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Government Notices Respecting Corporations

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Certificate of Dissolution

Notice Is Hereby Given that a certificate of dissolution under the Business Corporations Act, has been endorsed. The effective date of dissolution precedes the corporation listings.

Date	Name of Corporation	Ontario Corporation Number
2000-2-16	J. R. Stevens Associates Inc.	816680
2000-02-28	Caledon East Motors Limited	209227
2000-02-29	Caprice Hair Styles Limited	144414
2000-02-29	Kids & Kids Inc.	1137295
2000-02-29	Matilda’s Roman Villa Pizza Inc.	438060
2000-02-29	The Rush-Hockey Enterprises Ltd.	1067853
2000-02-29	1393460 Ontario Ltd.	1393460
2000-3-2	Endo Food Technologies Inc.	1083970
2000-3-2	Vlc Planning Inc.	487858
2000-3-2	742271 Ontario Limited	742271
2000-3-3	Talk-Path Assistive Telephone Devices Inc.	1215593
2000-3-6	La Contessa Alta Moda Inc.	1184787
2000-3-13	United Industrial Steel Fabricators Ltd.	1357561
2000-3-13	752475 Ontario Inc.	752475
2000-3-13	1053176 Ontario Inc.	1053176
2000-3-14	Bm-Jm Tech Services Limited	1303169
2000-3-14	Lake One Limited	306647
2000-3-14	Lakeview Signs & Screen Printing Inc.	1146027
2000-4-3	Benn’s Tropical Fish Ltd.	926668
2000-4-3	Hair Cutters International Inc.	608371
2000-4-4	Ansaa Canada International Inc.	1163829
2000-4-5	Eagle-Winger Industrial Subdivision Inc.	789028
2000-4-5	Parsons & Shaw Limited	665692
2000-4-5	Ridgegate Investments Limited	215565
2000-4-5	595819 Ontario Inc.	595819
2000-4-5	793207 Ontario Limited	793207
2000-4-5	793208 Ontario Limited	793208
2000-4-5	830528 Ontario Inc.	830528
2000-4-5	1073315 Ontario Inc.	1073315
2000-4-6	Barry And Forchuk Real Estate Limited	216246
2000-4-6	Imaginize Multimedia Inc.	1135211
2000-4-6	Meadowland Cafe Ltd.	818893
2000-4-6	285304 Ontario Limited	285304
2000-4-6	1226725 Ontario Inc.	1226725
2000-4-6	1269621 Ontario Limited	1269621
2000-4-7	845539 Ontario Inc.	845539
2000-4-10	Wakil Holdings Incorporated	663927
2000-4-10	929991 Ontario Limited	929991
2000-4-11	Mcarthur Importing & Exporting Ltd.	976258
2000-4-11	Palena Contracting Limited	409688
2000-4-11	Pro Motion Towers Inc.	1353048
2000-4-12	Hop Lek Fashion Contractors Ltd.	708406
2000-4-12	Richmond & St. George Limited	812317
2000-4-12	T S Information Inc.	1238162
2000-4-13	G. R. Chater Investments Limited	374496
2000-4-13	Goldmark Building Maintenance Ltd.	1099925
2000-4-13	986548 Ontario Limited	986548
2000-4-13	1186251 Ontario Limited	1186251
2000-4-14	Laurel Intimate Apparel Ltd.	1017400
2000-4-14	Melbourne Livestock Auction Limited	124759
2000-4-14	Sunny Hats (W.T.) Ltd.	1256761
2000-4-14	Sunny Hats & Caps Ltd.	995652
2000-4-14	747081 Ontario Limited	747081

Carol D. Kirsh,
Director, Companies Branch
18/00

Notice of Default in Complying with the Corporations Information Act

Notice Is Hereby Given under subsection 241(3) of the Business Corporations Act that unless the corporations listed hereunder comply with the filing requirements under the Corporations Information Act within 90 days of this notice orders dissolving the corporation(s) will be issued. The effective date precedes the corporation listings.

Date	Name of Corporation	Ontario Corporation Number
2000-4-17	Barometer Media Analysis & Tracking Systems Inc.	1350963
2000-4-17	International Loan Services Inc.	1108079
2000-4-17	Tci.Group Of Companies, Inc.	1321999
2000-4-17	Trust Transport Ltd.	8842125
2000-4-17	1351616 Ontario Ltd.	1351616

Carol D. Kirsh,
Director, Companies Branch
18/00

Notice of Default in Complying with a Filing Requirement under the Corporations Information Act

Notice Is Hereby Given under subsection 317(9) of the Corporations Act, that unless the corporations listed hereunder comply with the requirements of the Corporations Information Act within 90 days of this Notice, orders will be made dissolving the defaulting corporations. The effective date precedes the corporation listings.

Date	Name of Corporation	Ontario Corporation Number
2000-4-17	National Film Theatre Of Kingston	445093

Carol D. Kirsh,
Director, Companies Branch
18/00

Cancellation for Filing Default (Corporations Act)

Notice Is Hereby Given that orders under Section 317(9) of the Corporations Act have been made cancelling the Letters Patent of the following corporations and declaring them to be dissolved. The date of the order of dissolution precedes the name of the corporation.

Date	Name of Corporation	Ontario Corporation Number
2000-4-17	Clothe The Children Community Organization	1051554
2000-4-18	Ontario Secondary School Students’ Association Inc.	1075450
2000-4-18	Asfs – Association Des Sourde(E)S Francophones De Sudbury	1305767

Carol D. Kirsh,
Director, Companies Branch
18/00

Erratum Notice

Ontario Corporation Number 1364573

Vide Ontario Gazette, Vol. 133-12 dated March 18, 2000

Notice Is Hereby Given that the notice issued under section 240 of the Business Corporations Act set out in the issue of The Ontario Gazette of March 18, 2000 with respect to the cancellation of the Certificate of Incorporation of 1364573 Ontario Inc. was issued in error and is null and void.

Carol D. Kirsh,
Director, Companies Branch
18/00

Co-operative Corporations Act (Certificate of Incorporation Issued)

Notice Is Hereby Given that, under the Co-operative Corporations Act, a certificate of incorporation has been issued to:

Date	Name of Corporation	Head Office
2000-4-17	Mornington Heritage Cheese & Dairy Co-operative Inc.	Milverton

John M. Harper,
Director, Examination
Licensing and Enforcement Division
by delegated authority from
Dina Palozzi
Superintendant of Financial Services.
18/00

Financial Services Commission of Ontario

RE: Financial Services Commission of Ontario Priorities — Request for Submissions

The Financial Services Commission of Ontario Act, 1997 (FSCO Act) requires the Financial Services Commission of Ontario to deliver to the Minister of Finance, and publish in The Ontario Gazette, a statement setting out the proposed priorities of the Commission for the following fiscal year in connection with the administration of the Insurance Act, the Compulsory Automobile Insurance Act, the Motor Vehicle Accident Claims Act, the Marine Insurance Act, the Prepaid Hospital and Medical Services Act, the Co-operative Corporations Act, the Credit Unions and Caisses Populaires Act, the Loan and Trust Corporations Act, the Mortgage Brokers Act, the Pension Benefits Act and the Registered Insurance Brokers Act, together with a summary of the reasons for adopting those priorities.

The statement of priorities for fiscal year 2001/2002 will be submit- ted to the Minister of Finance in June 2000, and will be published in The Ontario Gazette shortly thereafter.

In keeping with the FSCO Act and the Commission’s goal of furthering transparency in the regulatory process, the Commission invites interested parties to make written submissions regarding their views as to the matters that should be identified as priorities of the Financial Services Commission of Ontario.

For a copy of the Statement of Priorities, or to forward submissions, please contact:

Chief Executive Officer And Superintendent Of Financial Services
Financial Services Commission of Ontario
5160 Yonge Street, Box 85
Toronto, Ontario
M2N 6L9

or fax to (416) 590-7070.

Please forward submissions by May 26, 2000.

Dated at Toronto, this 29^th day of April, 2000

(6639) 18

Ministry of Municipal Affairs and Housing

Building Code Act, 1992

Rulings Of The Minister Of Municipal Affairs And Housing

Notice Is Hereby Given pursuant to subsection 29(4) of the Building Code Act, 1992 that the following Rulings have been made under Clause 29(1)(a) of the Building Code Act, 1992 authorizing the use of innovative materials, systems or building designs evaluated by the Canadian Construction Materials Centre which is a materials evaluation body designated in the Ontario Building Code:

Ruling Number	Date	Material, System or Building Design	Manufacturer/ Agent
00-01-72-(12923-R)	Mar. 24/00	Geolam™ LVL (Laminated veneer lumber)	Evans Forest Products Ltd.
94-07-07-(12422-R) (Revised)	Mar. 24/00	ACFoam Supreme™/ Energy Shield	Atlas Roofing Corporation
94-12-12-(10241-R) (Revised)	Mar. 24/00	Decra ® Tile/Decra ® Shake (sheet metal roof system).	Tasman Roofing Inc.-DBA Decra

Ontario Securities Commission

Ontario Securities Commission Rule 61-501

Insider Bids, Issuer Bids, Going Private Transactions And Related Party Transactions

Table Of Contents

Part - Title

Part 1 - General Provisions

1. Definitions
2. Application of Part XX of the Act
3. Liquid Market in a Class of Securities
4. Arm’s Length Dealings
5. Interpretation

Part 2 - Insider Bids

1. Application
2. Disclosure
3. Formal Valuation
4. Exemptions from Formal Valuation Requirement

Part 3 - Issuer Bids

1. Application
2. Disclosure
3. Formal Valuation
4. Exemptions from Formal Valuation Requirement

Part 4 - Going Private Transactions

1. Application
2. Meeting and Information Circular
3. Conditions for Relief from Timing for Obca Information Circular
4. Formal Valuation
5. Exemptions from Formal Valuation Requirement
6. Conditions for Relief from Obca Valuation Requirement
7. Minority Approval
8. Exemptions from Minority Approval Requirement
9. Conditions for Relief from Obca Minority Approval Requirement

Part 5 - Related Party Transactions

1. Application
2. Disclosure: News Release and Material Change Report
3. Copy of Material Change Report
4. Meeting and Information Circular
5. Formal Valuation
6. Exemptions from Formal Valuation Requirement
7. Minority Approval
8. Exemptions from Minority Approval

Part 6 - Formal Valuations And Prior Valuations

1. Independence
2. Disclosure Re Valuator
3. Subject Matter of Formal Valuation
4. Preparation of Formal Valuation
5. Summary of Formal Valuation
6. Filing of Formal Valuation
7. Valuator’s Consent
8. Disclosure of Prior Valuation
9. Filing of Prior Valuation

Part 7 - Independent Directors

1. Independent Directors

Part 8 - Minority Approval

1. From Holders of Affected Securities
2. Multi-Step Transactions

Part 9 - Exemption

1. Exemption

Part 10 - Effective Date

1. Effective Date

Ontario Securities Commission Rule 61-501

Insider Bids, Issuer Bids, Going Private Transactions And Related Party Transactions

Part 1 - Definitions And Interpretation

1. Definitions
  1. In this Rule
    “affected security” means,
    1. for a going private transaction of an issuer, a participating security of the issuer in which the interest of a beneficial owner would be terminated by reason of the transaction, and
    2. for a related party transaction of an issuer, a participating security of the issuer;
    “bona fide lender” means a person or company that
    1. holds securities sufficient to affect materially the control of an issuer
      1. solely as collateral for debt under a written pledge agreement entered into by the person or company as a lender, or
      2. solely as collateral acquired under a written agreement by the person or company as an assignee or transferee of the debt and collateral referred to in subparagraph (i),
    2. is not yet legally entitled to dispose of the securities for the purpose of applying proceeds of realization in repayment of the secured debt, and
    3. was not a related party of the issuer at the time the pledge agreement referred to in subparagraph (a)(i) or the assignment or transfer referred to in subparagraph (a)(ii) was entered into;
    “class” includes a series of a class;
    
    “disclosure document” means,
    1. for an insider bid,
      1. a take-over bid circular sent to holders of offeree securities, or
      2. if the insider bid takes the form of a stock exchange insider bid, the disclosure document sent to holders of offeree securities that is deemed to be a take-over bid circular under subsection 131(10) of the Act,
    2. for an issuer bid,
      1. an issuer bid circular sent to holders of offeree securities, or
      2. if the issuer bid takes the form of a stock exchange issuer bid, the disclosure document sent to holders of offeree securities that is deemed to be an issuer bid circular under subsection 131(10) of the Act,
    3. for a going private transaction, an information circular sent to holders of affected securities, or, if no information circular is required, another document sent to holders of affected securities in connection with a meeting of holders of affected securities, and
    4. for a related party transaction,
      1. an information circular sent to holders of affected securities,
      2. if no information circular is required, another document sent to holders of affected securities in connection with a meeting of holders of affected securities, or
      3. if no information circular or document is required, a material change report filed for the transaction;
    “fair market value” means, except as provided in paragraph 6.4(1)(d), the monetary consideration that, in an open and unrestricted market, a prudent and informed buyer would pay to a prudent and informed seller, each acting at arm’s length with the other and under no compulsion to act;
    
    “formal valuation” means, for a transaction, a valuation prepared in accordance with Part 6 that contains a qualified and independent valuator’s opinion as to a value or range of values representing the fair market value of the subject matter of the valuation;
    
    “freely tradeable” means, in respect of securities, that
    1. the securities are not non-transferable,
    2. the securities are not subject to any escrow requirements,
    3. the securities do not form part of the holdings of any person or company or combination of persons or companies referred to in paragraph (c) of the definition of “distribution” in the Act,
    4. the securities are not subject to any cease trade order imposed by a Canadian securities regulatory authority,
    5. all hold periods imposed by Canadian securities legislation before the securities can be traded without a prospectus or in reliance on a prospectus exemption have expired, and
    6. any period of time for which the issuer has to have been a reporting issuer before the securities can be traded without a prospectus or in reliance on a prospectus exemption has passed;
    “independent committee” means, for an issuer, a committee consisting exclusively of one or more independent directors of the issuer;
    
    “independent director” means, for an issuer in respect of a transaction, a director of the issuer who
    1. is not an interested party in the transaction, and
    2. is independent, as determined in accordance with section 7.1;
    “independent valuator” means, for a transaction, a valuator that is independent of all interested parties in the transaction, as determined in accordance with section 6.1;
    
    “interested party” means,
    1. for an insider bid, the offeror,
    2. for an issuer bid,
      1. the issuer, and
      2. any person or company, other than a bona fide lender, that, whether alone or jointly or in concert with others, holds or would reasonably be expected to hold, upon successful completion of the issuer bid, securities of the issuer sufficient to affect materially its control,
    3. for a going private transaction, a related party of the issuer that is the subject of the going private transaction, if the related party would
      1. be entitled to receive, directly or indirectly, consequent upon the transaction
        
        a consideration per security that is not identical in amount and type to that paid to all other beneficial owners in Canada of affected securities of the same class, or
        
        consideration of greater value than that paid to all other beneficial owners of affected securities of the same class, or
      2. upon completion of the transaction, beneficially own, or exercise control or direction over, participating securities of a class other than affected securities, and
    4. for a related party transaction in respect of the issuer, a related party of the issuer, that is a party to or is involved in the related party transaction,
    “issuer insider” means, for an issuer
    1. every director or senior officer of the issuer,
    2. every director or senior officer of a company that is itself an issuer insider or subsidiary entity of the issuer, and
    3. a person or company who beneficially owns, directly or indirectly, voting securities of the issuer or who exercises control or direction over voting securities of the issuer, or a combination of both, carrying more than 10 percent of the voting rights attached to all voting securities of the issuer for the time being outstanding other than voting securities beneficially owned by the person or company as underwriter in the course of a distribution;
    “market capitalization” of an issuer means, for a transaction, the aggregate market price of all outstanding securities of all classes of equity securities of the issuer, the market price of the outstanding securities of a class being
    1. in the case of equity securities of a class for which there is a published market, the product of
      1. the number of securities of the class outstanding as at the close of business on the last business day of the calendar month preceding the calendar month in which the transaction is agreed to or, if no securities of the class were outstanding on that day, on the first business day after that day that securities of the class became outstanding, so long as that day precedes the date the transaction is agreed to, and
      2. the market price of the securities on the published market on which the class of securities is principally traded at the business day referred to in subparagraph (i), as determined in accordance with subsections 183(1), (2) and (4) of the Regulation,
    2. in the case of equity securities of a class for which there is no published market but that are currently convertible into a class of equity securities for which there is a published market, the product of
      1. the number of equity securities into which the convertible securities were convertible as at the close of business on the last business day of the calendar month preceding the calendar month in which the transaction is agreed to or, if no convertible securities were outstanding or convertible on that day, on the first business day after that day that the convertible securities became outstanding or convertible, so long as that day precedes the date the transaction is agreed to, and
      2. the market price of the securities into which the convertible securities were convertible, on the published market on which the class of securities is principally traded, at the business day referred to in subparagraph (i), as determined in accordance with subsections 183(1), (2) and (4) of the Regulation, and
    3. in the case of equity securities of a class not referred to in paragraphs (a) or (b), the amount determined by the issuer’s board of directors in good faith to represent the market price of the outstanding securities of that class;
    “minority approval” means, for a going private transaction or related party transaction in respect of an issuer, approval of the proposed transaction by a majority of the votes cast by holders of each class of affected securities specified by section 8.1 at a meeting of securityholders of that class called to consider the transaction;
    
