Competition Policy
National Legislation - Canada
Competition Act --
CHAPTER C-34
(Continuation)
PART IX
NOTIFIABLE TRANSACTIONS
Interpretation
Definitions
108.
(1) In this Part,
"operating business" «entreprise en exploitation»
"operating business"
means a business undertaking in Canada to
which employees employed in connection with the undertaking ordinarily
report for work;
"person" «personne»
"person" means
an individual, body corporate, unincorporated syndicate, unincorporated
organization, trustee, executor, administrator or other legal
representative, but does not include a bare trustee;
"prescribed" « réglementaire »
"prescribed" means prescribed by regulations made under section
124;
"voting share" «actions comportant droit de vote»
"voting share" means any share that carries voting rights under
all circumstances or by reason of an event that has occurred and is
continuing.
Corporations controlled by Her Majesty
(2) For the purposes of
this Part, except for the purposes of section 113, one corporation is not
affiliated with another corporation by reason only of the fact that both
corporations are controlled by Her Majesty in right of Canada or a
province, as the case may be.
R.S., 1985, c. 19 (2nd Supp.), s. 45; 1999,
c. 2, s. 25.
Application
General limit relating to parties
109.
(1) This
Part does not apply in respect of a proposed transaction unless the
parties thereto, together with their affiliates,
(a) have assets in Canada
that exceed four hundred million dollars in aggregate value, determined as
of such time and in such manner as may be prescribed, or such greater
amount as may be prescribed; or
(b) had gross revenues from sales in, from
or into Canada, determined for such annual period and in such manner as
may be prescribed, that exceed four hundred million dollars in aggregate
value, or such greater amount as may be prescribed.
Parties to acquisition
of shares
(2) For the purposes of this Part, the parties to a proposed
acquisition of shares are the person or persons who propose to acquire the
shares and the corporation the shares of which are to be acquired.
R.S.,
1985, c. 19 (2nd Supp.), s. 45; 1999, c. 2, s. 26.
Application of Part
110.
(1) This Part applies only in respect of proposed transactions
described in this section.
Acquisition of assets
(2) Subject to sections
111 and 113, this Part applies in respect of a proposed acquisition of any
of the assets in Canada of an operating business where the aggregate value
of those assets, determined as of such time and in such manner as may be
prescribed, or the gross revenues from sales in or from Canada generated
from those assets, determined for such annual period and in such manner as
may be prescribed, would exceed thirty-five million dollars or such
greater amount as may be prescribed.
Acquisition of shares
(3) Subject to
sections 111 and 113, this Part applies in respect of a proposed
acquisition of voting shares of a corporation that carries on an operating
business or controls a corporation that carries on an operating business
(a) where
(i) the aggregate value of the assets in Canada, determined as
of such time and in such manner as may be prescribed, that are owned by
the corporation or by corporations controlled by that corporation, other
than assets that are shares of any of those corporations, would exceed
thirty-five million dollars, or such greater amount as may be prescribed,
or
(ii) the gross revenues from sales in or from Canada, determined for
such annual period and in such manner as may be prescribed, generated from
the assets referred to in subparagraph (i) would exceed thirty-five
million dollars, or such greater amount as may be prescribed, and
(b)
where, as a result of the proposed acquisition of the voting shares, the
person or persons acquiring the shares, together with their affiliates,
would own voting shares of the corporation that in the aggregate carry
more than
(i) twenty per cent or, if the person or persons own twenty per
cent or more before the proposed acquisition, fifty per cent of the votes
attached to all outstanding voting shares of the corporation, in the case
of the acquisition of voting shares of a corporation any of the voting
shares of which are publicly traded, or
(ii) thirty-five per cent or, if
the person or persons own thirty-five per cent or more before the proposed
acquisition, fifty per cent of the votes attached to all outstanding
voting shares of the corporation, in the case of the acquisition of voting
shares of a corporation none of the voting shares of which are publicly
traded.
Amalgamation
(4) Subject to section 113, this Part applies in
respect of a proposed amalgamation of two or more corporations where one
or more of those corporations carries on an operating business or controls
a corporation that carries on an operating business where
(a) the
aggregate value of the assets in Canada, determined as of such time and in
such manner as may be prescribed, that would be owned by the continuing
corporation that would result from the amalgamation or by corporations
controlled by the continuing corporation, other than assets that are
shares of any of those corporations, would exceed seventy million dollars,
or such greater amount as may be prescribed; or
(b) the gross revenues
from sales in or from Canada, determined for such annual period and in
such manner as may be prescribed, generated from the assets referred to in
paragraph (a) would exceed seventy million dollars, or such greater amount
as may be prescribed.
Combination
(5) Subject to sections 112 and 113,
this Part applies in respect of a proposed combination of two or more
persons to carry on business otherwise than through a corporation where
one or more of those persons propose to contribute to the combination
assets that form all or part of an operating business carried on by those
persons, or corporations controlled by those persons, and where
(a) the
aggregate value of the assets in Canada, determined as of such time and in
such manner as may be prescribed, that are the subject-matter of the
combination would exceed thirty-five million dollars, or such greater
amount as may be prescribed; or
(b) the gross revenues from sales in or
from Canada, determined for such annual period and in such manner as may
be prescribed, generated from the assets referred to in paragraph (a)
would exceed thirty-five million dollars, or such greater amount as may be
prescribed.
Combination
(6) Subject to sections 111, 112 and 113, this
Part applies in respect of a proposed acquisition of an interest in a
combination that carries on an operating business otherwise than through a
corporation
(a) where
(i) the aggregate value of the assets in Canada,
determined as of such time and in such manner as may be prescribed, that
are the subject-matter of the combination would exceed thirty-five million
dollars or such greater amount as may be prescribed, or
(ii) the gross
revenues from sales in or from Canada, determined for such annual period
and in such manner as may be prescribed, generated from the assets
referred to in subparagraph (i) would exceed thirty-five million dollars
or such greater amount as may be prescribed, and
(b) where, as a result of
the proposed acquisition of the interest, the person or persons acquiring
the interest, together with their affiliates, would hold an aggregate
interest in the combination that entitles the person or persons to receive
more than thirty-five per cent of the profits of the combination, or more
than thirty-five per cent of its assets on dissolution or, where the
person or persons acquiring the interest are already so entitled, to
receive more than fifty per cent of such profits or assets.
R.S., 1985, c.
19 (2nd Supp.), s. 45; 1999, c. 2, s. 27.
Exemptions
Acquisition of Voting
Shares, Assets or Interests
Acquisitions
111. The following classes of
transactions are exempt from the application of this Part:
(a) an
acquisition of real property or goods in the ordinary course of business
if the person or persons who propose to acquire the assets would not, as a
result of the acquisition, hold all or substantially all of the assets of
a business or of an operating segment of a business;
(b) an acquisition of
voting shares or of an interest in a combination solely for the purpose of
underwriting the shares or the interest, within the meaning of subsection
5(2);
(c) an acquisition of voting shares, an interest in a combination or
assets that would result from a gift, intestate succession or testamentary
disposition;
(d) an acquisition of collateral or receivables, or an
acquisition resulting from a foreclosure or default or forming part of a
debt work-out, made by a creditor in or pursuant to a credit transaction
entered into in good faith in the ordinary course of business;
(e) an
acquisition of a Canadian resource property, as defined in subsection
66(15) of the Income Tax Act, pursuant to an agreement in writing that
provides for the transfer of that property to the person or persons
acquiring the property only if the person or persons acquiring the
property incur expenses to carry out exploration or development activities
with respect to the property; and
(f) an acquisition of voting shares of a
corporation pursuant to an agreement in writing that provides for the
issuance of those shares only if the person or persons acquiring them
incur expenses to carry out exploration or development activities with
respect to a Canadian resource property, as defined in subsection 66(15)
of the Income Tax Act, in respect of which the corporation has the right
to carry out those activities where the corporation does not have any
significant assets other than that property.
R.S., 1985, c. 19 (2nd
Supp.), s. 45; 1999, c. 2, s. 29, c. 31, s. 229.
Combinations
Combinations
that are joint ventures
112. A combination is exempt from the application
of this Part if
(a) all the persons who propose to form the combination
are parties to an agreement in writing or intended to be put in writing
that imposes on one or more of them an obligation to contribute assets and
governs a continuing relationship between those parties;
(b) no change in
control over any party to the combination would result from the
combination; and
(c) the agreement referred to in paragraph (a) restricts
the range of activities that may be carried on pursuant to the
combination, and contains provisions that would allow for its orderly
termination.
R.S., 1985, c. 19 (2nd Supp.), s. 45.
General
General
exemptions
113. The following classes of transactions are exempt from the
application of this Part:
(a) a transaction all the parties to which are
affiliates of each other; (a.1) a transaction in respect of which the
Minister of Finance has certified to the Commissioner under paragraph
94(b) that it is in the best interest of the financial system in Canada;
(b) a transaction in respect of which the Commissioner has issued a
certificate under section 102;
(c) a transaction in respect of which the
Commissioner or a person authorized by the Commissioner has waived the
obligation under this Part to notify the Commissioner and supply
information because substantially similar information was previously
supplied in relation to a request for a certificate under section 102; and
(d) such other classes of transactions as may be prescribed.
R.S., 1985,
c. 19 (2nd Supp.), s. 45; 1991, c. 45, s. 550, c. 46, s. 594, c. 47, s.
717; 1999, c. 2, ss. 30, 37.
Notice and Information
Notice of proposed
transaction
114.
(1) Subject to this Part, where
(a) a person, or two or
more persons pursuant to an agreement or arrangement, propose to acquire
assets in the circumstances set out in subsection 110(2), to acquire
shares in the circumstances set out in subsection 110(3) or to acquire an
interest in a combination in the circumstances set out in subsection
110(6),
(b) two or more corporations propose to amalgamate in the
circumstances set out in subsection 110(4), or
(c) two or more persons
propose to form a combination in the circumstances set out in subsection
110(5),
the parties to the proposed transaction shall, before the
transaction is completed, notify the Commissioner that the transaction is
proposed and supply the Commissioner with information in accordance with
this Part.
Information required
(2) The information required under
subsection (1) is, at the option of the person supplying the information,
prescribed short form information or prescribed long form information but,
where a person provides prescribed short form information, the
Commissioner or a person authorized by the Commissioner may, within
fourteen days after receiving it, require the person to supply the
prescribed long form information.
Corporation whose shares are acquired
(3) Where a proposed transaction is an acquisition of shares and the
Commissioner receives information supplied under subsection (1) by a party
to the transaction, other than the corporation whose shares are being
acquired, before receiving such information from the corporation,
(a) the
Commissioner shall immediately notify the corporation that the
Commissioner has received from that party the prescribed short form
information or prescribed long form information, as the case may be;
(b)
the corporation shall supply the Commissioner with the prescribed short
form information within ten days after being notified under paragraph (a)
or the prescribed long form information within twenty days after being so
notified, as the case may be; and
(c) where the corporation supplies the
prescribed short form information, the Commissioner may require the
corporation to supply the prescribed long form information and the
corporation shall supply it within twenty days after being so required by
the Commissioner.
Notice and information
(4) Any of the persons required
to give notice and supply information under this section may
(a) if duly
authorized to do so, give notice or supply information on behalf of and in
lieu of any of the others who are so required in respect of the same
transaction; or
(b) give notice or supply information jointly with any of
those others.
R.S., 1985, c. 19 (2nd Supp.), s. 45; 1999, c. 2, s. 31, c.
31, s. 53(F).
Prior notice of acquisitions
115.
(1) It is not necessary to
comply with section 114 in respect of a proposed acquisition of voting
shares or of an interest in a combination where a limit set out in
subsection 110(3) or (6) would be exceeded as a result of the proposed
acquisition within three years immediately following a previous compliance
with section 114 required in relation to the same limit.
Notice of future
acquisition
(2) Where a person or persons who propose to acquire voting
shares or an interest in a combination are required to comply with section
114 because the twenty or thirty-five per cent limit set out in subsection
110(3) or the thirty-five per cent limit set out in subsection 110(6)
would be exceeded as a result of the acquisition, the person or persons
may, at the time of the compliance, give notice to the Commissioner of a
proposed further acquisition of voting shares or of an interest in a
combination that would result in a fifty per cent limit set out in that
subsection being exceeded, and supply the Commissioner with a detailed
description in writing of the steps to be carried out in the further
acquisition.
Exemption for further acquisitions of voting shares
(3) It is
not necessary to comply with section 114 in respect of a proposed further
acquisition referred to in subsection (2) if
(a) notice of the further
acquisition is given to the Commissioner under subsection (2) and it is
carried out in accordance with the description supplied under that
subsection; and
(b) an additional notice of the further acquisition is
given to the Commissioner in writing within twenty-one, and at least
seven, days before the further acquisition.
Limitation
(4) Subsection (3)
does not apply in respect of a further acquisition unless the further
acquisition is completed within one year after notice of it is given under
subsection (2).
R.S., 1985, c. 19 (2nd Supp.), s. 45; 1999, c. 2, ss. 32,
37.
Where information cannot be supplied
116.
(1) If any of the
information required under section 114 is not known or reasonably
obtainable, or cannot be obtained without breaching a confidentiality
requirement established by law or without creating a significant risk that
confidential information will be used for an improper purpose or that
information that should, for commercial reasons, be kept confidential will
be disclosed to the public, the person who is supplying the information
may, in lieu of supplying the information, inform the Commissioner under
oath or solemn affirmation of the matters in respect of which information
has not been supplied and why it has not been obtained.
Where information
not relevant
(2) If any of the information required under section 114
could not, on any reasonable basis, be considered to be relevant to an
assessment by the Commissioner as to whether the proposed transaction
would or would be likely to prevent or lessen competition substantially,
the person who is supplying the information may, in lieu of supplying the
information, inform the Commissioner under oath or solemn affirmation of
the matters in respect of which information has not been supplied and why
the information was not considered relevant.
Where information previously
supplied
(2.1) If any of the information required under section 114 has
previously been supplied to the Commissioner, the person who is supplying
the information may, in lieu of supplying it, inform the Commissioner
under oath or solemn affirmation of the matters in respect of which
information has previously been supplied and when it was supplied.
Commissioner may require information
(3) Where a person chooses not to
supply the Commissioner with information required under section 114 and so
informs the Commissioner in accordance with subsection (2) or (2.1) and
the Commissioner or a person authorized by the Commissioner notifies that
person, within seven days after the Commissioner is so informed, that the
information is required, the person shall supply the Commissioner with the
information.
R.S., 1985, c. 19 (2nd Supp.), s. 45; 1999, c. 2, ss. 33, 37.
Saving
117.
(1) Nothing in section 114 requires any person who is a
director of a corporation to supply information that is known to that
person by virtue only of his position as a director of an affiliate of the
corporation that is neither a wholly-owned affiliate nor a wholly-owning
affiliate of the corporation.
Wholly-owned affiliate
(2) For the purposes
of subsection (1), one corporation is the wholly-owned affiliate of
another corporation if all its outstanding voting shares, other than
shares necessary to qualify persons as directors, are beneficially owned
by that other corporation directly, or indirectly through one or more
affiliates where all the outstanding voting shares of the affiliates,
other than shares necessary to qualify persons as directors, are
beneficially owned by that other corporation or each other.
Wholly-owning
affiliate
(3) For the purposes of subsection (1), one corporation is the
wholly-owning affiliate of another corporation if it beneficially owns all
the outstanding voting shares of that other corporation, other than shares
necessary to qualify persons as directors, directly, or indirectly through
one or more affiliates where all the outstanding voting shares of the
affiliates, other than shares necessary to qualify persons as directors,
are beneficially owned by the corporation or each other.
R.S., 1985, c. 19
(2nd Supp.), s. 45.
Information to be certified
118. The information
supplied to the Commissioner under section 114 shall be certified on oath
or solemn affirmation
(a) in the case of a corporation supplying the
information, by an officer thereof or other person duly authorized by the
board of directors or other governing body of the corporation, or
(b) in
the case of any other person supplying the information, by that person,
as
having been examined by that person and as being, to the best of his
knowledge and belief, correct and complete in all material respects.
R.S.,
1985, c. 19 (2nd Supp.), s. 45; 1999, c. 2, s. 37.
Where transaction not
completed
119. Where notice is given and information supplied in respect
of a proposed transaction under section 114 but the transaction is not
completed within one year thereafter or such longer period as the
Commissioner may specify in any particular case, section 114 applies as if
no notice were given or information supplied.
R.S., 1985, c. 19 (2nd
Supp.), s. 45; 1999, c. 2, s. 37.
120. to 122. [Repealed, 1999, c. 2, s.
34]
Completion of Proposed Transactions
Time when transaction may not
proceed
123.
(1) A proposed transaction referred to in section 114 shall
not be completed before the expiration of
(a) fourteen days after the day
on which information required under section 114 has been received by the
Commissioner, where the information is prescribed short form information
and the Commissioner has not, within that time, required prescribed long
form information to be supplied under that section,
(b) except as provided
in paragraph (c), forty-two days after the day on which information
required under section 114 has been received by the Commissioner, where
the information is prescribed long form information, or
(c) where the
proposed transaction is an acquisition of voting shares that is to be
effected through the facilities of a stock exchange in Canada and the
information supplied is prescribed long form information, twenty-one
trading days, or such longer period of time, not exceeding forty-two days,
as may be allowed by the rules of the stock exchange before shares must be
taken up, after the day on which the information required under section
114 has been received by the Commissioner,
unless the Commissioner or a
person authorized by the Commissioner, before the expiration of that time,
notifies the persons who are required to give notice and supply
information that the Commissioner does not, at that time, intend to make
an application under section 92 in respect of the proposed transaction.
Acquisition of voting shares
(2) In the case of an acquisition of voting
shares to which subsection 114(3) applies, the periods of time referred to
in subsection (1) shall be determined without reference to the day on
which the information required under section 114 is received by the
Commissioner from the corporation whose shares are being acquired.
R.S.,
1985, c. 19 (2nd Supp.), s. 45; 1999, c. 2, s. 35.
Regulations
Regulations
124.
(1) The Governor in Council may make regulations prescribing anything
that is by this Part to be prescribed.
Publication of proposed regulations
(2) Subject to subsection (3), a copy of each regulation that the Governor
in Council proposes to make under subsection (1) shall be published in the
Canada Gazette at least sixty days before the proposed effective date
thereof and a reasonable opportunity shall be afforded to interested
persons to make representations with respect thereto.
Exception
(3) No
proposed regulation need be published under subsection (2) if it has
previously been published pursuant to that subsection, whether or not it
has been amended as a result of representations made pursuant to that
subsection.
R.S., 1985, c. 19 (2nd Supp.), s. 45.
Continuation: Part
X - General
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