Are telecom and broadcasting foreign-ownership limits separate from Investment Canada Act review?

Telecommunications: 80% of the board, 80% of the vote, and it's a standing condition

Section 16(3) of the Telecommunications Act defines Canadian ownership and control: “(a) in the case of a corporation, not less than 80% of the members of the board of directors are individual Canadians; (b) Canadians beneficially own, directly or indirectly, in the aggregate and otherwise than by way of security only, not less than 80% of the entity's voting interests; and (c) the entity is not otherwise controlled by persons that are not Canadians.” Section 16(4) makes ongoing compliance mandatory, not just a closing condition: “No Canadian carrier shall operate as a telecommunications common carrier unless it is eligible under this section to operate as such.”

Broadcasting runs a near-identical test through a different instrument

The Direction to the CRTC (Ineligibility to Hold Broadcasting Licences) directs, at s.2: “the Canadian Radio-television and Telecommunications Commission is hereby directed that no broadcasting licence may be issued, and no amendments or renewals thereof may be granted, to an applicant that is a non-Canadian.” The Direction's “qualified corporation” test requires “not less than 80 per cent of the directors are Canadians” and “not less than 80 per cent of all the issued and outstanding voting shares … and not less than 80 per cent of the votes” — the same 80% figure as telecom, issued under a different statute (the Broadcasting Act) through a different regulator process.

Neither gate cares whether the deal cleared Investment Canada Act review

Both rules keep operating after closing, independent of the deal's Investment Canada Act outcome: a buyer can clear net-benefit review entirely and still be forced into a restructuring, or a licence revocation, if its cap table or board composition later slips below either 80% figure. The two regimes are administered separately and neither one substitutes for the other.

Where this plays out in the Case Files

• • A New Brunswick fibre carrier where a foreign buyout would have dropped Canadian ownership and board control below the s.16 thresholds
• • A cap table at 78% Canadian — a comfortable figure almost everywhere else, and a failing one under the Direction to the CRTC

Sources

• • Telecommunications Act, S.C. 1993, c. 38, s.16 — s.16(3) the Canadian-owned-and-controlled test, s.16(4) the prohibition on operating while ineligible.
• • Direction to the CRTC (Ineligibility to Hold Broadcasting Licences), SOR/97-192 — s.1 the qualified-corporation 80% test, s.2 the direction not to issue a licence to a non-Canadian, s.3 the deeming rule for an applicant controlled by a non-Canadian.
• • No Treadstone Law page addresses sector-specific foreign-ownership rules for telecommunications or broadcasting. Treadstone Law's published coverage is general Ontario business and corporate law and does not reach this federal mechanism, so none of its pages is cited here rather than force an adjacent link that does not genuinely cover the topic.