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The Manitoba Telephone System Reorganization and Consequential Amendments Act

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S.M. 1996, c. 79

THE MANITOBA TELEPHONE SYSTEM REORGANIZATION AND CONSEQUENTIAL AMENDMENTS ACT


Table of Contents

(Assented to November 28, 1996)

WHEREAS it is in the public interest of the province that The Manitoba Telephone System or its affiliate continue to provide access to telephone service to residents of the province in order to meet the telecommunications needs of all Manitobans with the right solutions, outstanding service and superior products;

AND WHEREAS it is in the public interest of the province that shares of The Manitoba Telephone System be offered for sale to members of the public;

NOW THEREFORE HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

Definitions

1(1)      In this Act,

"affiliate" means a body corporate that is affiliated with another entity within the meaning of subsection (2); (« groupe »)

"associate" when used to indicate a relationship with any person means

(a) a body corporate of which that person beneficially owns or controls, directly or indirectly, shares or securities currently convertible into shares carrying more than ten percent of the voting rights under all circumstances or by reason of occurrence of an event that has occurred and is continuing, or a currently exercisable option or right to purchase such shares or such convertible securities,

(b) a partner of that person acting on behalf of the partnership of which they are partners,

(c) a trust or estate in which that person has a substantial beneficial interest or in respect of which that person serves as a trustee or in a similar capacity,

(d) a spouse or child of that person,

(e) a relative of that person or of that person's spouse if that relative has the same residence as that person, or

(f) a person with whom that person has entered into an agreement or arrangement, other than only by the granting of a proxy, under which such persons agree to act or do act in concert, whether by active participation or passive consent, with respect to any of their interests, direct or indirect, in the issuer; (« liens »)

"beneficial owner" means, in respect of a security, a person who beneficially owns or controls the security, either directly or indirectly through a trustee, legal representative, agent or other intermediary, and whether or not such person is also the registered owner of the security; and "beneficially own" and "beneficially owned" have corresponding meanings; (« propriétaire véritable »)

"board" means the board of directors of the corporation; (« conseil »)

"body corporate" includes a company or other body corporate wherever or however incorporated; (« personne morale »)

"common share" means a voting common share of the corporation described in clause 6(1)(a); (« action ordinaire »)

"corporation" means The Manitoba Telephone System continued under this Act with the name Manitoba Telecom Services Inc., and any successor body corporate; (« Société »)

"Crown" means the Crown in right of the province; (« Couronne »)

"district registrar" means a person having the powers of a district registrar under The Real Property Act or the powers of a registrar under The Registry Act; (« registraire de district »)

"foreign government" means the government of a foreign state or of a political subdivision of a foreign state; (« gouvernement étranger »)

"group of associated persons" means a group of persons, each of which is an associate of one or more of the other of them; (« groupe de personnes liées »)

"holder" or "registered holder" means a person who is registered on the securities register of a body corporate as the owner of securities; (« titulaire » ou « titulaire inscrit »)

"indebtedness to the Crown" means indebtedness owing by the corporation to the Crown immediately prior to the coming into force of this section or any indebtedness to the Crown substituted therefor, or any part thereof owing from time to time; (« endettement envers la Couronne »)

"instrument" includes

(a) a caveat or an instrument within the meaning of The Real Property Act or The Registry Act,

(b) an Order in Council issued by the Lieutenant Governor in Council for the purpose of conveying the custody, control and administration of land or any other interest in land,

(c) a right-of-way agreement, easement agreement or other agreement, a transfer, assignment, licence, permit or reservation to use property, a mortgage, encumbrance, charge, title, certificate of title or certificate of registration,

(d) a judgment, order, direction, appointment, approval or determination of a court, judge or other constituted authority,

(e) a pleading, notice or document in an action or other proceeding in a court,

(f) a document issued, registered, filed, lodged or deposited by or with a district registrar, and

(g) a document issued, registered, filed, lodged or deposited in the register evidencing the disposition of Crown lands kept and maintained pursuant to the provisions of The Crown Lands Act; (« instrument »)

"issuer" means, in respect of voting shares, either the corporation or an affiliate of the corporation that has issued the voting shares; (« émetteur »)

"land" means real property of whatsoever nature or kind and includes messuages, tenements, leaseholds, hereditaments, corporeal and incorporeal, of every kind and description, whatever the estate or interest therein, and whether legal or equitable, together with all right or interest in, to, over, under or affecting land, including rights-of-way, and all paths, passages, ways, watercourses, waters, water rights, water powers, water privileges, air rights, licences, liberties, privileges, and easements, appertaining thereto, and all trees and timber thereon, and all mines, minerals, and quarries; (« biens-fonds »)

"minister" means the Minister of Finance; (« ministre »)

"non-resident of Canada" means

(a) an individual, other than a Canadian citizen, who is not ordinarily resident in Canada,

(b) a body corporate incorporated, formed or otherwise organized elsewhere than in Canada,

(c) a foreign government or its agent,

(d) a body corporate that is controlled directly or indirectly by a non-resident of Canada described in clause (a), (b) or (c),

(e) a trust in which non-residents of Canada described in any of clauses (a) to (d) have more than fifty percent of the beneficial interest,

(f) a body corporate of which the majority of

(i) the directors, or

(ii) persons acting in a capacity similar to that of a corporate director,

are non-residents of Canada described in clause (a), or

(g) a body corporate that is controlled directly or indirectly by a trust described in clause (e); (« non-résident du Canada »)

"non-voting common share" means a share of the corporation the holder of which is not entitled to receive notice of or attend or vote at meetings of shareholders except as specifically provided under The Corporations Act, is entitled to receive any dividend declared by the corporation and is entitled to share in the distribution of the assets of the corporation upon dissolution subject to the rights, privileges, and conditions attaching to any other class of shares of the corporation ranking in priority thereto; (« action ordinaire sans droit de vote »)

"owner" includes a mortgagee, lessee, tenant, occupant, or any person entitled to any estate or interest in land or property of every nature or kind whatsoever, and a guardian, committee, executor, administrator, or trustee in whom such land or property or estate or interest therein is vested; (« propriétaire »)

"person" includes an individual, partnership, association, body corporate, trustee, executor, administrator or other legal personal representative; (« personne »)

"predecessor corporations" means The Manitoba Telephone Commission and The Manitoba Telephone System; (« sociétés remplacées »)

"primary distribution to the public" has the meaning ascribed thereto in The Securities Act; (« premier placement auprès du public »)

"security" has the meaning ascribed thereto in The Securities Act;  (« valeur mobilière »)

"underwriter" has the meaning ascribed thereto in The Securities Act; (« preneur ferme »)

"voting common share" means a share of the corporation the holder of which is entitled to receive notice of and attend and vote at meetings of shareholders, to receive any dividend declared by the corporation and to share in the distribution of the assets of the corporation upon dissolution subject to the rights, privileges, and conditions attaching to any other class of shares of the corporation ranking in priority thereto; (« action ordinaire avec droit de vote »)

"voting share" means a share of an issuer the holder of which is entitled to receive notice of and attend and vote at meetings of shareholders on resolutions electing directors, and includes a voting common share; (« action avec droit de vote »)

Affiliated bodies corporate

1(2)      For the purposes of this Act,

(a) one body corporate is affiliated with another body corporate if one of them is the subsidiary of the other or both are subsidiaries of the same body corporate or each of them is controlled by the same person; and

(b) if two bodies corporate are affiliated with the same body corporate at the same time, they are deemed to be affiliated with each other.

Control of body corporate

1(3)      For the purposes of this Act, a body corporate is controlled by a person if

(a) securities of the body corporate to which are attached more than fifty percent of the votes that may be cast to elect directors of the body corporate are held, other than by way of security only, by or for the benefit of that person; and

(b) the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate.

Holding body corporate

1(4)      A body corporate is the holding body corporate of another body corporate if that other body corporate is its subsidiary.

Subsidiary body corporate

1(5)      A body corporate is a subsidiary of another body corporate if it is controlled by that other body corporate.

Control of securities

1(6)      A person controls a security if the person has the power to sell or direct the sale of the beneficial ownership of the security without being under an obligation to obtain consent or direction from any other person in respect of the sale.

Beneficial ownership of securities held as security or in managed account

1(7)      If securities are held by a person

(a) by way of security only; or

(b) as part of a portfolio of securities that is managed by that person without beneficial interest therein;

pursuant to a contract or arrangement under which that person has the right to sell or to direct the sale of the securities without being under an obligation to obtain consent or directions in respect of the sale of the securities from the person who in the absence of the contract or arrangement would be the beneficial owner of the securities, then for the purposes of this Act,

(c) the beneficial owner of the securities does not cease to be their beneficial owner by reason only of the contract or arrangement; and

(d) the person holding the securities by way of security only or as part of a managed portfolio of securities without beneficial interest therein does not become the beneficial owner of the securities by reason only of the contract or arrangement;

and a person does not cease to be the beneficial owner of securities by reason only that the securities cannot be sold without obtaining consent or directions from a court or public body or public official in respect of the sale.

Continuation of corporation

2(1)      The Manitoba Telephone System continued under The Manitoba Telephone Act  is continued as a body corporate with the name Manitoba Telecom Services Inc.

Rights and obligations continued

2(2)      All property of the predecessor corporations continues to be the property of the corporation, the corporation continues to be liable for the obligations of the predecessor corporations, any existing cause of action, claim or liability is unaffected, any action or proceeding pending by or against the predecessor corporations may continue to be prosecuted by or against the corporation and any ruling, order or judgment in favour of or against the predecessor corporations may be enforced by or against the corporation.

Application of The Corporations Act

3(1)      Subject to this Act, The Corporations Act applies to the corporation.

Conflicts

3(2)      In the event of a conflict between this Act or the regulations hereunder and The Corporations Act or the regulations thereunder, this Act and the regulations hereunder prevail.

Services of corporation

4(1)      The corporation or an affiliate of the corporation shall continue to provide access to telephone service to residents of the province on such terms and conditions as may be approved from time to time by a regulator of competent jurisdiction.

