Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to sections 553a, 564b and 1021c of the Insurance Companies Actd, hereby makes the annexed Investment Limits (Canadian Societies) Regulations.S.C. 2001, c. 9, s. 437S.C. 2001, c. 9, s. 439S.C. 2001, c. 9, s. 465S.C. 1991, c. 47InterpretationDefinitionsThe following definitions apply in these Regulations.Act means the Insurance Companies Act. (Loi)designated entity, in respect of a society, means an entity other thana joint venture;a financial institution; ora subsidiary of a financial institution, other than where the subsidiary is a subsidiary of a financial institution only because it is a subsidiary of the society. (entité désignée)joint venture means a real property entitythat was formed by a society, or by a designated entity controlled by a society, and one or more other persons for the purpose of a specific business undertaking;in which the society or designated entity has a substantial investment; andin respect of which the persons who formed it have agreed on joint control, regardless of the distribution of their equity. (coentreprise)real property entity means an entity that is primarily engaged in holding, managing or otherwise dealing withreal property;shares of a body corporate that is primarily engaged in holding, managing or otherwise dealing with real property, including shares of a body corporate that is another real property entity; orownership interests in an unincorporated entity that is primarily engaged in holding, managing or otherwise dealing with real property, including ownership interests in an unincorporated entity that is another real property entity. (entité immobilière)related real property entity, in respect of a society, meansa real property entity, other than a designated entity controlled by the society, in which the society or a designated entity controlled by the society beneficially owns sufficient shares or ownership interests to cause the society or designated entity to have a substantial investment in the real property entity; ora real property entity that is controlled by a real property entity described in paragraph (a). (entité immobilière apparentée)third party, in respect of a society, means a person other thanthe society;a designated entity controlled by the society; ora related real property entity of the society. (tierce partie)Book value of interest in real propertyFor the purposes of sections 7 to 10, the book value of an asset that is an interest of a society in real property, at a particular time, isif the asset is real property, the gross book value of the real property, less any accumulated depreciation on the real property, that would be reported on a balance sheet of the society prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 331(4) of the Act; andif the asset is a security or loan, the book value of the security or loan that would be reported on a balance sheet of the society prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 331(4) of the Act.Prescribed SubsidiaryPrescribed subsidiary of a societyFor the purposes of sections 563, 565 and 566 of the Act, a prescribed subsidiary of a society is any subsidiary of the society, except where that subsidiary isa financial institution; ora subsidiary of a financial institution, other than where the subsidiary is a subsidiary of a financial institution only because it is a subsidiary of the society.Amount DeterminedDefinition of total assetsIn this section, total assets, in respect of a society, at a particular time, means the amount determined by the formulaA - BwhereAis the total of the assets that would be reported on the balance sheet of the society prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 331(4) of the Act; andBis the total of all amounts each of which is an amount included in the value of A that is in respect of a subsidiary of the society, if that subsidiary isa financial institution, ora subsidiary of a financial institution, other than where the subsidiary is a subsidiary of a financial institution only because it is a subsidiary of the society.Amount determined — real propertyFor the purpose of section 563 of the Act, the amount determined in respect of a society is 15% of the total assets of the society.Amount determined — equityFor the purpose of section 565 of the Act, the amount determined in respect of a society is 25% of the total assets of the society.Valuation of EquityEquity owned by societyFor the purposes of sections 565 and 566 of the Act, the value of the participating shares and ownership interests referred to in those sections that are beneficially owned by a society and its subsidiaries prescribed by section 3 is equal to their book value as reported on the consolidated balance sheet of the society.Interests of a Society in Real PropertyGeneralDefinition and value of interest in real propertyFor the purposes of Part XII of the Act, sections 7 to 11 define the interests of a society in real property and set out how those interests are to be valued.Direct Interests — Real Property and Debt ObligationsDirect interestsThe following are interests of a society in real property:real property beneficially owned by the society or by a designated entity controlled by the society; anda debt obligation, for which the society or a designated entity controlled by the society is liable, that was issued for the purpose of acquiring or improving real property referred to in paragraph (a).Value of direct interestsThe value of the interests of a society in real property isin respect of real property referred to in paragraph (1)(a), the book value of the real property; andin respect of a debt obligation referred to in paragraph (1)(b), any amount by which the book value of the debt obligation exceeds the book value of the real property referred to in that paragraph.Indirect Interests — Real Property, Shares and Ownership InterestsCertain indirect interestsThe following are interests of a society in real property:at a particular time, real propertythat is beneficially owned bya related real property entity of the society that is a joint venture, oran entity in which an entity described in clause (A) has a substantial investment, andthat would be reported on a balance sheet of the society prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 331(4) of the Act; andshares and ownership interests beneficially owned by the society, or by a designated entity controlled by the society, in any related real property entity of the society other than a related real property entity referred to in paragraph (a).Value of those interestsThe value of the interests of a society in real property isin respect of real property referred to in paragraph (1)(a), the book value of the real property; andin respect of shares and ownership interests referred to in paragraph (1)(b), the book value of the shares and ownership interests.Indirect Interests — Loans and Debt ObligationsCertain indirect interestsThe following are interests of a society in real property:a debt obligation issued by a related real property entity of the society and beneficially owned by the society or by a designated entity controlled by the society;a