    “Obca” means the Business Corporations Act;
    
    “offeree security” means a security that is subject to an insider bid or an issuer bid;
    
    “participating security” means a security of an issuer that carries a residual right to participate in the earnings of the issuer and, upon the liquidation or winding up of the issuer, in its assets;
    
    “prior valuation” means a valuation or appraisal of an issuer or its securities or material assets, whether or not prepared by an independent valuator, that, if disclosed, would reasonably be expected to affect the decision of a beneficial owner to vote for or against a transaction, or to retain or dispose of affected securities or offeree securities, other than
    1. a report of a valuation or appraisal prepared for the issuer by another person or company, if
      1. the report was not solicited by the issuer, and
      2. the person or company preparing the report did so without knowledge of any material non-public information concerning the issuer, its securities or any of its material assets,
    2. in respect of a transaction involving an issuer, an internal valuation or appraisal prepared for the issuer in the ordinary course of business that has not been made available to, and has been prepared without the participation of
      1. the board of directors of the issuer, or
      2. any director or senior officer of an interested party, except a person who is a senior officer of the issuer in the case of an issuer bid,
    3. a report of a market analyst or financial analyst that
      1. has been prepared by or for and at the expense of a person or company other than the issuer, an interested party, or an associate or affiliated entity of the issuer or an interested party, and
      2. is either generally available to clients of the analyst or of the analyst’s employer or of an affiliated entity or associate of the analyst’s employer or, if not, is not based, so far as the person or company required to disclose a prior valuation is aware, on any material nonpublic information concerning the issuer, its securities or any of its material assets,
    4. a valuation or appraisal prepared by a person or company or a person or company retained by the person or company, for the purpose of assisting the person or company in determining the price at which to propose a transaction that resulted in the person or company becoming an issuer insider, if the valuation or appraisal is not made available to any of the independent directors of the issuer, or
    5. a valuation or appraisal prepared by an interested party or a person or company retained by the interested party, for the purpose of assisting the interested party in determining the price at which to propose a transaction that, if pursued, would be an insider bid, going private transaction or related party transaction, if the valuation or appraisal is not made available to any of the independent directors of the issuer;
    “related party” of an issuer or of an interested party in connection with a transaction, as the case may be, means a person or company, other than a bona fide lender, that, at the relevant time and after reasonable inquiry, is known by the issuer, the interested party or a director or senior officer of the issuer or interested party to be
    1. a person or company, whether alone or jointly or in concert with others, that holds securities of the issuer or of the interested party sufficient to affect materially the control of the issuer or of the interested party,
    2. a person or company in respect of which a person or company referred to in paragraph (a), whether alone or jointly or in concert with others, holds securities sufficient to affect materially the control of the first-mentioned person or company referred to in this paragraph (b),
    3. a person or company in respect of which the issuer or the interested party, whether alone or jointly or in concert with others, holds securities sufficient to affect materially the control of the person or company,
    4. a person or company that beneficially owns, or exercises control or direction over, voting securities of the issuer or of the interested party carrying more than 10 percent of the voting rights attached to all of the issued and outstanding voting securities of the issuer or of the interested party,
    5. a director or senior officer
      1. of the issuer or of the interested party, or
      2. of a related party within the meaning of paragraph (a), (b) (c), (d), (f) or (g) of the issuer or of the interested party,
    6. a person or company that manages or directs, to any substantial degree, the affairs or operations of the issuer or the interested party under an agreement, arrangement or understanding between the person or company and the issuer or the interested party, including the general partner of an issuer or interested party that is a limited partnership, and
    7. an affiliated entity of, a person controlling, or a company controlled by, any of the persons or companies described in paragraphs (a) through (f);
  2. For the purposes of this Rule, a person or company, whether alone or jointly or in concert with others, that beneficially owns, or exercises control or direction over, voting securities to which are attached more than 20 percent of the votes attached to all of the outstanding voting securities of another person or company, is considered, in the absence of evidence to the contrary, to hold securities sufficient to affect materially the control of that person or company.
  3. For the purposes of the Act, the regulations and the rules,
    “going private transaction” means an amalgamation, arrangement, consolidation, amendment to the terms of a class of participating securities of the issuer or any other transaction with or involving a person or company that is a related party of the issuer at the time the transaction is agreed to, as a consequence of which the interest of a beneficial owner of a participating security of the issuer in that security may be terminated without the beneficial owner’s consent, other than
    1. an acquisition of a participating security of an issuer under a statutory right of compulsory acquisition,
    2. a share consolidation that does not have the effect of terminating the interests of the beneficial owners of participating securities of an issuer in those securities without their consent except to an extent that is nominal in the circumstances,
    3. a redemption of, or other compulsory termination of, a beneficial owner’s interest in a participating security of an issuer in accordance with and under the terms attached to the class of securities of which the participating security forms a part,
    4. a proceeding under the liquidation or dissolution provisions of the statute under which the issuer is organized or is governed as to corporate law matters, or
    5. a transaction in which the related party or an affiliated entity of the related party
      1. is only entitled to receive, directly or indirectly, consequent upon the transaction a consideration per security that is identical in amount and type to that paid to all other beneficial owners in Canada of affected securities of the same class,
      2. is not entitled to receive, directly or indirectly, consequent upon the transaction consideration of greater value than that paid to all other beneficial owners of affected securities of the same class, and
      3. upon completion of the transaction does not beneficially own or exercise control or direction over participating securities of a class other than affected securities;
    “insider bid” means a take-over bid made by
    1. an issuer insider of the offeree issuer,
    2. an associate or affiliated entity of the issuer insider,
    3. an associate or affiliated entity of the offeree issuer, or
    4. an offeror acting jointly or in concert with a person or company referred to in paragraphs (a), (b) or (c); and
    “related party transaction” means, in respect of an issuer, a transaction between or involving the issuer and a person or company that is a related party of the issuer at the time the transaction is agreed to, whether or not there are also other parties to the transaction, as a consequence of which, either by itself or together with other related transactions between or involving the issuer and the related party or a person or company acting jointly or in concert with the related party, whether or not there are also other parties to the transaction, the issuer directly or indirectly
    1. purchases or acquires an asset from the related party for valuable consideration,
    2. purchases or acquires, jointly or in concert with the related party, an asset from a third party if the proportion of the asset acquired by the issuer is less than the proportion of the consideration paid by the issuer,
    3. assumes or otherwise becomes subject to a liability of the related party,
    4. sells, transfers or disposes of an asset to the related party,
    5. sells, transfers or disposes of, jointly or in concert with the related party, an asset to a third party if the proportion of the consideration received by the issuer is less than the proportion of the asset sold, transferred or disposed of by the issuer,
    6. leases property to or from the related party,
    7. issues a security to the related party or subscribes for a security of the related party,
    8. amends or agrees to the amendment of the terms of a security of the issuer if the security is beneficially owned or is one over which control or direction is exercised by the related party, or agrees to the amendment of the terms of a security of the related party if the security is beneficially owned by the issuer or is one over which the issuer exercises control or direction,
    9. borrows money from or lends money to the related party,
    10. releases, cancels or forgives a debt or liability owed by the related party,
    11. provides a guarantee or collateral security for a debt or liability of the related party, or amends or agrees to the amendment of the terms of the guarantee or security,
    12. is a party to an amalgamation, arrangement or merger with the related party, other than a transaction referred to in paragraph (m), or
    13. participates in a transaction with the related party that is a going private transaction in respect of the related party or would be a going private transaction in respect of the related party except that it comes within the exception in paragraph (e) of the definition of going private transaction.
2. Application of Part XX of the Act
  1. For the purposes of this Rule,
    1. “formal bid” and “offeror” have the respective meanings ascribed to those terms in subsection 89(1) of the Act; and
    2. “acting jointly or in concert” has the meaning ascribed to that phrase in section 91 of the Act.
  2. For the purposes of the definition of related party and subsection 1.1(2), section 90 of the Act applies in determining beneficial ownership of securities.
3. Liquid Market in a Class of Securities
  1. For the purposes of this Rule, a liquid market in a class of securities of an issuer in respect of a transaction involving an issuer exists at a particular time only
    1. if
      1. there is a published market for the class of securities,
      2. during the period of 12 months before the date the transaction is agreed to in the case of a related party transaction or 12 months before the date an insider bid, issuer bid, or going private transaction is announced, in the case of an insider bid, issuer bid, or going private transaction
        
        the number of outstanding securities of the class was at all times at least 5,000,000, excluding securities beneficially owned, directly or indirectly, or over which control or direction was exercised, by related parties and securities that were not freely tradeable,
        
        the aggregate trading volume of the class of securities on the published market on which that class is principally traded was at least 1,000,000 securities,
        
        there were at least 1,000 trades in securities of the class on the published market on which that class is principally traded, and
        
        the aggregate trading value based on the price of the trades referred to in clause (C) was at least $15,000,000, and
      3. the market value of the class of securities on the published market on which that class is principally traded, as determined in accordance with subsections (2) and (3), was at least $75,000,000 for the calendar month preceding the calendar month
        
        in which the transaction is agreed to, in the case of a related party transaction, or
        
        in which the transaction is announced, in the case of an insider bid, issuer bid or going private transaction, or
    2. if the test set out in paragraph (a) is not met,
      1. there is a published market for the class of securities,
      2. a qualified person or company that is independent of all interested parties to the transaction, as determined in accordance with section 6.1, provides an opinion to the issuer that there is a liquid market in the class at the date the transaction is agreed to in the case of a related party transaction or at the date the transaction is announced in the case of an insider bid, issuer bid or going private transaction, and
      3. the opinion is included in a disclosure document for the transaction, together with a statement that the published market on which the class is principally traded has sent a letter to the Director indicating concurrence with the opinion or providing a similar opinion.
  2. For the purpose of determining whether an issuer satisfies the market value requirement of subparagraph (1)(a)(iii), the market value of a class of securities for the calendar month is calculated by multiplying
    1. the number of securities of the class outstanding as at the close of business on the last business day of the calendar month; by
    2. if
      1. the published market provides a closing price for the securities, the arithmetic average of the closing prices of the securities of that class on the published market on which that class is principally traded for each of the trading days during the calendar month, or
      2. the published market does not provide a closing price, but provides only the highest and lowest prices of securities traded on a particular day, the arithmetic average of the simple averages of the highest and lowest prices of the securities of that class on the published market on which that class is principally traded for each of the trading days for which the securities traded during the calendar month.
  3. For the purposes of subsection (2), in calculating the number of securities of the class, an issuer shall exclude those securities of the class that were beneficially owned, directly or indirectly, or over which control or direction was exercised, by related parties and securities that were not freely tradeable.
  4. An issuer that relies on an opinion referred to in paragraph (1)(b) shall cause the letter referred to in subparagraph (1)(b)(iii) to be provided promptly to the Director.
4. Arm’s Length Dealings
  1. It is a question of fact whether two or more persons or companies act, negotiate or deal with each other at arm’s length.
  2. Despite subsection (1), an issuer does not act, negotiate or deal at arm’s length with a related party of the issuer and an interested party does not act, negotiate or deal at arm’s length with a related party of the interested party.
5. Interpretation
  1. In this Rule, a person or company is considered to be an affiliated entity of another person or company if one is a subsidiary entity of the other or if both are subsidiary entities of the same person or company, or if each of them is controlled by the same person or company.
  2. In this Rule, a person or company is considered to be a subsidiary entity of another person or company if
    1. it is controlled by
      1. that other, or
      2. that other and one or more persons or companies, each of which is controlled by that other, or
      3. two or more persons or companies, each of which is controlled by that other; or
    2. it is a subsidiary entity of a person or company that is that other’s subsidiary entity.
  3. In this Rule for the purposes of interpreting the terms “subsidiary entity” and “affiliated entity”, a person or company is considered to be controlled by another person or company if
    1. in the case of a person or company
      1. the other person or company beneficially owns or exercises control or direction over voting securities of the first-mentioned person or company carrying more than 50 percent of the votes for the election of directors, and
      2. the votes carried by the securities are entitled, if exercised, to elect a majority of the directors of the first-mentioned person or company;
    2. in the case of a partnership that does not have directors, other than a limited partnership, the other person or company beneficially owns or exercises control or direction over more than 50 percent of the interests in the partnership; or
    3. in the case of a limited partnership, the other person or company is the general partner.
  4. For the purposes of this Rule, a person or company is considered to be a wholly-owned subsidiary entity of an issuer if the issuer owns, directly or indirectly, all the voting and equity securities and securities convertible or exchangeable into voting and equity securities of the person or company.

Part 2 - Insider Bids

1. Application
  1. This Part applies to every insider bid, except an insider bid that is exempt from Part XX of the Act under
    1. clause 93(1)(a) of the Act, unless it is a stock exchange insider bid;
    2. clauses 93(1)(b) through (f) of the Act; or
    3. a decision made by the Commission under clause 104(2)(c) of the Act, unless the decision otherwise provides.
  2. Despite subsection (1), this Part does not apply to a takeover bid that is an insider bid by reason solely of the application of section 90 of the Act to an agreement between the offeror and a securityholder of the offeree issuer that offeree securities beneficially owned by the securityholder, or over which the securityholder exercises control or direction, will be tendered to the bid, if
    1. the securityholder is not acting jointly or in concert with the offeror; and
    2. the general nature and material terms of the agreement to tender are disclosed in a news release and report filed under section 101 of the Act or are otherwise generally disclosed.
  3. Despite subsection (1), this Part does not apply to an Mjds take-over bid circular, an Mjds directors’ circular, or an Mjds director’s or officer’s circular, in respect of an insider bid, unless securityholders of the offeree issuer whose last address as shown on the books of the issuer is in Canada, as determined in accordance with subsections 12.1(2) through (4) of National Instrument 71-101 The Multijurisdictional Disclosure System, hold 20 percent or more of the class of securities that is the subject of the bid.
  4. For the purpose of subsection (3), the terms “Mjds takeover bid circular”, “Mjds directors’ circular” and “Mjds director’s or officer’s circular” have the meaning ascribed to those terms in National Instrument 71-101.
2. Disclosure
  1. An offeror shall disclose in a disclosure document for an insider bid
    1. the background to the insider bid; and
    2. in accordance with section 6.8, every prior valuation in respect of the offeree issuer
      1. that has been made in the 24 months before the date of the insider bid, and
      2. the existence of which is known after reasonable inquiry to the offeror or any director or senior officer of the offeror.
  2. An offeror shall include in the required disclosure document for a stock exchange insider bid the disclosure required by Form 33 of the Regulation, appropriately modified.
  3. The board of directors of an offeree issuer shall
    1. disclose in the directors’ circular for an insider bid in accordance with section 6.8 every prior valuation in respect of the offeree issuer not disclosed in the disclosure document for the insider bid
      1. that has been made in the 24 months before the date of the insider bid, and
      2. the existence of which is known after reasonable inquiry to the offeree issuer or to any director or senior officer of the offeree issuer;
    2. disclose in the directors’ circular a description of the background to the insider bid to the extent the background has not been disclosed in the disclosure document for the insider bid;
    3. disclose in the directors’ circular any bona fide prior offer that relates to the offeree securities or is otherwise relevant to the insider bid, which offer was received by the issuer during the 24 months before the insider bid was publicly announced, and a description of the offer and the background to the offer; and
    4. include in the directors’ circular a discussion of the review and approval process adopted by the board of directors and the independent committee, if any, of the offeree issuer for the insider bid, including any materially contrary view or abstention by a director and any material disagreement between the board and the independent committee.
3. Formal Valuation
  1. Subject to section 2.4, the offeror in an insider bid shall
    1. obtain, at its own expense, a formal valuation;
    2. provide the disclosure required by section 6.2;
    3. disclose, in accordance with section 6.5, a summary of the formal valuation in the disclosure document for the insider bid, unless the formal valuation is included in its entirety in the disclosure document; and
    4. comply with the other provisions of Part 6 applicable to it relating to formal valuations.
  2. An independent committee of the offeree issuer shall, and the offeror shall enable the independent committee to
    1. determine who the valuator will be; and
    2. supervise the preparation of the formal valuation.
4. Exemptions from Formal Valuation Requirement
  1. Section 2.3 does not apply to an offeror in connection with an insider bid in any of the following circumstances if the facts supporting reliance upon an exemption are disclosed in the disclosure document for the insider bid:
    1. Discretionary Exemption - The offeror has been granted an exemption from section 2.3 under section 9.1.
    2. Lack of Knowledge and Representation - The offeror does not have and has not had within the preceding 12 months any board or management representation in respect of the offeree issuer and has no knowledge of any material non-public information concerning the offeree issuer or its securities.
    3. Previous Arm’s Length Negotiations - If
      1. the consideration under the insider bid is at least equal in value to and is in the same form as the highest consideration agreed to with one or more selling securityholders of the offeree issuer in arm’s length negotiations
        
        in connection with the making of the insider bid,
        
        in connection with another transaction involving securities of the class of offeree securities, if the agreement was entered into not more than 12 months before the date of the first public announcement of the bid, or
        
        in connection with two or more transactions or a combination of transactions referred to in subparagraphs (i) and (ii),
      2. at least one of the selling securityholders party to an agreement referred to in subparagraph (a)(i) or (ii) beneficially owns or exercises control or direction over, or beneficially owned or exercised control or direction over, and agreed to sell,
        
        at least five percent of the outstanding securities of the class of offeree securities, as determined in accordance with subsection (2), if the offeror beneficially owned, directly or indirectly, 80 percent or more of the outstanding securities of the class of offeree securities, as determined in accordance with subsection (2), or
        
        at least 10 percent of the outstanding securities of the class of offeree securities, as determined in accordance with subsection (2), if the offeror beneficially owned, directly or indirectly, less than 80 percent of the outstanding securities of the class of offeree securities, as determined in accordance with subsection (2),
      3. one or more of the selling securityholders party to any of the transactions referred to in paragraph (a) beneficially owns or exercises control or direction over, or beneficially owned or exercised control or direction over, and agreed to sell, in the aggregate, at least 20 percent of the outstanding securities of the class of offeree securities, as determined in accordance with subsection (3), beneficially owned, or over which control or direction is exercised, by persons or companies other than the offeror and persons or companies acting jointly or in concert with the offeror,
      4. the offeror reasonably believes, after reasonable inquiry, that at the time of each of the agreements referred to in paragraph (a)
        
        each selling securityholder party to the agreement had full knowledge and access to information concerning the offeree issuer and its securities, and
        
        any factors peculiar to a selling securityholder party to the agreement, including non-financial factors, that were considered relevant by that selling securityholder in assessing the consideration did not have the effect of reducing the price that would otherwise have been considered acceptable by that selling securityholder,
      5. at the time of each of the agreements referred to in paragraph (a), the offeror did not know, and to the knowledge of the offeror, after reasonable inquiry, no selling securityholder party to the agreement knew, of any material non-public information in respect of the offeree issuer or the offeree securities that,
        
        was not disclosed generally, and
        
        if disclosed, could have reasonably been expected to increase the agreed consideration,
      6. any of the agreements referred to in paragraph (a) was entered into with a selling securityholder by a person or company other than the offeror, the offeror reasonably believes, after reasonable inquiry, that at the time of that agreement, the person or company did not know of any material non-public information in respect of the offeree issuer or the offeree securities that
        
        was not disclosed generally, and
        
        if disclosed, could have reasonably been expected to increase the agreed consideration, and
      7. the offeror does not know, after reasonable inquiry, of any material non-public information in respect of the offeree issuer or the offeree securities since the time of each of the agreements referred to in paragraph (a) that has not been disclosed generally and could reasonably be expected to increase the value of the offeree securities.
    4. Auction - If
      1. the insider bid is publicly announced or made while
        
        one or more formal bids for securities of the same class that are the subject of the insider bid have been made and are outstanding,
        
        one or more going private transactions for securities of the same class that are the subject of the insider bid and ascribe a per security value to those securities are outstanding, or
        
        one or more transactions are outstanding that
        
        would be going private transactions in respect of securities of the same class that are the subject of the insider bid except that they come within the exception in paragraph (e) of the definition of going private transaction, and
        
        ascribe a per security value to those securities,
      2. at the time the insider bid is made, the offeree issuer has provided equal access to the offeree issuer and information concerning the offeree issuer and its securities, to the offeror in the insider bid, all other offerors and all other persons or companies that proposed the transactions described in subparagraph (ii) or (iii) of paragraph (a), and
      3. the offeror, in the disclosure document for the insider bid,
        
        includes all material non-public information concerning the offeree issuer and its securities that is known to the offeror after reasonable inquiry but has not been generally disclosed, together with a description of the nature of the offeror’s access to the issuer; and
        
        states that the offeror does not know, after reasonable inquiry, of any material non-public information concerning the offeree issuer and its securities other than information that has been disclosed under subparagraph (i) or that has otherwise been generally disclosed.
  2. For the purpose of paragraph 3(b) of subsection (1), the number of outstanding securities of the class of offeree securities
    1. is calculated at the time of the agreement referred to in subparagraph 3(a)(i) or (ii) of subsection (1), if the offeror knows the number of securities of the class outstanding at that time; or
    2. if paragraph (a) does not apply, is determined based upon the information most recently provided by the offeree issuer in a material change report or under section 2.1 of National Instrument 62-102 Disclosure of Outstanding Share Data, immediately preceding the date of the agreement referred to in subparagraph 3(a)(i) or (ii) of subsection (1).
  3. For the purpose of paragraph 3(c) of subsection (1), the number of outstanding securities of the class of offeree securities
    1. is calculated at the date of the last of the agreements referred to in paragraph 3(a) of subsection (1), if the offeror knows the number of securities of the class outstanding at that time; or
    2. if paragraph (a) does not apply, is determined based upon the information most recently provided by the offeree issuer in a material change report or under section 2.1 of National Instrument 62-102, immediately preceding the date of the last of the agreements referred to in paragraph 3(a) of subsection (1).

Part 3 - Issuer Bids

1. Application
  1. This Part applies to every issuer bid, except an issuer bid that is exempt from Part XX of the Act under
    1. clauses 93(3)(a) through (d) and (f) through (i) of the Act;
    2. clause 93(3)(e) of the Act, unless it is a stock exchange issuer bid; or
    3. a decision made by the Commission under clause 104(2)(c) of the Act, unless the decision otherwise provides.
  2. Despite subsection (1), this Part does not apply to a Mjds issuer bid circular, unless securityholders of the offeree issuer whose last address as shown on the books of the issuer is in Canada, as determined in accordance with subsections 12.1(2) through (4) of National Instrument 71-101, hold 20 percent or more of the class of securities that is the subject of the bid.
  3. For the purpose of subsection (2), the term “Mjds issuer bid circular” has the meaning ascribed to that term in National Instrument 71-101.
2. Disclosure
  1. An issuer shall
    1. include in a disclosure document for an issuer bid the disclosure required by item 16 of Form 32 of the Regulation, to the extent applicable;
    2. disclose in the disclosure document a description of the background to the issuer bid;
    3. disclose in the disclosure document in accordance with section 6.8 every prior valuation in respect of the offeree issuer
      1. that has been made in the 24 months before the date of the issuer bid, and
      2. the existence of which is known after reasonable inquiry to the issuer or to any director or senior officer of the issuer;
    4. disclose in the disclosure document any bona fide prior offer that relates to the offeree securities or is otherwise relevant to the issuer bid, which offer was received by the issuer during the 24 months before the issuer bid was publicly announced, and a description of the offer and the background to the offer;
    5. include in the disclosure document a discussion of the review and approval process adopted by the board of directors and the independent committee, if any, of the issuer for the issuer bid, including any materially contrary view or abstention by a director and any material disagreement between the board and the independent committee; and
    6. include in the disclosure document
      1. a statement of the intention, if known to the issuer after reasonable inquiry, of every interested party to accept or not to accept the issuer bid; and
      2. a description of the effect that the issuer anticipates the issuer bid, if successful, will have on the direct or indirect voting interest in the issuer of every interested party.
  2. An issuer shall include in the required disclosure document for a stock exchange issuer bid the applicable disclosure required by Form 33 of the Regulation.
3. Formal Valuation
  1. Subject to section 3.4, an issuer that makes an issuer bid shall
    1. obtain a formal valuation;
    2. provide the disclosure required by section 6.2;
    3. disclose, in accordance with section 6.5, a summary of the formal valuation in the disclosure document for the issuer bid, unless the formal valuation is included in its entirety in the disclosure document;
    4. if there is an interested party other than the issuer, state in the disclosure document who will pay or has paid for the valuation; and
    5. comply with the other provisions of Part 6 applicable to it relating to formal valuations.
  2. The board of directors of the issuer or an independent committee of the board shall
    1. determine who the valuator will be; and
    2. supervise the preparation of the formal valuation.
4. Exemptions from Formal Valuation Requirement – Section 3.3 does not apply to an issuer in connection with an issuer bid in any of the following circumstances if the facts supporting reliance upon an exemption are disclosed in the disclosure document for the issuer bid:
  1. Discretionary Exemption - The issuer has been granted an exemption from section 3.3 under section 9.1.
  2. Bid for Non-Convertible Securities - The issuer bid is for securities that are not participating securities and that are not, directly or indirectly, convertible into or exchangeable for participating securities.
  3. Liquid Market - The issuer bid is made for securities for which
    1. a liquid market exists,
    2. it is reasonable to conclude that, following the completion of the bid, there will be a market for beneficial owners of the securities who do not tender to the bid that is not materially less liquid than the market that existed at the time of the making of the bid, and
    3. if an opinion referred to in subparagraph (b)(ii) of subsection 1.3(1) is provided, the person or company providing the opinion reaches the conclusion described in subparagraph 3(b) of this section 3.4 and so states in its opinion.

Part 4 - Going Private Transactions

1. Application
  1. Subject to subsection (2), this Part applies to every going private transaction.
  2. This Part does not apply to a going private transaction
    1. if the issuer is not a reporting issuer;
    2. if the issuer is a mutual fund;
    3. if
      1. persons or companies
        
        whose last address as shown on the books of the issuer is in Ontario do not hold more than two percent of each class of the outstanding affected securities of the issuer, or
        
        who are in Ontario and who beneficially own affected securities of the issuer do not beneficially own more than two percent of each class of the outstanding affected securities of the issuer, and
      2. all documents concerning the transaction that are sent generally to other holders of affected securities of the issuer are concurrently sent to all holders of the securities whose last address as shown on the books of the issuer is in Ontario; or
    4. if the transaction
      1. was announced before the coming into force of this Rule,
      2. has not been completed before the coming into force of this Rule,
      3. is being carried out in accordance with the guidelines of Ontario Securities Commission Policy 9.1, and
      4. is completed substantially in accordance with the terms generally disclosed at the time the transaction was announced or thereafter before the coming into force of this Rule.
2. Meeting and Information Circular
  1. If minority approval is required to be obtained for a going private transaction, the issuer shall
    1. call a meeting of holders of affected securities; and
    2. send an information circular to holders of affected securities.
  2. An issuer shall include in the information circular referred to in paragraph (1)(b)
    1. the disclosure required by Form 33 of the Regulation, to the extent applicable and with necessary modifications;
    2. the disclosure required by item 16 of Form 32 of the Regulation, to the extent applicable, together with a description of rights that may be available to securityholders opposed to the transaction and of legal developments, if any, relating to the type of transaction;
    3. a description of the background to the going private transaction;
    4. disclosure in accordance with section 6.8 of every prior valuation in respect of the issuer
      1. that has been made in the 24 months before the date of the information circular, and
      2. the existence of which is known after reasonable inquiry to the issuer or to any director or senior officer of the issuer;
    5. disclosure of any bona fide prior offer that relates to the subject matter of or is otherwise relevant to the transaction, which offer was received by the issuer during the 24 months before the transaction was publicly announced, and a description of the offer and the background to the offer; and
    6. a discussion of the review and approval process adopted by the board of directors and the independent committee, if any, of the issuer for the transaction, including any materially contrary view or abstention by a director and any material disagreement between the board and the independent committee.
  3. If, after sending the information circular referred to in paragraph (1)(b) and before the date of the meeting, a change occurs that, if disclosed, would reasonably be expected to affect the decision of a beneficial owner of affected securities to vote for or against the going private transaction or to retain or dispose of affected securities, the issuer shall promptly disseminate disclosure of the change
    1. in a manner that the issuer reasonably determines will inform beneficial owners of affected securities of the change; and
    2. sufficiently in advance of the meeting that the beneficial owners of affected securities will be able to assess the impact of the change.
  4. If subsection (3) applies, the issuer shall file a copy of the information disseminated contemporaneously with its dissemination.
3. Conditions for Relief from Timing for Obca Information Circular
  1. The conditions for the granting of an exemption from the requirement in subsection 190(3) of the Obca to send a management information circular not less than 40 days before the date of a meeting called to consider a “going private transaction” as defined in the Obca are that
    1. Part 4 does not apply to the transaction by reason of subsection 4.1(2);
    2. the transaction is not a going private transaction as defined in subsection 1.1(3); or
    3. the transaction is carried out in accordance with Part 4.
  2. If any one of the conditions in subsection (1) applies, an issuer that proposes to carry out a transaction that is a “going private transaction” as defined in the Obca
    1. is exempt from the 40 day requirement in subsection 190(3) of the Obca in respect of a meeting called to consider a “going private transaction” as defined in the Obca; and
    2. is not required to make an application under subsection 190(6) of the Obca for the requisite exemption.
4. Formal Valuation
  1. Subject to section 4.5, an issuer whose affected securities are the subject of a proposed going private transaction shall
    1. obtain a formal valuation;
    2. provide the disclosure required by section 6.2;
    3. disclose, in accordance with section 6.5, a summary of the formal valuation in the disclosure document for the going private transaction, unless the formal valuation is included in its entirety in the disclosure document;
    4. state in the disclosure document for the going private transaction who will pay or has paid for the valuation; and
    5. comply with the other provisions of Part 6 applicable to it relating to formal valuations.
  2. The board of directors of the issuer or an independent committee of the board shall
    1. determine who the valuator will be; and
    2. supervise the preparation of the formal valuation.
5. Exemptions from Formal Valuation Requirement
  1. Section 4.4 does not apply to an issuer in connection with a going private transaction in any of the following circumstances if the facts supporting reliance upon an exemption are disclosed in the disclosure document:
    1. Discretionary Exemption - The issuer has been granted an exemption from section 4.4 under section 9.1.
    2. Previous Arm’s Length Negotiations - If
      1. the consideration under the going private transaction is at least equal in value to and is in the same form as the highest consideration agreed to with one or more selling securityholders of the issuer in arm’s length negotiations
        
        in connection with the going private transaction,
        
        in connection with another transaction involving securities of the class of affected securities, if the agreement was entered into not more than 12 months before the date of the first public announcement of the going private transaction, or
        
        in connection with two or more transactions or a combination of transactions referred to in subparagraphs (i) and (ii),
      2. at least one of the selling securityholders party to an agreement referred to in subparagraph (a)(i) or (ii) beneficially owns or exercises control or direction over, or beneficially owned or exercised control or direction over, and agreed to sell,
        
        at least five percent of the outstanding securities of the class of affected securities, as determined in accordance with subsection (2), if the person or company proposing the going private transaction beneficially owned, directly or indirectly, 80 percent or more of the outstanding securities of the class of affected securities, as determined in accordance with subsection (2), or
        
        at least 10 percent of the outstanding securities of the class of affected securities, as determined in accordance with subsection (2), if the person or company proposing the going private transaction beneficially owned, directly or indirectly, less than 80 percent of the outstanding securities of the class of affected securities, as determined in accordance with subsection (2),
      3. one or more of the selling securityholders party to any of the transactions referred to in paragraph (a) beneficially owns or exercises control or direction over, or beneficially owned or exercised control or direction over, and agreed to sell, in the aggregate, at least 20 percent of the outstanding securities of the class of affected securities, as determined in accordance with subsection (3), beneficially owned or over which control or direction is exercised by persons or companies other than an interested party and persons or companies acting jointly or in concert with an interested party,
      4. the person or company proposing the going private transaction reasonably believes, after reasonable inquiry, that at the time of each of the agreements referred to in paragraph (a)
        
