Telus 2012 Annual Report Download - page 16

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16
FOREIGN OWNERSHIP RESTRICTIONS
Certain subsidiaries of TELUS or partnerships in which TELUS has a controlling interest,
are Canadian carriers, holders of radio authorizations or licences, and holders of
broadcasting licences, and are required by the Telecommunications Act (Canada) (the
“Telecommunications Act”), the Radiocommunication Act (Canada) (the
“Radiocommunication Act”) and a Direction to the Canadian Radio-television and
Telecommunications Commission (“CRTC”) (Ineligibility of Non-Canadians) given under
the Broadcasting Act (Canada) (the “Broadcasting Act”) to be Canadian-owned and
controlled. Each of the Canadian carriers, under the Telecommunications Act, is
considered to be Canadian-owned and controlled as long as: (a) not less than 80% of
the members of its board of directors are individual Canadians; (b) Canadians
beneficially own not less than 80% of its issued and outstanding voting shares; and (c) it
is not otherwise controlled in fact by persons who are not Canadians. Substantially the
same rules apply under the Radiocommunication Act and the Broadcasting Act. We
have filed with the CRTC the requisite documentation affirming TCC’s status as a
Canadian carrier. We further intend that TCC will remain controlled by TELUS
Corporation and that it will remain “Canadian” for the purposes of these ownership
requirements.
The Canadian Telecommunications Common Carrier Ownership and Control
Regulations (the “Ownership and Control Regulations”), made under the
Telecommunications Act further provide that in order for a company that holds shares in
a carrier to be considered Canadian, not less than 66-2/3% of the issued and
outstanding voting shares of that company must be owned by Canadians and that such
company must not otherwise be controlled in fact by non-Canadians. Accordingly, not
less than 66-2/3% of the issued and outstanding voting shares of TELUS Corporation
must be owned by Canadians and we must not otherwise be controlled in fact by non-
Canadians. To the best of our knowledge, Canadians beneficially own and control in the
aggregate not less than 66-2/3% of the issued and outstanding Common Shares of
TELUS and TELUS is not otherwise controlled in fact by non-Canadians. For the
purposes of these regulations, “Canadian” means among other things:
(i) a Canadian citizen who is ordinarily resident in Canada;
(ii) a permanent resident of Canada who is ordinarily resident in Canada and has
been so for more than one year after the date he or she was eligible to apply for
Canadian citizenship;
(iii) a corporation with not less than 66-2/3% of the issued and outstanding voting
shares of which are beneficially owned and controlled by Canadians and which is
not otherwise controlled in fact by non-Canadians; or
(iv) a pension fund society the majority of whose members of its board of directors
are individual Canadians, and that is established under applicable federal
legislation or any provincial legislation relating to the establishment of pension
fund societies.
The Ownership and Control Regulations provide Canadian carriers and carrier holding
companies, such as TELUS Corporation, with the time and ability to rectify ineligibility