Business and powers not restricted

4(2)      The preamble and subsection (1) shall not be construed so as to restrict the business that may be carried on, or the power that may be exercised, by the corporation or its affiliates.

Relationship to Crown

5(1)      The corporation is not, and shall not be deemed to be, an agent of the Crown.

Shares of affiliates

5(2)      100 shares of the capital stock of each of MTS NetCom Inc., MTS Mobility Inc. and MTS Advanced Inc. are deemed to have been validly issued to the corporation on January 1, 1996, and the stated capital of those shares is deemed to be $1.00 per share.

Deeming

5(3)      All references to Her Majesty the Queen in Right of the Province of Manitoba in certificates of title or other instruments relating to land that is beneficially owned by the corporation or an affiliate of the corporation and registered in the name of Her Majesty the Queen in Right of the Province of Manitoba shall be deemed to be references to the corporation or to such affiliate.

New title

5(4)      The district registrar, upon the filing of a transmission application and payment of the applicable registration fees, shall issue a title in the name of the corporation or any of its affiliates for land beneficially owned by the corporation or its affiliates that is registered in the name of Her Majesty the Queen in Right of the Province of Manitoba.

Evidence of beneficial ownership of land

5(5)      For the purposes of subsection (4), the district registrar shall accept as conclusive evidence the certificate or affidavit of an officer of the corporation or its affiliate together with a certificate or affidavit of an officer of the Crown as to whether any land registered in the name of Her Majesty the Queen in Right of the Province of Manitoba is beneficially owned by the corporation or an affiliate of the corporation.

No land transfer tax

5(6)      No tax is payable under Part III of The Revenue Act on a transfer to the corporation or its affiliate of all or any portion of the land referred to in subsection (3).

Mines and minerals reserved

5(7)      Notwithstanding the definition of "land" in subsection 1(1) and notwithstanding any other provision of this section, mines and minerals in, upon or under land referred to in this section are reserved to the Crown in the same manner as set out in section 4 of The Crown Lands Act.

Authorized capital

6(1)      Subject to subsection (2), the authorized capital of the corporation consists of

(a) an unlimited number of voting common shares of a single class;

(b) an unlimited number of preference shares of two classes, issuable in one or more series, for which the directors of the corporation may fix the number of shares and determine the designation, rights, privileges, restrictions and conditions; and

(c) a class of shares consisting of a single share issuable to the Crown, designated  as the "special share", with such rights, privileges, restrictions and conditions attached thereto as are designated by the Lieutenant Governor in Council prior to the filing with The Manitoba Securities Commission of a final prospectus for the initial offering in the course of a primary distribution to the public of the common shares, including a provision for the automatic redemption of the special share for $1.00 at such time as all indebtedness to the Crown has been repaid.

Additional classes

6(2)      The shareholders of the corporation may by special resolution create new classes of shares.

Issuance of shares to Crown

7(1)      After the coming into force of this section, and at such time as is determined by the Lieutenant Governor in Council, the corporation shall issue to the minister on behalf of the Crown

(a) the special share; and

(b) such number of voting common shares as the board determines;

in consideration and satisfaction of such amount of indebtedness to the Crown as is determined by the Lieutenant Governor in Council.

Additional issuances

7(2)      If no offering of common shares under section 16 has been completed, the corporation from time to time shall at the request of the minister issue to the minister on behalf of the Crown such further number of common shares as the board determines in consideration for and concurrently with the satisfaction from time to time of such amount or amounts of indebtedness to the Crown as is determined by the Lieutenant Governor in Council.

Stated capital of special share

8         The stated capital of the special share is $1.00.

Legend

9         An issuer shall cause to be printed

(a) on each share certificate issued in respect of shares of the issuer; and

(b) on any certificates representing other securities of the issuer that are exchangeable for or convertible into shares of the issuer;

a legible statement that this Act applies to the securities of the issuer.

Class vote

10        The minister on behalf of the Crown as owner of the special share is entitled to vote separately as a class

(a) on a resolution in respect of any matter for which The Corporations Act provides for a class vote;

(b) on a resolution in respect of any matter described in section 11; and

(c) on a resolution in respect of the creation of new classes of shares under subsection 6(2);

and a resolution in respect of any such matter requires approval by holders of each class of shares voting separately.

Fundamental changes

11(1)     So long as the Crown owns the special share, neither the corporation nor any affiliate of the corporation shall

(a) change its name;

(b) amalgamate with one or more other bodies corporate;

(c) apply under section 185 of The Corporations Act for an order approving an arrangement;

(d) sell, lease or otherwise dispose of any of its property other than in the ordinary course of its business;

(e) sell, lease or otherwise dispose of all or substantially all of its property;

(f) grant security in respect of any indebtedness that ranks or purports to rank prior to or pari passu with the indebtedness to the Crown or any part thereof;

(g) cease to carry on business; or

(h) be dissolved or liquidated and dissolved under The Corporations Act or otherwise;

without the consent of the Lieutenant Governor in Council, which consent may be granted upon terms and conditions prescribed by the Lieutenant Governor in Council.