        each selling securityholder party to the agreement had full knowledge of and access to information concerning the issuer and its securities,
        
        any factors peculiar to a selling securityholder party to the agreement, including non-financial factors, that were considered relevant by the selling securityholder in assessing the consideration did not have the effect of reducing the price that would otherwise have been considered acceptable by that selling securityholder,
      5. at the time of each of the agreements referred to in paragraph (a), the person or company proposing the going private transaction did not know, and to the knowledge of the person or company proposing the going private transaction, after reasonable inquiry, no selling securityholder party to the agreement knew, of any material non-public information in respect of the issuer or the affected securities that
        
        was not disclosed generally, and
        
        if disclosed, could have reasonably been expected to increase the agreed consideration,
      6. any of the agreements referred to in paragraph (a) was entered into with a selling securityholder by a person or company other than the person or company proposing the going private transaction, the person or company proposing the going private transaction reasonably believes, after reasonable inquiry, that at the time of that agreement, the person or company did not know of any material nonpublic information in respect of the issuer or the affected securities that,
        
        was not disclosed generally, and
        
        if disclosed, could have reasonably been expected to increase the agreed consideration, and
      7. the person or company proposing the going private transaction, after reasonable inquiry, does not know of any material non-public information in respect of the issuer or the affected securities since the time of each of the agreements referred to in paragraph (a) that has not been disclosed generally and could reasonably be expected to increase the value of the affected securities.
    3. Auction - If
      1. the going private transaction is publicly announced while
        
        one or more going private transactions for the affected securities that ascribe a per security value to those securities are outstanding,
        
        one or more transactions are outstanding that
        
        would be going private transactions in respect of the affected securities, except that they come within the exception in paragraph (e) of the definition of going private transaction, and
        
        ascribe a per security value to those securities, or
        
        one or more formal bids for the affected securities have been made and are outstanding, and
      2. at the time the disclosure document for the going private transaction has been sent, the issuer has provided equal access to the issuer and information concerning the issuer and its securities, to the person or company proposing the going private transaction, the persons or companies that have proposed the other transactions described in clauses (i) or (ii) of subparagraph (a) and the offerors that have made the formal bids.
    4. Second Step Going Private Transaction - If
      1. the going private transaction in respect of the offeree issuer is being effected by a person or company or an affiliated entity of the person or company following a formal bid by the person or company and is in respect of the outstanding securities of the same class that were the subject of the bid,
      2. the going private transaction is completed no later than 120 days after the date of expiry of the formal bid,
      3. the intent to effect the going private transaction was disclosed in the disclosure document for the formal bid,
      4. the consideration per security paid by the person or company or the affiliated entity of the person or company in the going private transaction
        
        is at least equal in value to the consideration per security that was paid by the person or company in the formal bid, and
        
        is in the same form as the consideration per security that was paid by the person or company in the formal bid, and if the consideration paid consisted of securities of the person or company, consists of the same securities, and
      5. the disclosure document for the formal bid
        
        described the tax consequences of both the formal bid and the subsequent going private transaction, if, at the time of making the formal bid, the tax consequences arising from the subsequent going private transaction
        
        were known or reasonably foreseeable to the person or company that made the formal bid, and
        
        were reasonably expected to be different from the tax consequences of tendering to the formal bid, or
        
        disclosed that the tax consequences of the formal bid and the subsequent going private transaction may be different, if, at the time of making the formal bid, the person or company that made the formal bid did not know or could not reasonably foresee the tax consequences arising from the subsequent going private transaction.
    5. Non-redeemable Investment Fund - The issuer is a non-redeemable investment fund that
      1. at least once each quarter calculates and publicly disseminates the net asset value of its securities, and
      2. at the time of announcing the going private transaction, publicly disseminates the net asset value of its securities as at the business day before announcing the going private transaction.
  2. For the purposes of paragraph 2(b) of subsection (1), the number of outstanding securities of the class of affected securities
    1. is calculated at the time of the agreement referred to in subparagraph 2(a)(i) or (ii) of subsection (1), if the person or company proposing the going private transaction knows the number of securities of the class outstanding at that time; or
    2. if paragraph (a) does not apply, is determined based upon the information most recently provided by the issuer of the affected securities, in a material change report or under section 2.1 of National Instrument 62-102, immediately preceding the date of the agreement referred to in subparagraph 2(a)(i) or (ii) of subsection (1).
  3. For the purposes of paragraph 2(c) of subsection (1), the number of outstanding securities of the class of affected securities
    1. is calculated at the date of the last of the agreements referred to in paragraph 2(a) of subsection (1), if the person or company proposing the going private transaction knows the number of securities of the class outstanding at that time; or
    2. if paragraph (a) does not apply, is determined based upon the information most recently provided by the issuer of the affected securities in a material change report or under section 2.1 of National Instrument 62-102, immediately preceding the date of the last of the agreements referred to in paragraph 2(a) of subsection (1).
6. Conditions for Relief from Obca Valuation Requirement
  1. The conditions for the granting of an exemption from the requirements of subsection 190(2) and clauses 190(3)(a) and (c) of the Obca for a transaction that is a “going private transaction” as defined in the Obca are that
    1. Part 4 does not apply to the transaction by reason of subsection 4.1(2);
    2. the transaction is not a going private transaction as defined in subsection 1.1(3);
    3. section 4.4 does not apply by reason of section 4.5; or
    4. the issuer complies with section 4.4.
  2. If any one of the conditions referred to in subsection (1) applies, an issuer that proposes to carry out a transaction that is a “going private transaction” as defined in the Obca
    1. is exempt from the requirements of subsection 190(2) and clauses 190(3)(a) and (c) of the Obca; and
    2. is not required to make an application under subsection 190(6) of the Obca for the requisite exemptions.
7. Minority Approval - Subject to section 4.8, no going private transaction shall be carried out in respect of an issuer unless minority approval for the going private transaction has been obtained under Part 8.
8. Exemptions from Minority Approval Requirement
  1. Section 4.7 does not apply to a going private transaction in any of the following circumstances if the facts supporting reliance upon an exemption are disclosed in the disclosure document for the going private transaction:
    1. Discretionary Exemption - The issuer has been granted an exemption from section 4.7 under section 9.1.
    2. 90 Percent Exemption - Subject to subsection (2), one or more interested parties beneficially owns 90 percent or more of the outstanding securities of a class of affected securities at the time that the going private transaction is proposed and either
      1. an appraisal remedy is available to holders of the class of affected securities under the statute under which the issuer is organized or is governed as to corporate law matters, or
      2. if the appraisal remedy referred to in subparagraph (a) is not available, holders of the class of affected securities are given an enforceable right that is substantially equivalent to the appraisal remedy provided for in subsection 185(4) of the Obca and that is described in the disclosure document for the going private transaction.
  2. If there are two or more classes of affected securities, paragraph 2 of subsection (1) applies only to a class for which the interested party beneficially owns or the interested parties beneficially own 90 percent or more of the outstanding securities of the class.
9. Conditions for Relief from Obca Minority Approval Requirement
  1. The conditions for the granting of an exemption from the requirements of clauses 190(3)(b) and (d) and subsection 190(4) of the Obca for a transaction that is a “going private transaction” as defined in the Obca are that
    1. Part 4 does not apply to the transaction by reason of subsection 4.1(2);
    2. the transaction is not a going private transaction as defined in subsection 1.1(3);
    3. section 4.7 does not apply by reason of section 4.8; or
    4. the issuer complies with section 4.7.
  2. If any one of the conditions referred to in subsection (1) applies, an issuer that proposes to carry out a transaction that is a “going private transaction” as defined in the Obca
    1. is exempt from the requirements of clauses 190(3)(b) and (d) and subsection 190(4) of the Obca; and
    2. is not required to make an application under subsection 190(6) of the Obca for the requisite exemptions.

Part 5 - Related Party Transactions

1. Application
  1. Subject to subsection (2), this Part applies to every related party transaction.
  2. This Part does not apply to a related party transaction
    1. if the issuer is not a reporting issuer;
    2. if the issuer is a mutual fund;
    3. if
      1. persons or companies
        
        whose last address as shown on the books of the issuer is in Ontario do not hold more than two percent of each class of the outstanding affected securities of the issuer, or
        
        who are in Ontario and who beneficially own affected securities of the issuer do not beneficially own more than two percent of each class of the outstanding affected securities of the issuer, and
      2. all documents concerning the transaction that are sent generally to other holders of affected securities of the issuer are concurrently sent to all holders of the securities whose last address as shown on the books of the issuer is in Ontario;
    4. that is a statutory amalgamation between
      1. the issuer and one or more of its wholly- owned subsidiary entities, but no other person or company, or
      2. two or more wholly-owned subsidiary entities of the issuer, but no other person or company;
    5. that is a going private transaction in respect of the issuer carried out in accordance with Part 4 or exempt from Part 4 under subsection 4.1(2);
    6. that would be a going private transaction in respect of the issuer except that it comes within the exceptions in paragraphs (a) through (e) of the definition of going private transaction;
    7. that
      1. is part of a series of related transactions that the issuer or a predecessor of the issuer negotiated at arm’s length with a person or company that became a related party of the issuer only as a consequence of one of the transactions in the series of related transactions, and
      2. the issuer is obligated to and does complete the transaction substantially in accordance with the terms negotiated at arm’s length;
    8. that was agreed to by the issuer or a predecessor of the issuer before July 5, 1991, if the issuer is obligated to complete the transaction in accordance with the terms agreed to and generally disclosed at that time or thereafter before the coming into force of this Rule;
    9. that
      1. was agreed to by the issuer or a predecessor of the issuer after July 5, 1991 but before the coming into force of this Rule,
      2. has not been completed before the coming into force of this Rule,
      3. is being carried out in accordance with the guidelines of Ontario Securities Commission Policy 9.1, and
      4. the issuer is obligated to and does complete the transaction substantially in accordance with the terms agreed to and generally disclosed at the time the transaction was agreed to or thereafter before the coming into force of this Rule;
    10. if
      1. the transaction was agreed to by the issuer or a predecessor of the issuer on or before the date that the issuer became a reporting issuer, and
      2. the issuer is obligated to and does complete the transaction substantially in accordance with the terms agreed to and generally disclosed at the time the transaction was agreed to or thereafter on or before the date that the issuer became a reporting issuer;
    11. if the transaction represents an issuance or transfer by an issuer of securities upon the exercise by a holder of a right to purchase, convert, exchange or retract previously granted by the issuer, which right is attached to a class of securities for which there is a published market, and the issuer is obligated to complete the transaction;
    12. that is carried out by an issuer to which the Rule In the Matter of Certain Trades in Securities of Junior Resource Issuers (1997), 20 Oscb 1218, as amended by (1999), 22 Oscb 2152, or any successor to that Rule applies, in accordance with that Rule or any successor to that Rule; or
    13. that is a distribution
      1. of the securities of an issuer and is a related party transaction in respect of the issuer solely because the interested party is an underwriter of the distribution, and
      2. carried out in compliance with, or under an exemption from, the requirements of
        
        until Multilateral Instrument 33-105 Underwriting Conflicts comes into force, Part Xiii of the Regulation, and
        
