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As of June 13, 2019, the Canada Business Corporations Act (the “CBCA”) requires that each federal private corporation (a “Corporation”) implements and maintains a register (the “Register”) listing all individuals with significant control over the Corporation (the “Individuals with Significant Control”).  The register must be kept at the corporation’s registered office or another place in

On April 8, 2019, the federal government introduced Bill C-97 to implement measures from its spring budget. The bill proposes amendments to many federal statutes, including several important amendments to the Canada Business Corporations Act (CBCA) relevant to both private and public companies. Our summary of the proposed changes is set out below, some of which deal with familiar issues, while others would introduce new requirements for companies.


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It’s fall, which means it’s time for the annual Canadian Securities Administrators staff review of disclosure made by public companies under Form 58-101F1 Corporate Governance Disclosure, particularly as it relates to gender diversity among corporate leadership. The 2018 review is the fourth such annual review, with previous reviews having been published in 2015, 2016, and 2017.

Here are the five things you should know about the 2018 staff review. For more details, access the full publication of CSA Multilateral Staff Notice 58-310 Report on Fourth Staff Review of Disclosure regarding Women on Boards and in Executive Officer Positions. Publication of the review’s full dataset follows later in the fall. In this post, the term “public company” refers to a reporting issuer captured in the 2018 staff review.[1]


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Bill C-25 is a federal government bill that would, if adopted, introduce sweeping changes to the corporate governance regime for reporting issuers incorporated under the Canada Business Corporations Act (CBCA). Like the proverbial tortoise, the bill has moved unhurriedly through the legislative process, in part due to several changes made to the bill since our previous post that discussed Bill C-25. The bill’s enactment would be just one of many “finish lines”, and it may take several years for all provisions of the bill and accompanying regulations to be drafted and brought into force. This post will canvass the amendments made so far to Bill C-25, with a focus on the proposed gender diversity disclosure framework, and will show a path forward to its eventual coming into force.

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When seeking to access capital in the public markets in an uncertain economy, traditional follow-on financing methods might not be the right choice for some issuers. It may be that “bought deal” and “best efforts” public financings are unavailable or otherwise available but on terms that are unsuitable.

In these circumstances, issuers may consider an alternative financing method provided for in Canadian securities legislation: namely, an at-the-market (ATM) public offering. Under an ATM offering, an issuer sells its shares directly into the market through the facilities of a stock exchange or marketplace. In establishing an ATM offering, the issuer sets a maximum number of securities to be issued, and then determines on an ongoing basis how many securities to issue and sell (if any) by setting the specific minimum price, quantity of securities, and sales timing.

This post discusses the framework for ATM offerings and explores some of the advantages and disadvantages associated with this kind of financing.

General Framework

Base Shelf Prospectus

The first formal step by the issuer in setting up an ATM offering is to file a base shelf prospectus in accordance with National Instrument 44-102 Shelf Distributions (NI 44-102). A base shelf prospectus is a type of short-form prospectus where an issuer normally qualifies the distribution of various types of securities up to a specified maximum dollar amount, which can then be issued over a 25-month period.

While the general rule under securities laws is that all distributions of securities under a prospectus must be made at a fixed price, NI 44-102 provides an exception to this rule for ATM offerings. To give effect to this exception, the shelf prospectus must disclose that the issuer may undertake non-fixed price offering transactions by way of ATM offerings.

Note that NI 44-102 places certain limits on ATM offerings. First, it limits the securities that may be issued by way of an ATM offering to “equity securities”, which are securities that carry a residual right to participate in the earnings of an issuer and, upon liquidation or winding-up of the issuer, in its assets. This typically excludes ATM offerings in respect of preferred shares and debt securities. Second, NI 44-102 limits the market value of equity securities that can be distributed under an ATM offering to 10% of the aggregate market value of the equity securities of that class (for this calculation, securities controlled by persons holding more than 10% of the issuer’s total outstanding equity securities are excluded). Finally, it prohibits an overallotment of securities or any other transaction made with the intention of stabilizing or maintaining the market price of securities.

Prospectus Supplement

Once the final base shelf prospectus has been receipted by the applicable securities regulators and all other above steps are complete, the issuer then files a prospectus supplement to the final base shelf prospectus. The prospectus supplement sets out the parameters and terms of the ATM offering and describes the securities that are the subject of such offering. This document generally is not reviewed by the securities regulators and can be quite brief. However, it must set out either the maximum number of shares to be sold or the maximum aggregate offering size, and it must identify the securities dealers that are implementing the ATM offering and specify any commissions to be paid.

Distribution Agreement

Concurrent with the filing of the prospectus supplement for an ATM offering, the issuer typically executes a distribution or sales agency agreement (Distribution Agreement) with the securities dealer selected to act as the issuer’s agent for the ATM offering. Distribution Agreements for ATM offerings contain standard securities dealer protections, including customary covenants, representations and warranties made by the issuer, and customary closing conditions for each placement of securities. Securities dealers are subject to statutory underwriter liability, and so will engage in standard due diligence practices. Because ATM offerings are ongoing affairs, securities dealers will seek comfort letters and legal opinions both as of the time of execution of the Distribution Agreement and on a periodic basis.


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Where does one draw the line between personal and business? It’s a timeless question, and was also the subject at issue in Koh v Ellipsiz Communications Ltd., 2016 ONSC 7345 (Koh), decided by the Ontario Superior Court of Justice on November 28, 2016.

The facts of the case are these: Ellipsiz Communications

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Bill C-25: Major changes proposed to director elections and other governance matters for CBCA reporting issuers

On September 28, 2016, the federal Minister of Innovation, Science and Economic Development introduced Bill C-25, An Act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act. Bill C-25, if enacted, would result in sweeping changes to the corporate governance regime for reporting issuers incorporated under the Canada Business Corporations Act (CBCA).

The CBCA is the incorporating statute for nearly 270,000 corporations. Although most of these are small- or medium-sized and privately held, a large number of Canada’s largest reporting issuers are also governed by the CBCA. The amendments proposed in Bill C-25 stem from a House of Commons committee-led statutory review in 2010, which, in turn, led to a further consultation undertaken in 2014 by Industry Canada.


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On August 22, 2016, a group of shareholders commenced a proxy contest to change the entire board of Hemostemix Inc. (Hemostemix), a widely-held, micro cap, clinical-stage biotechnology company (TSXV:HEM, OTCQX:HMTXF).

Hemostemix’s business activities focus on the development and planned future commercialization of ACP-01, a proprietary, blood-derived cell product designed to treat critical limb ischemia, a painful obstruction of the arteries that reduces blood flow to the extremities. Hemostemix had reached an agreement in 2014 with a contract research organization (CRO) to manage most aspects of the phase 2 clinical trial of ACP-01, but Hemostemix announced on June 28, 2016, that the CRO had terminated the agreement, and that phase 2 clinical trials would be placed on hold.


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