Prohibition

11(2)     So long as the Crown owns the special share, no affiliate of the corporation existing at the time of coming into force of this section shall issue any securities without the consent of the Lieutenant Governor in Council, which consent may be granted upon terms and conditions prescribed by the Lieutenant Governor in Council.

Registered and head office

12(1)     The registered and head office of the corporation shall be in the province.

No continuance outside Manitoba

12(2)     The corporation shall not continue into another jurisdiction.

Board minimum and maximum

13(1)     The board shall consist of a minimum of nine directors and a maximum of fifteen directors.

Number of directors to be elected

13(2)     Subject to subsections (1) and (3), the board shall by resolution passed by a majority of directors determine the number of directors from time to time.

New board

13(3)     On the coming into force of this section

(a) the number of directors comprising the board; and

(b) the directors of the corporation;

shall be determined by the Lieutenant Governor in Council.

Manitoba directors

13(4)     A majority of the directors of the corporation shall be ordinarily resident in the province.

Class voting

13(5)     At meetings of the corporation called for the purpose of electing directors, the minister on behalf of the Crown as owner of the special share shall have the exclusive right, voting as a class, to nominate and elect four directors of the corporation and the registered holders of the common shares, other than the Crown, shall be entitled to nominate and elect the remaining directors of the corporation.

Vacancy among Crown nominees

13(6)     A vacancy among the directors of the corporation elected by the Crown pursuant to subsection (5) shall only be filled by the Crown through the written direction of the minister, and the minister may exercise the Crown's right hereunder at any time prior to the next meeting of the corporation called for the purpose of electing directors.

Limit on Crown vote

13(7)     The right of the Crown pursuant to subsection (5) is in lieu of and not in addition to any other voting rights of the Crown in respect of the election of directors of the corporation.

Crown vote ceases

13(8)     Upon the redemption by the corporation of the special share, the registered holders of the common shares shall be entitled to elect all the directors of the corporation.

Certificate of continuance

14(1)     Not prior to but upon the redemption of the special share and subject to the approval of the Lieutenant Governor in Council under subsection (2), the corporation, without the need for a resolution of the shareholders, shall submit an application under The Corporations Act for a certificate of continuance, and the director under The Corporations Act shall issue such certificate of continuance continuing the corporation as a body corporate under The Corporations Act.

Mandatory provisions

14(2)     Articles continuing the corporation as a body corporate under The Corporations Act shall include provisions that are approved by the Lieutenant Governor in Council with respect to the following matters:

(a) limitations on ownership of voting shares by non-residents, as set out in section 17;

(b) limitations on ownership of voting shares by any one person as beneficial owner or by the members of any group of associated persons as beneficial owners, as set out in section 18;

(c) the prohibition on ownership of voting shares by any government or agency thereof, other than the Crown and its agents, as set out in section 19;

(d) the suspension of voting rights in circumstances where limits or restrictions set out in section 17, 18 or 19 are exceeded or violated;

(e) the refusal by the corporation to issue or register voting shares in circumstances where limits or restrictions set out in section 17, 18 or 19 are exceeded or violated;

(f) the purchase of voting shares from holders whose holdings exceed limits or violate restrictions set out in section 17, 18 or 19;

(g) the requirement that the registered and head office of the corporation be in the province; and

(h) the requirement that a majority of the directors of the corporation be ordinarily resident in the province.

Repeal on continuance

14(3)     On the issuance of a certificate of continuance continuing the corporation as a body corporate under The Corporations Act, sections 3, 5(1), 6, 7, 8, 9, 10, 11, 13(1), 13(2), 13(3), 13(5), 13(6), 13(7), 13(8), 14, 16(1), 16(2), 16(3), 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 29(a), 29(b) and 29(c) of this Act are deemed to be repealed.

Employee benefit definitions

15(1)     In this section and in clause 29(d),

"employee" means a present or former employee of the corporation or of an affiliate of the corporation; (« employé »)

"fund" means The Civil Service Superannuation Fund constituted under The Civil Service Superannuation Act; (« caisse »)

"implementation date" means the date prescribed by the regulations after which the corporation is responsible for all benefits to which the persons described in clause (2)(a) are entitled under the new plan; (« date de mise en oeuvre »)

"new plan" means a registrable pension plan established by the corporation and registered under the Income Tax Act (Canada) and the Pension Benefits Standards Act, 1985 (Canada); (« nouveau régime »)

"transfer amount" means that part of the assets of the fund, as at the implementation date, determined by multiplying the total assets of the fund including any surplus by a fraction, the numerator of which is the amount of the actuarial liabilities of the fund for benefits payable or accrued to the persons described in clause (2)(a) based upon an actuarial valuation and the denominator of which is the  amount of the actuarial liabilities of the fund for benefits payable or accrued to all persons entitled to benefits from the fund based upon an actuarial valuation; (« somme transférée »)

"trust fund" means the trust fund maintained by the trustee under the new plan. (« fonds de fiducie »)

New plans established

15(2)     On or prior to the implementation date, the corporation shall establish

(a) the new plan which shall provide for benefits which on the implementation date are equivalent in value to the pension benefits to which employees have or may have become entitled under The Civil Service Superannuation Act  or to which any other person has or would have become entitled under The Civil Service Superannuation Act by virtue of the death of an employee; and

(b) a funding arrangement which shall provide for group insurance benefits for employees which on the implementation date are equivalent in value to the insurance benefits provided in the plan of insurance under The Public Servants Insurance Act.

Independent actuary to review plan

15(3)     As soon as possible after this Act receives royal assent, the Provincial Auditor shall appoint an independent actuary to review the plan proposed by the corporation for the purposes of clause (2)(a) to determine whether the benefits under the proposed plan are equivalent in value as required by that clause.

Concerns of independent actuary to be addressed

15(4)     The corporation shall take any steps necessary to resolve any concerns raised by the independent actuary in a report prepared for the purposes of subsection (3).

Transfer of transfer amount

15(5)     The transfer amount shall be determined and adjusted, and the assets to be included as part of the transfer amount determined, in a manner prescribed by the regulations, and shall be transferred from the fund to the trust fund under the new plan on or before the date prescribed in the regulations.

Interim payments

15(6)     During the period between the implementation date and the date on which the transfer is made under subsection (5),  the fund may on behalf of the new plan receive employee contributions and make benefit payments pursuant to the provisions of the new plan.

Liabilities assigned and assumed

15(7)     All liabilities of the fund to the persons described in clause (2)(a) and all rights and obligations of the fund under any related agreements are assigned to and assumed by the corporation and shall become liabilities, rights and obligations of the trust fund under the new plan on the date of transfer of the transfer amount pursuant to subsection (5).

Waiver

15(8)     All notices, consents and approvals that may be required in connection with the transfer described in subsection (5) and the assignment and assumption described in subsection (7) are waived.

Corporation and affiliates responsible

15(9)     All current and future liabilities of the corporation and its affiliates as employers shall continue to be liabilities of such employers, and the corporation and its affiliates shall be responsible, in accordance with applicable law, for any deficiency in the funding of such liabilities.  Neither the Crown nor the fund shall be responsible for any current or future liabilities of the corporation or its affiliates as employers.

Deemed consent

15(10)     The persons described in subsection (2) are deemed to consent

(a) to termination of their participation in the fund;

(b) to the assignment and transfer of assets, liabilities and agreements from the fund to the new plan;

(c) to the determination of all rights under the new plan without reference to The Civil Service Superannuation Act, the fund, or any trust or trust agreement relating to them; and

(d) to termination of their participation in the group insurance plan established under The Public Servants Insurance Act and to the assignment and transfer of monies and investments, liabilities and agreements related to such group insurance plan.

Effect of agreement

15(11)    Nothing in this section is to be interpreted as nullifying the effect of an agreement executed on November 7, 1996 by representatives of The Manitoba Telephone System, the Government of Manitoba and employees on the subject of pension issues.

Insurance fund transferred

15(12)    All monies and investments attributable to the corporation or its affiliates or their respective employees and held pursuant to the provisions of The Public Servants Insurance Act shall be determined and transferred in the manner prescribed by the regulations.

Crown and fund liability extinguished

15(13)    Upon completion of the transfers under subsections (5) and (12), the liability of the Crown and of The Civil Service Superannuation Board is extinguished with respect to

(a) employee participation or entitlement under The Civil Service Superannuation Act  as it relates to any obligations associated with the fund; and

(b) employee participation or entitlement to any benefit or matter arising under or through The Public Servants Insurance Act other than for claims incurred prior to the implementation date.

Public offering

16(1)     The common shares issued to the Crown under clause 7(1)(b) may be offered by way of primary distribution to the public.

Manitoba preference

16(2)     When making  an offering by way of primary distribution to the public of the common shares, residents of the province shall be entitled in accordance with the regulations to a preference with respect to a majority of the common shares issued to the Crown under clause 7(1)(b).

Manitoba resident defined

16(3)     For the purposes of this section, a "resident of the province" means

(a) an individual who is ordinarily resident in Manitoba; or

(b) a self-directed registered retirement savings plan or self-directed registered retirement income fund, the beneficiary or annuitant of which is an individual ordinarily resident in the province.

Deeming

16(4)     For the purpose of qualifying the common shares issued to the Crown under clause 7(1)(b) as an authorized investment under clause 328(2)(l) of Part XXIV of The Corporations Act, the corporation is deemed to have satisfied the requirements of clause 328(2)(l) of The Corporations Act with respect to each of the five years immediately preceding an offering of common shares under this section.

Non-resident ownership

17(1)     The number of voting shares of the corporation that may be beneficially owned by non-residents of Canada other than by way of security only shall not exceed in the aggregate twenty-five percent of the total number of issued and outstanding voting shares of the corporation.

Non-resident ownership in affiliate

17(2)     The number of voting shares of an affiliate of the corporation existing at the time of coming into force of this section that may be beneficially owned by non-residents of Canada shall not exceed in the aggregate twenty-five percent of the total number of issued and outstanding voting shares of that affiliate.