        after Multilateral Instrument 33-105 comes into force, that Multilateral Instrument.
  3. This Part does not apply to a person or company that is subject to the requirements of Part IX of the Loan and Trust Corporations Act, Part XI of the Bank Act (Canada), Part XI of the Insurance Companies Act (Canada), or Part XI of the Trust and Loan Companies Act (Canada), and the person or company complies with those provisions.
2. Disclosure: News Release and Material Change Report
  1. An issuer shall include in a material change report required to be filed under the Act for a related party transaction
    1. a description of the transaction and its material terms;
    2. the purpose and business reasons for the transaction;
    3. the anticipated effect of the transaction on the issuer’s business and affairs;
    4. a description of
      1. the interest in the transaction of every interested party that is expected to receive, directly or indirectly, as a consequence of the transaction, a benefit that is not also expected to be received on a pro rata basis by all other holders of affected securities, and the issuer insiders, associates, affiliated entities and other related parties of that interested party,
      2. the effect of the transaction on every person or company referred to in subparagraph (i), and
      3. the nature of any benefit that will accrue as a consequence of the transaction to every person or company referred to in subparagraph (i);
    5. if subsection 5.4(2) does not apply to the issuer, a discussion of the review and approval process adopted by the board of directors, and the independent committee, if any, of the issuer for the transaction, including any materially contrary view or abstention by a director and any material disagreement between the board and the independent committee;
    6. a summary in accordance with section 6.5 of the formal valuation, if any, obtained for the transaction, unless the formal valuation is included in its entirety in the material change report or will be included in its entirety in another disclosure document for the transaction;
    7. disclosure in accordance with section 6.8 of every prior valuation in respect of the issuer that has been made in the 24 months before the date of the material change report
      1. that relates to the subject matter of or is otherwise relevant to the transaction, and
      2. the existence of which is known after reasonable inquiry to the issuer or to any director or senior officer of the issuer; and
    8. the general nature and material terms of any agreement entered into by the issuer, or a related party of the issuer, with an interested party, or a person or company acting jointly or in concert with an interested party, in connection with the transaction.
  2. If a material change report is filed by a reporting issuer less than 21 days before the expected date of closing of the transaction, the issuer shall explain in the news release required to be issued under the Act and material change report why the shorter period is reasonable or necessary in the circumstances.
  3. Despite paragraph (1)(f), if an issuer is required to include a summary of the formal valuation in the material change report and the formal valuation is not available at the time the issuer files the material change report, the issuer shall file a supplementary material change report containing the disclosure required by paragraph (1)(f) as soon as the formal valuation is available.
3. Copy of Material Change Report - An issuer shall send a copy of any material change report prepared by it in respect of the related party transaction to any securityholder of the issuer upon request and without charge.
4. Meeting and Information Circular
  1. If minority approval is required to be obtained for a related party transaction, the issuer shall
    1. call a meeting of holders of affected securities; and
    2. send an information circular to holders of affected securities.
  2. An issuer shall include in the information circular referred to in paragraph (1)(b)
    1. the disclosure required by Form 33 of the Regulation, to the extent applicable and with necessary modifications;
    2. the disclosure required by item 16 of Form 32 of the Regulation, to the extent applicable, together with a description of rights that may be available to securityholders opposed to the transaction and of legal developments, if any, relating to the type of transaction;
    3. a description of the background to the related party transaction;
    4. disclosure in accordance with section 6.8 of every prior valuation in respect of the issuer that relates to the subject matter of or is otherwise relevant to the transaction
      1. that has been made in the 24 months before the date of the information circular, and
      2. the existence of which is known after reasonable inquiry to the issuer or to any director or senior officer of the issuer;
    5. disclosure of any bona fide prior offer that relates to the subject matter of or is otherwise relevant to the transaction, which was received by the issuer during the 24 months before the transaction was publicly announced, and a description of the offer and the background to the offer; and
    6. a discussion of the review and approval process adopted by the board of directors and the independent committee, if any, of the issuer for the transaction, including any materially contrary view or abstention by a director and any material disagreement between the board and the independent committee.
  3. If, after sending the information circular referred to in paragraph (1)(b) and before the date of the meeting, a change occurs that would, if disclosed, reasonably be expected to affect the decision of a beneficial owner of affected securities to vote for or against the related party transaction or to retain or dispose of affected securities, the issuer shall promptly disseminate disclosure of the change
    1. in a manner that the issuer reasonably determines will inform beneficial owners of affected securities of the change; and
    2. sufficiently in advance of the meeting that the beneficial owners of affected securities will be able to assess the impact of the change.
  4. If subsection (3) applies, the issuer shall file a copy of the information disseminated contemporaneously with its dissemination.
5. Formal Valuation
  1. Subject to section 5.6, an issuer involved in a related party transaction shall
    1. obtain a formal valuation;
    2. provide the disclosure required by section 6.2;
    3. disclose, in accordance with section 6.5, a summary of the formal valuation in the disclosure document for the related party transaction, unless the formal valuation is included in its entirety in the disclosure document;
    4. state in the disclosure document for the related party transaction who will pay or has paid for the valuation; and
    5. comply with the other provisions of Part 6 applicable to it relating to formal valuations.
  2. The board of directors of the issuer or an independent committee of the board shall
    1. determine who the valuator will be; and
    2. supervise the preparation of the formal valuation.
6. Exemptions from Formal Valuation Requirement – Section 5.5 does not apply to an issuer in connection with a related party transaction in any of the following circumstances if the facts supporting reliance upon an exemption are disclosed in both the material change report referred to in section 5.2 and the information circular referred to in paragraph (b) of subsection 5.4(1):
  1. Discretionary Exemption - The issuer has been granted an exemption from section 5.5 under section 9.1.
  2. Fair Market Value not more than 25 Percent of Market Capitalization - The transaction
    1. is not an amalgamation or merger, whether by way of arrangement or otherwise, and
    2. is one in which at the date the transaction is agreed to
      1. neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involves all interested parties, is greater than 25 percent of the issuer’s market capitalization, or
      2. if either of the values referred to in clause (i) is not readily determinable, the board of directors of the issuer, acting in good faith, determines that the value referred to in clause (i) that is not readily determinable, is not greater than 25 percent of the issuer’s market capitalization.
  3. Amalgamation, Merger or Arrangement - The transaction is
    1. an amalgamation, merger or arrangement between an issuer or a wholly-owned subsidiary entity of the issuer, and an interested party described in paragraph (c) of the definition of related party without taking into account securities beneficially owned by an affiliated entity of the issuer that is not a subsidiary entity of the issuer, and
    2. one in which, as at the date the transaction is agreed to
      1. neither the fair market value of the securities of the interested party beneficially owned by persons or companies other than the issuer and persons or companies acting jointly or in concert with the issuer, before the transaction, nor the fair market value of the consideration to be received by those persons or companies under the transaction, is greater than 25 percent of the issuer’s market capitalization, or
      2. if either of the values referred to in clause (i) is not readily determinable, the board of directors of the issuer, acting in good faith, determines that the value referred to in clause (i) that is not readily determinable is not greater than 25 percent of the issuer’s market capitalization.
  4. Certain Transactions in the Ordinary Course of Business - The transaction is
    1. a purchase or sale, in the ordinary course of business of the issuer, of inventory consisting of personal property under an agreement that has been approved by the board of directors of the issuer and the existence of which has been generally disclosed, or
    2. a lease of real or personal property under an agreement on reasonable commercial terms that, considered as a whole, are not less advantageous to the issuer than if the lease was with a person or company dealing at arm’s length with the issuer and the existence of which has been generally disclosed.
  5. Pro Rata Transaction – If
    1. the transaction consists of
      1. a rights offering made to holders of affected securities,
      2. a dividend paid in cash or in securities of the issuer or a dividend in specie to holders of affected securities,
      3. a distribution of assets of the issuer directly or indirectly to holders of affected securities, or
      4. a reorganization of one or more classes of an issuer’s affected securities to which subparagraphs (i), (ii) and (iii) do not apply, and
    2. the interested party is treated identically to all other holders in Canada of affected securities and does not receive, directly or indirectly, as a consequence of the transaction consideration of greater value than that received on a pro rata basis by all other holders of affected securities, except that in the case of a rights offering made to holders of affected securities, an interested party may provide a standby commitment, and take up securities under the stand-by commitment, in accordance with the terms of Commission Policy No. 6.2 Rights Offerings or a successor rule.
  6. Negotiated Transaction with Arm’s Length Controlling Shareholder - The interested party beneficially owns, or exercises control or direction over, voting securities of the issuer that carry fewer voting rights than the voting securities beneficially owned, or over which control or direction is exercised, by another securityholder of the issuer whose holding affects materially the control of the issuer and who, in the circumstances of the transaction
    1. is not also a party to the transaction,
    2. is dealing at arm’s length with the interested party,
    3. supports the transaction, and
    4. is treated identically to all other holders in Canada of affected securities and does not receive, directly or indirectly, as a consequence of the transaction a benefit that is not also received on a pro rata basis by all other holders of affected securities.
  7. Bankruptcy, Insolvency or Reorganization – If
    1. the transaction is subject to court approval under
      1. the Bankruptcy and Insolvency Act (Canada) or the Companies’ Creditors Arrangement Act (Canada),
      2. section 191 of the Canada Business Corporations Act (Canada), or
      3. bankruptcy or insolvency laws of another jurisdiction or foreign jurisdiction that are applicable to the transaction,
    2. the issuer advises the court of the requirements of this Rule, and
    3. the court does not require compliance with section 5.5.
  8. Financial Hardship – If
    1. the issuer is insolvent or in serious financial difficulty,
    2. the transaction is designed to improve the financial position of the issuer,
    3. paragraph 7 is not applicable, and
    4. the board of directors of the issuer, acting in good faith, determines, and not less than two-thirds of the independent directors of the issuer, acting in good faith, determine, that
      1. paragraphs (a) and (b) apply, and
      2. the terms of the transaction are reasonable in the circumstances of the issuer.
  9. Transaction with Wholly-owned Subsidiary Entity - The transaction is between
    1. an issuer and one or more wholly-owned subsidiary entities of the issuer and no other person or company,
    2. an issuer that is, directly or indirectly, a wholly-owned subsidiary entity of another issuer and that issuer and no other person or company, or
    3. two or more wholly-owned subsidiary entities of the issuer and no other person or company.
  10. Transaction with an Interested Party involving another Related Party - If paragraph 9 does not apply, the transaction is between an issuer and an interested party described in paragraph (c) of the definition of related party, without taking into account securities beneficially owned by an affiliated entity of the issuer that is not a subsidiary entity of the issuer if, to the knowledge of the issuer after reasonable inquiry, no other related party of the issuer other than a wholly-owned subsidiary entity of the issuer either
    1. beneficially owns, or exercises control or direction over, other than through the related party’s interest in the issuer, securities in the interested party that
      1. constitute more than five percent of the securities of a class of the interested party, or
      2. could reasonably be expected to result in the related party exercising control or influence over the issuer so as to benefit the interested party, or
    2. receives, directly or indirectly, as a consequence of the transaction, other than through its security holding in the interested party referred to in subparagraph (a), a benefit that is not also received on a pro rata basis by all other holders of affected securities.
  11. Loan on Commercial Terms - The transaction is
    1. a loan, or the creation of, or an advance under, a credit facility
      1. that is obtained by the issuer from an interested party on reasonable commercial terms that are not less advantageous to the issuer than if the loan or credit facility were obtained from a person or company dealing at arm’s length with the issuer
      2. that is not, directly or indirectly, convertible into or exchangeable for participating securities or voting securities of the issuer or a subsidiary entity of the issuer and is not otherwise participating in nature or accompanied by rights to acquire participating or voting securities of the issuer or a subsidiary entity of the issuer, and
      3. for which neither principal nor interest is payable, directly or indirectly, in participating securities or voting securities of the issuer or a subsidiary entity of the issuer, or
    2. a payment in cash by the issuer to that interested party as payment under the loan or credit facility referred to in paragraph (a).
  12. Amalgamation with No Adverse Effect on Issuer or Minority - The transaction is a statutory amalgamation between the issuer or a wholly-owned subsidiary entity of the issuer and an interested party that is undertaken in whole or in part for the benefit of another related party, if
    1. the transaction does not and will not have any adverse tax or other consequences to the issuer, a company resulting from the amalgamation or beneficial owners of affected securities generally,
    2. no material actual or contingent liability of the interested party with which the issuer or a wholly-owned subsidiary entity of the issuer is amalgamating will be assumed by the issuer, the wholly-owned subsidiary entity of the issuer or a successor to the issuer,
    3. the related party agrees to indemnify the issuer against any and all liabilities of the interested party with which the issuer, or a wholly-owned subsidiary entity of the issuer is amalgamating,
    4. after the transaction, the nature and extent of the equity participation of holders of affected securities in the amalgamated entity will be the same as, and the value of their equity participation will not be less than, the value of their interest in the issuer before the transaction, and
    5. the related party pays for all of the costs and expenses of or relating to or resulting from the transaction.
  13. Transaction Size - The transaction is one in which, at the date the transaction is agreed to
    1. neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction is $500,000 or more, or
    2. if either of the values referred to in subparagraph (a) is not readily determinable, the board of directors of the issuer that is the subject of the related party transaction, acting in good faith, determines that the value referred to in subparagraph (a) that is not readily determinable is less than $500,000.
  14. Distribution of Listed Securities - The transaction involves a distribution by an issuer of its securities to an interested party for cash consideration, if
    1. the securities have been listed and posted for trading on The Toronto Stock Exchange, The Montreal Exchange or the Canadian Venture Exchange or any predecessor market to those stock exchanges for the 12 months immediately preceding the date that the transaction is agreed to,
    2. a liquid market for the securities exists,
    3. neither the issuer nor, to the knowledge of the issuer after reasonable inquiry, the interested party has knowledge of any material non-public information concerning the issuer or its securities that has not been generally disclosed, and the disclosure document for the related party transaction includes a statement to that effect, and
    4. the disclosure document for the related party transaction includes a description of the effect of the distribution on the direct or indirect voting interest of the interested party.
  15. Asset Resale - The subject matter of the related party transaction was acquired by the issuer or an interested party, as the case may be, in a prior transaction with a person or company acting at arm’s length that was agreed to not more than 12 months before the date that the related party transaction is agreed to and a qualified valuator, independent of all interested parties to the transaction, as determined in accordance with section 6.1, provides a written opinion that, after making such adjustments, if any, as the valuator considers appropriate in the exercise of the valuator’s professional judgment
    1. the value of the consideration payable by the issuer for the subject matter of the related party transaction is not more than the value of the consideration paid by the interested party in the prior arm’s length transaction, or
    2. the value of the consideration to be received by the issuer for the subject matter of the related party transaction is not less than the value of the consideration paid by the issuer in the prior arm’s length transaction.
  16. Non-redeemable Investment Fund - The issuer is a non- redeemable investment fund that
    1. at least once each quarter calculates and publicly disseminates the net asset value of its securities, and
    2. at the time of announcing the related party transaction, publicly disseminates the net asset value of its securities as at the business day before announcing the related party transaction.
7. Minority Approval - Subject to section 5.8, an issuer shall not carry out a related party transaction unless minority approval for the related party transaction has been obtained under Part 8.
8. Exemptions from Minority Approval
  1. Section 5.7 does not apply to an issuer in connection with a related party transaction in any of the following circumstances if the facts supporting reliance upon an exemption are disclosed in both the material change report referred to in section 5.2 and the information circular referred to in paragraph (b) of subsection 5.4(1):
    1. Discretionary Exemption - The issuer has been granted an exemption from section 5.7 under section 9.1.
    2. Fair Market Value not more than 25 Percent of Market Capitalization - The circumstances described in paragraph 2 or 3 of section 5.6.
    3. Other Transactions Exempt from Formal Valuation - The circumstances described in paragraph 4, 5, 6, 9, 10, 11 or 12 of section 5.6.
    4. Bankruptcy - The circumstances described in subparagraphs 7(a) and 7(b) of section 5.6, if the court does not require compliance with section 5.7.
    5. Financial Hardship - The circumstances described in paragraph 8 of section 5.6, if there is no other requirement, corporate or otherwise, to hold a meeting to obtain any approval of the holders of any class of affected securities.
    6. 90 Percent Exemption - Subject to subsection (2), one or more interested parties beneficially owns 90 percent or more of the outstanding securities of a class of affected securities at the time that the related party transaction is proposed and either
      1. an appraisal remedy is available to holders of the class of affected securities under the statute under which the issuer is organized or is governed as to corporate law matters, or
      2. if the appraisal remedy referred to in subparagraph (a) is not available, holders of the class of affected securities are given an enforceable right that is substantially equivalent to the appraisal remedy provided for in subsection 185(4) of the Obca and that is described in an information circular or other document sent to securityholders in connection with a meeting to approve the related party transaction.
  2. If there are two or more classes of affected securities, paragraph 6 of subsection (1) applies only to a class for which the interested party beneficially owns, or the interested parties beneficially own, 90 percent or more of the outstanding securities of the class.

Part 6 - Formal Valuations And Prior Valuations

1. Independence
  1. Every formal valuation required by this Rule for a transaction shall be prepared by an independent valuator for the transaction having appropriate qualifications.
  2. Subject to subsections (3), (4) and (5), it is a question of fact as to whether
    1. a valuator is independent of an interested party;
    2. a person or company is independent of an interested party, for the purpose of subparagraph (b)(ii) of subsection 1.3(1); and
    3. a valuator or a person or company referred to in paragraph (b) has appropriate qualifications.
  3. A valuator or a person or company referred to in paragraph (2)(b) is not independent of an interested party in connection with a transaction if
    1. the valuator or the person or company or an affiliated entity of either of them is an issuer insider, associate or affiliated entity of the interested party;
    2. except in the circumstances described in paragraph (e), and subject to subsection (5), the valuator or the person or company or an affiliated entity of either of them acts as an adviser to the interested party in respect of the transaction;
    3. the compensation of the valuator or the person or company or an affiliated entity of either of them depends in whole or in part upon an agreement, arrangement or understanding that gives the valuator or person or company or affiliated entity of either of them a financial incentive in respect of the conclusions reached in the formal valuation or opinion or the outcome of the transaction;
    4. the valuator or the person or company or an affiliated entity of either of them is
      1. a manager or co-manager of a soliciting dealer group formed in respect of the transaction, or
      2. a member of the soliciting dealer group, if the valuator or person or company or affiliated entity of either of them, in its capacity as a soliciting dealer, performs services beyond the customary soliciting dealer’s function or receives more than the per security or per securityholder fees payable to other members of the group;
    5. the valuator or the person or company is the independent auditor of the issuer or of an interested party, or the valuator or person or company is an affiliated entity of the auditor, unless neither the valuator nor the person or company nor an affiliated entity of either of them will be the independent auditor of the issuer or an interested party upon completion of the transaction and that fact has been publicly disclosed; or
    6. the valuator or the person or company or an affiliated entity of either of them has a material financial interest in the completion of the transaction.
  4. A valuator or a person or company referred to in paragraph (2)(b) that is paid by one or more interested parties to a transaction or is paid jointly by the issuer and one or more interested parties to a transaction to prepare a formal valuation for a transaction or to provide the opinion referred to in subparagraph (b)(ii) of subsection 1.3(1) for a transaction is not, by virtue of that fact alone, not independent.
  5. For the purpose of paragraph (3)(b), a valuator or a person or company referred to in paragraph (2)(b) that is retained by an issuer to prepare a formal valuation for an issuer bid or to provide the opinion referred to in subparagraph (b)(ii) of subsection 1.3(1) for an issuer bid is not, by virtue of that fact alone, considered to be an adviser to the interested party in respect of the transaction.
2. Disclosure Re Valuator - An issuer or offeror required to obtain a formal valuation in respect of a transaction or that relies on an opinion referred to in subparagraph (b)(ii) of subsection 1.3(1) or paragraph 15 of section 5.6 shall include in the disclosure document for the transaction
  1. a statement that the valuator or the person or company has been determined to be qualified and independent;
  2. a description of any past, present or anticipated relationship between the valuator or the person or company and the issuer or an interested party that may be relevant to a perception of lack of independence;
  3. a description of the compensation paid or to be paid to the valuator or the person or company;
  4. a description of any other factors relevant to a perceived lack of independence of the valuator or the person or company;
  5. the basis for determining that the valuator or the person or company is qualified; and
  6. the basis for determining that the valuator or the person or company is independent, despite any perceived lack of independence, including the amount of the compensation or other factors referred to in paragraphs (b) and (d).
3. Subject Matter of Formal Valuation
  1. An issuer or offeror required to obtain a formal valuation under this Rule shall provide the valuation in respect of
    1. the offeree securities, in the case of an insider bid or issuer bid;
    2. the affected securities, in the case of a going private transaction;
    3. the subject matter of the transaction, in the case of a related party transaction; and
    4. except as provided in subsection (2), any non-cash consideration being offered in or forming part of the transaction.
  2. A formal valuation of non-cash consideration is not required if
    1. the non-cash consideration consists of securities of a class of an issuer for which a liquid market exists;
    2. the securities offered as non-cash consideration
      1. constitute 10 percent or less of the aggregate number of securities of the class that are issued and outstanding immediately before the distribution of the securities offered as non-cash consideration, and
      2. are freely tradeable;
    3. the valuator is of the opinion that a valuation of the non-cash consideration is not required; and
    4. the issuer or offeror required to obtain the formal valuation states in the disclosure document for the transaction that the issuer or offeror has no knowledge of any material non-public information concerning the issuer of the securities or its securities that has not been generally disclosed.
4. Preparation of Formal Valuation
  1. A person or company preparing a formal valuation under this Rule shall
    1. prepare the formal valuation in a diligent and professional manner;
    2. prepare the formal valuation as of an effective date that is not more than 120 days before the earlier of
      1. the date that a disclosure document for the transaction is first sent to securityholders, if applicable, and
      2. the date that a disclosure document is filed;
    3. make appropriate adjustments in the formal valuation for material intervening events of which it is aware between the effective date of the valuation and the earlier of the dates referred to in paragraph (b);
    4. in determining fair market value of securities, not include in the formal valuation a downward adjustment to reflect the liquidity of the securities, the effect of the transaction on the securities or the fact that the securities do not form part of a controlling interest; and
    5. provide sufficient disclosure in the formal valuation to allow the beneficial owners of the securities to understand the principal judgments and principal underlying reasoning of the valuator so as to form a reasoned judgment of the valuation opinion or conclusion.
  2. National Instrument 52-101 Future Oriented Financial Information does not apply to a formal valuation for which financial forecasts and projections are relied upon and disclosed.
5. Summary of Formal Valuation
  1. An issuer or offeror that is required by this Rule to provide a summary of a formal valuation shall ensure that the summary provides sufficient detail to allow the beneficial owners of the securities to understand the principal judgments and principal underlying reasoning of the valuator so as to form a reasoned judgment of the valuation opinion or conclusion.
  2. In addition to the disclosure referred to in subsection (1), if an issuer or offeror is required by this Rule to provide a summary of a formal valuation, the issuer or offeror shall ensure that the summary
    1. discloses
      1. the valuation date, and
      2. any distinctive material benefit that might accrue to an interested party as a consequence of the transaction, including the earlier use of available tax losses, lower income taxes, reduced costs or increased revenues;
    2. if the formal valuation differs materially from a prior valuation, explains the differences between the two valuations or, if it is not practicable to do so, the reasons why it is not practicable to do so;
    3. indicates an address where a copy of the formal valuation is available for inspection; and
    4. states that a copy of the formal valuation will be sent to any securityholder upon request and without charge.
6. Filing of Formal Valuation
  1. An issuer or offeror required to obtain a formal valuation in respect of a transaction shall file a copy of the formal valuation
    1. concurrently with the sending of the disclosure document for the transaction to securityholders; or
    2. concurrently with the filing of a material change report for a related party transaction for which no disclosure document is sent to securityholders, or if the formal valuation is not available at the time of filing the material change report, as soon as the formal valuation is available.
  2. If the formal valuation is included in its entirety in a disclosure document, an issuer or offeror satisfies the requirement in subsection (1) by filing the disclosure document.
7. Valuator’s Consent - An issuer or offeror required to obtain a formal valuation shall
  1. obtain the valuator’s consent to its filing and to the inclusion of the formal valuation or disclosure of a summary of the formal valuation in the disclosure document for the transaction for which the formal valuation was obtained; and
  2. include in the disclosure document a statement signed by the valuator substantially as follows:
  We refer to the formal valuation dated •, which we prepared for (indicate name of the person or company) for (briefly describe the transaction for which the formal valuation was prepared). We consent to the filing of the formal valuation with the Ontario Securities Commission and the inclusion of [a summary of the formal valuation/ the formal valuation] in this document.
8. Disclosure of Prior Valuation
  1. A person or company required to disclose a prior valuation shall, in the document in which the person or company is required to disclose the prior valuation
    1. disclose sufficient detail to enable beneficial owners of securities to understand the prior valuation and its relevance to the present transaction;
    2. indicate an address where a copy of the prior valuation is available for inspection; and
    3. state that a copy of the prior valuation will be sent to any securityholder upon request and without charge.
  2. If there are no prior valuations, the existence of which is known after reasonable inquiry, the person or company preparing the document in which the person or company would be required to disclose the prior valuation, if one existed, shall include a statement to that effect in the document.
  3. Despite anything to the contrary contained in this Rule, disclosure of a prior valuation is not required in a document if
    1. the contents of the prior valuation are not known to the person or company required under this Rule to disclose the prior valuation;
    2. the prior valuation is not reasonably obtainable by the person or company referred to in paragraph (a), irrespective of any obligations of confidentiality; and
    3. the document contains statements in respect of the prior valuation substantially to the effect of paragraphs (a) and (b).
9. Filing of Prior Valuation - An issuer or offeror required to disclose a prior valuation shall file a copy of the prior valuation concurrently with the filing of the document to which the prior valuation relates.

