The Securities Commission has granted Énergir Inc., a corporation operating under Quebec’s Business Corporations Act, an exemption from the requirement to prepare its financial statements in accordance with Canadian GAAP as applicable to publicly accountable enterprises. Instead, Énergir Inc. is permitted to use U.S. GAAP for its financial statements. This decision is based on the fact that Énergir Inc. is involved in rate-regulated activities and is not a SEC issuer, which would have otherwise allowed it to use U.S. GAAP under section 3.7 of Regulation 52-107.
The exemption is similar to a previous relief granted in 2018, known as the U.S. GAAP Relief, which was set to expire on January 1, 2024, or upon the International Accounting Standards Board (IASB) mandating a specific IFRS standard for rate-regulated entities. Since the IASB has not yet finalized such a standard, Énergir Inc. requires more time to transition from U.S. GAAP to IFRS.
The granted exemption will remain in effect until the earliest of January 1, 2027, the date Énergir Inc. ceases to have rate-regulated activities, or two years after the IASB publishes a final version of the Mandatory Rate-regulated Standard, whichever comes first. This decision is supported by the Autorité des marchés financiers as the principal regulator and is also recognized by the securities regulatory authority in Ontario. The exemption is made under the securities legislation of Quebec and Ontario, specifically referencing Regulation 52-107 respecting Acceptable Accounting Principles and Auditing Standards, and is in accordance with National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions.