shares of any other body corporate or otherwise. (contrôle)

maximum aggregate holdings

maximum aggregate holdings means the total number of voting shares of a constrained share corporation that may be held by or on behalf of persons in the constrained class and their associates in accordance with the articles of the corporation. (avoir maximum total)

maximum individual holdings

maximum individual holdings means the total number of voting shares of a constrained share corporation that may be held by or on behalf of any one person in the constrained class and their associates in accordance with the articles of the corporation. (avoir maximum individuel)

voting share

voting share means a share that is subject to a constraint referred to in paragraph (a) or (b) of the definition constraint and that carries voting rights under all circumstances or by reason of the occurrence of an event that has occurred and that is continuing, and includes a security currently convertible into such a share and a currently exercisable option or right to acquire such a share or convertible security. (action avec droit de vote)

Disclosure Required

74 Each of the following documents issued or published by a constrained share corporation shall indicate conspicuously the general nature of its constrained share provisions:

• (a) a certificate representing a voting share;

• (b) a management proxy circular; and

• (c) a prospectus, statement of material facts, registration statement or similar document.

Powers and Duties of Directors

• 75 (1) The directors of a constrained share corporation that has provisions in its articles imposing a constraint referred to in paragraph (a) or (b) of the definition constraint in section 73 shall refuse to register a transfer of a voting share of the corporation in accordance with the articles if

  • (a) the total number of voting shares held by or on behalf of persons in the constrained class exceeds the maximum aggregate holdings and the transfer is to a person in the constrained class;

  • (b) the total number of voting shares held by or on behalf of persons in the constrained class does not exceed the maximum aggregate holdings and the transfer would cause the number of shares held by persons in the constrained class to exceed the maximum aggregate holdings;

  • (c) the total number of voting shares held by or on behalf of a person in the constrained class exceeds the maximum individual holdings and the transfer is to that person; or

  • (d) the total number of voting shares held by or on behalf of a person in the constrained class does not exceed the maximum individual holdings and the transfer would cause the number of shares held by that person to exceed the maximum individual holdings.

• (2) Despite subsection (1), the directors of a constrained share corporation that is described in that subsection shall register a transfer of a voting share of the corporation to a person in the constrained class if that person establishes that they were the beneficial owner of that share on the day on which the corporation became a constrained share corporation.

• (3) The directors of a constrained share corporation that is described in subsection (1) shall not issue a voting share of the corporation to a person in the constrained class if the directors are required by that subsection to refuse to register a transfer of the share.

• (4) For the purpose of subsection (3), the directors may count as issued shares the voting shares that the corporation is currently offering to its shareholders or prospective shareholders.

76 The directors of a constrained share corporation that has provisions in its articles imposing a constraint referred to in paragraph (c) of the definition constraint in section 73

• (a) shall not issue a share of the corporation to a person

  • (i) whose ownership of the share would be contrary to the constraint,

  • (ii) who, in respect of the issue of the share, has been requested by the corporation to provide it with information referred to in subsection 80(7) and has not provided the information, or

  • (iii) whose ownership of the share the directors have determined, on the basis of information provided to the corporation by that person under a request referred to in subparagraph (ii), may be contrary to the constraint; and

• (b) shall refuse to register a transfer of a share of the corporation if the transfer is to a person

  • (i) whose ownership of the share is contrary to the constraint,

  • (ii) who, in respect of the registration of the share, has been requested by the corporation to provide it with information referred to in subsection 80(7) and has not provided the information, or

  • (iii) whose ownership of the share the directors have determined, on the basis of information provided to the corporation by that person under a request referred to in subparagraph (ii), may be contrary to the constraint.

Limitation on Voting Rights

77 Sections 78 and 79 apply to a constrained share corporation that has provisions in its articles imposing a constraint referred to in paragraph (a) or (b) of the definition constraint in section 73.

• 78 (1) If, on the day on which a corporation becomes a constrained share corporation, the total number of voting shares of the corporation held by or on behalf of a person in the constrained class exceeds the maximum individual holdings, the person or their nominee may only, in person or by proxy, exercise the voting rights attached to the maximum individual holdings so held on that day or on any later day.

• (2) After the total number of shares held by or on behalf of the person referred to in subsection (1) is reduced below the maximum individual holdings, they or their nominee may, in person or by proxy, exercise the voting rights attached to shares held.

• 79 (1) Except as provided in subsection 78(1), if the total number of voting shares of a constrained share corporation held by or on behalf of a person in the constrained class exceeds the maximum individual holdings, no person shall, in person or by proxy, exercise the voting rights attached to those shares.

• (2) If it appears from the securities register of a constrained share corporation that the total number of voting shares held by a shareholder is less than the maximum individual holdings, a proxyholder for the shareholder may vote those shares unless the proxyholder has knowledge that the shares beneficially owned by the shareholder exceed the maximum individual holdings.

• (3) If, after the day on which a corporation becomes a constrained share corporation, a corporation or trust that was not a person in the constrained class becomes a person in the constrained class, the corporation or trust shall not exercise the voting rights attached to any shares it holds in the constrained share corporation while it is a person in the constrained class.

Sale of Constrained Shares

• 80 (1) For the purpose of subsection 46(1) of the Act, before a constrained share corporation concludes that shares of the corporation are owned contrary to a constraint referred to in paragraph (c) of the definition constraint in section 73 or the directors of the corporation determine that shares of the corporation may be owned contrary to the constraint, the corporation shall send by registered mail a written notice in accordance with subsection (5) to the person shown in the securities register of the corporation as the holder of the shares.

• (2) For the purpose of subsection 46(1) of the Act, in determining that shares of a constrained share corporation may be owned contrary to a constraint referred to in paragraph (c) of the definition constraint in section 73, the directors of the corporation shall

  • (a) ascertain whether or not the corporation has received a reply to a request for information referred to in subsection (7) respecting the shares and consider the reply, if any, to the request; and

  • (b) examine and consider any other records of the corporation that contain information that would indicate whether the shares are owned contrary to the constraint.

• (3) For the purpose of subsection 46(1) of the Act, if a constrained share corporation has sent a notice referred to in subsection (1) to a person shown in the securities register of the corporation as the holder of shares and the corporation intends to sell all or some of the shares under subsection 46(1) of the Act, the corporation shall, not less than 90 days but not more than 150 days after sending the notice, send to that person by registered mail a further written notice in accordance with subsection (6) respecting the shares that the corporation intends to sell, if

  • (a) the corporation has concluded that shares in respect of which the notice was sent are owned contrary to a constraint referred to in paragraph (c) of the definition constraint in section 73; or

  • (b) the directors of the corporation have determined in accordance with subsection (2) that shares in respect of which the notice was sent may be owned contrary to the constraint.

• (4) When a corporation sends a notice under subsection (1) or (3), it shall, at the time the notice is sent, enter or cause to be entered in the securities register of the corporation the particulars of the notice, including the date on which it was sent.

• (5) The notice referred to in subsection (1) shall contain

  • (a) the name and address of the holder of the shares as shown in the securities register of the corporation;

  • (b) a statement that identifies the certificate that represents the shares, by certificate number or otherwise;

  • (c) a statement that indicates that all or some of the shares may be sold by the corporation under subsection 46(1) of the Act if the shares are owned, or the directors of the corporation determine in accordance with subsection (2) that the shares may be owned, contrary to a constraint referred to in paragraph (c) of the definition constraint in section 73;

  • (d) a statement that indicates that the corporation may conclude that all or some of the shares are owned contrary to a constraint referred to in paragraph (c) of the definition constraint in section 73;

  • (e) a statement that indicates that the directors of the corporation may determine in accordance with subsection (2) that all or some of the shares may be owned contrary to a constraint referred to in paragraph (c) of the definition constraint in section 73 and that, for the purpose of making the determination, the directors of the corporation will

    • (i) consider the reply, if any, to a request for information referred to in subsection (7) respecting the shares, and

    • (ii) examine and consider any other records of the corporation that contain information that would indicate whether the shares are owned contrary to the constraint;

  • (f) a statement that indicates that no share in respect of which the notice is sent may be sold under subsection 46(1) of the Act if a transfer of the share is registered in the securities register of the corporation after the notice was sent, unless the corporation again complies with the requirements set out in this Part respecting the sale of the share;

  • (g) a statement that indicates that no share in respect of which the notice is sent may be sold under subsection 46(1) of the Act unless not less than 60 days but not more than 150 days have elapsed after the day on which a notice referred to in subsection (3) is sent to the holder of the share;

  • (h) a statement that indicates the earliest date and the latest date on which the corporation may sell the shares, having regard to the requirements of section 82;