Part 7 - Independent Directors

1. Independent Directors
  1. Subject to subsections (2) and (3), it is a question of fact as to whether a director of an issuer is independent.
  2. A director of an issuer is not independent in connection with a transaction if
    1. the director is currently, or has been at any time during the 12 months before the date of the transaction, an employee, issuer insider or associate of an interested party or an affiliated entity of an interested party, other than solely in his or her capacity as a director of the issuer;
    2. the director is currently, or has been at any time during the 12 months before the date of the transaction, an adviser to an interested party in connection with the transaction, an employee, issuer insider or associate of any person or company acting as an adviser to an interested party in connection with the transaction or an affiliated entity of the adviser, other than solely in his or her capacity as a director of the issuer;
    3. the director has a material financial interest in an interested party or an affiliated entity of an interested party or it is anticipated that the director will, in the event that the transaction is successful, be provided with the opportunity to obtain a material financial interest in an interested party, an affiliated entity of the interested party, or in the issuer; or
    4. the director would reasonably be expected to receive a benefit as a consequence of the transaction that is not also received on a pro rata basis by all other beneficial owners in Canada of affected securities.
  3. For the purposes of this section, in the case of an issuer bid, a director of the issuer is not, by that fact alone, not independent of the issuer.

Part 8 - Minority Approval

1. From Holders of Affected Securities
  1. Subject to subsection (2), if minority approval is required for a going private transaction or related party transaction, it shall be obtained from the holders of every class of affected securities of the issuer, in each case voting separately as a class.
  2. If minority approval is required for a going private transaction or a related party transaction and the transaction would affect a particular series of a class of affected securities of the issuer in a manner different from other securities of the class, then the holders of the series shall be entitled to vote separately as a series.
  3. In determining minority approval for a going private transaction or a related party transaction, an issuer shall exclude the votes attached to affected securities that, to the knowledge of the issuer or any interested party or their respective directors or senior officers, after reason- able inquiry, are beneficially owned or over which control or direction is exercised by
    1. the issuer;
    2. subject to section 8.2, an interested party, unless, in the context of a related party transaction, the interested party is treated identically to all other holders in Canada of affected securities and does not receive, directly or indirectly, as a consequence of the transaction, consideration of greater value than that received by all other holders of affected securities;
    3. a related party of an interested party, unless
      1. the related party is a director of the issuer who is independent of the interested party, or
      2. in the context of a related party transaction, the related party and interested party are treated identically to all other holders in Canada of affected securities and do not receive, directly or indirectly, as a consequence of the transaction, consideration of greater value than that received by all other holders of affected securities and the related party of an interested party does not hold, directly or indirectly, whether alone or jointly or in concert with others, securities of more than one party to the transaction sufficient to affect materially the control of such parties; and
    4. a person or company acting jointly or in concert with a person or company referred to in paragraph (b) or (c) in respect of the transaction.
2. Multi-Step Transactions - Despite paragraphs (b) and (c) of subsection 8.1(3), the votes attached to securities tendered to a formal bid may be included as votes in favour of a subsequent going private transaction in the determination of whether the requisite minority approval has been obtained if
  1. the securityholder tendering the securities
    1. did not receive
      1. a consideration per security that is not identical in amount and type to that paid to all other beneficial owners in Canada of affected securities of the same class, or
      2. consideration of greater value than that paid to all other beneficial owners of affected securities of the same class, or
    2. upon completion of the transaction, did not beneficially own, or exercise control or direction over, participating securities of a class other than affected securities;
  2. the going private transaction is completed no later than 120 days after the date of expiry of the formal bid;
  3. the going private transaction is proposed by the offeror who made the formal bid or an affiliated entity of the offeror and involves the outstanding securities of the same class that were the subject of the formal bid and that were not acquired by the offeror under the formal bid;
  4. the consideration per security in the subsequent going private transaction is
    1. at least equal in value to the consideration per security in the formal bid paid by the offeror, and
    2. in the same form as the consideration per security in the formal bid, and if the consideration paid consisted of securities of the person or company, consists of the same securities; and
  5. the disclosure document for the formal bid
    1. disclosed the intent to effect the subsequent transaction,
    2. contained a summary of a formal valuation of the securities in accordance with the applicable provisions of Part 6, or contained the valuation in its entirety, if the offeror in the formal bid was subject to and not exempt from the requirement to obtain a formal valuation,
    3. identified the securities, if known to the offeror after reasonable inquiry, the votes attached to which would be required to be excluded in the determination of whether the requisite minority approval of the subsequent transaction had been obtained,
    4. stated that the subsequent transaction would be subject to minority approval,
    5. identified each class of securities, the holders of which would be entitled to vote separately as a class on the subsequent transaction,
    6. described the tax consequences of both the formal bid and the subsequent going private transaction, if, at the time of making the formal bid, the tax consequences arising from the subsequent going private transaction
      1. were known or reasonably foreseeable to the offeror, and
      2. were reasonably expected to be different from the tax consequences of tendering to the formal bid, and
    7. disclosed that the tax consequences of the formal bid and the subsequent going private transaction may be different, if, at the time of making the formal bid, the offeror did not know or could not reasonably foresee the tax consequences arising from the subsequent going private transaction.

Part 9 - Exemption

1. Exemption - The Director may grant an exemption to this Rule, in whole or in part, subject to such conditions or restrictions as may be imposed in the exemption.

Part 10 - Effective Date

1. Effective Date - This Rule comes into force on May 1, 2000.

Ontario Securities Commission Companion Policy 61-501Cp

To Ontario Securities Commission Rule 61-501 Insider Bids, Issuer Bids, Going Private Transactions And Related Party Transactions

Table Of Contents

Part - Title

Part 1 - General

1. General

Part 2 - Definitions And Interpretation

1. Director
2. Freely Tradeable
3. Jointly or in Concert
4. Issuer Bid
5. Director for Purposes of Section 1.3
6. Going Private Transactions Carried out in Accordance with Part 4
7. Related Party Transactions Carried out in Accordance with Policy 9.1
8. Persons or Companies Involved in a Transaction
9. Amalgamations
10. Same Consideration
11. Arm’s Length
12. Previous Arm’s Length Negotiations
13. Collateral Benefit

Part 3 - Majority Of The Minority Approval

1. Majority of the Minority Approval

Part 4 - Disclosure

1. Form 33 Disclosure
2. Disclosure of Financial Information
3. Disclosure of Smaller Related Party Transactions

Part 5 - Valuations

1. Formal Valuations
2. Independent Valuators

Part 6 - Related Transactions

1. Related Transactions

Part 7 - Role Of Directors

1. Role of Directors

Ontario Securities Commission Companion Policy 61-501Cp

To Ontario Securities Commission Rule 61-501 Insider Bids, Issuer Bids, Going Private Transactions And Related Party Transactions

Part 1 - General

1. General - The Commission regards it as essential, in connection with the disclosure, valuation, review and approval processes followed for insider bids, issuer bids, going private transactions and related party transactions, that all securityholders be treated in a manner that is fair and that is perceived to be fair. In the view of the Commission, issuers and others who benefit from access to the capital markets assume an obligation to treat securityholders fairly and the fulfilment of this obligation is essential to the protection of the public interest in maintaining capital markets that operate efficiently, fairly and with integrity.
  
  The Commission does not consider that insider bids, issuer bids, going private transactions and related party transactions are inherently unfair. It recognizes, however, that these transac- tions are capable of being abusive or unfair, and has made Rule 61-501 (the “Rule”) to regulate these transactions.
  
  This Policy expresses the Commission’s views on certain matters related to the Rule.

Part 2 - Definitions And Interpretation

1. Director - The term “director” is used frequently in the Rule. By virtue of Rule 14-501 Definitions, the term has the meaning in section 1 of the Act. The Commission is of the view that, by virtue of this definition, in appropriate circumstances a director of a general partner in a limited partnership can be considered to be a director of the limited partnership.
2. Freely Tradeable - In order for securities to be “freely tradeable” for purposes of the Rule, all hold periods imposed by Ontario securities law must have expired, any period of time under Ontario securities law for which an issuer must be a reporting issuer must have passed and the other conditions of the definition must be met. Securities that can only be distributed under a prospectus or in reliance on a prospectus exemption, including any exemption in Ontario securities law applicable to control person distributions, would not be considered to be freely tradeable.
3. Jointly or in Concert
  1. The Act sets out certain circumstances where the presumption will arise that parties are acting jointly or in concert. Paragraph (b) of subsection 1.2(1) of the Rule provides that the term “acting jointly or in concert” has the meaning ascribed to it in section 91 of the Act. The Commission is of the view that, for an insider bid, an offeror and an insider may be viewed as acting jointly or in concert if an agreement, commitment or understanding between an offeror and an insider provides that the insider shall not tender to the offer or provides the insider with an opportunity not offered to all securityholders to maintain or acquire a direct or indirect equity interest in the offeror, the issuer or a material asset of the issuer.
  2. Concern has been expressed that agreements by a share- holder to tender into a proposed take-over bid or to vote in favour of a proposed transaction, which are commonly referred to as lock-up agreements, may result in the selling shareholder being seen to be acting jointly or in concert with an acquiror. While the language of section 91 of the Act is broad, and the particular facts of any case must be considered, the Commission is of the view that an ordinary lock-up agreement with an identically treated shareholder should not in and of itself generally result in arm’s length parties being seen to be acting jointly or in concert.
4. Issuer Bid
  1. The term “issuer bid” is defined in National Instrument 14-101 Definitions as having the meaning ascribed to that term in securities legislation (in Ontario, subsection 89(1) of the Act). Subject to subsection (2), the Commission is of the view that, by virtue of the provisions of section 92 of the Act, an offer to acquire securities of the issuer made by a wholly-owned subsidiary entity of the issuer would be an issuer bid.
  2. The Commission is of the view that there may be limited circumstances in which a purchase of securities of an issuer made by a wholly-owned subsidiary entity of the issuer may not be an issuer bid. An example of one such situation is where the wholly-owned subsidiary entity of the issuer is a registered dealer and the registered dealer is not acting at the direction of the issuer in making the purchases, e.g., a registered dealer acting in its capacity as an underwriter or agent for a purchaser other than the issuer.
5. Director for Purposes of Section 1.3 - Subparagraph (b)(iii) of subsection 1.3(1) of the Rule and subsection 1.3(4) of the Rule require certain letters to be sent to the Director for purposes of satisfying the liquid market test. Those letters should be sent to the Director, Take-over/Issuer Bids, Mergers and Acquisitions, Corporate Finance Branch.
6. Going Private Transactions Carried Out in Accordance with Part 4 - Paragraph (c) of subsection 4.3(1) of the Rule provides an exemption from the 40 day delivery requirement in the Obca if the going private transaction is carried out in accordance with Part 4 of the Rule. Paragraph (e) of subsection 5.1(2) of the Rule provides that Part 5 of the Rule does not apply to a related party transaction that is a going private transaction carried out in accordance with Part 4 of the Rule. If the issuer relies on or obtains an exemption from the valuation or majority of the minority requirements in Part 4 of the Rule, the Commission still views the going private transaction as being carried out in accordance with Part 4 of the Rule.
7. Related Party Transactions Carried Out in Accordance with Policy 9.1 - Paragraph (d) of subsection 4.1(2) of the Rule provides that Part 4 of the Rule does not apply to a going private transaction that was announced before the coming into force of the Rule and, among other things, is being carried out in accordance with the guidelines of Ontario Securities Commission Policy 9.1. Paragraph (i) of subsection 5.1(2) provides a similar exemption for related party transactions. The Commission is of the view that the transaction is being carried out in accordance with the guidelines of Ontario Securities Commission Policy 9.1
  1. if Policy 9.1 is being complied with, or
  2. if all or any part of a transaction is not being carried out in accordance with Policy 9.1, the transaction is being carried out in accordance with a “no-action letter” granted by staff.
8. Persons or Companies Involved in a Transaction - In the definitions of “interested party”, “going private transaction” and “related party transaction”, the Rule refers to a person or company involved in a transaction or a transaction involving a person or company. In those situations, the Rule sets out certain consequences for the person or company (e.g., disclosure, exclusion for minority approval purposes). The Commission is of the view that a director or senior officer of an issuer is not involved in a transaction merely because the director or senior officer is acting in that capacity in negotiating or approving the transaction.
9. Amalgamations
  1. Generally, a transaction is a going private transaction if the interest of a beneficial owner of a participating security of an issuer may be terminated without the beneficial owner’s consent as a consequence of the transaction, a related party of the issuer is involved in the transaction and the transaction does not come within the exceptions to the definition of going private transaction in the Rule. The Commission is of the view that in the normal situation, where two or more arm’s length operating corporations amalgamate and shareholders of the amalgamating corporations receive non-redeemable participating securities of the amalgamated corporation, a beneficial owner’s interest in a participating security is not being terminated and therefore the transaction is not a going private transaction.
  2. An amalgamation between a corporation and one or more related parties of the corporation is a related party transaction for all of the amalgamating corporations.
  3. Exemptions from the valuation and minority approval requirements of the Rule may be available under paragraphs 3 and 10 of section 5.6 and paragraphs 2 and 3 of subsection 5.8(1) of the Rule for an upstream corporation amalgamating with a downstream corporation. Those exemptions are not available for the downstream corporation. Similarly, those exemptions are not available for amalgamating corporations that are related parties because of a common controlling shareholder.
  4. Paragraph 5 of section 5.6 and paragraph 3 of subsection 5.8(1) contain an exemption from the valuation requirement and minority approval requirement for certain transactions, including a reorganization of one or more classes of an issuer’s affected securities if certain conditions are satisfied. A reorganization, as referred to in those paragraphs, is a reorganization of capital and would not encompass an amalgamation of the issuer with another issuer.
10. Same Consideration - One of the conditions to the valuation for second step going private transactions exemption in paragraph 4 of section 4.5 is that the consideration per security paid in the going private transaction is in the same form as the consideration per security paid in the formal bid. The Commission is aware that often in going private transactions, the consideration takes the form of redeemable preference shares, which are immediately redeemed for cash. The Commission is of the view that where the cash paid on redemption is the same as the cash consideration paid on the formal bid, the consideration in the going private transaction is in the same form as the consideration paid in the formal bid.
11. Arm’s Length - Section 1.4 of the Rule provides that it is a question of fact whether two or more persons or companies act, negotiate or deal with each other at arm’s length. The Commission is of the view that persons or companies related to each other by blood or marriage would not normally be considered to be dealing with each other at arm’s length. The Commission also notes that in the case of the exemptions in paragraph 3 of subsection 2.4(1) and paragraph 2 of subsection 4.5(1), the arm’s length relationship must be between the selling securityholder and all persons or companies that negotiated with the selling securityholder.
12. Previous Arm’s Length Negotiations - The Commission notes that the previous arm’s length negotiation exemption is based on the view that such negotiations can be a substitute for a valuation. An important requirement for the exemption to be available is that the offeror or proponent of the going private transaction, as the case might be, engages in “reasonable inquiries” to determine whether various circumstances exist. In the Commission’s view, if an offeror cannot satisfy this requirement, through receipt of representations of the parties directly involved or some other suitable method, the offeror or proponent of the transaction is not entitled to rely on this exemption.
13. Collateral Benefit
  1. A number of provisions in the Rule turn on whether a particular securityholder is receiving consideration of greater value than that received by or paid to other securityholders.
  2. The Commission notes that the words “consideration of greater value” are found in subsection 97(2) of the Act, which subsection contains what is commonly referred to as the “collateral benefit rule”.
  3. Decisions considering subsection 97(2) of the Act may be of assistance in interpreting the relevant provisions in the Rule.
  4. The Commission is of the view that a securityholder does not receive consideration of greater value than another securityholder merely as a result of holding more shares than another securityholder.

Part 3 - Majority Of The Minority Approval

1. Majority of the Minority Approval - While the Rule provides, in a number of circumstances, for minority approval, the Commission recognizes that such a requirement may give rise to abuses. As the purpose of the Rule is to ensure fair treatment of minority securityholders, unjustifiable minority tactics in a situation involving a minimal minority position may cause the Director to grant an exemption from the requirement to obtain minority approval.

Part 4 - Disclosure

1. Form 33 Disclosure
  1. Form 32 of the Regulation (the form for a take-over bid circular) requires for an insider bid, and subsection 2.2(2) of the Rule requires for a stock exchange insider bid, the disclosure required by Form 33 of the Regulation, appropriately modified. In the view of the Commission, Form 33 disclosure would generally include, in addition to Form 32 disclosure, disclosure with respect to the following items, with necessary modifications, in the context of an insider bid or a stock exchange insider bid:
    1. Item 10 Reasons for Bid
    2. Item 14 Acceptance of Bid
    3. Item 15 Benefits from Bid
    4. Item 17 Other Benefits to Insiders, Affiliates and Associates
    5. Item 18 Arrangements Between Issuer and Security Holder
    6. Item 19 Previous Purchases and Sales
    7. Item 21 Valuation
    8. Item 24 Previous Distribution
    9. Item 25 Dividend Policy
    10. Item 26 Tax Consequences
    11. Item 27 Expenses of Bid
  2. Paragraph (a) of subsection 4.2(2) of the Rule and paragraph (a) of subsection 5.4(2) of the Rule require, for a going private transaction and a related party transaction, respectively, the disclosure required by Form 33 of the Regulation, to the extent applicable and with necessary modifications. In the view of the Commission, Form 33 disclosure would generally include disclosure with respect to the following items, with necessary modifications, in the context of those transactions:
    1. Item 5 Consideration Offered
    2. Item 10 Reasons for Bid
    3. Item 11 Trading in Securities to be Acquired
    4. Item 12 Ownership of Securities of Issuer
    5. Item 13 Commitments to Acquire Securities of Issuer
    6. Item 14 Acceptance of Bid
    7. Item 15 Benefits from Bid
    8. Item 16 Material Changes in the Affairs of Issuer
    9. Item 17 Other Benefits to Insiders, Affiliates and Associates
    10. Item 18 Arrangements Between Issuer and Security Holder
    11. Item 19 Previous Purchases and Sales
    12. Item 20 Financial Statements
    13. Item 21 Valuation
    14. Item 22 Securities of Issuer to be Exchanged for Others
    15. Item 23 Approval of Bid
    16. Item 24 Previous Distribution
    17. Item 25 Dividend Policy
    18. Item 26 Tax Consequences
    19. Item 27 Expenses of Bid
    20. Item 28 Judicial Developments
    21. Item 29 Other Material Facts
    22. Item 30 Solicitations
2. Disclosure of Financial Information - The Commission is of the view that, in order to provide securityholders with sufficiently detailed information to form a reasoned judgment, a disclosure document delivered to securityholders in respect of transactions subject to and not exempt from the formal valuation requirements of the Rule should contain, unless such information would be irrelevant or unavailable, summary disclosure of comparative historical annual financial information over the previous three years and of historical interim financial information for the most recent period and the comparative period in the previous year, together with summary information concerning key financial statement ratios and statistics and key operating statistics over the same periods. This disclosure would be in addition to any disclosure required under Ontario securities law or referred to in Staff Accounting Communique No. 7: Financial Disclosure in Information Circulars, or other Staff Accounting Communiques or any successor instruments.
3. Disclosure of Smaller Related Party Transactions - The Commission is of the view that transactions involving related parties, and beneficial ownership by an issuer of, or an issuer’s exercise of control or direction over, securities of related parties other than the issuer’s subsidiary entities, should be disclosed to securityholders if they are material either individually or in the aggregate, in order to provide securityholders with sufficiently detailed information to form a reasoned judgment regarding such matters as the election of directors. If such transactions or ownership do not otherwise require immediate disclosure, annual disclosure may suffice. Issuers are referred, without limitation, to item 8 of Form 30 of the Regulation and other similar information circular requirements, as well as to section 3840 of the Handbook.

Part 5 - Valuations

1. Formal Valuations
  1. The Rule requires formal valuations in a number of circumstances. The Commission is of the view that a conclusory statement of opinion as to the value or range of values of the subject matter of the formal valuation does not by itself achieve this purpose.
  2. The disclosure standards proposed by the Investment Dealers Association of Canada and Appendix A to Standard #110 of the Canadian Institute of Chartered Business Valuators each generally represent a reasonable approach to meeting the applicable legal requirements. Specific disclosure standards, however, cannot be construed as a substitute for the professional judgment and responsibility of the valuator and, on occasion, additional disclosure may be necessary.
  3. A person or company required to have a formal valuation prepared should, at the request of the valuator, promptly furnish the valuator with access to the person or company’s management and advisers and to all material information in its possession relevant to the formal valuation. The valuator is expected to use that access to perform a comprehensive review and analysis of information upon which the formal valuation is based. The valuator should form its own independent views of the reasonableness of this information, including any forecasts or projections or other measurements of the expected future performance of the enterprise, and of any of the assumptions upon which it is based, and adjust the information accordingly.
  4. The disclosure in the valuation of the scope of review should include a description of any limitation on the scope of the review and the implications of the limitation on the valuator’s conclusion. Scope limitations should not be imposed by the issuer, an interested party or the valuator, but should be limited to those beyond their control that arise solely as a result of unusual circumstances. In addition, it is inappropriate for any interested party to exercise or attempt to exercise any influence over a valuator.
  5. The person or company responsible for obtaining a formal valuation should work in cooperation with the valuator to ensure that the requirements of the Rule are satisfied.
  6. Subsection 2.3(2) of the Rule provides that in the context of an insider bid, an independent committee of the offeree issuer shall, and the offeror shall enable the independent committee to, determine who the valuator will be and supervise the preparation of the formal valuation. The Commission is aware that an independent committee could attempt to use this requirement as a means to delay or impede an insider bid viewed by them as unfriendly. In a situation where an offeror is of the view that an independent committee is not acting in a timely manner in having the formal valuation prepared, the offeror may seek relief under section 9.1 of the Rule from the requirement that the issuer obtain a valuation.
  7. Similarly, in circumstances where an independent committee is of the view that a bid that has been announced will not actually be made or that the bid is not being made in good faith, an independent committee may apply for relief from the requirement that the independent committee determine the valuator and supervise the preparation of the valuation.
  8. Subsection 6.4(2) of the Rule provides that National Instrument 52-101 Future-Oriented Financial Information does not apply to a formal valuation for which financial forecasts and projections are relied upon and disclosed. National Instrument 52-101 will replace National Policy No. 48 Future-Oriented Financial Information. Until such time, National Policy No. 48 does not apply to a formal valuation for which financial forecasts and projections are relied upon and disclosed.
2. Independent Valuators - While, except in certain prescribed situations, the Rule provides that it is a question of fact as to whether a valuator or a person or company providing the opinion referred to in subparagraph (b)(ii) of subsection 1.3(1) is independent, situations have been identified in the past that raise serious concerns for the Commission and that must be disclosed and assessed for materiality. In determining the independence of the valuator or person or company from the interested party, a number of factors may be relevant, including whether
  1. the valuator or the person or company or an affiliated entity of either of them has a material financial interest in future business in respect of which an agreement, commitment or understanding exists involving the issuer, an interested party of the issuer or an associate or affiliated entity of the issuer or interested party;
  2. during the 24 months before the valuator or person or company was first contacted for the purpose of the formal valuation or opinion, the valuator or the person or company or an affiliated entity of either of them
    1. had a material involvement in an evaluation, appraisal or review of the financial condition of an interested party or an associate or affiliated entity of the interested party, other than the issuer,
    2. had a material involvement in an evaluation, appraisal or review of the financial condition of an issuer or an associate or an affiliated entity of the issuer, if the evaluation, appraisal or review was carried out at the direction or request of the interested party or paid for by the interested party, other than the issuer in the case of an issuer bid,
    3. acted as a lead or co-lead underwriter of a distribution of securities by the interested party, or acted as a lead or co-lead underwriter of a distribution of securities by the issuer if the retention of the underwriter was carried out at the direction or request of the interested party or paid for by the interested party, other than the issuer in the case of an issuer bid,
    4. had a material financial interest in transactions involving the interested party, other than the issuer in the case of an issuer bid, or
    5. had a material financial interest in transactions involving the issuer other than by virtue of performing the services referred to in subparagraphs (b)(ii) and (b)(iii); or
  3. the valuator or the person or company or an affiliated entity of either of them is
    1. a lead or co-lead lender or manager of a lending syndicate in respect of the transaction in question, or
    2. a lender of a material amount of indebtedness in a situation where an interested party or the issuer is in financial difficulty and the transaction would reasonably be expected to have the effect of materially enhancing the lender’s position.

Part 6 - Related Transactions

1. Related Transactions
  1. The definition of “related party transaction” in subsection 1.1(3) of the Rule refers to other related transactions between the issuer and the related party.
  2. Depending on the circumstances, it may be possible for an issuer to rely on one or more exemptions in the Rule in connection with a series of transactions between the issuer and a related party.
  3. The Commission may intervene if it believes that one or more exemptions are not capable of being relied upon such that a part or all of the transaction is not exempt from the proposed Rule or if a transaction is being structured or carried out in series or stages to take advantage of individual exemptions that could not be relied upon if the transaction was carried out in one step.

Part 7 - Role Of Directors

1. Role of Directors
  1. Paragraphs (d) of subsection 2.2(3), (e) of subsection 3.2(1), (f) of subsection 4.2(2), (e) of subsection 5.2(1) and (f) of subsection 5.4(2) of the Rule require that the relevant disclosure documents include a discussion of the review and approval process adopted by the board of directors and the independent committee, if any, of the issuer for the relevant transaction, including any materially contrary view or abstention by a director and any material disagreement between the board and the independent committee.
  2. An issuer involved in any of the types of transactions regulated by the Rule should provide sufficient information to beneficial owners of securities to enable them to make an informed decision. Accordingly, directors should disclose their reasonable beliefs as to the desirability or fairness of the proposed transaction and make useful recommendations with regard to the transaction. A statement that the directors are unable to make or are not making a recommendation with respect to the transaction, without detailed reasons, generally would be viewed as insufficient disclosure.
  3. In reaching a conclusion as to the fairness of a transaction, the directors should disclose in reasonable detail the material factors on which their beliefs regarding the transaction are based. The disclosure disseminated by the directors should discuss fully the background of deliberations by the directors and any special committee and any analysis of expert opinions obtained.
  4. The factors that are important in determining the fairness of a transaction to beneficial owners of securities and the weight to be given to these factors in a particular context will vary with the circumstances. Normally the factors considered should include whether or not the transaction is subject to minority approval, whether or not the transaction has been reviewed and approved by a special committee and, if there has been a formal valuation, whether the consideration offered is fair in relation to the valuation conclusions arrived at through the application of the valuation methods considered relevant for the subject matter of the formal valuation. A statement that the directors have no reasonable belief as to the desirability or fairness of the transaction or that the transaction is fair in relation to values arrived at through the application of valuation methods considered relevant, without more, generally would be viewed as insufficient disclosure.
  5. The directors of an issuer involved in an issuer bid, insider bid, going private transaction or related party transaction generally are in the best position to assess the formal valuation to be provided to securityholders. Accordingly, the Commission is of the view that, in discharging their duty to securityholders, the directors should consider the formal valuation and all prior valuations disclosed and discuss them fully in the applicable disclosure document.
  6. To safeguard against the potential for unfair advantage accruing to an interested party as a result of that party’s conflict of interest or informational or other advantage in respect of the proposed transaction, it is good practice for negotiations respecting a transaction involving an interested party to be carried out by or reviewed and reported upon by a special committee of disinterested directors. Following this practice normally would assist in addressing the Commission’s interest in maintaining capital markets that operate efficiently, fairly and with integrity. While the Rule only mandates independent committees in limited circumstances, the Commission is of the view that it generally would be appropriate for, and that corporate law may require, issuers involved in a material transaction to which the Rule applies to constitute an independent committee of the board of directors to participate in the transaction. The Commission also would encourage independent committees to select the valuator, to supervise any formal valuation involved and to review the disclosure respecting the formal valuation.
  7. A special committee should, in the Commission’s view, include only directors who are independent from the interested party. While a special committee may invite non-independent board members and other persons possessing specialized knowledge to meet with, provide information to, and carry out instructions from, the committee, in the Commission’s view non-independent persons should not be present at or participate in the decision-making deliberations of the special committee.

Regulation To Amend Regulation 1015 Of The Revised Regulations Of Ontario, 1990 Made Under The Securities Act

Note: Since the end of 1998, Regulation 1015 has been amended by Ontario Regulations 1/99, 322/99 and 3/00. Previous amendments are listed in the Table of Regulations in the Statutes of Ontario, 1998.

Section 182 of Regulation 1015 of the Revised Regulations of Ontario, 1990 is revoked.
The definition of “going private transaction” in subsection 203.2 (2) of the Regulation is amended by striking out “subsection 2.2 (4) of Ontario Securities Commission Policy Statement 9.1” and substituting “subsection 1.1 (3) of Ontario Securities Commission Rule 61-501 Insider Bids, Issuer Bids, Going Private Transactions and Related Party Transactions”.
1. The definition of “going private transaction” in subsection 1 (1) of Schedule 1 to the Regulation is amended by striking out “subsection 2.2 (4) of Ontario Securities Commission Policy Statement 9.1” and substituting”subsection 1.1 (3) of Ontario Securities Commission Rule 61-501 Insider Bids, Issuer Bids, Going Private Transactions and Related Party Transactions”.
2. Subsection 46 (1) of Schedule 1 to the Regulation is revoked.
3. Subsection 46 (2) of Schedule 1 to the Regulation is amended by striking out “Ontario Securities Commission Policy Statement 9.1” and substituting “Ontario Securities Commission Rule 61-501 Insider Bids, Issuer Bids, Going Private Transactions and Related Party Transactions”.
This Regulation comes into force on May 1, 2000.

(6638) 18

Public Guardian and Trustee Act

Fees Of The Public Guardian And Trustee

(pursuant to s. 8(2) of the Public Guardian and Trustee Act, R.S.O 1990, c. P.51, as amended)

I, Louise Stratford, Hereby Establish The Fees OfThe Public Guardian And Trustee As Follows, Effective May 1, 2000:

Note: GST is not payable on any service rendered under Section D of this Fee Schedule relating to Charitable Property.

Counsel:

No. of Years of Experience: Rate per Hour

0 to 2 years: $100.

3 to 5 years: $125.

6 to 8 years: $150.

9 to 10 years: $175.

Over 10 years: $200.

Accountant: $ 80.

Articling Students: $ 50.

Law Clerks: $ 40.

The Public Guardian and Trustee may designate counsel in the Office of the Public Guardian and Trustee who may charge up to an additional $50.00 per hour for specialized legal services. [No counsel have been so designated as of April, 2000]

Services To Incapable Clients And Absentees
1. Compensation:
  Notwithstanding the Ontario Disability Support Program Act, compensation at the rate of:
  3.0% on capital and income receipts; and
  3.0% on capital and income disbursements, payable by the client.
2. Care and Management Fee:
  Notwithstanding the Ontario Disability Support Program Act, a care and management fee of 3/5 of 1% per annum on the average annual value of the assets under management, payable monthly by the client.
3. Client Overdrafts:
  A fee equivalent to the interest rate from time to time under s. 1(a) of the Certificate of the Public Guardian and Trustee, pursuant to s. 13.1(1)m of the Public Guardian and Trustee Act, to be calculated on the daily balance and payable monthly by the client.
4. Investigations:
  For any investigation relating to a client, including preparation of reports, a fee of $100./hr, payable by the client.
5. Client Legal Services:
  1. Consultation and Advice: To clients, Client Representatives or other employees of the Public Guardian and Trustee, at the hourly rate of legal counsel providing the service, payable by the client.
  2. Clients’ Interests in Estates:
    1. For collection of bequests to clients and reviewing accounts of estate trustees where no passing of accounts is scheduled, at the hourly rate of legal counsel and staff providing the service, payable by the client.
    2. For passings of accounts without a hearing, costs to be requested in accordance with Tariff C of the Rules of Civil Procedure, to be paid by the estate or by the client if not ordered to be paid out of the estate.
    3. For contested passings of accounts, or where the costs exceed the amount of costs allowed by Tariff C, costs to be requested at the hourly rate of legal counsel and staff providing the service, to be paid by the estate or by the client if not ordered to be paid out of the estate.
  3. Family Law:
    For consultation, advice, negotiation of a separation agreement, domestic contract, support, division of property, election under the Family Law Act or any other proceedings under the Family Law Act or Divorce Act, at the hourly rate of legal counsel and staff providing the service, payable by the client.
  4. Sale or Purchase of Real Estate: For all legal services rendered in relation to the sale of real property, in accordance with the recommended fee scale of the local law association in the municipality where the Office is located, with a minimum fee of $500., in addition to disbursements, payable by the client.
  5. Transmission Application: $150. per application or Document General, payable by the client or Registration of Interest on Title (or Removal): upon registration.
  6. Discharge of Mortgage: $175. each, payable by the mortgagor.
  7. Other Legal Services: For any other legal service rendered to a client, at the hourly rate of legal counsel providing the service, payable by the client.
6. Review Fee for Applications to replace the Public Guardian and Trustee as statutory guardian under the Substitute Decisions Act:
  $382., payable upon issuance of the Certificate of the Public Guardian and Trustee.
Income Tax Preparation Fees:
1. Taxable Income of $ 0 to $3,500. $ 15.
  
  Taxable Income of $3,501. to $6,000. $ 25.
  
  Taxable Income of $6,001. to $10,000. $ 55.
  
  Taxable Income of $10,001. to $20,000. $ 70.
  
  Taxable Income of $20,001. to $30,000. $ 85.
  
  Taxable Income of $30,001. to $40,000. $100.
  
  Taxable Income of $40,001. to $50,000. $120.
  
  Taxable Income of $50,000. and over $100./hr. with 1.5 hr. minimum
  
  Taxable Income from $0 to $40,000. $100.
  
  Taxable Income over $40,001. $200.
  
  Taxable Income of $0 to $10,000. $100./hr. with 1 hr. minimum
  
  Taxable Income of $10,001. to $15,000. $100./hr. with 1.5 hr. minimum
  
  Taxable Income of $15,001. and over $100./hr. with 2 hr. minimum
  
  T3 supplementary for resident of Canada: $20.
  
  T3 supplementary for non-resident of Canada $40.
  1. T1 Fees, payable by clients:
  2. First T1 Returns filed by Public Guardian and Trustee for New Clients, in addition to the T1 fee payable under item 8(a),
  3. T3 Fees, payable by estates:
  4. Beneficiaries of estates, payable by estates:
  5. Terminal Returns and New Estates: $100./hr. with 2 hr. minimum
Administration Of Estates, Trusts And Specialized Property
1. 1. Compensation for the administration of estates or trusts pursuant to the Crown Administration of Estates Act or the Estates Act:
    3.0% on capital and income receipts; and
    3.0% on capital and income disbursements; payable by the estate or trust.
  2. Compensation for the administration of trusts under the Trustee Act or the Victims’ Right to Proceeds of Crime Act, 1994:
    3.0% on capital and income receipts; and
    3.0% on capital and income disbursements,
    payable by the trust.
2. Compensation for the administration and management of perpetual care funds under the Cemeteries Act:
  3.0% on capital and income receipts; and
  3.0% on capital and income disbursements;
  0.0% on the distribution of annual net income of the trust for the perpetual care of cemeteries.
3. Care and Management Fee for estates or trusts under the Estates Act or Crown Administration of Estates Act or trust assets managed under the Trustee Act or Victims’ Right to Proceeds of Crime Act, 1994 or the Cemeteries Act:
  3/5 of 1% per annum of the average annual value of the assets under management payable monthly by the estate or trust.
4. Overdrafts:
  A fee equivalent to the interest rate from time to time under s. 1(a) of the Certificate of the Public Guardian and Trustee, pursuant to s. 13.1(1) of the Public Guardian and Trustee Act, to be calculated on the daily balance and payable monthly by the estate or trust.
5. Consent to the Revival of a Corporation:
  $150.00, payable by the applicant.
6. Mortgagee’s Letters:
  For preparation of a requested letter confirming that the Public Guardian and Trustee does not have an interest or object to the sale of real property of a dissolved corporation under power of sale, a fee of $100. per dissolved corporation, payable by the applicant.
7. Taking possession or acquiring property or estates under the Escheats Act:
  A fee of 10% of the total value of the property or estates, to be deducted from the property or estate.
8. Legal Services:
  1. Registration of Cautions on real property under the Estates Administration Act or Withdrawal of a Caution:
    $150., payable by the estate upon registration of a Caution on title; and $150. payable by the estate or applicant for preparation of a Withdrawal of Caution.
  2. Preparation and execution of a Transfer, Release or Assignment of a corporate or Crown interest in property, not requiring an Order-in-Council:
    Fee at the hourly rate of legal counsel and staff providing the service, with a minimum fee of $400., payable by the applicant.
  3. Claims against Estates of Deceased Persons:
    Fee at the hourly rate of legal counsel and staff providing the service, payable by the estate.
  4. Redemption of shares of Dissolved Corporations:
    $50./hr. for each hour, payable by the applicant or shareholder.
  5. Preparation of Agreements relating to Corporations:
    At the hourly rate of legal counsel and staff providing the service, payable by the corporation.
  6. Sale of Real Property: Fee of 1% to 1.5% of the sale price, with a minimum fee of $500., payable by the transferor or vendor.
  7. Review of Proof of Identity Affidavit in the Estate of a Deceased Person:
    $50. per affidavit, payable by the estate.
  8. Services relating to an Order-in-Council:
    In the estate of a deceased person, at the hourly rate of legal counsel and staff providing the service, with a minimum fee of $300., payable by the estate.
    Relating to a dissolved corporation, at the hourly rate of legal counsel providing the service, with a minimum fee of $800., payable by the applicant.
  9. Review of documents required to establish heirship to the estate of a deceased person:
    At the hourly rate of legal counsel providing the service, payable by the estate.
  10. Legal Services relating to the administration of a deceased person’s estate:
    Based on the value of the estate,
    On the first $10,000.: 3%
    On the next $90,000.: 2%
    On the next $200,000.: 1.25%
    On the next $400,000.: .5%,
    with a minimum fee of: $500.
  11. Other Legal Services relating to estates of deceased persons, trusts or dissolved corporations:
    At the hourly rate of legal counsel or staff providing the service, to be paid by the estate, trust or corporation.
  12. Any legal service relating to the Victims’ Right to Proceeds of Crime Act, 1994:
    At the hourly rate of legal counsel or staff providing the service, to be paid out of the trust or proceeds of crime.
Charitable Property Services
1. Reviewing an application to continue an Ontario or extra- provincial corporation under the Corporations Act; to transfer an Ontario corporation to another jurisdiction or to Ontario Cooperative Corporations Act; or to surrender a corporation’s charter and terminate its existence:
  $150. payable by the applicant at the time of delivery to the Public Guardian and Trustee.
2. Reviewing an application to incorporate a charitable corporation; for amalgamation, payable for each amalgamating corporation; for revival; for an amendment to an incorporating, amending or previously approved document:
  $150. payable by the applicant at the time of delivery to the Public Guardian and Trustee.
3. Legal Services relating to Charitable Property:
  1. Concerning the administration of interests subject to compliance with the Charitable Gifts Act:
    At the hourly rate of legal counsel and staff providing the service, payable by the estate trustee, trustee or corporation.
  2. Concerning the administration of charities, estates and charitable interests, under the Charities Accounting Act:
    At the hourly rate of legal counsel and staff providing the service, payable by the estate trustee, trustee or corporation.
  3. Passings of Accounts:
    Where no attendance is required at a hearing for the passing of accounts, costs in accordance with Tariff C of the Rules of Civil Procedure, payable by the applicant, estate trustee, trustee or corporation;
    Where the hourly rate exceeds Tariff C on a passing where no attendance or hearing is required, solicitor-client costs on the basis of time spent by legal counsel and staff providing the service, payable by the applicant, estate trustee, trustee or corporation.
    Where the passing of accounts is contested, at the hourly rate of legal counsel and staff providing the service, payable by the applicant, estate trustee, trustee or corporation.
  4. Responding to or initiating cy-pres applications and all other legal services:
    At the hourly rate of legal counsel and staff providing the service, payable by the applicant, estate trustee, trustee or corporation
Litigation Services
1. Passings of Accounts:
  Where no attendance is required at a hearing for the passing of accounts, costs in accordance with Tariff C of the Rules of Civil Procedure, payable by the estate, trust or incapable person;
  Where the passing of accounts is contested, or where the costs exceed the amount allowed under Tariff C, solicitor-client costs at the hourly rate of legal counsel and staff providing the service, payable by the estate, trust or incapable person.
2. For all other litigious matters, including but not limited to applications under the Substitute Decisions Act, family law, estate litigation or other civil litigation:
  At the hourly rate of legal counsel and staff providing the service, payable by the opposing party, where possible, or, in the alternative, by the client or estate.
3. For litigation services rendered to clients for whom the Public Guardian and Trustee acts as litigation guardian or legal representative under any rule of Court or by court Order:
  At the hourly rate of legal counsel or staff providing the service, payable by the opposing party, where possible, or, in the alternative, by the client or estate.
Legal Services
1. For any legal service provided by the Public Guardian and Trustee not specifically listed in this Schedule:
  At the hourly rate of legal counsel and staff providing the service.
2. The hourly rates of legal counsel and staff are as follows:
Accountant Of The Superior Court Of Justice
1. Compensation on trusts held for minors, incapable adults under a mental disability person and absentees:
  3.0% on capital and income receipts; and 3.0% on capital and income disbursements, payable monthly by the minor, incapable or trust.
2. Care and Management Fee on Trusts managed for minors, Incapable adults under a mental Disability and absentees:
  3/5 of 1% per annum on the average annual value of the trust under management, payable monthly by the minor, incapable person, trust or absentee.
3. Care and Management Fee on money paid into Court by or on behalf of a party to litigation (who are not minors or mentally incapable adults), whether on Consent or pursuant to a Court Order:
  3/5 of 1% per annum on the average annual value of the funds under management payable monthly out of the funds held in Court.
Miscellaneous Fees
1. Registration of existing Orders under the Mental Incompetency Act, pursuant to s. 21 of the Consent and Capacity Statute Law Amendment Act:
  $50. per registration, payable by the incapable person at the time of request for registration.
2. Reviewing applications under the Substitute Decisions Act for a court-appointed guardian of property or guardian for personal care, or an application to vary a Management plan, Guardianship plan, sale of real estate or proceeding for directions, by a proposed or existing guardian or attorney under a continuing power of attorney:
  $250. per application, payable by the incapable person or applicant at the time of service upon the Public Guardian and Trustee.
3. Investigations under ss. 27 or 62 of the Substitute Decisions Act, as amended:
  $100. per hour, including preparation of reports, payable by the incapable person.
4. Publications fees:
  1. How to be an Attorney for Property: $ 14.95
  2. How to be an Attorney for Personal Care: $ 14.95
  3. How to be a Guardian for Property: $ 14.95
  4. How to be a Guardian for Personal Care: $ 14.95
  5. How to Replace the Public Guardian and Trustee as Statutory Guardian: $ 14.95
  6. How to Complete a Management Plan: $ 9.95
  7. How to Complete a Guardianship Plan: $ 9.95
  8. How to Keep Accounts: $ 19.95
  9. How to make a Ulysses Contract: $ 4.95
  Policy Manuals:
  1. Property Management: $100.00
  2. Personal Care: $100.00
  3. Treatment Decisions: $100.00
  4. Acquiring Jurisdiction: $100.00
  5. Screening Applications: $100.00
  6. Temporary Guardianship Investigations: $100.00
1. Disbursements:
  Within the geographical limits defined by the Ministry of the Attorney General as Northern Ontario: $.30.5 per km.
  1. Travel:
    Within the geographical limits defined by the Ministry of the Attorney General as Southern Ontario: $.30 per km.
  2. Long distance telephone charges:
    For telephone calls outside Ontario, at the rate charged by the service provider.
  3. Fax transmissions:
    $.50 per page within Ontario.
    Outside Ontario, $.50 per page in addition to long distance telephone charges.
  4. Photocopying:
    $.20 per page.
  5. Agents and Service Providers:
    For any service or agent’s fee payable to an agent or or service provider to the Office of the Public Guardian and Trustee, as invoiced by the agent or service provider, payable by the Incapable client, estate or trust.
  6. GST
    Payable on all services rendered by the Public Guardian and Trustee, except for those services listed in Section D relating to Charitable Property.
2. Waiver of Fees:
  The Public Guardian and Trustee may waive any fees under this Schedule in her absolute discretion, in cases of hardship or otherwise.

This Schedule Prevails Over Fees Of The Public Guardian And Trustee Under Any Other Act, Except S. 40(3) Of The Substitute Decisions Act, In Accordance With S. 8(4) of The Public Guardian And Trustee Act, R.S.O 1990, C. P. 51, as amended.

Louise A. Stratford,
Public Guardian and Trustee

Approved By The Attorney General, pursuant to s. 8(2) of the Public Guardian and Trustee Act.

Dated this 17^th day of April 2000.

James Flaherty,
Attorney General
(6640) 18

Updated: May 17, 2019

Published: April 29, 2000