Vol. 132, No. 41 — October 10, 1998

Regulations Amending the Radiocommunication Regulations

Statutory Authority

Radiocommunication Act

Sponsoring Department

Department of Industry

REGULATORY IMPACT
ANALYSIS STATEMENT

Description

On February 15, 1997, at the World Trade Organization (WTO), Canada and 68 other countries concluded a multilateral agreement, the General Agreement on Trade in Services Agreement on Basic Telecommunications (GATS-ABT), to liberalize trade in telecommunications services.

Under this agreement Canada committed to eliminating monopolies in overseas telecommunications services and fixed satellite services. As a result of these commitments, Teleglobe's monopoly on the provision of facilities for overseas will end on October 1, 1998. Telesat's monopoly on the provision of fixed satellites services will end on March 1, 2000. These measures will enable Canadians to have access to all types of competing domestic and foreign satellites (except direct-to-home and direct-broadcast satellite).

Amongst other commitments concerning the mobile satellite service (MSS) and traffic routine requirements, Canada also agreed to remove foreign ownership and control restrictions for earth stations that operate in the fixed satellite service (FSS). The FSS uses fixed earth stations and one or more space stations to route radio signals between fixed locations. The MSS provides for communications between mobile stations (i.e. radio apparatus on board aircraft, ships and other vehicles) and space stations.

This amendment to the Radiocommunication Regulations concerns the eligibility requirements for licensing earth stations in the fixed and mobile satellite services. The existing regulations require that radiocommunication carriers be Canadian owned and controlled in terms of voting shares, board membership and control of the corporation. These licensing eligibility requirements will be broadened to meet Canada's GATS-ABT commitments.

Accordingly, a new provision is being added to the Regulations that complements the provision in the Telecommunications Act under which Canadian ownership and control provisions do not apply to earth stations that provide telecommunications services by means of satellites.

The new provision removes the requirement for Canadian ownership and control of licence holders for earth stations in the FSS and MSS that provide telecommunications services by means of satellites.

The new section of the Regulations will allow a service provider that is not Canadian owned and controlled to be eligible to hold a radio licence as a radiocommunication carrier for earth stations in the fixed satellite service and the mobile satellite service.

The new provision excludes

(a) services, i.e. over-the-air television, radio, and cable television, regulated under the Broadcasting Act and measures affecting such services, and

(b) telecommunications services supplied for the transmission of services, i.e. direct-to-home and direct-broadcasting Satellite, regulated under the Broadcasting Act where such services are intended for direct reception by the public.

In each case, the applicable Canadian ownership and control requirements made under the Broadcasting Act, Telecommunication Act or Radiocommunication Act apply. This is consistent Canada's GATS-ABT commitments.

The proposed effective date of the Regulations is their date of registration.

Alternatives

There is no alternative: these are enabling Regulations required to meet Canada's trade commitments.

Benefits and Costs

Benefits

The GATS agreement on basic telecommunications allows the Canadian telecommunications industry greater access to the United States, Europe and other important markets. Through this agreement, Canadian telecommunications companies are able to capture a larger share of the multi-billion-dollar global market in telecommunications services. From a consumer perspective, implementation of the agreement is expected to result eventually in cheaper international long distance rates as competition in the overseas long distance market increases.

Costs

No additional costs to the Department in administering the licensing of service providers is anticipated.

Consultation

The development of Canada's offer to the WTO was done with full public consultation and support of Canadian industry. The implementation of the agreement has been the subject of extensive consultation during the approval of legislative amendments to the Telecommunications Act (Bill C-17) and with the release of various policy and discussion papers.

In February 1998, the Department published a Canada Gazette notice (DGTP-001-98) that announced amendments to the Policy Framework for the Provision of Mobile Satellite Services via Regional and Global Satellite Systems in the Canadian Market (RP-007). The amendments rescinded the provision of the policy framework that required that the Canadian licensee for the provision of mobile satellite services in Canada hold an equity share in the entity owning the satellite system at least proportional to the expected Canadian usage. It also made other amendments that liberalized the routing of mobile satellite services.

The revised policy, however, maintained that the applicant (MSS service provider) must be a Canadian owned and controlled corporation incorporated or continued under the laws of Canada or a province.

In March 1998, the release of a document entitled "Policy Consultation Paper Respecting the Authorization of Earth and Space Stations for Fixed Satellite Services Following the Coming into Force of the GATS Agreement on Basic Telecommunications", solicited public comment on issues relating to the Canadian satellite policies (other than the policies governing satellites providing mobile satellite and broadcasting services) that are to be implemented as a result of the agreement.