  • (i) a statement that indicates that the shares may be sold on any stock exchange if shares of the corporation are listed and posted for trading or, if shares of the corporation are not listed and posted for trading on a stock exchange, in any other manner that the directors of the corporation determine to be appropriate;

  • (j) a statement that indicates that, if not all the shares of the holder represented by a certificate are sold under subsection 46(1) of the Act, a certificate that represents the shares that are not sold will be issued on surrender for cancellation of the certificate that represents the shares sold; and

  • (k) a statement that indicates that, immediately after the sale of the shares under subsection 46(1) of the Act, the corporation will

    • (i) 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 corporation, and

    • (ii) send a notice of the sale in accordance with paragraph 83(1)(b) to the person shown in the securities register of the corporation as the holder of the shares at the time of sale.

• (6) The notice referred to in subsection (3) shall contain

  • (a) the name and address of the holder of the shares as shown in the securities register of the corporation;

  • (b) a statement that identifies the certificate that represents the shares, by certificate number or otherwise;

  • (c) a statement that indicates that all or some of the shares may be sold by the corporation under subsection 46(1) of the Act if the shares are owned, or the directors of the corporation determine in accordance with subsection (2) that the shares may be owned, contrary to a constraint referred to in paragraph (c) of the definition constraint in section 73;

  • (d) a statement that indicates that the corporation has concluded that the shares are owned, or that the directors of the corporation have determined in accordance with subsection (2) that the shares may be owned, contrary to a constraint referred to in paragraph (c) of the definition constraint in section 73 and that indicates the reason why the corporation so concluded or the directors so determined, as the case may be;

  • (e) a statement that indicates that the corporation intends to sell all or a specified number of the shares under subsection 46(1) of the Act;

  • (f) a statement that indicates that, if before the sale the corporation changes its conclusion that the shares are owned, or the directors of the corporation change their determination made in accordance with subsection (2) that the shares may be owned, contrary to a constraint referred to in paragraph (c) of the definition constraint in section 73, or there is a change in the reason for the conclusion or determination, the corporation will send a notice in accordance with subsection 81(1) to the person shown in the securities register of the corporation as the holder of the shares;

  • (g) a statement that advises that, unless the person shown in the securities register of the corporation as the holder of the shares receives a notice referred to in paragraph (f), the person and all other interested persons should not assume that

    • (i) the corporation has changed its conclusion that the shares are owned, or the directors of the corporation have changed their determination made in accordance with subsection (2) that the shares may be owned, contrary to a constraint referred to in paragraph (c) of the definition constraint in section 73,

    • (ii) there has been a change in the reason for the conclusion or determination, or

    • (iii) the corporation no longer intends to sell the shares under subsection 46(1) of the Act;

  • (h) a statement that indicates that no share in respect of which the notice is sent may be sold under subsection 46(1) of the Act if a transfer of the share is registered in the securities register of the corporation after the notice referred to in subsection (1) was sent, unless the corporation again complies with the requirements set out in this Part respecting the sale of the share;

  • (i) a statement that indicates that no share in respect of which the notice is sent may be sold under subsection 46(1) of the Act unless not less than 60 days but not more than 150 days have elapsed from the day on which the notice was sent to the holder of the share; and

  • (j) a statement that indicates each of the matters referred to in paragraphs (5)(h) to (k).

• (7) The notice referred to in subsection (1) shall be accompanied by a request for the information, including a request for the completion of the forms, that would indicate whether the shares are owned contrary to a constraint referred to in paragraph (c) of the definition constraint in section 73.

• (8) The notice referred to in subsection (3) shall be accompanied by a request for information referred to in subsection (7), unless the corporation has received the requested information before the notice is sent.

• (9) A request for information referred to in subsection (7) shall be accompanied by instructions for the provision of the information and the completion of the forms referred to in that subsection and by a sufficient number of copies of the forms.

• 81 (1) If a constrained share corporation has sent a notice referred to in subsection 80(3) and has not sold, under subsection 46(1) of the Act, any share in respect of which the notice was sent, and if the corporation changes its conclusion referred to in paragraph 80(3)(a) or its directors change their determination referred to in paragraph 80(3)(b) or if there is a change in the reason for the conclusion or determination, the corporation shall immediately send by registered mail to the recipient of that notice a notice of the change to the conclusion, to the determination or to the reason for the conclusion or determination, including the reason for the change.

