ARCHIVED - Telecom Circular CRTC 2004-3

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Telecom Circular CRTC 2004-3

  Ottawa, 7 April 2004

Treatment of partnerships for the purpose of telecommunications fees


Purpose of this circular


The purpose of this circular is to provide Canadian carriers with guidance on how the Commission has treated partnerships when considering the amount of telecommunications fees owed by a Canadian carrier.



The Telecommunications Fees Regulations, 1995 (Fees Regulations) prescribe that a Canadian carrier for which tariffs are filed with the Commission shall, in respect of a year, pay to the Commission, on receipt of an invoice sent by the Commission, an annual telecommunications fee calculated in accordance with the Fees Regulations.


The amount of the annual telecommunications fee payable by a Canadian carrier is calculated, pursuant to the Fees Regulations, with reference to the Canadian carrier's operating revenues, derived from the provision of telecommunications services and reported in that Canadian carrier's most recent annual financial statements.


The Telecommunications Act (the Act) defines a "Canadian carrier" to be a telecommunications common carrier that is subject to the legislative authority of Parliament. A "telecommunications common carrier" is defined in the Act as a person who owns or operates a transmission facility used by that person or another person to provide telecommunications services to the public for compensation. The Act also defines "person" as any individual, partnership, body corporate, unincorporated organization, government, government agency, trustee, executor, administrator or other legal representative.


Despite the broad definitions of "telecommunications common carrier" and "person" provided in the Act, section 16 of the Act provides that in order for a Canadian carrier to be eligible to operate as a telecommunications common carrier it must be a Canadian-owned and controlled corporation incorporated or continued under the laws of Canada or a province.


The Commission, in a decision letter dated 19 July 1995 (the fONOROLA ruling), provided its opinion as to the status of a partnership to be eligible to act as a telecommunications common carrier in Canada under the Act. The Commission stated, in the fONOROLA ruling, its view that the objectives of the Act would be satisfied if each of the partners is a corporation that meets the Canadian ownership and control requirements set out in section 16 of the Act. The Commission found that the partners, acting collectively as a Canadian carrier under the arrangement of the partnership, would satisfy the objectives of the Act, so long as every current and future partner remained at all times a Canadian-owned and controlled corporation in accordance with section 16 of the Act.

Treatment of partnerships for the purpose of the Fees Regulations


A partnership is not, under Canadian law, a legal entity distinct from its partners. Each partner has a proportional proprietary interest in the partnership's assets. Equally, the partners remain personally responsible for the debts of the partnership. Furthermore, section 16 of the Act provides that only corporations are eligible to operate in Canada as telecommunications common carriers, and thus as Canadian carriers.


Consistent with the fONOROLA ruling, the Commission considers that it is the partners, together carrying on business in a partnership, who are collectively the "corporation" that is eligible to operate as a Canadian carrier for purposes of section 16 of the Act.


Therefore, in the case of a partnership the Commission attributes the telecommunications operating revenues of the partnership to each partner in proportion to each partner's share of the partnership for the purpose of determining the amount of telecommunications fees that each partner may be liable to pay to the Commission.
  Secretary General
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Date Modified: 2004-04-07

Date modified: