Securities Law & Instruments

Headnote

Regulation 11-102 respecting Passport System and Policy Statement 11-203 respecting Process for Exemptive Relief Applications in Multiple Jurisdictions -- Regulation 52-107 respecting Acceptable Accounting Principles and Auditing Standards(Regulation 52-107), s. 5.1 -- the Filer applied for relief from the requirements in section 3.2 of Regulation 52-107 that financial statements be prepared in accordance with Canadian GAAP applicable to publicly accountable enterprises to permit the Filer to prepare its financial statements in accordance with U.S. GAAP.

Applicable Legislative Provision

Regulation 52-107 respecting Acceptable Accounting Principle and Auditing Standards, s. 5.1.

[TRANSLATION]

March 9, 2018

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 ÉNERGIR INC. (the Filer)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) for an exemption (the Exemption Sought) from the requirements of section 3.2 of Regulation 52-107 respecting Acceptable Accounting Principles and Auditing Standards (Regulation 52-107) that financial statements (a) be prepared in accordance with Canadian generally accepted accounting principles 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. The Exemption Sought is similar to the exemption granted to the Filer by the Decision Maker in each of the Jurisdictions (Decision No. 2015-SMV-0016) on May 12, 2015 (the U.S. GAAP Relief).

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

1. the Autorité des marchés financiers is the principal regulator for this application;

2. the Filer has provided notice that section 4.7(1) of Regulation 11-102 respecting Passport System (Regulation 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, Yukon Territory, the Northwest Territories and Nunavut (the Passport Jurisdictions); and

3. the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

In this decision:

1. unless otherwise defined herein, terms defined in Regulation 14-101 respecting Definitions, Regulation 11-102 and Regulation 52-107 have the same meaning; and

2. "activities subject to rate regulation" has the meaning ascribed thereto in the Handbook.

Representations

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

1. The Filer is a corporation existing under the Business Corporations Act and the head office of the Filer is in Montréal, Québec.

2. The Filer is a reporting issuer or equivalent in the Jurisdictions and each of the Passport Jurisdictions and is not in default of securities legislation in any of those jurisdictions.

3. The Filer currently prepares and files its financial statements for annual and interim periods in accordance with U.S. GAAP, in reliance on the U.S. GAAP Relief.

4. The Filer has activities subject to rate regulation.

5. The Filer is currently not a SEC issuer and therefore cannot rely on section 3.7 of Regulation 52-107 to file its financial statements prepared in accordance with U.S. GAAP.

6. The U.S. GAAP Relief will expire no later than January 1, 2019.

7. The International Accounting Standards Board (the 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.

Decision

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:

1. the U.S. GAAP Relief is revoked;

2. the Exemption Sought is granted to the Filer in respect of the Filer's annual financial statements required to be filed on or after the date of this decision, provided that the Filer prepares such financial statements in accordance with U.S. GAAP; and

3. the Exemption Sought will terminate in respect of the Filer on the earliest of the following:

a) January 1, 2024;

b) 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

c) 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.

"Gilles Leclerc"
Superintendent, Securities Markets
Autorité des marchés financiers