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Proposed Regulations
for Pre-Publication in Part I,
Canada Gazette
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Statutory Authority
&
Regulatory Plan Listing
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Canada Business Corporations
Regulations, amendment (Insider trading, proxies,
financial disclosure and take-over bids)
This amendment proposes to amend Parts III, IV, V and
VIII of the Canada Business Corporations
Regulations concerning insider trading, proxies and
proxy solicitation, financial disclosure and take-over
bids respectively.
Most of 60 amendments being proposed are technical in
nature and non-controversial. In general, the proposed
amendments are intended to eliminate unduly burdensome
requirements, harmonize the Regulations with concurrent
provincial securities legislation, and improve the level
of disclosure required in these areas.
Generally, the amendments propose to:
- eliminate items of disclosure which are not in
provincial regulation and which do not appear to be of
material interest to shareholders;
- adopt wording that is more consistent with
provincial regulation, where warranted, as well as to
require additional items of disclosure of material
interest currently in provincial legislation but
lacking in the Regulations; and
- ensure that certain disclosure items do not extend
to private companies when the information is of
material interest to shareholders of a public company.
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Canada Business Corporations Act, section 261
IC/96-13-L
To be published in Canada Gazette September 13, 1997
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More specifically, the amendments with respect to
insider trading would:
- allow insiders to send insider reports using
either Form 24 in Schedule I. 1 of the Regulations or
the insider report form prescribed under any
provincial securities laws.
- allow insiders of CBCA public corporations which
have not distributed their securities in Canada to
file U.S. insider reports. This will eliminate the
cost of preparing additional insider reports (for
reporting under the CBCA) or of applying for an
exemption under subsection 127(8) of the CBCA.
- revoke paragraph 31.1 requiring corporations with
15 or more shareholders to advertise the fact that
they propose to purchase or otherwise acquire their
own shares. This requirement is not considered
necessary given the fact that there are already
adequate provisions under the stock exchange rules in
this regard with respect to listed corporations. The
proposal would eliminate altogether the expensive and
unduly burdensome requirement of publishing a notice
in the newspapers with respect to private corporations
with 15 or more shareholders.
More specifically, the amendments with respect to the
contents of management proxy circulars would:
- delete the provision requiring disclosure of the
general nature of constrained share provisions if the
corporation has amended its articles to constrain the
issue or transfer of its voting shares (paragraph
35(g)). Section 52 of the Regulations already requires
disclosure of constrained share provisions.
- restrain the scope of disclosure with respect to
various items in the regulations, such as paragraphs
35(r) and (aa), to "subsidiaries and holding bodies
corporate", instead of the larger web of companies
defined by the term "affiliates". This will facilitate
disclosure by reducing the scope of companies caught
and be more in line with the provisions of the
provincial securities laws which refer to
"subsidiaries" in most cases. The proposal to refer to
"holding bodies corporate" is in our view necessary to
ensure disclosure of information of material interest
to shareholders.
- revoke the disclosure required with regard to the
name of the person who acquires control, the date and
a description of the transaction if there is a change
in the effective control of the corporation (paragraph
35(n)). The purpose of this amendment would be to
eliminate a regulatory requirement which is a
regulatory burden to the corporation without providing
shareholders with information of material interest.
Also, the information required by this section is
largely available through other means including the
inclusion of disclosure as to shareholders holding
more than 10% of the voting shares.
- amend the requirement of the disclosure of a
five-year employment history for all continuing and
proposed directors. Corporations would only be
required to disclose employment history for proposed
directors (sub-paragraph 35(r)(ii)).
- amend the disclosure provision dealing with the
persons indebted to a corporation. The disclosure of
"routine indebtedness", as will be defined, will no
longer be required (paragraph 3 5(v)). The purpose is
to revoke a requirement that does not provide to the
shareholders information of material interest.
- increase the threshold of outstanding debt which
must be disclosed in the proxy circular to $25,000
from $10,000.
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- require the management proxy circular to state
whether the reporting issuer has an executive
committee of its Board of Directors or is required to
have an audit committee and, if so, to name those
directors who are members of each such committee. This
proposal will provide information of material interest
to the shareholders and it will also harmonize the
requirement with provincial securities legislation.
More specifically, the amendments with respect to the
contents of a dissident's proxy circular would:
- reduce the amount of information that a dissident
must disclose by eliminating many provisions under
section 38, including repealing some of the
requirements with regard to details of the identity
and background of each dissident, where more
comprehensive information is required from dissidents
than of directors in management proxy circulars
(sub-paragraph 38 (c)(iii)).
- repeal disclosure of the fact that a person has
previously been a dissident in respect of another
corporation (sub-paragraph 38(c)(iv)). This
requirement is a regulatory burden for a dissident
without providing other shareholders with information
of material interest.
- amend sub-paragraph 38(c)(v) so that dissidents
must disclose whether they have been convicted of
crimes of an economic nature such as fraud or market
manipulation.
More specifically, the amendments with respect to the
contents of financial disclosure would:
- revoke section 47 which requires separate
disclosure of financial information by reporting
classes of business. Disclosure should rather be based
on the requirements under the CICA Handbook.
More specifically, the amendments with respect to the
contents of take-over bids would:
- with regard to an exempt offer in a take-over bid
situation, amend section 58 of the regulations which
requires a corporation in certain circumstances, among
other things, to place detailed advertisements in
newspapers. This section would be amended by requiring
corporations which comply with the rules under
recognized stock exchanges to simply send to the
Director a copy of the documents filed pursuant to the
stock exchange rules. This will confirm the actual
administrative practice.
- amend section 58, to eliminate the reference to
the rules under the over-the-counter market as a
possible source of exemption on the basis that there
are no recognized rules dealing with take-over bids
under such a regime.
- with respect to take-over bid circular under
subsection 198(1) of the Act, clarify the wording by
requiring simply the name and a brief description of
the activities of the offeror (section 59). In the
present Regulations, two of the items to be contained
in a take-over bid circular are the identity and
business background of the offeror.
- with respect to take-over bid circulars under
section 200 of the Act, harmonize the Regulations with
parallel provincial securities provisions which do not
require proforma financial statements unless these
statements would disclose a material change in the
financial statements of the offeror arising as a
result of the offer (section 60). This exception would
result in substantive savings for offerors in
circumstances where "pro forma" statements are not
necessary on the basis of materiality.
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- require offerors to certify that no
misrepresentation has been made (proposed section 66A)
in the take-over bid circular, in order to provide for
more assurance that the information provided in a
take-over bid circular is complete and not misleading
- expressly require a bidder to prepare an amendment
to a take-over bid circular in the event that there
are changes to material statements in the initial
take-over bid circular (section 67).
- adopt the provincial securities law threshold of
preparing an amendment to a take-over bid only if the
change "would reasonably be expected to affect the
decision of the holders of securities".
- delete certain requirements of less significance
and add new provisions which will provide shareholders
with information of material interest (proposed
paragraphs 68(p)-(z)).
- require the directors of offerer corporations to
certify that no misrepresentation has been made
(proposed section 73A) in the directors' circular.
There has been no expressed opposition to the proposed
changes.
Contact: Guylaine Huot, Corporations Directorate,
Department of Industry, 10th floor, Jean Edmonds Tower
South, 365 Laurier Ave. West, Ottawa, Ontario. Tel:
613-941-5728; Fax: 613-941-5781; e-mail:
huot.guylaine@ic.gc.ca.
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Canada Business Corporations
Regulations, amendment (Constrained share corporations)
This amendment proposes to amend sections 51 and
57(2)Parts III, IV, V and VIII of the Canada Business
Corporations Regulations concerning constrained
shares.
More specifically, the amendment to section 51 would
expand the list of constrained share corporations that
must disclose to their shareholders that the corporation
intends to sell the shareholders' shares without the
shareholders' knowledge.
The amendment would specify that disclosure must be
made, not only to shareholders of corporations
incorporated under the Canada Business Corporations
Act (CBCA) selling shares to qualify under laws
prescribed in section 57(2) of the regulations (e.g., the
Canada Oil and Gas Act and the Petroleum
Incentives Program Act), but also to shareholders of
corporations selling shares to comply with loan, trust or
insurance corporation legislation. The disclosure would
alert the shareholders that the corporation intends to
sell the shares of the shareholders without their
knowledge. This would give shareholders an opportunity to
reply or object, if they so choose.
The amendment will also remove the Canada Oil and
Gas Act and add the Canada Petroleum Resources
Act in section 57(2)(a) because the Canada Oil and
Gas Act has been repealed and replaced by the
Canada Petroleum Resources Act.
Contact: Coleen Kirby, Senior Compliance Officer,
Corporations Directorate, Department of Industry, 9th
Floor, Jean Edmonds Tower South, 365 Laurier Ave. West,
Ottawa, Ontario, K1A 0C8. Tel: 613-941-5720; Fax:
613-941-5781; e-mail:
kirby.coleen@ic.gc.ca.
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Canada Business Corporations Act, sections 46
and 261
IC/96-12-L
To be published in Canada Gazette September 13, 1997
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Toronto - Lester B. Pearson
International Airport Zoning Regulations
The proposed zoning regulations will limit the height
of new buildings, structures and objects or additions to
any existing buildings, structures or objects, including
objects of natural growth, and will prohibit the disposal
of any waste edible by or attractive to birds on lands
within eight kilometres of the Toronto-Lester B. Pearson
International airport reference point.
