National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards (NI 52-107), s. 5.1 – the Filers request relief from the requirements under section 3.2 of NI 52-107 that financial statements be prepared in accordance with Canadian GAAP applicable to publicly accountable enterprises to permit the Filers to prepare financial statements in accordance with U.S. GAAP.
Applicable Legislative Provisions
National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards, ss. 3.2, 5.1.
Citation: Re Westcoast Energy Inc., 2018 ABASC 82
May 25, 2018
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ALBERTA AND ONTARIO
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS
IN THE MATTER OF
WESTCOAST ENERGY INC. AND
UNION GAS LIMITED
The securities regulatory authority or regulator in each of the Jurisdictions (each a Decision Maker) has received an application from the Filers for a decision under the securities legislation (the Legislation) of the Jurisdictions exempting the Filers (the Exemption Sought) from the requirements under section 3.2 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards (NI 52-107) that financial statements (a) be prepared in accordance with Canadian GAAP applicable to publicly accountable enterprises and (b) disclose an unreserved statement of compliance with IFRS in the case of annual financial statements and an unreserved statement of compliance with IAS 34 in the case of an interim financial report.
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):
(a) the Alberta Securities Commission is the principal regulator for this application;
(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Saskatchewan, Manitoba, Québec, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador (Passport Jurisdictions); and
(c) this decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
In this decision:
(a) unless otherwise defined herein, terms defined in National Instrument 14-101 Definitions, MI 11-102 or NI 52-107 have the same meaning; and
(b) “activities subject to rate regulation” has the meaning ascribed in the Handbook.
This decision is based on the following facts represented by the Filers:
1. Enbridge Inc. (EI) is continued under the Canada Business Corporations Act and its head office is located in Calgary, Alberta.
2. Westcoast Energy Inc. is a corporation existing under the Canada Business Corporations Act and its head office is located in Calgary, Alberta.
3. Union Gas Limited is a corporation existing under the Business Corporations Act (Ontario) and its head office is located in Chatham, Ontario.
4. Each of the Filers is a reporting issuer in the Jurisdictions and each of the Passport Jurisdictions and is not in default of securities legislation in any jurisdiction in Canada.
5. Each of the Filers has “activities subject to rate regulation”.
6. Each of the Filers are indirect subsidiaries of EI.
7. The financial statements of each of the Filers are consolidated into the financial statements of EI.
8. EI is an SEC issuer and relies on section 3.7 of NI 52-107 to file its financial statements prepared in accordance with U.S. GAAP.
9. The Filers are not SEC issuers and, therefore, cannot rely on that provision.
10. By order cited as In the Matter of Westcoast Energy Inc. and Union Gas Limited, 2014 BCSECCOM 54, each of the Filers have been granted relief substantially similar to the Exemption Sought (the Existing Relief).
11. The Existing Relief will expire not later than January 1, 2019.
12. The International Accounting Standards Board (IASB) continues to work on a project focusing on accounting specific to activities subject to rate regulation. It is not yet known when this project will be completed or whether IFRS will include a specific standard that is mandatory for entities with activities subject to rate regulation.
Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.
The decision of the Decision Makers under the Legislation is that:
(a) the Exemption Sought is granted effective January 1, 2019;
(b) the Exemption Sought is granted to each Filer in respect of each Filer’s financial statements required to be filed on or after the date of this decision, provided that the Filer prepares those financial statements in accordance with U.S. GAAP; and
(c) the Exemption Sought will terminate in respect of each Filer on the earliest of the following:
(i) January 1, 2024;
(ii) if the Filer ceases to have activities subject to rate regulation, the first day of the Filer’s financial year that commences after the Filer ceases to have activities subject to rate regulation; and
(iii) the effective date prescribed by the IASB for the mandatory application of a standard within IFRS specific to entities with activities subject to rate regulation.
For the Commission: