Filtered Insights

Employees on leave during an asset acquisition: What Brandt v. Morasse means for employers

Wed, 29 Apr 2026 00:00:00 Z

Employees on leave can be out of sight, but shouldn't be out of mind

In Brandt Tractor Ltd. v. Morasse, 2026 ONSC 992, the Ontario Divisional Court upheld findings of discrimination where an acquiring employer systematically excluded employees on leave from its hiring process during an asset transaction. While the transaction occurred on an expedited timeline and the acquiring employer applied its approach identically to all employees on leave (regardless of the reason for leave), the Court confirmed that these factors do not insulate an employer from human rights liability.

Key takeaways

Brandt v. Morasse is a clear reminder that human rights obligations do not pause during business transitions. Employers involved in acquisitions, mergers, or restructurings must ensure that employees on protected leaves are meaningfully considered when making employment-related decisions.

A purchaser cannot outsource its human rights obligations to a predecessor, hide behind a tight timeline, or rely on a uniformly applied discriminatory policy; there will be a cost to doing so. For Brandt, it was over $50,000 in damages, mandatory training for its HR team, and ongoing litigation exposure. That expense is avoidable, but it requires employers to account for human rights considerations in transaction planning from the outset.

Background: When an acquiring employer excludes employees on leave from hiring

Ms. Morasse was an employee of Nortrax Canada Inc. for five years. She was on maternity leave when Nortrax sold substantially all of its assets to Brandt in a transaction that was completed, from beginning to end, in fewer than three months.

Brandt hired all but 30 of Nortrax’s 650 employees. Notably, neither Ms. Morasse nor any of the Nortrax employees who were on leave during the asset transfer were contacted, interviewed, or offered positions by Brandt. Instead, while at home on maternity leave, Ms. Morasse was notified that her employment with Nortrax was terminated because Brandt “[did] not have a position available” for her.

The Human Rights Tribunal of Ontario (HRTO) found that Brandt discriminated against Ms. Morasse based on sex and family status. Brandt sought judicial review to set aside the Tribunal’s decision.

Ultimately, the Divisional Court upheld the findings made by the HRTO as reasonable.

The Divisional Court's reasoning: Upholding human rights obligations in an asset acquisition

Successor status does not shield employers from liability

Brandt argued that the Tribunal erred in keeping it as a named party because it was never Ms. Morasse’s employer, and therefore could not be liable. The Divisional Court rejected that argument.

The Court agreed with the Tribunal’s reasoning that, while prior cases had limited the ability to add successor employers to human rights proceedings, those decisions involved successors that entered the picture years after the alleged discrimination had occurred, and thus, had no involvement in the underlying events. This case was materially different.

The evidence showed that Brandt was directly involved in the hiring decisions that excluded Ms. Morasse. Brandt obtained Nortrax’s HR files, consulted with local managers, and participated in a “heavily cooperative process” to decide which employees would receive offers. Further, Ms. Morasse’s termination letter expressly confirmed that her employment with Nortrax was ending precisely because Brandt did not offer her a position. In the circumstances, Brandt could not credibly be characterized as a successor with “nothing to do” with the complaint.

The Court emphasized that “Brandt’s status as a successor organization played no role in the determination that it was a proper party. Rather, it was Brandt’s own allegedly discriminatory conduct in its hiring process that grounded that determination.”

Knowledge of protected status

Brandt argued that it did not know Morasse was on maternity leave, and therefore her protected status could not have influenced the hiring decision. The Court rejected this on two independent grounds:

Brandt “knew or ought to have known” that a policy excluding all employees on leave from the interview process would disproportionately affect individuals on protected leaves. Given its access to HR files and active role in selecting hires, Brandt could not avoid liability by “turning a blind eye” to the discriminatory impact of its policy; and
More significantly, Brandt admitted in oral evidence that it chose not to interview Ms. Morasse because she was on a leave of absence and was “not immediately available.” This admission contradicted Brandt's assertion that the decision was grounded solely in business reasons and established a clear sequence of events: Ms. Morasse was on maternity and parental leave, her exclusion from the interview process therefore flowed directly from her protected leave, which resulted in no offer from Brandt, and ultimately, the termination of her employment by Nortrax.

The Court held that this admission established a clear nexus between Ms. Morasse’s maternity leave and the adverse impact. In doing so, the Court reiterated that the protected ground need only be a factor, not the sole factor, in the decision that led to the adverse impact.

