Control of Corporations Regulation

Link to law: http://www.qp.alberta.ca/1266.cfm?page=2003_284.cfm&leg_type=Regs&isbncln=9780779773169&display=html
Published: 2013

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AR 284/2003 CONTROL OF CORPORATIONS REGULATION (Consolidated up to 114/2013)
ALBERTA REGULATION 284/2003
Municipal Government Act
CONTROL OF CORPORATIONS REGULATION
Table of Contents
                1       Definitions
                2       Approval required
                3       Application for approval
                4       Limit on borrowing
                5       Time to complete wind‑up, amalgamation or divestiture
                6       Minister’s power
                7       Due diligence study
                8       Immunity for the Crown
                9       Confidentiality
              10       Conditions on disposition
              11       Exemption of existing corporations
              12       Transitional
              13       Repeal
              14       Expiry Definitions
1   In this Regulation,
                                 (a)    “Act” means the Municipal Government Act;
                                 (b)    “controlled corporation” means
                                           (i)    an existing corporation that a municipality or group of municipalities wishes to obtain control of, or
                                          (ii)    a new corporation that a municipality or group of municipalities wishes to establish and control;
                                 (c)    “corporation” means a corporation that operates for the purpose of making a profit.
Approval required
2(1)  Neither a municipality nor a group of municipalities may, without the prior written approval of the Minister,
                                 (a)    establish and control, or
                                 (b)    obtain control of
any corporation, including any subsidiary of a corporation that the municipality or group of municipalities controls.
(2)  This section does not apply in respect of a subsidiary
                                 (a)    of ENMAX Corporation, or
                                 (b)    of EPCOR Utilities Inc.
Application for approval
3(1)  A municipality or group of municipalities that intends to obtain control of or to establish and control a corporation must apply to the Minister for approval.
(2)  An application referred to in subsection (1) must include the following:
                                 (a)    the costs related to establishing or obtaining control of the corporation, as the case may be;
                                 (b)    the value of any assets of the corporation that are to be transferred to the municipality or group of municipalities;
                                 (c)    in respect of a corporation referred to in section 1(b)(i), a copy of
                                           (i)    its most recent annual financial statement, and
                                          (ii)    its current operating and capital budgets;
                                 (d)    in respect of a corporation referred to in section 1(b)(ii), a copy of a proposed business plan that includes a cash flow projection for the first 3 years of the corporation’s operation or for any other period that is satisfactory to the Minister;
                                 (e)    a copy of the certificate of incorporation for the corporation.
(3)  An application referred to in subsection (1) must satisfy the Minister
                                 (a)    that the controlled corporation will carry on business solely for one or more of the purposes described in section 3 of the Act,
                                 (b)    that the controlled corporation
                                           (i)    will acquire the assets of an entity that provides an existing municipal service for the purpose of providing that municipal service,
                                          (ii)    will provide a regional municipal service, facility or other thing, or
                                         (iii)    will enter into partnership arrangements with other entities to carry out an activity described in subclause (i) or (ii),
                                 (c)    that the controlled corporation will not own or lease assets outside Alberta unless
                                           (i)    the Minister’s approval under section 5 authorizes the corporation to do so, or
                                          (ii)    the corporation generates, distributes, transmits or retails electricity or gas,
                                 (d)    that the controlled corporation will not be dependent for its on‑going operation on the municipality or group of municipalities that controls it, and
                                 (e)    that the purpose and the profit and dividends of the controlled corporation will provide a direct benefit to the residents of the municipality or group of municipalities that controls it.
Limit on borrowing
4   An applicant referred to in section 3(1) must provide with the application evidence satisfactory to the Minister that if the controlled corporation intends to borrow any amount to pay a cost referred to in section 3(2)(a), such borrowing
                                 (a)    will not exceed a loan‑to‑value ratio exceeding 80% of the acquisition or establishment costs of the controlled corporation,
                                 (b)    will not exceed 25% of the applicant’s debt limit under the Debt Limit Regulation (AR 255/2000), and
                                 (c)    will not cause the applicant to increase its total debt beyond 75% of its debt limit under the Debt Limit Regulation (AR 255/2000).
Time to complete wind-up, amalgamation or divestiture
5   An applicant referred to in section 3(1) that intends to obtain control of a corporation for the purpose of winding it up, amalgamating it or disposing of it must provide with the application the time period in which the winding up, amalgamation or disposition is expected to occur.
Minister’s power
6   The Minister may
                                 (a)    approve an application under section 3, with or without terms and conditions, or
                                 (b)    refuse to approve an application under section 3.
Due diligence study
7   Before making a decision under section 6, the Minister may require the municipality or group of municipalities to undertake a due diligence study that discloses potential environmental, financial, labour or other liability risks and provide a copy of the study to the Minister for review.
Immunity for the Crown
8   No action may be brought against the Crown claiming compensation for any real or perceived loss or damage resulting from the granting of an approval under section 6.
Confidentiality
9   Subject to the Freedom of Information and Protection of Privacy Act, all applications and information submitted to the Minister under this Regulation that are expressly marked as confidential must be dealt with in confidence by the Minister and the Minister’s staff.
Conditions on disposition
10   If a municipality or group of municipalities proposes to dispose of a corporation in respect of which an approval has been granted under section 6,
                                 (a)    the municipality or group of municipalities must advertise in accordance with section 606 of the Act a notice of its intention to do so, and
                                 (b)    any grants, loans, property or other assistance provided by the Government of Alberta to the controlled corporation must be repaid to the Government of Alberta if the Minister so directs.
Exemption of existing corporations
11   Where a municipality or group of municipalities has obtained control of a corporation before the coming into force of this Regulation, no approval is required under section 3(1) in respect of that corporation.
Transitional
12   If
                                 (a)    prior to January 1, 1995, the Minister consented to a municipality acquiring and holding the shares of a corporation, and
                                 (b)    on January 1, 1995 the municipality controlled the corporation,
the Minister’s consent is deemed to be an approval under section 6 of this Regulation.
Repeal
13   The Control of Corporations Regulation (AR 373/94) is repealed.
Expiry
14   For the purpose of ensuring that this Regulation is reviewed for ongoing relevancy and necessity, with the option that it may be repassed in its present or an amended form following a review, this Regulation expires on July 31, 2018.
AR 284/2003 s14;114/2013