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Aeronautics Act
TC/R-8-L
To be published in Canada Gazette September 13, 1997
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The regulations would also prohibit such lands from
being used or developed in a manner that causes
interference with any signals or communications to from
any aircraft or to and from any facilities used to
provide services relating to aeronautics.
Property owners within the limits of the outer
surface, within a radius of 4,000 metres from the airport
reference point, would be restricted in any construction
within that area to an elevation of 45 metres above the
airport reference point elevation and, within the runway
approaches and transitional surfaces, to more restrictive
limitations.
Affected municipalities were advised in June 1993 of
the intention to make the proposed regulations. In
September 1994, the Minister of Transport announced the
decision to construct a second north-south runway and the
future possibility of additional east-west runways.
Contact: Debra D. Taylor, Regional Director Civil
Aviation, Transport Canada, Ontario Region, 4900 Yonge
Street, Suite 300, Willowdale, Ontario, M2N 6A5. Tel:
416-952-0904.
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Canadian Aviation Regulations,
amendment (Part V)
The proposed regulations, which were still under
development when the Canadian Aviation Regulations were
first implemented in October 1996, would update existing
airworthiness provisions.
More specifically, Part V (Airworthiness), Subpart 11
(Approval of the Type Design of an Aeronautical Product),
Subpart 13 (Approval of Modification Subpart 16 (Aircraft
Emissions), Subpart 22 (Gliders and Powered Gliders),
Subpart 23 (Normal, Utility, Aerobatic and Commuter
Category Aeroplanes), Subpart 25 (Transport Category
Aeroplanes), Subpart 27 (Normal Category Rotorcraff),
Subpart 29 (Transport Category Rotorcraff), Subpart 31
(Manned Free Balloons), Subpart 33 (Aircraff Engines),
Subpart 35 (Aircraft Propellers), Subpart 37 (Aircraff
Appliances and Other Aeronautical Products), Subpart 41
(Airships), Subpart 49 (Amateur-Built Aircraff) and
Subpart 51 (Aircraff Equipment) of the Canadian Aviation
Regulations will replace Subpart 11 (Design).
With the exception of a few minor revisions, proposed
Subparts 11 (Approval of the Type Design of an
Aeronautical Product), 13 (Approval of Modification and
Repair Designs), 16 through 49 and 51 (Aircraff
Equipment) and their associated Standards will leave
unchanged current regulations and standards, accepted
industry practices and Transport Canada policy in general
application throughout the industry. The technical
content of the revised regulations and standards has been
clarified and the application of accepted practices and
policies will be normalized as a result.
Some regulations within Division II contain minor
changes from present requirements. CAR 511.07 (Applicable
Standards), in subsection 511.07(1)(b), will extend and
clarify the definition of "special conditions" which may
be specified by the Minister, when issuing a type
certificate, to include cases in which no applicable
standards of airworthiness for the aeronautical product
have been established.
CAR 51 1.07(1)(c) will require that the standards for
noise, fuel venting and engine emissions specified in
Subpart 16 (Aircraft Emissions) which must be satisfied
by an applicant for the issuance of a type certificate
are those in force on the date on which the type
certificate is issued rather than those in force on the
date at which the application was made.
CAR 511.09 (Function and Reliability Test Flights)
will extend the requirement to conduct function and
reliability test flights, when a type certificate is
applied for, to airships with passenger capacity for 10
or more passengers.
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Aeronautics Act
TC/95-33-L
To be published in Canada Gazette September 13, 1997
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Canadian Aviation Regulations 511.34 (Supplemental
Integrity Instructions) will mandate airworthiness
requirements which must be met to ensure continued safe
operation of older aircraft. The new regulation and its
associated standards, which can be found in Airworthiness
Manual, Chapter 511, section 511.34, contain minor
differences from the AMA.
The AMA was applicable to "each aircraft type
registered in Canada, of either Canadian or foreign
manufacture, that has a passenger seating capacity of 10
or more seats, as specified in the Type Approval
including amendments thereto". CAR 511.34 will be
applicable to "an aeroplane for which a type certificate
in the commuter category or the transport category has
been issued and that is operated pursuant to Subparts 4
and 5 of Part Vll". This change will exempt operators of
helicopters and of private corporate jet aeroplanes,
operated under CARs 604, from the need for inspecting
their aircraft in accordance with Supplementary
Structural Integrity Directions (SSIDs). The change
captures current practices followed by both sets of
operators and accepted by Transport Canada.
The AMA and the proposed regulation also differ with
respect to the time period allowed for development of the
information necessary to formulate an SSID prior to the
completion of one design life of an aircraft and to the
time period allowed for implementation of the necessary
inspections by the operator of the aircraft.
Under the AMA these periods are two years and six
months, respectively, i.e. the holder of the type
approval was required to produce the information needed
to develop an SSID within two years of being requested to
do so by Transport Canada and the operator of the
aircraft was required to implement the SSID within six
months of its becoming available. Neither CAR 511.34 nor
the associated standard will establish defined time
periods for development or implementation of an SSID.
However, the intent of the AMA remains unchanged. The
operator of an aeroplane which has reached the end of its
design life may not continue to operate that aeroplane
without following the necessary inspection procedure.
Contact: Chief, Regulatory Affairs (MRBH),
Transport Canada Safety and Security, Place de Ville,
Tower "C", Ottawa, Ontario K1A ON8. Tel: 613-993-7284 or
1-800-3052059; Fax: 613-990-1198.
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Exempt from
Pre-Publication
and Approved
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Statutory Authority
&
Regulatory Plan Listing
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Order Terminating the Administration, Management and
Control by the Canada Ports Corporation of the Harbour of
Churchill
(SOR/97-428,
OIC 1997-1256)
The Order terminates the administration by the Canada
Ports Corporation of the harbour of Churchill and of
related works and property.
The Order is effective September 5, 1997.
Contact: Thomas E. Gallagher, Senior Counsel,
Common Law, Canada Ports Corporation, 99 Metcalfe Street,
Ottawa, Ontario, K1A 0N6. Tel: 613-957-6726.
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Canada Ports Corporation Act, paragraph
34(1)(b)
Not included in Regulatory Plan
To be published in Canada Gazette September 17, 1997
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Canadian Wheat Board Regulations, amendment
(SOR/97-431,
OIC 1997-1272)
This amendment establishes a higher initial payment
for the base grades of wheat (an increase of $20 per
metric tonne), amber durum wheat (an increase of $41 per
metric tonne), barley (an increase of $16 per metric
tonne), and designated barley (an increase of $14 per
metric tonne) for the 1997-98 crop year. The higher
initial payments could increase payments to farmers by
some $450-million.
Contact: Craig Fulton, Commerce Officer, Grains and
Oilseeds Division, International Markets Bureau, Market
and Industry Services Branch, Agriculture and Agri-Food
Canada, Sir John Carling Building, 930 Carling Avenue,
Ottawa, Ontario, K1A 0C5. Tel: 613-759-7698; Fax:
613-759-7499.
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Canadian Wheat Board Act, subparagraph
32(1)(b)(i), subsection 47(2) and section 61
Not included in Regulatory Plan
To be published in Canada Gazette October 1, 1997
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Ministerial Orders
Approved
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Statutory Authority
&
Regulatory Plan Listing
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Exemption Order No. 1, 1997
(Sending of Notices and Documents)
(SOR/97-429)
The Order exempts persons from filing requirements for
designated notices and documents where the person is
already required by specified provincial legislation to
file a notice or document containing similar information.
The exempt notices and documents set out under Part A
of the Schedule are:
- insider report under section 127 of the Canada
Business Corporations Act;
- interim financial statements under section 160;
- prospectus under section 193;
- statement of material facts under section 193;
- registration statement under section 193; and
- news release under section 193.
Part B sets out provincial legislation covered by the
Order, including Securities Acts for Ontario, Quebec,
Nova Scotia, Manitoba, Prince Edward Island, Alberta,
Newfoundland, Yukon Territory, and Northwest Territories,
as well as the Security Frauds Prevention Act of
New Brunswick.
The Order comes into effect on September 5, 1997.
Contact: Caroline P. Melia, Senior Compliance
Policy Advisor, Corporations Directorate, Industry
Canada, 9th floor, Jean Edmonds Tower South, 365 Laurier
Avenue West, Ottawa, Ontario. Tel: 613-941-5755; Fax:
613-941-5781.
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Canada Business Corporations Act, section 258.2
Not included in Regulatory Plan
To be published in Canada Gazette September 17, 1997
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Canadian Turkey Marketing
Quota Regulations, 1990, amendment
(SOR/97-432)
The amendment revises the limitations to be applied
when determining the market allotment of a producer or
when issuing a new market allotment within a province
during the control period beginning May 1, 1997 and
ending April 30, 1998.
For the period, the allotment (in pounds of turkey)
set out in the Schedule to the Regulations is as follows:
for Ontario, 120,225,461 pounds; for Quebec, 62,206,271;
for Nova Scotia, 7,800,148; for New Brunswick, 5,377,462;
for Manitoba, 20,358,366; for British Columbia,
32,137,036; for Saskatchewan, 10,367,081; and for
Alberta, 24,332,325.
The Order comes into effect on September 11, 1997.
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Farm Products Agencies Act, paragraph 22(1)(f);
Canadian Turkey Marketing Agency Proclamation,
section 2, Part II
Not included in Regulatory Plan
To be published in Canada Gazette October 1, 1997
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