Overall, the response to the policy paper was favourable, with many of the respondents supporting the Government's commitment to open its fixed satellite services market to full competition by March 1, 2000. Some respondents, such as Teleglobe and the Satellite Industry Association (SIA), favour accelerating the timetable for the change from monopoly to competitive market conditions in order to offer new services to Canadian consumers. In response to this call, the date for the removal of certain routing restrictions on international services and on foreign ownership of fixed satellites used to provide service between points in Canada and all points outside Canada, except in the United States, has been advanced to October 1, 1998, from December 31, 1999.

In response to the FSS policy paper, The Radio Advisory Board of Canada (RABC) requested that Industry Canada clarify the application of Canadian ownership and control requirements to radio apparatus communicating with fixed satellites that are interconnected with the public switched network. The RABC believes that a satellite service provider that supplies and earth station interconnected with the PSN should not be subject to Canadian ownership and control restrictions when it does not operate other telecommunication facilities. The Department has clarified these requirements with this new provision.

The different foreign ownership and control licensing eligibility requirements for earth stations in the MSS and FSS may unnecessarily restrict strategic business alliances that may wish to offer both services. Accordingly, the Department has initiated public consultations (Notice No. DGTP-014-98 published in this Canada Gazette on page 2652) and this regulatory initiative to solicit views on liberalizing these requirements for the mobile satellite service.

Compliance and Enforcement

Service providers that are not Canadian owned and controlled and who are issued earth station licences will be subject to the same compliance and enforcement regime and laws as Canadian owned and controlled service providers. The Minister, through due process, will be able to suspend or revoke these licences for contraventions of the Radiocommunication Act, the Radiocommunication Regulations or terms and conditions of the licence.

Contact

Mr. Ronald Amero, Director, Space and International Regulatory Activity Directorate, Radiocommunication and Broadcasting Regulatory Branch, Industry Canada, 300 Slater Street, Ottawa, Ontario K1A 0C8, (613) 998-3759 (Telephone), (613) 952-9871 (Facsimile), Amero.Ron(ic.gc.ca (Electronic mail).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council proposes, pursuant to section 6 (see footnote a) of the Radiocommunication Act (see footnote b), to make the annexed Regulations Amending the Radiocommunication Regulations.

Interested persons may make representations concerning the proposed Regulations to the Minister of Industry within 30 days after the date of publication of this notice. All such representations should cite the Canada Gazette, Part I, and the date of publication of this notice and be addressed to Mr. Ronald Amero, Director, Space and International Regulatory Activity Directorate, Radiocommunication and Broadcasting Regulatory Branch, Industry Canada, 300 Slater Street, Ottawa, Ontario K1A 0C8, (613) 998-3759 (Telephone), (613) 952-9871 (Facsimile), Amero.Ron@ic.gc.ca (Electronic mail).

The representations should also stipulate the parts of the representations that should not be disclosed pursuant to the Access to Information Act and, in particular, pursuant to sections 19 and 20 of that Act, the reason why those parts should not be disclosed and the period during which they should remain undisclosed. The representations should also stipulate those parts of the representations for which there is consent to disclosure pursuant to the Access to Information Act.

October 1, 1998

MICHEL GARNEAU
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE RADIOCOMMUNICATION REGULATIONS

AMENDMENT

1. The Radiocommunication Regulations (see footnote 1) are amended by adding the following after section 10:

10.1 (1) The definitions in this subsection apply in this section.

"earth station" means a fixed or mobile station that operates either in the fixed satellite service or in the mobile satellite service. (station terrienne)

"fixed satellite service" means a radiocommunication service that provides for communications between fixed stations and space stations. (service fixe par satellite)

"mobile satellite service" means a radiocommunication service that provides for communications between mobile stations and space stations. (service mobile par satellite)

"radiocommunication service" means a service provided by means of radiocommunication but excludes the following services:

(2) Notwithstanding sections 9 and 10, the following persons, who operate an earth station in a fixed satellite service, are eligible to be issued, in respect of that earth station, a radio licence as a radiocommunication user, a radiocommunication service provider other than a radiocommunication carrier, or a radiocommunication carrier:

(a) an individual who is

(b) a corporation that is incorporated or continued under the laws of Canada or a province;

(c) a partnership or joint venture where each partner or co-venturer is eligible to be issued a radio licence under this subsection; and

(d) a Canadian government, whether federal, provincial or local, or an agency thereof.

(3) Notwithstanding sections 9 and 10, the following persons, who operate an earth station in a mobile satellite service, are eligible to be issued, in respect of that earth station, a radio licence as a radiocommunication user, as a radiocommunication service provider other than a radiocommunication carrier, or a radiocommunication carrier:

(a) an individual who is

(b) a corporation that is incorporated or continued under the laws of Canada or a province;

(c) a partnership or joint venture where each partner or co-venturer is eligible to be issued a radio licence under this subsection; and

(d) a Canadian government, whether federal, provincial or local, or an agency thereof.

(4) This section applies beginning on March 1, 2000 in respect of earth stations that are fixed stations in the fixed satellite service and that provide telecommunication services between points in Canada and between points in Canada and the United States.

COMING INTO FORCE

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

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Regulations Amending the Minority Investment (Banks) Regulations

Statutory Authority

Bank Act

Sponsoring Agency

Office of the Superintendent of Financial Institutions

REGULATORY IMPACT
ANALYSIS STATEMENT

Description

On July 28, 1997, the Government promulgated revised Minority Investment Regulations, which enhanced the ability of federally regulated financial institutions (FRFIs) to make less than controlling investments in permitted entities. The revised Regulations enhanced the ability of financial institutions to form alliances, enter new markets, and compete more effectively in Canada and abroad.

The promulgation of Bill C-82, among other things, extended the list of permitted entities to include multi-activity type entities. However, the authority to make less than controlling investments in multi-activity type entities was omitted from the revised Minority Investment Regulations. As a result, the Government is amending the July 28, 1997, Minority Investment Regulations to rectify this situation.

The Regulations amending the Minority Investment Regulations also include a few minor technical changes which were requested by the Standing Joint Committee for the Scrutiny of Regulations.

Alternatives

Given that the amendments to the Regulations simply reflect the change brought into force by Bill C-82, no other alternatives were considered.

Benefits and Costs

The implementation of the amendments will enable FRFIs to make less than controlling investments in multi-activity type entities, as promulgated in Bill C-82, and will generate no additional costs to either the Office of the Superintendent of Financial Institutions (OSFI) or to FRFIs.

Consultation

During the extensive consultation process leading up to the promulgation of Bill C-82, various industry associations such as the Canadian Bankers Association, the Canadian Life and Health Insurance Association, the Insurance Bureau of Canada, the Trust Companies Association, the Credit Union Central of Canada, and a few specific financial institutions were kept abreast of the Government's intent to broaden the list of permitted entities to include multi-activity type entities.

The industry associations support the proposed amendments. No further consultation with industry associations or specific financial institutions are considered necessary.

Compliance and Enforcement

These changes will not have a material impact on OSFI's resources or on its ability to supervise FRFIs.

Contact

Charles P. Johnston, Regulations Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario K1A 0H2, (613) 990-7472 (Telephone), (613) 998-6716 (Facsimile).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to section 474 (see footnote c) of the Bank Act (see footnote d), proposes to make the annexed Regulations Amending the Minority Investment (Banks) Regulations.

An interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must be addressed to Mr. Charles P. Johnston, Regulations Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario K1A 0H2, and cite the Canada Gazette, Part I, and the date of this notice.

October 1, 1998

MICHEL GARNEAU
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE MINORITY INVESTMENT (BANKS) REGULATIONS

AMENDMENTS

1. The definition "designated body corporate" in section 1 of the Minority Investment (Banks) Regulations (see footnote 2) is replaced by the following:

"designated body corporate" means a body corporate referred to in

2. (1) Paragraph 2(1)(a) of the Regulations is replaced by the following:

(a) for the purposes of subparagraphs 468(3)(a)(ii) and (a.1)(ii) of the Act, a bank may acquire or increase a substantial investment in a designated body corporate; and

(2) Paragraph 2(1)(b) of the French version of the Regulations is replaced by the following:

b) pour l'application du paragraphe 468(10) de la Loi, la banque qui contrôle une personne morale désignée peut renoncer au contrôle tout en maintenant un intérêt de groupe financier dans celle-ci.

(3) Subsection 2(2) of the French version of the Regulations is replaced by the following:

(2) Lorsque la personne morale désignée est une institution étrangère, le paragraphe (1) ne s'applique que si les activités de celle-ci sont assujetties aux lois du territoire où elle les exerce.

COMING INTO FORCE

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

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Regulations Amending the Minority Investment (Cooperative Credit Associations) Regulations

Statutory Authority

Cooperative Credit Associations Act

Sponsoring Agency

Office of the Superintendent of Financial Institutions

REGULATORY IMPACT
ANALYSIS STATEMENT

For the Regulatory Impact Analysis Statement, see the Regulations Amending the Minority Investment (Banks) Regulations.

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to section 396 (see footnote e) of the Cooperative Credit Associations Act (see footnote f), proposes to make the annexed Regulations Amending the Minority Investment (Cooperative Credit Associations) Regulations.

Any interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must be addressed to Mr. Charles P. Johnston, Regulations Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario K1A 0H2, and cite the Canada Gazette, Part I, and the date of this notice.

October 1, 1998

MICHEL GARNEAU
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE MINORITY INVESTMENT (COOPERATIVE CREDIT ASSOCIATIONS) REGULATIONS

AMENDMENTS

1. The definition "designated body corporate" in section 1 of the Minority Investment (Cooperative Credit Associations) Regulations (see footnote 3) is replaced by the following:

"designated body corporate" means a body corporate referred to in

2. (1) Paragraph 2(1)(a) of the Regulations is replaced by the following:

(a) for the purposes of subparagraphs 390(3)(a)(ii) and (a.1)(ii) of the Act, an association may acquire or increase a substantial investment in a designated body corporate; and

(2) Paragraph 2(1)(b) of the French version of the Regulations is replaced by the following:

b) pour l'application du paragraphe 390(8) de la Loi, l'association qui contrôle une personne morale désignée peut renoncer au contrôle tout en maintenant un intérêt de groupe financier dans celle-ci.

COMING INTO FORCE

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

[41-1-o]

Regulations Amending the Minority Investment (Insurance Companies) Regulations

Statutory Authority

Insurance Companies Act

Sponsoring Agency

Office of the Superintendent of Financial Institutions

REGULATORY IMPACT
ANALYSIS STATEMENT

For the Regulatory Impact Analysis Statement, see the Regulations Amending the Minority Investment (Banks) Regulations.

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to section 501 (see footnote g) of the Insurance Companies Act (see footnote h), proposes to make the annexed Regulations Amending the Minority Investment (Insurance Companies) Regulations.

Any interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must be addressed to Mr. Charles P. Johnston, Regulations Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario K1A 0H2, and cite the Canada Gazette, Part I, and the date of this notice.

October 1, 1998

MICHEL GARNEAU
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE MINORITY INVESTMENT (INSURANCE COMPANIES) REGULATIONS

AMENDMENTS

1. The definition "designated body corporate" in section 1 of the Minority Investment (Insurance Companies) Regulations (see footnote 4) is replaced by the following:

"designated body corporate" means a body corporate referred to in

2. (1) Paragraph 2(1)(a) of the Regulations is replaced by the following:

(a) for the purposes of subparagraphs 495(4)(a)(ii) and (a.1)(ii) of the Act, a company may acquire or increase a substantial investment in a designated body corporate; and

(2) Paragraph 2(1)(b) of the French version of the Regulations is replaced by the following:

b) pour l'application du paragraphe 495(7) de la Loi, la société qui contrôle une personne morale désignée peut renoncer au contrôle tout en maintenant un intérêt de groupe financier dans celle-ci.

COMING INTO FORCE

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

[41-1-o]

Regulations Amending the Minority Investment (Trust and Loan Companies) Regulations

Statutory Authority

Trust and Loan Companies Act

Sponsoring Agency

Office of the Superintendent of Financial Institutions

REGULATORY IMPACT
ANALYSIS STATEMENT

For the Regulatory Impact Analysis Statement, see see the Regulations Amending the Minority Investment (Banks) Regulations.

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to section 459 (see footnote i) of the Trust and Loan Companies Act (see footnote j), proposes to make the annexed Regulations Amending the Minority Investment (Trust and Loan Companies) Regulations.

Any interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must be addressed to Mr. Charles P. Johnston, Regulations Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario K1A 0H2, and cite the Canada Gazette, Part I, and the date of this notice.

October 1, 1998

MICHEL GARNEAU
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE MINORITY INVESTMENT (TRUST AND LOAN COMPANIES) REGULATIONS

AMENDMENTS

1. The definitions "designated body corporate" in section 1 of the Minority Investment (Trust and Loan Companies) Regulations (see footnote 5) is replaced by the following:

"designated body corporate" means a body corporate referred to in

2. (1) Paragraph 2(1)(a) of the Regulations is replaced by the following:

(a) for the purposes of subparagraphs 453(3)(a)(ii) and (a.1)(ii) of the Act, a company may acquire or increase a substantial investment in a designated body corporate; and

(2) Paragraph 2(1)(b) of the French version of the Regulations is replaced by the following:

b) pour l'application du paragraphe 453(8) de la Loi, la société qui contrôle une personne morale désignée peut renoncer au contrôle tout en maintenant un intérêt de groupe financier dans celle-ci.

COMING INTO FORCE

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

[41-1-o]

Footnote a

S.C., 1989, c. 17, s. 4

Footnote b

S.C., 1989, c. 17, s. 2

Footnote 1

SOR/96-484

Footnote c

S.C., 1997, c. 15, s. 61

Footnote d

S.C., 1991, c. 46

Footnote 2

SOR/97-371

Footnote e

S.C., 1997, c. 15, s. 145

Footnote f

S.C., 1991, c. 48

Footnote 3

SOR/97-372

Footnote g

S.C., 1997, c. 15, s. 269

Footnote h

S.C., 1991, c. 47

Footnote 4

SOR/97-373

Footnote i

S.C., 1997, c. 15, s. 391

Footnote j

S.C., 1991, c. 45

Footnote 5

SOR/97-374

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