Identical treatment is not the same as equal treatment

Finally, Brandt argued that its policy was non‑discriminatory because it was applied uniformly to all employees on leave. The Court rejected this submission, reiterating that identical treatment can still result in inequality if it has a disparate impact on protected groups. The fact that the policy was framed in neutral terms and applied consistently did not insulate it from scrutiny.

Further, since Brandt had expressly admitted that Ms. Morasse was excluded from the interview process because she was on leave, and therefore unavailable to be interviewed, the causal link between the policy and the protected ground was direct and explicit. As a result, the uniform application of the policy did not shield Brandt from liability.

What Brandt v. Morasse means for employers

Where a successor employer is directly involved in hiring decisions or works closely with the predecessor in selecting employees, it may be held liable for discriminatory outcomes.
Employees on protected leave must be actively considered by employers in decision-making processes. Excluding them simply because they are on leave creates significant risk exposure, regardless of intent.
A uniformly applied rule will not withstand scrutiny if it disproportionately affects individuals on protected grounds. Courts will focus on impact, not just consistency.
Where information about an employee’s protected status is accessible and the employer is involved in the decision-making process, knowledge may be inferred. This is particularly the case where the information within the employer’s knowledge (in this case the knowledge that the employee is on leave) should cause the employer to question whether a protected ground is engaged.
In the context of acquisitions or restructurings, time pressure does not justify excluding or failing to consider employees on protected leave.
Discrimination does not require that a protected ground be the sole or primary reason for the decision. It is sufficient if it played any part in the adverse impact.

Canada’s AML Shift: Preparing for Universal Enrolment, Higher Penalties and FINTRAC Enforcement

Wed, 29 Apr 2026 00:00:00 Z

Amendments to Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), summarized in our previous bulletin, Canada’s New Border Bill to Combat Money Laundering, and introduced by Bill C-12, An Act respecting certain measures relating to the security of Canada’s borders and the integrity of the Canadian immigration system and respecting other related security measures (Bill C-12), received royal assent on March 26, 2026. The amendments substantially increase administrative monetary penalties (AMPs), introduce universal enrolment, requiring all reporting entities subject to the PCMLTFA to register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), and raise overall compliance expectations, fundamentally changing how businesses must approach anti-money laundering risk and enforcement.

Universal Enrolment: All reporting entities must register with FINTRAC

While not yet in effect, Bill C-12 sets out the universal enrolment framework that will require all reporting entities subject to the PCMLTFA to apply and enrol with FINTRAC in a prescribed form for a prescribed period. Bill C-12 also provides a renewal process for such enrolment. Future regulations will provide more clarity as to the substance and manner in which the enrolment framework will be implemented.

The enrolment framework represents an expansion of the existing registration requirements which are currently only applicable to domestic and foreign money service businesses. Once in force on a date that is to be set by Order in Council, all reporting entities will be required to abide by the new requirements, which incorporate ongoing obligations such as notifying FINTRAC of any change in information within 30 days after the day on which the reporting entity becomes aware of the change or obtains the new information.

AML Compliance Programs

As summarized in our previous bulletin, reporting entities must ensure their compliance programs are “reasonably designed, risk-based and effective.” This compliance standard requires anti-money laundering and anti-terrorist financing policies to be tailored to the specific risk and operations of the reporting entity – simply copying and pasting FINTRAC guidance or using generic templates is not sufficient. Compliance programs must be functional and defensible, particularly considering heightened enforcement powers and compliance expectations.

Significant AMPs and FINTRAC Enforcement

Bill C-12 increases AMPs that FINTRAC may impose for contravention of the PCMLTFA by a factor of forty. Minor violations can result in penalties up to $40,000, serious violations up to $4,000,000, and very serious violations up to $20,000,000. For multiple violations, cumulative penalties are capped at the greater of $20 million or 3 per cent of a reporting entity’s gross global revenue (where revenue exceeds $20 million). For individuals, the cap is the greater of $4,000,000 or 3 per cent of their gross global income from the prior year.

Bill C‑12 also amends the criteria FINTRAC considers when determining the amount of an AMP for violations that do not have a fixed penalty amount. Additionally, FINTRAC will be required to consider the ability of the individual or entity to pay the AMP.

Bill C-12 implements transitional provisions for violations that will determine whether the pre-Bill C-12 AMP framework, or the Bill C-12 AMP framework will be applied. If the violation is committed before March 26, 2026, the pre-Bill C-12 AMP framework is to be considered. If the violation is committed after March 26, 2026, the Bill C-12 AMP framework would apply.

Bill C‑12 is accompanied by a shift in FINTRAC’s enforcement approach, reflected in both supervisory guidance and updated AMP policy. As summarized in our bulletin, Changes to FINTRAC Supervision Model and Penalty Policy, FINTRAC signalled a more assertive and outcomes‑focused approach to supervision. Taken together with the increased AMPs, these developments underscore the importance of demonstrably risk‑based and defensible compliance programs.

Further to the passing of Bill C-12, on April 13, 2026, FINTRAC published a modernization update, Modernization and upcoming changes impacting reporting entities, setting out a centralized roadmap detailing how and when the resulting legislative and regulatory changes will apply to reporting entities under the PCMLTFA. FINTRAC will be updating its AMP policy and developing accompanying guidance to assist reporting entities subject to the PCMLTFA in complying with their applicable obligations when the amendments come into force.

Next Steps

Regulations containing the substance of the legal requirements are expected to be published in spring 2026. Bill C-12 will come into force using a phased implementation approach, as detailed in the FINTRAC roadmap published in its above-referenced modernization guidance. Reporting entities must ensure readiness for each stage once the new obligations take effect.

Contact us

For more information on these updates to Canada’s anti-money laundering and anti-terrorist financing legislation, please reach out to the key contacts below or any lawyer from BLG’s Banking & Financial Services Group.

Ten tax takeaways from Canada’s spring economic update 2026

Wed, 29 Apr 2026 00:00:00 Z

On April 28, 2026, The Honourable François-Philippe Champagne, minister of Finance and National Revenue, presented Canada’s spring economic update 2026 (Economic Update). BLG is pleased to highlight its key income tax proposals.

Business tax measures

1. Employee ownership trust capital gains exemption: Made permanent

Employee ownership trusts (EOTs) provide a business succession alternative for many private company owners approaching retirement. Although introduced in 2023, the legislation permitting EOTs was not passed into law until June 2024.

Individuals (other than trusts) are provided with an exemption from taxation on up to $10 million in capital gains realized on the sale of a business to an EOT or worker cooperative corporation, subject to certain conditions. This exemption was to expire at the end of 2026. The Economic Update will make this $10 million exemption permanent. Given that it can take many months or years for business owners to plan for a sale to an EOT, this announcement is welcome news. For more information on EOTs, see Employee ownership trusts: Business succession alternative for private businesses in Canada.

2. Carbon capture, utilization and storage tax credits: Extended to enhanced oil recovery (EOR)

Over the past few years, Canada has enacted a number of “clean economy” investment tax credits (ITCs) to support Canada’s transition to a net-zero economy (see Canada's clean economy ITCs) for a detailed overview of these tax credits).

The carbon capture, utilization & storage (CCUS) investment tax credit allows taxpayers who undertake a qualified CCUS project to claim investment tax credits of up to 60 per cent on qualifying expenditures relating to the capture, transportation, use or storage of CO2 that is the subject of an “eligible use.” Currently, the only “eligible uses” of captured CO2 are storage in a dedicated geological formation or use in concrete production.

The Economic Update designates enhanced oil recovery (EOR) as a new “eligible use” of captured CO2 so long as the invested CO2 remains permanently stored, effective April 28, 2026. Capture and transportation equipment of a qualified CCUS project that stores CO2 through EOR will be eligible, as will equipment that injects and stores CO2 through EOR (unless all or substantially all of the use of the equipment is to produce oil).

While the effective ITC rates associated with the storage of CO2 through EOR will be only half that of the ITC rates applicable to other eligible uses of CO2 (that is, 30 per cent maximum rather than 60 per cent maximum), this still constitutes significant tax support for a major segment of the Canadian economy and helps put the Canadian industry in a better competitive position with its U.S. counterpart. The additional details on equipment eligibility stated to be pending from Natural Resources Canada will be very important in determining the exact parameters of this initiative.

3. Accelerated CCA for low‑carbon LNG facilities

Last fall, Budget 2025 proposed to reinstate accelerated capital cost allowances (CCAs) for eligible liquefied natural gas (LNG) equipment and related buildings for low-carbon LNG facilities. The Economic Update proposes how this measure will be implemented.

