Canada Gazette, Part I, Volume 156, Number 40: Regulations Amending the Notifiable Transactions Regulations (Miscellaneous Program)

October 1, 2022

Statutory authority
Competition Act

Sponsoring department
Department of Industry

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

As a result of amendments to the Competition Act (“the Act”) by Bill C-25 (An Act to amend the Canadian Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act), the concept of affiliation under the Act was broadened to include new business structures. Bill C-25 also aligned the treatment of these new business structures with the treatment of corporations under the Act. Similar technical amendments must be made to the Notifiable Transactions Regulations (“NTR”) in order to reflect the changes implemented by Bill C-25.

Minor technical amendments to the NTR are also needed to harmonize the regulation with the Bank of Canada’s (BoC) current procedure for posting exchange rates.

Objective

The amendments have the following objectives:

Description and rationale

The following amendments are proposed to bring the NTR in line with the changes made by Bill C-25:

  1. Repeal the definition of “equity security” in section 2 of the NTR and replace it with the term “equity interest”;
    • Bill C-25 broadened the Act by introducing the definition of “equity interest” to align the treatment of corporate shares and non-corporate interests for certain parts of the Act. The NTR currently include the definition “equity security,” and though the definition is similar to that of “equity interest,” it does not accurately capture the intentionally broad scope of “equity interest.” The proposed amendment updates the NTR to better align with the terminology and concepts used in the Act.
  2. Replace “voting share of a corporation or an interest in a combination” with “equity interest” in section 2;
    • This amendment would remove redundant language that is now captured by the definition of “equity interest”
  3. Replace “corporation” with “entity” in a portion of section 2, sections 9.1 and 9.2 and paragraphs 10(c)and 11(c);
  4. Add the concept “entity” to the paragraphs 10(b) and 11(b)
    • Bill C-25 expanded the concept of affiliation under the Act by introducing the new definition of “entity,” which encompasses corporations, partnerships, sole proprietorships, trusts, and unincorporated entities. Proposed amendments 3 and 4 would incorporate the “entity” concept into the NTR and are necessary to align the regulation with the Act.
  5. Replace “unincorporated entity” with “entity other than a corporation” in paragraph 16(1)(d)
    • The existing wording is potentially inconsistent with the definition of “entity” that was introduced to the Act by Bill C-25. The new wording reflects the fact that the definition of “entity” includes corporations.

Aligning the NTR with the current BoC policy

As part of the threshold calculation to determine whether a transaction is notifiable, the NTR requires foreign sales or asset values be converted into Canadian dollars using the BoC’s “noon exchange rate.” As of April 28, 2017, the BoC has replaced the “noon exchange rate” with the “daily exchange rate.” Instead of publishing the exchange rate at a single point in time, this new calculation is meant to broadly reflect the average exchange rate observed throughout the business day. The proposed amendments modernize the NTR by removing the outdated “noon exchange rate” concept and replacing it with a requirement to use the exchange rate published by the BoC for that foreign currency or, where no exchange rate is published, the exchange rate that would be used in the ordinary course of business.

One-for-one rule and small business lens

The one-for-one rule does not apply to these amendments, as there is no change in administrative costs or burden to business.

Analysis under the small business lens determined that the proposal will not impact small businesses in Canada.

Contact

Anthony Durocher
Deputy Commissioner
Competition Promotion Branch
Email: ic.competitionpromotion-lapromotiondelaconcurrence.ic@canada.ca

PROPOSED REGULATORY TEXT

Notice is given, under subsection 124(2)footnote a of the Competition Act footnote b, that the Governor in Council, under subsection 124(1)footnote a of that Act, proposes to make the annexed Regulations Amending the Notifiable Transactions Regulations (Miscellaneous Program).

Interested persons may make representations concerning the proposed Regulations within 60 days after the date of publication of this notice. All representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Anthony Durocher, Deputy Commissioner, Competition Promotion Branch, Competition Bureau, 50 Victoria St., Gatineau, Quebec K1A 0C9.

Ottawa, September 22, 2022

Wendy Nixon
Assistant Clerk of the Privy Council

Regulations Amending the Notifiable Transactions Regulations (Miscellaneous Program)

Amendments

1 (1) The definition equity security in section 2 of the Notifiable Transactions Regulations footnote 1 is repealed.

(2) The definition états financiers vérifiés in section 2 of the French version of the Regulations is replaced by the following:

états financiers vérifiés
États financiers faisant l’objet d’un rapport rédigé par un vérificateur agréé externe qui est un membre en règle d’un ordre professionnel, d’une association ou d’un institut de comptables professionnels. (audited financial statements)

(3) Subclause (b)(iii)(D)(II) of the definition asset securitization transaction in section 2 of the Regulations is replaced by the following:

(4) Subclause (b)(iii)(E)(II) of the definition asset securitization transaction in section 2 of the Regulations is replaced by the following:

(5) Paragraph (c) of the definition financial asset in section 2 of the Regulations is replaced by the following:

(6) Subclause (b)(iii)(D)(I) of the definition asset securitization transaction in section 2 of the English version of the Regulations is replaced by the following:

(7) Subclause (b)(iii)(E)(I) of the definition asset securitization transaction in section 2 of the English version of the Regulations is replaced by the following:

2 Subsection 4(4) of the Regulations is replaced by the following:

(4) The conversion into Canadian dollars of the aggregate value of assets reported in foreign currency shall be based on

3 Subsection 5(4) of the Regulations is replaced by the following:

(4) The conversion into Canadian dollars of the gross revenues from sales reported in foreign currency shall be based on

4 Paragraph 10(b) of the Regulations is replaced by the following:

5 Paragraph 11(b) of the Regulations is replaced by the following:

6 Paragraph 16(1)(d) of the Regulations is replaced by the following:

7 The Regulations are amended by replacing “corporation” with “entity”, with any necessary modifications, in the following provisions:

Coming into Force

8 These Regulations come into force on the day on which they are registered.

Terms of use and Privacy notice

Terms of use

It is your responsibility to ensure that the comments you provide do not:

  • contain personal information
  • contain protected or classified information of the Government of Canada
  • express or incite discrimination on the basis of race, sex, religion, sexual orientation or against any other group protected under the Canadian Human Rights Act or the Canadian Charter of Rights and Freedoms
  • contain hateful, defamatory, or obscene language
  • contain threatening, violent, intimidating or harassing language
  • contain language contrary to any federal, provincial or territorial laws of Canada
  • constitute impersonation, advertising or spam
  • encourage or incite any criminal activity
  • contain a language other than English or French
  • otherwise violate this notice

The federal institution managing the proposed regulatory change retains the right to review and remove personal information, hate speech, or other information deemed inappropriate for public posting as listed above.

Confidential Business Information should only be posted in the specific Confidential Business Information text box. In general, Confidential Business Information includes information that (i) is not publicly available, (ii) is treated in a confidential manner by the person to whose business the information relates, and (iii) has actual or potential economic value to the person or their competitors because it is not publicly available and whose disclosure would result in financial loss to the person or a material gain to their competitors. Comments that you provide in the Confidential Business Information section that satisfy this description will not be made publicly available. The federal institution managing the proposed regulatory change retains the right to post the comment publicly if it is not deemed to be Confidential Business Information.

Your comments will be posted on the Canada Gazette website for public review. However, you have the right to submit your comments anonymously. If you choose to remain anonymous, your comments will be made public and attributed to an anonymous individual. No other information about you will be made publicly available.

Comments will remain posted on the Canada Gazette website for at least 10 years.

Please note that public email is not secure, if the attachment you wish to send contains sensitive information, please contact the departmental email to discuss ways in which you can transmit sensitive information.

Privacy notice

The information you provide is collected under the authority of the Financial Administration Act, the Department of Public Works and Government Services Act, the Canada–United States–Mexico Agreement Implementation Act,and applicable regulators’ enabling statutes for the purpose of collecting comments related to the proposed regulatory changes. Your comments and documents are collected for the purpose of increasing transparency in the regulatory process and making Government more accessible to Canadians.

Personal information submitted is collected, used, disclosed, retained, and protected from unauthorized persons and/or agencies pursuant to the provisions of the Privacy Act and the Privacy Regulations. Individual names that are submitted will not be posted online but will be kept for contact if needed. The names of organizations that submit comments will be posted online.

Submitted information, including personal information, will be accessible to Public Services and Procurement Canada, who is responsible for the Canada Gazette webpage, and the federal institution managing the proposed regulatory change.

You have the right of access to and correction of your personal information. To seek access or correction of your personal information, contact the Access to Information and Privacy (ATIP) Office of the federal institution managing the proposed regulatory change.

You have the right to file a complaint to the Privacy Commission of Canada regarding any federal institution’s handling of your personal information.

The personal information provided is included in Personal Information Bank PSU 938 Outreach Activities. Individuals requesting access to their personal information under the Privacy Act should submit their request to the appropriate regulator with sufficient information for that federal institution to retrieve their personal information. For individuals who choose to submit comments anonymously, requests for their information may not be reasonably retrievable by the government institution.