• (2) When a corporation sends a notice under subsection (1), the corporation shall, at the time the notice is sent, enter or cause to be entered in the securities register of the corporation the particulars of the notice, including the date on which it was sent.

• 82 (1) No share shall be sold by a constrained share corporation under subsection 46(1) of the Act unless

  • (a) the corporation has sent the notices referred to in subsections 80(1) and (3) to the person shown in the securities register of the corporation as the holder of the share;

  • (b) not less than 150 days but not more than 300 days have elapsed from the day on which the notice referred to in subsection 80(1) was sent to the holder of the share;

  • (c) not less than 60 days but not more than 150 days have elapsed from the day on which the notice referred to in subsection 80(3) was sent to the holder of the share;

  • (d) the corporation has concluded that the share is owned, or the directors of the corporation have determined in accordance with subsection 80(2) that the share may be owned, contrary to a constraint referred to in paragraph (c) of the definition constraint in section 73 and, at the time of sale, the corporation has no reasonable grounds on which to change its conclusion or the directors of the corporation have no reasonable grounds on which to change their determination, as the case may be;

  • (e) the sale takes place

    • (i) on a stock exchange where shares of the corporation are listed and posted for trading, or

    • (ii) if shares of the corporation are not listed and posted for trading on a stock exchange, in any other manner that the directors of the corporation determine to be appropriate; and

  • (f) the corporation sells the share with a view to obtaining the best sale price available in the circumstances at the time of sale.

• (2) No share in respect of which a notice is sent in accordance with subsection 80(1) shall be sold by a constrained share corporation under subsection 46(1) of the Act if a transfer of the share is registered in the securities register of the corporation after the notice was sent, unless the corporation again complies with the requirements set out in this Part respecting the sale of the share.

• 83 (1) Immediately after a sale of shares by a constrained share corporation under subsection 46(1) of the Act, the corporation 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 corporation; and

  • (b) send a notice of the sale to the person shown in the securities register of the corporation 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 shares sold;

  • (b) identify the certificate that represents the 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 46(3) of the Act may obtain them;

  • (e) state that the corporation concluded that the shares were owned, or that the directors determined in accordance with subsection 80(2) that the shares may be owned, contrary to a constraint referred to in paragraph (c) of the definition constraint in section 73 and state the reason why the corporation so concluded or the directors so determined, as the case may be; and

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

84 For the purpose of subsection 47(1) of the Act, the proceeds of a sale by a constrained share corporation under subsection 46(1) of the Act shall be deposited in an interest-bearing account with a chartered bank in Canada to which the Bank Act applies or a trust company in Canada to which the Trust and Loan Companies Act applies.

Disclosure of Beneficial Ownership

85 Section 86 applies to a constrained share corporation that has provisions in its articles imposing a constraint referred to in paragraph (a) or (b) of the definition constraint in section 73.

• 86 (1) Subject to section 103 of the Act, the directors of a constrained share corporation may make, amend or repeal any by-laws required to administer the constrained share provisions set out in the articles of the corporation, including by-laws

  • (a) to require any person in whose name shares of the corporation are registered to provide a statutory declaration under the Canada Evidence Act concerning

    • (i) whether the shareholder is the beneficial owner of the shares of the corporation or holds them for a beneficial owner,

    • (ii) whether the shareholder is an associate of any other shareholder,

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

    • (iv) any further facts that the directors consider relevant;

  • (b) to require any person seeking to have a transfer of a voting share registered in their name or to have a voting share issued to them to provide a declaration similar to the declaration a shareholder may be required to provide under paragraph (a); and

  • (c) to determine the circumstances in which any declarations are required, their form and the times when they are to be provided.

• (2) If a person is required to provide a declaration under a by-law made under subsection (1), the directors may refuse to register a transfer of a voting share in their name or to issue a voting share to them until that person has provided the declaration.

• (3) In administering the constrained share provisions set out in the articles of a constrained share corporation, the directors of the corporation may rely on

  • (a) a statement made in a declaration referred to in subsection (1) or (2); and

  • (b) the knowledge of a director, an officer, an employee or an agent of the corporation.

• (4) If the directors are required to determine the total number of voting shares of a constrained share corporation held by or on behalf of persons other than Canadians, the directors may rely on the sum of the voting shares held by every shareholder whose latest address as shown in the securities register is

  • (a) outside Canada; and

  • (b) in Canada but who, to the knowledge of a director, an officer, an employee or an agent of the corporation, is not a Canadian.

