The Calgary Airport Authority
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief from the prospectus requirement in connection with the distribution of non-convertible debentures, subject to conditions -- non-reporting, not-for-profit issuer unable to rely on the exemption in section 2.4 of NI 45-106.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s.74.
Citation: Re The Calgary Airport Authority, 2021 ABASC 156
October 7, 2021
IN THE MATTER OF THE SECURITIES LEGISLATION OF ALBERTA AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF THE CALGARY AIRPORT AUTHORITY (the Filer)
The securities regulatory authority or regulator in each of the Jurisdictions (each, a Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) for an exemption from the prospectus requirement in connection with the distribution (an Offering) of non-convertible debt securities of the Filer (the Exemption Sought).
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 Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each province of Canada, other than Ontario and Alberta, and
(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filer:
1. The Filer is a private, not-for-profit corporation, formed on 26 July 1990 by way of order in council O.C. 398/90 issued by the Lieutenant Governor in Council of Alberta.
2. The head office of the Filer is located in Alberta.
3. The Filer is governed by articles of incorporation dated 7 October 1998 (the Articles) as well as the Regional Airports Authorities Act (the RAA Act) and the Regional Airports Authorities Regulation (the RAA Regulation).
4. The Filer is not a reporting issuer in any jurisdiction of Canada and is not in default of securities legislation in any jurisdiction of Canada.
5. The Articles provide that there are no restrictions on:
(a) the number of securities or any particular form of securities that the Filer is permitted to issue; or
(b) the right to transfer any of the securities issued by the Filer; however, the Articles do not provide for specific classes of shares or other equity securities issuable by the Filer.
6. There is a strict prohibition on the Filer's ability to issue shares under section 36(2) of the RAA Act, which is not an optional prohibition and cannot be overridden by provisions of the Articles and the Filer is therefore unable to issue share capital. Accordingly, the Filer does not have any shares or other equity securities outstanding and has never issued such equity securities.
7. The outstanding securities of the Filer consist of approximately $2.915 billion in non-convertible debentures (the Prior Offering). Debentures of the Filer were distributed solely to the Government of Alberta in the name of the Alberta Capital Finance Authority. By subsequent assignment, all such debentures under the Prior Offering have been transferred directly to the Province of Alberta.
8. While the RAA Act contemplates the issuance of securities by authorities such as the Filer, section 36(2) of the RAA Act restricts the issuance of share capital by providing that "unless otherwise prescribed, an authority shall not issue any shares". The RAA Regulation does not prescribe anything to the contrary.
9. In order to complete a distribution or trade of securities, the Filer would be required to file a prospectus or rely on an exemption from the prospectus requirements under National Instrument 45-106 Prospectus Exemptions (NI 45-106).
10. The Filer cannot rely on the exemption in section 2.4 of NI 45-106 (the Private Issuer Exemption) with respect to the Offering because it does not technically satisfy subparagraph (b)(i) of the definition of "private issuer" contained in the Private Issuer Exemption, as there are no restrictions on the transfer of the relevant securities of the Filer contained in the Filer's constating documents or security holders' agreement.
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 the Exemption Sought is granted, provided that,
(a) at the time of an Offering,
(i) the Filer satisfies paragraphs (a) and (c) of the definition of "private issuer" contained in the Private Issuer Exemption,
(ii) there has been no amendment to section 36(2) of the RAA Act,
(iii) the RAA Regulation prescribes no exception to section 36(2) of the RAA Act, and
(b) the first trade of any non-convertible debt securities of the Filer issued in reliance on the Exemption Sought will be subject to section 2.6 of National Instrument 45-102 Resale of Securities.
For the Commission:
"Tom Cotter"Vice-Chair"Kari Horn"Vice-Chair