Jointly owned shares

17(3)     For the purposes of this Act, if voting shares are beneficially owned jointly by two or more persons, and one or more of the joint beneficial owners is a non-resident of Canada,  the voting shares are deemed to be beneficially owned by a non-resident of Canada.

Beneficial owner becoming non-resident

17(4)     For the purposes of this Act, if a person who was at any time not a non-resident of Canada becomes a non-resident of Canada, any voting shares beneficially owned by that person shall be deemed to be beneficially owned by a non-resident of Canada.

Individual ownership of shares

18(1)     Subject to subsection (4), the total number of voting shares of the corporation that may be beneficially owned

(a) by any one person; or

(b) by the members of any one group of associated persons

other than by way of security only shall not exceed ten percent of the total number of issued and outstanding voting shares of the corporation.

Calculation of issued shares

18(2)     For the purposes of subsection (1), in the case of the subscription for shares of the corporation pursuant to an offer of voting shares

(a) by way of rights granted to holders of voting shares of the corporation to purchase additional voting shares of the corporation; or

(b) in the course of a primary distribution to the public;

the corporation shall count all the voting shares included in the offer as voting shares of the corporation issued and outstanding.

Exception for Crown and underwriters

18(3)     The percentage limit in subsection (1) shall not apply to

(a) voting shares beneficially owned by the Crown or its agents; or

(b) voting shares beneficially owned by a person acting as underwriter in connection with a primary distribution to the public of voting shares by the corporation or the Crown, during the period commencing on the commencement date of that primary distribution to the public and ending 150 days after such commencement date.

Underwriters not to vote

18(4)     A person referred to in clause (3)(b) shall not exercise the voting rights attached to the voting shares so beneficially owned during the period mentioned.

Individual ownership in affiliate

18(5)     Subject to subsection (6), the total number of voting shares of an affiliate of the corporation existing at the time of coming into force of this section that may be beneficially owned

(a) by any one person; or

(b) by the members of any one group of associated persons;

other than by way of security only shall not exceed ten percent of the total number of issued and outstanding voting shares of that affiliate.

Exception

18(6)     The percentage limit in subsection (5) shall not apply to voting shares beneficially owned by the corporation or by another affiliate of the corporation.

More than one beneficial owner

18(7)     For the purposes of subsections (1) and (5), if two or more persons beneficially own the same voting shares, each of those persons is deemed to be the sole beneficial owner of those voting shares.

No government ownership of corporation

19(1)     No voting shares of the corporation may be beneficially owned by any government or agency thereof, other than the Crown and its agents.

No government ownership of affiliate

19(2)     No voting shares of any affiliate of the corporation may be beneficially owned by any government or agency thereof, other than the Crown and its agents.

Constraints on issues and transfers

20         An issuer shall not

(a) issue voting shares; or

(b) register or otherwise recognize the transfer of voting shares;

if a contravention of this Act would result.

Notice of contravention

21(1)     If voting shares are beneficially owned by a person or a group of associated persons in contravention of section 17, 18 or 19, the issuer may, by notice to the registered holder of those voting shares, require the voting shares in excess or violation of the limit or restriction in section 17, 18 or 19, as the case may be, to be disposed of within the period stated in the notice.

Manner of giving notice

21(2)     Notice under subsection (1) shall be given, in the manner prescribed in the by-laws of the issuer for the giving of notice, to the registered holder at the last known address according to the records of the issuer or its registrar and transfer agent, and shall prescribe a period of not less than 60 days from the time the notice is given as the period within which the voting shares must be disposed.

Continuing contravention

21(3)     If the excess voting shares referred to in subsection (1) have not been disposed of within the time set out in the notice given under that subsection,  then during the period of contravention

(a) no voting rights attached to any voting shares beneficially owned by such person or group of associated persons may be exercised; and

(b) the issuer may purchase for cancellation, or its nominee may purchase,  from the person or group of associated persons or any of them who shall be required to sell, the number of voting shares beneficially owned in contravention of section 17, 18 or 19.

Purchase of shares

21(4)     A purchase of voting shares under subsection (3) may be effected by the issuer or its nominee depositing the amount of the consideration in an account with a Canadian chartered bank, and giving to the registered holder notice of the purchase and of the deposit in the manner described in subsection (2),  and thereupon the voting shares are purchased and the rights of the registered holder and any beneficial owners of the voting shares cease except the right of a registered holder to receive out of the amount so deposited, without interest, the consideration payable with respect to the voting shares on presentation and surrender of the certificate representing the voting shares.

Purchase price

21(5)     The consideration for each voting share purchased under this section shall be the lowest closing price per voting share during the 12 month period prior to the giving of notice under subsection (4), based on the trading prices of any stock exchange on which the voting shares are listed.

Interest

21(6)     Any interest payable by the Canadian chartered bank on the deposit made under subsection (4) shall be paid to the issuer.

Sequence

21(7)     Voting shares purchased under this section due to a contravention of section 17 shall be purchased according to the length of time they have been held by the registered holders as evidenced by the securities register of the issuer, with the voting shares held for the shortest period of time being purchased before others held for a longer time.

