Bell Canada

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Relief granted from continuous disclosure requirements, certification requirements, audit committees requirements, corporate governance requirements and insider reporting requirements, subject to conditions. Company relies on the credit supporter exemption under section 13.4(2) of National Instrument 51-102 Continuous Disclosure Obligations. Voting securities to be issued to holders other than parent in connection with a Plan of Arrangement and will be acquired by parent of Company after a limited period. Technical relief granted for the limited period of time where the Company does not meet the conditions of paragraphs (a) and (c)(ii) of section 13.4(2) of National Instrument 51-102 Continuous Disclosure Obligations.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss 107, 121.

National Instrument 51-102 Continuous Disclosure Obligations, s. 13.1.

National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, s. 8.6.

National Instrument 52-110 Audit Committees, s. 10.1.

National Instrument 58-101 Disclosure of Corporate Governance Practices, s. 3.1.

[Translation]

September 16, 2016

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

QUÉBEC AND ONTARIO

(the “Jurisdictions”)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS

IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

BELL CANADA

(the “Filer”)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the “Decision Maker”) has received an application (the “Application”) from the Filer for a decision under the securities legislation of the Jurisdictions (the “Legislation”) exempting the Filer or its insiders, as the case may be, from:

(i)            the continuous disclosure requirements of Regulation 51-102 respecting Continuous Disclosure Obligations (“Regulation 51-102”) (the “Continuous Disclosure Requirements”);

(ii)           the requirements of Regulation 52-109 respecting Certification of Disclosure in Issuers’ Annual and Interim Filings (the “Certification Requirements”);

(iii)          the requirements relating to audit committees of Regulation 52-110 respecting Audit Committees (the “Audit Committees Requirements”);

(iv)          the requirements relating to disclosure of corporate governance of Regulation 58-101 respecting Disclosure of Corporate Governance Practices (the “Corporate Governance Requirements” and, together with the Continuous Disclosure Requirements, the Certification Requirements and the Audit Committees Requirements, the “Information Requirements”); and

(v)           the requirements relating to insider reporting of Regulation 55-104 respecting Insider Reporting Requirements and Exemptions and, if applicable, any comparable requirement under the Legislation (the “Insider Reporting Requirements”);

to accommodate the issuance of common or preferred shares (which would not represent “designated credit support securities” under Regulation 51-102) of the Filer (“Bell Securities”) to the shareholders of Manitoba Telecom Services Inc. (“MTS”), which Bell Securities would be beneficially owned by MTS Shareholders pending their immediate transfer to BCE Inc. (“BCE”), all in accordance with a series of transactions contemplated under the Plan of Arrangement (as defined below).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a)           the Autorité des marchés financiers is the principal regulator for this Application;

(b)           the Filer has provided notice that Subsection 4.7(1) of Regulation 11-102 – Passport System (“Regulation 11-102”) is intended to be relied upon by the Filer in British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador (the “Passport Jurisdictions”); and

(c)           the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in Regulation 14-101 - Definitions, Regulation 51-102, and Regulation 11-102, including without limitation, “credit support issuer”, “parent credit supporter”, and “designated credit support securities”, have the same meaning if used in this decision, unless otherwise defined herein.

Representations

This decision is based on the following facts represented by the Filer:

(a)           The Filer is a corporation governed by the Canada Business Corporations Act.

(b)           The head office of the Filer is located at 1 Carrefour Alexander Graham Bell, Tour A-8, Verdun, Québec, H3E 3B3.

(c)           The Filer is a reporting issuer in all of the Jurisdictions and Passport Jurisdictions and is not in default of any requirement of the Legislation as a reporting issuer.

(d)           the Filer has issued and has outstanding non-convertible debt securities (the “Non-Convertible Debt Securities”) and is a credit support issuer.

(e)           BCE, as parent credit supporter, fully and unconditionally guarantees the Non-Convertible Debt Securities of the Filer. BCE is not in default of any requirement of the Legislation as a reporting issuer.

(f)            The Filer currently qualifies under the credit support issuer exemption and satisfies the conditions under subsection 13.4(2) of Regulation 51-102 (the “Credit Support Issuer Exemption”), including the following:

(i)            the Filer does not have any securities outstanding other than (i) common shares held by BCE, (ii) the Non-Convertible Debt Securities which are designated credit support securities, and (iii) certain commercial paper representing “designated credit support securities” as defined in Section 13.4 of Regulation 51-102;

(ii)           BCE is a reporting issuer in all of the provinces of Canada and has filed all documents it is required to file under Regulation 51-102;

(iii)          the Filer files in electronic format a notice indicating that it is relying on the continuous disclosure documents filed by BCE and setting out where those documents can be found for viewing in electronic format;

(iv)          the Filer files with such notice in electronic format, for the period covered by the consolidated interim financial report or consolidated annual financial statements filed by BCE, consolidating summary financial information for BCE presented with a separate column for (a) BCE, (b) the Filer, (c) any other subsidiaries of BCE on a combined basis, (d) consolidating adjustments, and (e) total consolidated amounts;

(v)           the Filer issues in Canada a news release and files a material change report in accordance with Part 7 of Regulation 51-102 for all material changes in respect of the affairs of the Filer that are not also material changes in the affairs of BCE;

(vi)          no person other than BCE has provided a guarantee or alternative credit support for the payments to be made under any issued and outstanding securities of the Filer.

(g)           On May 1, 2016, BCE and MTS entered into an arrangement agreement (the “Arrangement Agreement”) pursuant to which BCE agreed to purchase all of the outstanding common shares of MTS (“MTS Shares”) in accordance with and subject to the terms and conditions of the Arrangement Agreement and a plan of arrangement (the “Plan of Arrangement”).

(h)           Pursuant to the Plan of Arrangement, holders of MTS Shares (“MTS Shareholders”) will be entitled to receive at each MTS Shareholder’s election, for his, her or its MTS Shares, either: (i) $40.00 in cash per MTS Share, or (ii) 0.6756 of a common share of BCE (each, a “BCE Share”) per MTS Share, subject to proration where MTS Shareholders collectively elect or are deemed to have elected, as applicable, more than the Maximum Cash Consideration (as defined in the Arrangement Agreement) or the Maximum Share Consideration (as defined in the Arrangement Agreement).

(i)            Under the Plan of Arrangement, the share consideration ultimately received by the MTS Shareholders entitled to share consideration for their MTS Shares will be BCE Shares.

(j)            To provide BCE with flexibility in structuring its acquisition of MTS Shares, BCE can opt to have MTS Shares acquired by a direct or indirect wholly-owned subsidiary of BCE. BCE intends to opt to have the Filer purchase the MTS Shares.

(k)           In the context of this structure, in order to ensure that MTS Shareholders who receive BCE Shares under the Plan of Arrangement benefit from a tax rollover in respect of their MTS shares, the share consideration initially received by MTS Shareholders (subject to an exception in the case of an MTS Shareholder that is a registered plan) will be Bell Securities. Such Bell Securities will subsequently be transferred by MTS Shareholders to BCE in exchange for the number of BCE Shares that MTS Shareholders are entitled to receive pursuant to the Plan of Arrangement.

(l)            Section 13.4(2) of Regulation 51-102 provides that, except as provided in that section, a credit support issuer satisfies the requirements of Regulation 51-102 if, amongst other things:

(i)            the parent credit supporter is the beneficial owner of all the outstanding voting securities of the credit support issuer; and

(ii)           the credit support issuer does not issue any securities, and does not have any securities outstanding, other than (a) designated credit support securities; (b) securities issued to and held by the parent credit supporter or an affiliate of the parent credit supporter; (c) debt securities issued to and held by banks, loan corporations, loan and investment corporations, savings companies, trust corporations, treasury branches, savings or credit unions, financial services cooperatives, insurance companies or other financial institutions; or (d) securities issued under exemptions from the prospectus requirement in section 2.35 of Regulation 45-106 – Prospectus Exemptions (“Regulation 45-106”).

(m)          The issuance of the Bell Securities to MTS Shareholders as part of the series of transactions provided for under the Plan of Arrangement would cause the Filer to not satisfy the conditions of the Credit Support Issuer Exemption for a limited period of time until the subsequent transfer of the Bell Securities by MTS Shareholders to BCE insofar as:

(i)            BCE would not be the beneficial owner of all of the outstanding voting securities of the Filer (unless the Bell Securities are non-voting preferred shares), and

(ii)           the Filer would have issued securities and would have securities outstanding that do not fall within any of the exceptions contemplated by Section 13.4(2)(c) of Regulation 51-102.

(n)           The Bell Securities cannot be issued pursuant to the Plan of Arrangement without also subsequently being transferred to BCE.

Decision

The Decision Makers are satisfied that the decision meets the test set out in the Legislation for the Decision Makers to make the decision.

Exemptions From Information Requirements

The decision of the Decision Makers under the Legislation is that the exemption sought in respect of the Information Requirements is granted provided that:

a.             the Filer continues to satisfy the conditions set out in subsection 13.4(2) of Regulation 51-102, except for the conditions under subsections 13.4(2)(a) and 13.4(2)(c);

b.             the Filer does not have to comply with the requirement in section 13.4(2)(a) of Regulation 51-102 if any and all beneficial owners of the voting securities of the Filer other than the parent credit supporter receive such shares as consideration for their MTS Shares pursuant to the Plan of Arrangement and all such shares are subsequently and immediately transferred to the parent credit supporter as part of the Plan of Arrangement;

c.             the Filer does not have to comply with the requirement in section 13.4(2)(c) of Regulation 51-102 if the Filer does not issue any securities, and does not have any securities outstanding, other than:

i.              designated credit support securities;

ii.             securities issued to and held by the parent credit supporter or an affiliate of the credit supporter;

iii.            securities issued and paid to persons other than the parent credit supporter as consideration for their MTS Shares pursuant to the Plan of Arrangement to be held for a limited period of time until the subsequent transfer of those securities to the parent credit supporter as part of the Plan of Arrangement;

iv.            debt securities issued to and held by banks, loan corporations, loan and investment corporations, savings companies, trust corporations, treasury branches, savings or credit unions, financial services cooperatives, insurance companies or other financial institutions; or

v.             securities issued under exemptions from the prospectus requirement in section 2.35 of Regulation 45-106.

d.             on the effective date of the Plan of Arrangement, BCE is the beneficial owner of all of the outstanding voting securities of the Filer.

Exemption From Insider Reporting Requirements

The decision of the Decision Makers under the Legislation is that the exemption sought in respect of the Insider Reporting Requirements is granted provided that:

a.             the Filer satisfies the conditions of the exemption in respect of the Information Requirements;

b.             if the insider is not BCE, (i) the insider does not receive, in the ordinary course, information as to material facts or material changes concerning BCE before the material facts or material changes are generally disclosed, and (ii) the insider is not an insider of BCE in any capacity other than by virtue of being and insider of the Filer;

c.             if the insider is BCE, the insider does not beneficially own any “designated credit support securities”.

“Gilles Leclerc”

Superintendent, Securities Markets

Autorité des marchés financiers