loan made by the society, or by a designated entity controlled by the society, to a related real property entity of the society;a loan made by the society, or by a designated entity controlled by the society, toa real property entity in which a financial institution controlled by the society has a substantial investment, ora real property entity that is controlled by a real property entity described in subparagraph (i);a debt obligation issued by a real property entity described in subparagraph (c)(i) or (ii) and beneficially owned by the society or by a designated entity controlled by the society;a debt obligation that isissued by a related real property entity of the society,beneficially owned by a third party, andguaranteed by the society or by a designated entity controlled by the society; anda loan made by a third party to a related real property entity of the society and guaranteed by the society or by a designated entity controlled by the society.Value of those interestsThe value of the interests of a society in real property isin respect of a debt obligation referred to in paragraph (1)(a) or (d), the book value of the debt obligation;in respect of a loan referred to in paragraph (1)(b) or (c), the book value of the loan; andin respect of a guaranteed debt obligation referred to in paragraph (1)(e) or a guaranteed loan referred to in paragraph (1)(f),if the debt obligation is issued by, or the loan is made to, an entity that is a related real property entity of the society and the entity beneficially owns real property that is an interest of the society in real property under paragraph 8(1)(a), any amount by which the face value of the guarantee exceeds the value of the real property determined in accordance with paragraph 8(2)(a), andin any other case, the face value of the guarantee.Indirect Interests — Secured Loans and Debt ObligationsCertain indirect interestsIf a society or a designated entity controlled by a society makes a loan to, or beneficially owns or guarantees the debt obligation of, a third party, the loan or debt obligation is an interest of the society in real property if it is secured byreal property beneficially owned by a third party in conjunction withthe society,the designated entity,a related real property entity of the society,a financial institution controlled by the society,an entity controlled by a financial institution referred to in subparagraph (iv), ora real property entity described in subparagraph 9(1)(c)(i) or (ii); orshares or ownership interests beneficially owned by a third party inan entity that beneficially owns real property in conjunction with the society, a related real property entity of the society or a designated entity controlled by the society, ora related real property entity of the society.Value of those interestsThe value of the interests of a society in real property isin respect of a loan or debt obligation that is secured by real property referred to in paragraph (1)(a), the lesser ofthe net realizable value of the third party’s interest in the real property at the time that the security interest was given, andthe amount determined by the formulaA - BwhereAisif the loan was made by the society or a designated entity controlled by the society or the debt obligation is beneficially owned by the society or a designated entity controlled by the society, the book value of the loan or debt obligation, orif the debt obligation is guaranteed by the society or a designated entity controlled by the society, the face value of the guarantee, andBis the total net realizable value of any other security interests that were given for the loan or debt obligation;in respect of a loan or debt obligation that is secured by shares or ownership interests beneficially owned by a third party in an entity referred to in subparagraph (1)(b)(i), the lesser ofthe net realizable value of the third party’s interest in those shares or ownership interests at the time that the security interest was given, andthe amount determined by the formulaA - (B - (C × D/E))whereAisif the loan was made by the society or a designated entity controlled by the society or the debt obligation is beneficially owned by the society or a designated entity controlled by the society, the book value of the loan or debt obligation, orif the debt obligation is guaranteed by the society or a designated entity controlled by the society, the face value of the guarantee,Bis the total net realizable value of all security interests that were given for the loan or debt obligation,Cis the net realizable value of the entity’s interest in the real property referred to in subparagraph (1)(b)(i),Dis the value of the shares or ownership interests that are given as the security interest, andEis the total value of the outstanding shares or ownership interests in the entity; andin respect of a loan or debt obligation that is secured by shares or ownership interests beneficially owned by a third party in a related real property entity referred to in subparagraph (1)(b)(ii), the lesser ofthe net realizable value of the third party’s interest in those shares or ownership interests at the time that the security interest was given, andthe amount determined by the formulaA - BwhereAisif the loan was made by the society or a designated entity controlled by the society or the debt obligation is beneficially owned by the society or a designated entity controlled by the society, the book value of the loan or debt obligation, orif the debt obligation is guaranteed by the society or a designated entity controlled by the society, the face value of the guarantee, andBis the total net realizable value of any other security interests that were given for the loan or debt obligation.Other InterestsOther interestsThe following are interests of a society in real property:a guarantee given by the society, or by a designated entity controlled by the society, to an entity other than the society or designated entity for the purpose of completing the development of real property that is beneficially owned bythe society,a designated entity controlled by the society, ora related real property entity of the society; andan agreement made by the society, or by a designated entity controlled by the society, to support a third party’s cost of operating or financing real property that is beneficially owned bythe society,a designated entity controlled by the society, ora related real property entity of the society.Value of those interestsThe value of the interests of a society in real property isin respect of a guarantee referred to in paragraph (1)(a), the estimated cost of completing the development of the real property; andin respect of an agreement referred to in paragraph (1)(b), the amount of any funds advanced by the society, or by a designated entity controlled by the society, under the agreement.RepealRepeal[Repeal]Coming into ForceComing into forceThese Regulations come into force on the day on which sections 553 and 564 of the Insurance Companies Act, as enacted by sections 437 and 439 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, come into force.[Note: Regulations in force October 24, 2001, see SI/2001-102.]