1987, c. 12

[Assented to April 1, 1987]

An Act respecting the reorganization and divestiture of Teleglobe Canada

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

1. This Act may be cited as the Teleglobe Canada Reorganization and Divestiture Act.

2. (1) In this Act,

“Commission” means the Canadian Radio-television and Telecommunications Commission;

“control” means control in any manner that results in control in fact, whether directly through the ownership of shares or indirectly through a trust, an agreement, the ownership of any body corporate or otherwise;

“designated telecommunications common carrier”[Repealed, 1998, c. 8, s. 11]

“Minister” means the Minister of State (Privatization) or such other member of the Queen’s Privy Council for Canada as is designated by the Governor in Council as the Minister for the purposes of this Act;

“new corporation” means the corporation incorporated pursuant to section 4;

“person” includes any individual, partnership, body corporate, unincorporated organization, government or agency thereof, trustee, executor, administrator or other legal representative;

“telecommunication”[Repealed, 1993, c. 38, s. 116]

“Teleglobe” means the corporation established by the Teleglobe Canada Act;

“voting share”, in respect of a body corporate, means a share of the body corporate carrying voting rights under all circumstances or under some circumstances that have occurred and are continuing, and includes

(a) a security currently convertible into such a share, and

(b) currently exercisable options and rights to acquire such a share or such a convertible security.

(2) Unless a contrary intention appears, words and expressions used in this Act have the same meaning as in the Canada Business Corporations Act.

(3) In the event of any inconsistency between this Act and the Canada Business Corporations Act, or anything issued, made or established under that Act, this Act prevails.

(4) Nothing in or done under the authority of this Act affects the operation of the Competition Act in respect of the acquisition of any interest in the new corporation.

1987, c. 12, s. 2; 1993, c. 38, s. 116; 1994, c. 24, s. 34(F); 1998, c. 8, s. 11.

3. This Act is binding on Her Majesty in right of Canada or a province.

4. (1) The Minister may submit to the Governor in Council for approval articles of incorporation under the Canada Business Corporations Act prepared in accordance with section 5.

(2) Within ten days after the Governor in Council approves articles of incorporation submitted pursuant to subsection (1), Teleglobe shall send to the Director the approved articles and such other documents as are required under the Canada Business Corporations Act to effect the incorporation.

(3) Subject to such terms and conditions as are approved by the Governor in Council, Teleglobe shall subscribe for and be issued authorized shares of the new corporation and, in consideration for securities of the new corporation and the assumption by the new corporation of obligations and liabilities of Teleglobe, Teleglobe shall transfer its business, works and undertaking to the new corporation.

(4) For the purpose of effecting the transfer and assumption referred to in subsection (3),

(a) all property, rights and interests of Her Majesty in right of Canada held by Teleglobe on the coming into force of this subsection, and

(b) all obligations and liabilities of Her Majesty in right of Canada incurred by Teleglobe and existing on the coming into force of this subsection

are hereby vested in Teleglobe.

(5) For the purposes of the Income Tax Act, the Income Tax Application Rules, 1971 and the Income Tax Regulations,

(a) the property vested in Teleglobe by subsection (4) is deemed to have been owned by Teleglobe throughout the period during which the property was property of Her Majesty held by Teleglobe;

(b) the cost amount to Teleglobe of that property, other than any such property that is depreciable property, immediately after the vesting thereof in Teleglobe is deemed to be the cost amount thereof to Her Majesty immediately prior to the vesting; and

(c) the adjusted cost base and cost amount to Teleglobe of any such property that is depreciable property, immediately after the vesting thereof in Teleglobe, are deemed to be the amounts that may reasonably be regarded as the adjusted cost base and cost amount to Her Majesty in respect of the property immediately prior to the vesting.

(6) Section 45 and subsection 108(1) of the Financial Administration Act do not apply in respect of any property, rights, interests, obligations or liabilities vested in Teleglobe by subsection (4) and section 134 of that Act does not apply in respect of any securities issued by the new corporation to Teleglobe.

(7) The Governor in Council may, by order, exempt any property, rights, interests, obligations or liabilities of Her Majesty from the application of subsection (4).

1987, c. 12, s. 4; 1994, c. 24, s. 34(F).

5. [Repealed, 1998, c. 8, s. 12]

6. [Repealed, 1998, c. 8, s. 13]

7. [Repealed, 1998, c. 8, s. 14]

8. [Repealed, 1998, c. 8, s. 15]

9. The works of the new corporation are hereby declared to be works for the general advantage of Canada.

10. [Repealed, 1998, c. 8, s. 16]

11. The head office of the new corporation shall be in the Montreal Urban Community.

12. [Repealed, 1998, c. 8, s. 17]

13. [Repealed, 1998, c. 8, s. 18]

14. to 16. [Repealed, 1993, c. 38, s. 117]

17. [Repealed, 1998, c. 8, s. 19]

18. [Repealed, 1998, c. 8, s. 20]

*19. (1) The Minister may direct Teleglobe to sell or otherwise dispose of any or all securities of the new corporation held by Teleglobe on such terms and conditions as are approved by the Governor in Council.

(2) On receiving a direction under subsection (1), Teleglobe is hereby authorized to sell or dispose of the securities of the new corporation held by Teleglobe in accordance with the direction and shall comply with the direction.

(3) The Minister is hereby authorized to acquire shares of the new corporation from Teleglobe on such terms and conditions as are approved by the Governor in Council.

(4) Shares acquired pursuant to subsection (3) shall be held by the Minister in trust for Her Majesty in right of Canada.

* [Note: Pursuant to paragraph 20(2)(a), the references to “Teleglobe” in this section shall be construed as including references to “TH(1987)”.]

20. (1) The name of Teleglobe is hereby changed to TH(1987).

(2) On the coming into force of this section,

(a) the references to “Teleglobe” in sections 19 and 26 shall be construed as including references to “TH(1987)”.

(b) to (d) [Amendments to other Acts]

21. TH(1987) is hereby dissolved.

22. The Minister may do and perform all acts and things necessary for or incidental to the dissolution of TH(1987).

23. The Minister, after consultation with the President of the Treasury Board, shall cause such adjustments to be made in the accounts of Canada as are required as a result of any transaction authorized or required by this Act.

24. [Repealed, 1998, c. 8, s. 21]

25. (1) In the manner and to the extent provided by the regulations made under subsection (3), the Public Service Superannuation Act, the Supplementary Retirement Benefits Act and the regulations made under those Acts apply to a person who meets all of the following criteria:

(a) immediately prior to the coming into force of this section, the person was employed by Teleglobe or the new corporation and was a contributor under the Public Service Superannuation Act;

(b) the President of the Treasury Board has not made a payment to the new corporation pursuant to section 30 of the Public Service Superannuation Act in respect of that person;

(c) the person has not received or opted to receive any annuity or other benefit under section 11 or 12 of the Public Service Superannuation Act in respect of the pensionable service to that person’s credit under that Act immediately prior to the coming into force of this section; and

(d) the person elects, within one year after the coming into force of this section and in such form and manner as the President of the Treasury Board directs, to have the Public Service Superannuation Act, the Supplementary Retirement Benefits Act and the regulations made under those Acts apply to that person in the manner and to the extent provided by the regulations made under subsection (3).

(2) An election referred to in paragraph (1)(d) is irrevocable.

(3) The Governor in Council may, in relation to persons referred to in paragraph (1)(d), make regulations

(a) respecting the manner in which and extent to which provisions, as amended, of the Acts and regulations mentioned in subsection (1) apply;

(b) adapting provisions of those Acts and regulations for the purposes of this section; and

(c) generally for carrying out the purposes and provisions of this section.

(4) Regulations made under subsection (3) may, if they so provide, be retroactive and have effect with respect to any period before they are made.

*26. Notwithstanding subsections 32(3) and (4) of the Public Service Superannuation Act, the Governor in Council may, by order,

(a) add the name of the new corporation to Part I of Schedule A to that Act;

(b) delete the name of the new corporation from Part I of Schedule A to that Act;

(c) add the name of the new corporation to Part III of Schedule A to that Act; and

(d) add the name of Teleglobe to Part III of Schedule A to that Act.

* [Note: Pursuant to paragraph 20(2)(a), the reference to “Teleglobe” in this section shall be construed as including a reference to “TH(1987)”.]

27. For greater certainty, the transfer of the business, works and undertaking of Teleglobe to the new corporation under section 4 is deemed to be,

(a) for the purposes of Part III of the Canada Labour Code, a transfer of a particular federal work or undertaking or business within the meaning of section 45 of that Act; and

(b) for the purposes of section 144 of that Act, a sale of a business within the meaning of that section.

28. (1) For the purpose of qualifying the shares of the new corporation

(a) as an authorized investment under paragraph 63(1)(m) of the Canadian and British Insurance Companies Act, paragraph 60(1)(e) of the Loan Companies Act or paragraph 68(1)(j) of the Trust Companies Act,

(b) as a permitted investment under paragraph 1(s) of Schedule III to the Pension Benefits Standards Regulations, 1985, and

(c) as assets that may be vested in trust in Canada under paragraph 1(m) of Schedule II to the Canadian and British Insurance Companies Act or paragraph 1(m) of Schedule I to the Foreign Insurance Companies Act,

the new corporation is deemed to have satisfied the requirements of those paragraphs with respect to each of the five years immediately preceding the privatization date.

(2) For the purpose of qualifying the bonds, debentures or other evidences of indebtedness of the new corporation

(a) as an authorized investment under subparagraph 63(1)(j)(i) of the Canadian and British Insurance Companies Act, subparagraph 60(1)(c)(i) of the Loan Companies Act or subparagraph 68(1)(g)(i) of the Trust Companies Act,

(b) as a permitted investment under paragraph 1(m) of Schedule III to the Pension Benefits Standards Regulations, 1985, and

(c) as assets that may be vested in trust in Canada under subparagraph 1(j)(i) of Schedule II to the Canadian and British Insurance Companies Act or subparagraph 1(j)(i) of Schedule I to the Foreign Insurance Companies Act,

the new corporation is deemed

(d) to have satisfied the requirements of the paragraphs referred to in subsection (1) with respect to each of the five years immediately preceding the privatization date, and

(e) to have had amounts of paid-in capital, contributed surplus, retained earnings and total indebtedness at any relevant time prior to the privatization date identical to the corresponding amounts of Teleglobe at that time.

(3) For the purpose of qualifying

(a) the bonds, debentures or other evidences of indebtedness of or guaranteed by the new corporation as an authorized investment under subparagraph 63(1)(j)(ii) of the Canadian and British Insurance Companies Act, subparagraph 60(1)(c)(ii) of the Loan Companies Act or subparagraph 68(1)(g)(ii) of the Trust Companies Act,

(b) the bonds, debentures or other evidences of indebtedness of or guaranteed by the new corporation as a permitted investment under subparagraph 1(n)(i) of Schedule III to the Pension Benefits Standards Regulations, 1985, and

(c) the bonds, debentures or other evidences of indebtedness of the new corporation as assets that may be vested in trust in Canada under subparagraph 1(j)(ii) of Schedule II to the Canadian and British Insurance Companies Act or subparagraph 1(j)(ii) of Schedule I to the Foreign Insurance Companies Act,

the new corporation is deemed to have had earnings and annual interest requirements for any relevant period prior to the privatization date identical to the corresponding amounts of Teleglobe for that period.

(4) In this section, “privatization date” means the date of the first sale or other disposal of shares of the new corporation by Teleglobe.

29. (1) The new corporation may continue to charge any telegraph toll or telephone toll previously charged by Teleglobe that is in force at the time the new corporation commences business notwithstanding that a tariff of the tolls is not then filed with the Commission, but the new corporation shall file a tariff of those tolls with the Commission forthwith after it commences business.

(2) Subject to subsection (1), the new corporation shall file with the Commission in accordance with section 320 of the Railway Act tariffs of the telegraph tolls and telephone tolls of the new corporation in force from time to time in 1987, but such tolls are deemed to comply with, and to have been approved by the Commission for the purposes of, that section and section 321 of that Act and the Commission may not, for any period in that year, revise, replace, disallow, suspend or postpone them or require the new corporation to do so.

30. (1) The Governor in Council shall, forthwith after the coming into force of this section, issue to the Commission a direction respecting the approval of the telegraph tolls and telephone tolls of the new corporation in force from time to time in the transitional period and the Commission shall give effect to the direction under and in accordance with the Act of Parliament that establishes the powers, duties and functions of the Commission in relation to the subject-matter of the direction.

(2) The Minister of Communications shall cause a copy of the direction issued under subsection (1) to be laid before each House of Parliament on any of the first fifteen days on which that House is sitting after the direction is issued.

(3) In this section, “transitional period” means the period from January 1, 1988 to December 31, 1991.

31. All contracts, agreements and arrangements entered into by Teleglobe and in force at the time the new corporation commences business that, but for this section, would be subject to the approval of the Commission before they have any force or effect shall be deemed to have been approved by the Commission and the Commission may not, for any period in 1987, revise, replace, disallow, suspend or postpone them or require the new corporation to do so.

32. Wherever in any contract, agreement, deed, lease or other instrument Teleglobe is mentioned or referred to, there shall, in every case, unless the context otherwise requires, be substituted therefor a mention or reference to the new corporation.

33. An agreement or arrangement referred to in section 29 of the Telecommunications Act or a limitation of liability referred to in section 31 of that Act that was entered into or imposed, respectively, by the new corporation, or to which the new corporation is an assignee or a successor on the coming into force of this section, and that is in effect on the coming into force of this section, is deemed to have been approved under section 29 or 31 of that Act.

1987, c. 12, s. 33; 1998, c. 8, s. 22.

34. [Repeal of another Act]

*35. Subsection 4(4) and sections 20, 21, 25, 30 and 32 to 34 shall come into force on a day or days to fixed by proclamation.

* [Note: Subsection 4(4) and sections 30 and 32 in force April 2, 1987, see SI/87-89; section 25 in force April 4, 1987, see SI/87-90; section 34 in force July 29, 1993, see SI/93-100; section 20 in force July 28, 1993, see SI/93-147; sections 21 and 33 in force July 29, 1993, see SI/93-148.]

[Repealed, 1998, c. 8, s. 23]