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

References and Definitions for the Purpose of Certain Provisions of the Act

• 87 (1) For the purpose of paragraph 174(1)(b) of the Act,

  • (a) the following laws 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 made under the Territorial Lands Act and Federal Real Property Act,

    • (iv) the Broadcasting Act,

    • (v) the Northern Mineral Exploration Assistance Regulations made under Appropriation Act No. 9, 1966,

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

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

    • (viii) the Securities Act (Quebec), R.S.Q. c. V-1.1 and any regulations made under it, and

    • (ix) any other law of Canada or of a province with requirements in relation to Canadian ownership; and

  • (b) “financial intermediary” includes a bank, a trust company, a loan company, an insurance company, an investment company and a body corporate that carries on business as a securities broker, a dealer or an underwriter.

• (2) For the purposes of subsection 32(1) and paragraphs 46(1)(a), 49(10)(a) and 174(1)(c) of the Act, the following laws 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 paragraphs 46(1)(b), 49(10)(b) and 174(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.

PART 10Rules of Procedure for Applications for Exemptions

Application

88 This Part applies to every application for an exemption under subsection 2(6), 10(2), 82(3) or 151(1), section 156 or subsection 171(2) or 187(11) of the Act.

Time of Filing Applications

• 89 (1) An application for an exemption under

  • (a) subsection 2(6) of the Act may be made at any time;

  • (b) subsection 10(2) or 187(11) of the Act shall be made before the date of issue of the certificate of continuance referred to in subsection 187(4) of the Act;

  • (c) subsection 82(3) of the Act shall be made at least 30 days before the corporation is required to comply with Part VIII of the Act;

  • (d) subsection 151(1) of the Act shall be made before the date of the notice referred to in subsection 149(1) of the Act;

  • (e) section 156 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; and

  • (f) subsection 171(2) of the Act may be made at any time.

• (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

90 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 Director’s refusal, together with reasons for the refusal.

General

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

92 The Director shall give the applicant for an exemption a copy of any information received from any other person under section 91 and shall allow the applicant a reasonable opportunity to respond in writing.

93 If an applicant for an exemption or a person from whom the Director has requested information under section 91 does not provide the information within the time specified by the Director, the Director may deal with the application without regard to the information.

94 If the Director does not grant an exemption or send written notice of the Director’s refusal within the time specified in section 90, the applicant may exercise their rights under section 246 of the Act as if the Director had refused the exemption.

PART 11Value of Total Financial Interest

95 For the purpose of paragraph 237.5(1)(b) of the Act, the prescribed amount of the value of the plaintiff’s total financial interest is $20,000.

PART 12Cancellation of Articles and Certificates

• 96 (1) For the purpose of subsection 265.1(1) of the Act, the prescribed circumstances are that

  • (a) the error is obvious;

  • (b) the error is 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 265.1(3) of the Act, the prescribed circumstances are that

  • (a) there is no dispute among the directors or shareholders on the circumstances of the request for cancellation; and

  • (b) the corporation has not used the articles and related certificate, or, if it has, if anyone dealing with the corporation on the basis of the articles and related certificate has consented to the cancellation.

PART 13Prescribed Fees

• 97 (1) The fee in respect of the filing, examination or copying of any document or in respect of any action that the Director is required or authorized to take under the Act, set out in column 1 of an item of Schedule 5,

  • (a) is the applicable fee set out in column 2 of that item; and

  • (b) shall be paid to the Director on the filing, examination or copying of the document or before the Director takes the action in respect of which the fee is payable.

• (2) No fee is payable for the issuance by the Director of

  • (a) a certificate of amendment issued under section 178 of the Act, if the only purpose of the amendment is to add an English or a French version to a corporation’s name, or to replace a corporate name that the Director has directed be changed under subsection 12(2) or (4) of the Act;

  • (b) a certificate of dissolution issued under subsection 210(5) or 211(15) of the Act;

  • (c) a certificate of intent to dissolve issued under subsection 211(5) of the Act; or

  • (d) a corrected certificate issued under subsection 265(6) of the Act when the correction is required solely as the result of an error made by the Director.

• (3) For the purpose of subsection 49(2) of the Act, the prescribed maximum fee for the issuance of a security certificate is $3.

Repeal

98 [Repeal]

Coming into Force

99 These Regulations come into force on the day on November 24, 2001.