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 Filer requests 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 in order to permit the Filer to prepare its financial statements in accordance with U.S. GAAP -- revocation or variation of decision -- Filer requests to have conditions in existing decision replaced with revised conditions -- existing decision revoked -- requested relief granted.
Applicable Legislative Provisions
National Instrument 52-107 Acceptable Accounting Principles and Auditing Standard, s. 5.1. Securities Act, R.S.O. 1990, c. S.5, as am., s. 144 -- Revocation or variation of decision.
Citation: Re NOVA Gas Transmission Ltd., 2014 ABASC 62
February 19, 2014
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 NOVA GAS TRANSMISSION LTD. (THE FILER)
The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filer under the securities legislation (the Legislation) of the Jurisdictions seeking exemption (the Exemption Sought) from the requirements of 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 Filer has provided notice that subsection 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, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland and Labrador, Yukon, the Northwest Territories and Nunavut; 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 at the date hereof.
This decision is based on the following facts represented by the Filer:
1. The Filer was incorporated under the NOVA Corporation Act of Alberta on April 8, 1954 and was continued under the Business Corporations Act (Alberta) on September 1, 1987 and the Filer's head office is located in Calgary, Alberta.
2. The Filer is an indirect wholly-owned subsidiary of TransCanada Corporation (TransCanada) by virtue of TransCanada's 100% ownership interest in TransCanada PipeLines Limited (TCPL). TCPL owns a direct 100% interest in the Filer.
3. The Filer is a reporting issuer or equivalent in the Jurisdictions and each of the Passport Jurisdictions.
4. The Filer is not in default of securities legislation in any jurisdiction in Canada.
5. The Filer has activities subject to rate regulation.
6. The financial statements of the Filer are consolidated into the financial statements of TransCanada and TCPL.
7. TransCanada and TCPL are SEC issuers and each relies on subsection 3.7 of NI 52-107 to file financial statements prepared in accordance with U.S. GAAP. The Filer is not an SEC issuer and, therefore, cannot rely on that provision.
8. By an order cited as Re: Nova Gas Transmission Ltd., 2011 ABASC 348, the Filer has been granted relief substantially similar to the Exemption Sought (the Existing Relief).
9. The Existing Relief will expire not later than 1 January 2015.
10. 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 satisfies the test set out in the Legislation for the Decision Maker to make the decision.
1. The decision of the Decision Makers under the Legislation is that:
(a) the Existing Relief is revoked;
(b) the Exemption Sought is granted to the Filer in respect of the Filer's financial statements required to be filed on or after the date of this order, provided that the Filer prepares those financial statements in accordance with U.S. GAAP; and
(c) the Exemption Sought will terminate on the earliest of the following:
(i) 1 January 2019;
(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 rate-regulated activities.
For the Commission: