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His Excellency the Governor General recommends to the House of
Commons the appropriation of public revenue under the circumstances,
in the manner and for the purposes set out in a measure entitled ``An Act
to amend the Telecommunications Act and the Teleglobe Canada
Reorganization and Divestiture Act''.
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This enactment amends the Telecommunications Act and the
Teleglobe Canada Reorganization and Divestiture Act in order to
implement Canada's obligations to liberalize basic international tele
communications services under the Fourth Protocol to the General
Agreement on Trade in Services. Consistent with these obligations, the
amendments to the Telecommunications Act
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(a) authorize the Canadian Radio-television and Telecommunica
tions Commission to establish a licensing regime for telecommu
nications service providers and to administer telecommunications
numbering resources and other activities related to telecommunica
tions; and
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(b) augment the existing regime for the certification and inspection
of telecommunications equipment in Canada.
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Amendments to the Teleglobe Canada Reorganization and Divesti
ture Act repeal provisions that are inconsistent with the termination of
Teleglobe Canada Inc.'s monopoly in the provision of facilities for
telecommunications services between Canada and overseas.
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Clause 1: New.
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Clause 2: New.
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Clause 3: New.
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Clause 4: Subsection 19(1) reads as follows:
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19. (1) The Minister may, on application, issue an international
submarine cable licence to a corporation that is eligible under the
regulations to hold the licence.
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Clause 5: The relevant portion of subsection 22(2)
reads as follows:
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(2) The Governor in Council may, in relation to international
submarine cable licences, make regulations
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(c) prescribing classes of international submarine cable licences and
determining the corporations eligible to hold licences of any
particular class;
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Clause 6: New.
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Clause 7: New. The relevant portion of subsection
67(1) reads as follows:
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67. (1) The Commission may make regulations
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Clause 8: New.
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Clause 9: (1) The relevant portion of subsection 73(1)
reads as follows:
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73. (1) Every person who contravenes section 16 or 17 is guilty of
an offence punishable on summary conviction and liable
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(2) and (3) The relevant portion of subsection 73(2)
reads as follows:
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(2) Every person who
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(a) contravenes section 25 or subsection 27(1) or (2),
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(d) knowingly makes a material misrepresentation of fact or omits to
state a material fact to the Minister, the Commission, a person
appointed under section 70 or an inspector appointed under section
71
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is guilty of an offence punishable on summary conviction and liable, in
the case of an individual, to a fine not exceeding ten thousand dollars
for a first offence or twenty-five thousand dollars for a subsequent of
fence, and in the case of a corporation, to a fine not exceeding one
hundred thousand dollars for a first offence or two hundred and fifty
thousand dollars for a subsequent offence.
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(4) New.
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Clause 10: New.
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Clause 11: The definition ``designated telecommu
nications common carrier'' in subsection 2(1) reads as
follows:
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``designated telecommunications common carrier'' means a telecom
munications common carrier named in Schedule I;
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Clause 12: Section 5 reads as follows:
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5. (1) The articles of incorporation of the new corporation shall
contain
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(a) provisions imposing constraints on the issue, transfer and
ownership, including joint ownership, of voting shares of the new
corporation to prevent designated telecommunications common
carriers, together with the associates thereof, from holding, benefi
cially owning or controlling, directly or indirectly, otherwise than by
way of security only, in the aggregate,
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(i) subject to subparagraph (ii), voting shares to which are
attached more than forty per cent of the votes that may ordinarily
be cast to elect directors of the new corporation, and
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(ii) on and after sixty days after the day on which voting shares
of the new corporation are first distributed to the public, voting
shares to which are attached more than thirty-three and one-third
per cent of the votes that may ordinarily be cast to elect directors
of the new corporation;
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(b) provisions imposing constraints on the issue, transfer and
ownership, including joint ownership, of voting shares of the new
corporation to prevent non-residents, including any designated
common carrier that is a non-resident, from holding, beneficially
owning or controlling, directly or indirectly, otherwise than by way
of security only, in the aggregate voting shares to which are attached
more than twenty per cent of the votes that may ordinarily be cast to
elect directors of the new corporation;
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(i) permitting designated telecommunications common carriers
and their associates, in lieu of casting votes on any resolution
electing directors of the new corporation, to appoint that
proportion of the total number of directors that the total number
of votes that all such carriers and associates may ordinarily cast
to elect directors is of the total number of votes that may
ordinarily be cast to elect directors, and
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(ii) restricting the total number of directors that may be elected by
designated telecommunications common carriers and their
associates or appointed under the provisions included in the
articles pursuant to subparagraph (i) to prevent control of the new
corporation by designated telecommunications common carriers
and their associates, such number in any case not to exceed one
third of the total number of directors;
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(d) provisions respecting the exercise of voting rights attached to
voting shares of the new corporation to prevent control of the new
corporation by designated telecommunications common carriers
and their associates and by non-residents; and
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(e) provisions respecting the enforcement of the constraints imposed
pursuant to this subsection or by subsection (2).
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(2) Notwithstanding the provisions included in the articles of
incorporation of the new corporation in compliance with subsection (1),
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(a) no non-resident that is a telecommunications common carrier,
and
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(b) no associate of such a non-resident,
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other than a designated telecommunications common carrier, shall
hold, beneficially own or control, solely or jointly, directly or indirectly,
any voting share of the new corporation otherwise than by way of secu
rity only.
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(3) Without limiting the generality of paragraph (1)(e), the provi
sions referred to therein may provide for the filing of declarations, the
suspension of voting rights, the forfeiture of dividends or the refusal of
the issue or registration of voting shares.
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(4) Where it appears from the central securities register of the new
corporation that a subscriber for or a transferee of voting shares of the
new corporation would, on acquiring the shares, hold, beneficially own
or control shares to which are attached not more than the lesser of two
one-hundredths of one per cent of the votes that may ordinarily be cast
to elect directors of the new corporation and two thousand such votes,
the directors are entitled to assume that the subscriber or transferee is not
and will not be an associate of anyone else and, unless the address to be
recorded in the register for the subscriber or transferee is a place outside
Canada, that the shares will not be held, beneficially owned or
controlled in contravention of the articles of incorporation of the new
corporation.
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(5) For the purpose of this section, a person is an associate of another
person if
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(a) one is a corporation of which the other is an officer or director;
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(b) one is a corporation that is controlled by the other or by a group
of persons of which the other is a member;
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(c) one is a partnership of which the other is a trustee;
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(d) one is a trust of which the other is a trustee;
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(e) both are corporations controlled by the same person;
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(f) both are members of a voting trust that relates to voting shares of
the new corporation; or
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(g) both are at the same time associates within the meaning of any of
paragraphs (a) to (f) of the same person.
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(6) Notwithstanding subsection (5), for the purposes of this section,
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(a) where a resident who, but for this paragraph, would be an
associate of a designated common carrier or a non-resident submits
to the new corporation a statutory declaration stating that no voting
shares of the new corporation held or to be held by the resident are
or will be, to the resident's knowledge, held in the right of, or for the
use or benefit of, the resident or in the right of, for the use or the
benefit of, or under control of, any designated telecommunications
common carrier or non-resident of which, but for this paragraph, the
resident would be an associate, that resident and that designated
telecommunications common carrier or non-resident, as the case
may be, are not associates so long as the voting shares held by the
resident are not held contrary to the statements made in the
declaration;
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(b) two corporations are not associates pursuant to paragraph (5)(g)
by reason only that under paragraph (5)(a) each is an associate of the
same individual; and
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(c) where it appears from the central securities register of the new
corporation that any person holds, beneficially owns or controls
voting shares to which are attached not more than the lesser of two
one-hundredths of one per cent of the votes that may ordinarily be
cast to elect directors of the new corporation and two thousand such
votes, that person is not an associate of anyone else and no one else
is an associate of that person.
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(7) In this section,
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``corporation'' includes a body corporate, partnership or unincorpo
rated organization;
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``non-resident'' means
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(a) an individual, other than a Canadian citizen, who is not
ordinarily resident in Canada,
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(b) a corporation incorporated, formed or otherwise organized
outside Canada,
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(c) a foreign government or an agency thereof,
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(d) a corporation that is controlled by non-residents as defined in
any of paragraphs (a) to (c),
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(i) established by a non-resident as defined in any of
paragraphs (b) to (d), other than a trust for the administration
of a pension fund for the benefit of individuals a majority of
whom are residents, or
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(ii) in which non-residents as defined in any of paragraphs (a)
to (d) have more than fifty per cent of the beneficial interest,
or
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(f) a corporation that is controlled by a trust described in
paragraph (e);
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``resident'' means an individual, corporation, government or agency
thereof or trust that is not a non-resident.
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Clause 13: Section 6 reads as follows:
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6. The new corporation and its shareholders and directors
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(a) shall not, without prior approval of the Governor in Council,
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(i) amend any provisions included in its articles of incorporation
in compliance with section 5, or
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(ii) apply for continuance of the new corporation in another
jurisdiction; and
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(b) shall not make any articles or by-laws inconsistent with the
provisions referred to in subparagraph (a)(i) or with subsection 5(2).
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Clause 14: Section 7 reads as follows:
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7. (1) The new corporation shall provide public telecommunication
services between Canada and places outside Canada and in connection
therewith
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(a) shall coordinate telecommunication services between Canada
and places outside Canada with the telecommunication services of
other countries; and
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(b) shall, so far as practicable and reasonable,
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(i) make use of developments in cable and radio transmission or
reception for public telecommunication services between Cana
da and places outside Canada, and
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(ii) conduct research and development for the purpose of
improving telecommunication services.
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(2) Nothing in this section shall be construed as limiting the capacity,
rights, powers and privileges of the new corporation or as imposing a
restriction on the businesses that it may carry on.
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Clause 15: Section 8 reads as follows:
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8. (1) The new corporation shall be designated as the new signatory
for Canada to the International Maritime Satellite Organization (IN
MARSAT) and the International Telecommunications Satelitte Orga
nization (INTELSAT) and shall be appointed as the representative of
Canada to the Commonwealth Telecommunications Council of the
Commonwealth Telecommunications Organisation, but such designa
tion and appointment does not prevent the designation or appointment
of another person as a new signatory or representative in substitution for
the new corporation.
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(2) The new corporation shall, on request, apprise the Minister of
Communications and the Minister of Foreign Affairs of any of its
negotiations with a foreign government or body, or an international
organization, respecting telecommunications facilities, operations or
services.
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Clause 16: Section 10 reads as follows:
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10. No act relating to the solvency or winding-up of a corporation
applies to the new corporation and in no case shall the new corporation
be wound up or amalgamated unless Parliament so provides.
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Clause 17: Section 12 reads as follows:
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12. No officer of the new corporation may be appointed or continue
as director or officer of a designated telecommunications common
carrier or an affiliate of a designated telecommunications common
carrier, other than an affiliate that is wholly-owned by the new
corporation and one or more designated telecommunications common
carriers.
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Clause 18: Section 13 reads as follows:
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13. (1) No person shall acquire control of the new corporation
without the prior approval of the Commission.
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(2) Except in the ordinary course of the business of the new
corporation, the new corporation shall not sell, lease, loan or otherwise
dispose of any facilities of the new corporation that are integral and
necessary for the carrying on of telecommunications activities without
the prior approval of the Commission.
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(3) In deciding whether to approve a proposed transaction under this
section, the Commission shall decide whether, in its opinion, the
transaction is in the public interest.
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(4) An approval under this section may be specific or general and
may be granted on such terms and conditions as the Commission deems
expedient.
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(5) This section does not apply in respect of any issue of shares under
subsection 4(3) or any sale or other disposal of shares under section 19.
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Clause 19: Section 17 reads as follows:
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17. Notwithstanding the Telecommunications Act, an agreement or
arrangement between the new corporation and any foreign telecommu
nications carrier or foreign communications carrier or foreign commu
nications administration respecting international telecommunications
facilities, operations or services is not subject to the approval of
Commission and comes into force in accordance with its terms, but shall
be filed with the Commission if the Commission so requires.
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Clause 20: Section 18 reads as follows:
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18. (1) The Governor in Council may give a directive to the new
corporation with respect to any matter relating to the national security,
the foreign policy or the international telecommunications policy of
Canada.
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(2) Before a directive is given to the new corporation, the Minister
of Industry may consult the board of directors of the new corporation
with respect to the proposed directive.
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(3) The directors of the new corporation shall ensure that every
directive given to the new corporation is implemented in a prompt and
efficient manner and shall forthwith notify the Minister of Industry
when the directive is implemented.
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(4) The Governor in Council may compensate the new corporation
in respect of the implementation of a directive with such moneys as are
appropriated by Parliament for the purpose.
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(5) Complaince by the new corporation with a directive is deemed
to be in the best interests of the new corporation.
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(6) The Commission shall allow for regulatory purposes any
reasonable costs incurred by the new corporation in implementing a
directive to the extent that the costs exceed any compensation paid to
the new corporation under this section.
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(7) The Minister of Industry shall cause a copy of every directive
given to the new corporation to be laid before each House of Parliament
on any of the first fifteen days on which that House is sitting after the
directive is given, unless the Governor in Council is of the opinion that
to do so would be against the interests of national security or foreign
relations or the commercial interests of any person.
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Clause 21: Section 24 reads as follows:
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24. The Governor in Council may, by order,
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(a) delete from Schedule I the name of any telecommunications
common carrier that has been changed and substitute the new name
therefor;
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(a.1) add to Schedule I the name of any telecommunications
common carrier that carries on, in whole or in part, the same business
as a carrier whose name appears in that Schedule; and
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(b) delete from Schedule I the name of any former telecommunica
tions common carrier that has been dissolved or has otherwise
ceased to be a telecommunications common carrier.
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Clause 22: Section 33 reads as follows:
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33. The Acts set out in column I of Schedule II are amended in the
manner and to the extent indicated in column II of that Schedule.
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