Request for information

22(1)     An issuer may request that a person who

(a) is or proposes to be a registered holder of voting shares;

(b) holds or proposes to hold or is believed by the issuer to hold voting shares on behalf of another person, other than as a registered holder;

(c) is or proposes to be or is believed by the issuer to be a beneficial owner of voting shares;

(d) subscribes for voting shares;

(e) requests registration of a transfer of voting shares;

(f) requests a change in the registration of voting shares; or

(g) elects to convert or exchange any securities into or for voting shares;

shall file a shareholder's declaration with the issuer or its registrar and transfer agent within the time limit prescribed in the request, which time limit shall be not less than 30 days.

Declaration to be submitted

22(2)     A person to whom a request is made pursuant to subsection (1) shall submit the shareholder's declaration in a form authorized by the issuer, and the shareholder's declaration shall contain the information requested by the issuer to enable the issuer to determine whether this Act is being or may be contravened.

Contents of request

22(3)     Such information may include, but shall not be limited to,

(a) the name and address of the person;

(b) the name and address of any person on whose behalf that person holds voting shares;

(c) the names and addresses of that person's associates;

(d) the names and addresses of any persons with whom that person acts in concert with respect to interests in the issuer;

(e) whether that person is a non-resident of Canada;

(f) the number of voting shares that are or are to be beneficially owned by that person and by that person's associates, and the date or dates on which that person or that person's associates acquired the interests in the voting shares;

(g) whether any voting shares are held by way of security only; and

(h) in the case of a person that is a body corporate, a summary of the residency or citizenship of the holders of shares, units or interests of whatever nature of such body corporate.

Failure to submit

22(4)     In the event that a shareholder's declaration is requested in respect of voting shares from a registered holder or from a beneficial owner or other person for whom the voting shares are or may be held, and a declaration satisfactory to the issuer has not been submitted within the time prescribed in the request, then, until a declaration satisfactory to the issuer has been submitted to it, section 21 shall apply to those voting shares as though they were voting shares held by that person as a beneficial owner in contravention of sections 17, 18 and 19.

Purchases and transfers prohibited

22(5)     If the issuer has requested a declaration from a person under this section, the issuer shall not

(a) accept any offer to purchase voting shares from that person; or

(b) allow any transfer of voting shares to be made or recorded in the name of that person in the securities register of the issuer;

unless the declaration has been submitted to the issuer and it appears from the declaration that the proposed beneficial owner of those voting shares would not, by the purchase of the voting shares being purchased or the entry in the securities register of the voting shares being transferred, hold those voting shares in contravention of this Act.

Validity of actions

23        A contravention of section 17, 18, 19, 20 or 21 shall not render invalid

(a) a meeting of shareholders of the issuer or any action taken at it;

(b) a transfer of voting shares that has been made or recorded in the securities register of the issuer; or

(c) the issuance of voting shares.

Application to court

24(1)     A registered holder or beneficial owner of voting shares may apply to the Court of Queen's Bench for an order under this section.

Order

24(2)     The Court may make any interim or final order it thinks fit, including, without limiting the generality of the foregoing, any or all of the following:

(a) an order restraining the board of directors of the issuer from exercising any powers specified in the order;

(b) an order removing the directors of the issuer then holding office, other than those appointed by the Lieutenant Governor in Council;

(c) an order in respect of an election of directors of the issuer, other than those appointed by the Lieutenant Governor in Council, and providing for their terms of office;

(d) an order directing the issuer to purchase voting shares in accordance with section 21.

Registered holder assumed to be beneficial owner

25(1)     An issuer is entitled to assume for the purposes of sections 17, 18 and 19 that the registered holder of any voting shares is also the beneficial owner of the voting shares except to the extent that the issuer has evidence to the contrary by way of

(a) a statutory declaration submitted by the registered holder to the issuer stating that some other person is the beneficial owner of the voting shares and naming that beneficial owner;

(b) statements made in any declaration submitted to the issuer under section 22; or

(c) any other information in the possession of the issuer.

Reliance on declaration

25(2)     In determining for the purposes of this Act

(a) whether voting shares are held in contravention of section 17, 18 or 19;

(b) whether voting rights were exercised in contravention of section 21;

(c) whether a person is associated with any other person; or

(d) any other circumstances relevant to the performance of the duties of the issuer and the board under this Act;

the issuer and any director, officer, employee or agent thereof may rely on statements made in any declaration submitted under section 22, and the issuer and its directors, officers, employees and agents are not liable in an action for anything done or omitted by them in good faith as a result of any conclusions made by them on the basis of any such statements or on the basis of a person failing to submit a declaration.

Determination by board of directors

26(1)     The board of directors of the issuer may determine whether voting shares are held by a person or a group of associated persons in contravention of the Act or whether section 21 applies to a person or a group of associated persons.

Directors bound

26(2)     The board of directors of the issuer is bound by a determination made under subsection (1) unless a fact material in making the determination was not disclosed or there is a subsequent material change of circumstances.

Expenses of public offering

27        The expenses of any offering in the course of a primary distribution to the public pursuant to section 16 shall be paid out of the proceeds of such offering.

Deeming

28(1)     All references to "The Manitoba Telephone Commission" or "The Manitoba Telephone System" in any agreement, instrument, evidence of indebtedness or other document issued or executed by or on behalf of or relating to The Manitoba Telephone Commission or The Manitoba Telephone System, shall be conclusively deemed to be references to and shall mean "Manitoba Telecom Services Inc." or its affiliate to whom such agreement, instrument, evidence of indebtedness or other document has been assigned.

Easement agreements, caveats

28(2)     Any reference to either of the predecessor corporations in a right-of-way agreement, an easement agreement, or a caveat relating to a right-of-way agreement or an easement agreement within the meaning of The Real Property Act is deemed to be a reference to the affiliate of the corporation to which the interests of the predecessor corporation in such right-of-way agreement, easement agreement or caveat has been assigned or transferred, as specified by the regulations, and such affiliate shall have the same obligations, rights and status that the predecessor had in respect of such right-of-way agreement, easement agreement or caveat.

Unregistered easements

28(3)     Where the predecessor corporations or any of their affiliates have constructed or installed or have agreed or commenced to construct or install telecommunications lines, wires, cables, equipment or other facilities over, across, upon or under land, whether pursuant to a right-of-way agreement, easement agreement, statutory right or a right otherwise created, the corporation or its affiliates shall have the continuing right, notwithstanding any change in ownership of the land, to maintain, inspect, repair, remove, replace or add to the telecommunications lines, wires, cables, equipment or other facilities over, across, upon or under the land, and where such construction or installation was made pursuant to a right-of-way agreement or easement agreement that has not been registered against the title to the land, the corporation or its affiliates shall have the right but shall not be obligated to register the right-of-way agreement or easement agreement or a caveat in respect thereof as determined by the corporation or its affiliates.

Regulations

29        The Lieutenant Governor in Council may make regulations

(a) in respect of the offering and sale of voting shares held by the Crown;

(b) authorizing any terms and conditions pursuant to which voting shares will be offered on a preferential basis to residents of the province;

(c) authorizing any terms and conditions pursuant to which voting shares will be offered to employees of the corporation and of any affiliate of the corporation;

(d) in respect of establishing the implementation date and the date of transfer to the new plan, the method of determining and the actuarial assumptions and methods to be used in calculating and adjusting the transfer amount, the assets to be included as part of the transfer amount,  and the basis for determining the amount attributable to the corporation or its affiliates or their respective employees under The Public Servants Insurance Act and for the transfer of such amount to or for the benefit of the corporation or its affiliates or their respective employees;

(e) specifying the affiliates of the corporation to which reference is made in subsection 28(2);

(f) in respect of any other matter considered necessary or advisable to carry out the intent and purpose of this Act.

CONSEQUENTIAL AMENDMENTS, REPEAL AND COMING INTO FORCE

Consequential amendment, C.C.S.M. c. B91

30        Section 1 of The Builders' Liens Act is amended in the definition "Crown agency" by repealing clause (h).

Consequential amendment, C.C.S.M. c. C336

31        Subsection 2(2) of The Crown Corporations Public Review and Accountability Act is amended by striking out "and The Manitoba Telephone System".

Consequential amendments, C.C.S.M. c. H60

32(1)     The Highway Traffic Act is amended by this section.

32(2)     Clause 38(3)(e) is amended by striking out "The Manitoba Telephone System" and substituting "MTS NetCom Inc.".

32(3)     Subclause 221(4)(a)(i) is amended by striking out "The Manitoba Telephone System" and substituting "MTS NetCom Inc.".

Consequential amendment, C.C.S.M. c. L40

33        Section 1 of The Land Acquisition Act is amended in the definition "utility" by striking out "or The Manitoba Telephone System".

Consequential amendment, C.C.S.M. c. M225

34        Clause 213(3)(b) of The Municipal Act is amended

(a) by striking out "The Manitoba Telephone System,"; and

(b) by striking out ", The Manitoba Telephone Act".

Consequential amendment, C.C.S.M. c. M226

35        Subclause 22(1)(a)(vi) of The Municipal Assessment Act is repealed.

Consequential amendments, C.C.S.M. c. P80

36        Clause 60(3)(e) of The Planning Act is amended by adding ", MTS NetCom Inc." after "of Manitoba".

Consequential amendments, C.C.S.M. c. R30

37(1)     The Real Property Act is amended by this section.

37(2)     Clause 111(1)(h) is amended by striking out "The Manitoba Telephone System" and substituting "MTS NetCom Inc.".

37(3)     Subsection 112(3) is amended by striking out "the Manitoba Telephone System" and substituting "MTS NetCom Inc.".

Repeal

38        The Manitoba Telephone Act, R.S.M. 1987, c. T40, is repealed on the coming into force of this section.

Coming into force

39(1)     Subject to subsections (2) and (3), this Act comes into force on a day fixed by proclamation.

Coming into force: subsection 5(2)

39(2)     Subsection 5(2) is retroactive and is deemed to have come into force on January 1, 1996.

Coming into force: certain provisions

39(3)     Sections 7, 16 and 29 and subsections 15(3) and (4) come into force on the day this Act receives royal assent.