The accelerated CCA rate would be 50 per cent for Class 47 liquefaction equipment, and 10 per cent for Class 1 non-residential buildings used in LNG facilities. In addition, LNG facilities would be able to take advantage of the enhanced first-year accelerated investment incentive deduction for certain capital property.

To claim accelerated CCA rates for eligible assets for a particular LNG facility, that facility would first need to be certified by the minister of Energy and Natural Resources, which would entail submitting a one-time report to the minister of Energy and Natural Resources. Based on the expected emissions intensity of an LNG facility, as determined from the report, the minister of Energy and Natural Resources would certify whether the LNG facility qualifies for the measure.

For certified LNG facilities, the accelerated CCA rates would be available for eligible assets acquired on or after Nov. 4, 2025, and up to the end of 2034.

4. Base CPP contribution rate reduction

To provide relief for employees and employers, the rate of the base contribution to the Canada Pension Plan (CPP) is currently 9.9 per cent (4.95 per cent by each of employer and employee). The rate will be reduced by 0.5 per cent to 9.4 per cent starting from Jan. 1, 2027.

5. Prioritized advance income tax rulings

Taxpayers often request binding advance income tax rulings from the Canada Revenue Agency (CRA) before implementing major transactions to confirm the anticipated tax treatment of a proposed transaction. The CRA will give priority to advance income tax ruling requests relating to:

large-scale nation-building projects;
projects of national importance; and
investments that enhance productivity and strengthen critical sectors of Canada’s economy.

Personal tax measures

6. Easier access to the disability tax credit (DTC)

The DTC is an important tax benefit for individuals suffering from disabilities, and DTC eligibility is a requirement for other programs (such as the Canada Disability Benefit). Currently, a qualified medical practitioner must not only certify that an individual suffers from a disability, but also provide details confirming that the impairment is severe and prolonged, significantly impacting the individual’s activities of daily living. Completing the required forms can be a time-consuming and onerous process for the medical practitioner.

To alleviate the burden on qualified medical practitioners, a streamlined DTC application process will be available for individuals commencing in 2026 with certain listed medical conditions. For individuals suffering from other (non-listed) conditions, a medical practitioner would continue to be able to certify DTC eligibility as before.

The list of medical professionals who may certify eligibility has also been expanded to include podiatrists. For an adult under their care for property matters, provincial or territorial public guardians, trustees, and curators will be able to certify, on the DTC application form, that the individual has a valid certificate of incapacity (or equivalent document) issued by a healthcare professional in accordance with applicable provincial or territorial laws for determining decision-making capacity; for matters under the Indian Act, Indigenous Services Canada, as well as Crown-Indigenous Relations and Northern Affairs Canada, will also have that possibility.

Where such a certification is provided, a qualified medical practitioner would no longer be required to certify the individual’s impairment for their DTC application. The CRA will continue to have the authority to request additional information to confirm eligibility in all cases.

7. Expanded labour mobility deduction for tradespeople

Currently, an eligible construction worker can deduct up to $4,000 per year in relocating expenses (travels, meals and lodging). One condition required to qualify for such a deduction is that the worker must relocate, for a limited period, to a temporary lodging place that is at least 150 kilometres closer to a temporary worksite than their ordinary residence.

The Economic Update will increase the annual deduction limit to $10,000 per year (with annual indexation thereafter), and the temporary lodging place will only need to be at least 120 kilometres closer to a temporary worksite than their ordinary residence. This measure will apply to 2026 and subsequent taxation years.

8. Extension of time to repay under Home Buyers Plan

Withdrawals from a registered retirement savings plan (RRSP) are generally taxable. A notable exception for this is for withdrawals of up to $60,000 from a RRSP under the Home Buyers’ Plan (HBP) for the purpose of buying a home. Under the HBP, withdrawals must be repaid over a period not exceeding 15 years, starting the second year following the year the first withdrawal was made.

Budget 2024 temporarily increased the grace period under the HBP during which homeowners are not required to start repaying their withdrawals, from two to five years for participants making a first withdrawal between Jan. 1, 2022, and Dec. 31, 2025. To address continued affordability concerns, the Economic Update proposes to extend that five-year grace period for participants making a first withdrawal up to the end of 2028.

Other announcements

9. Consultation in the charitable sector

The Economic Update recognizes that both the charitable sector and non-governmental organizations are an important driver for the Canadian economy, create well-paying jobs, and supplement the social safety net.

With advances in technology and digitization, the Economic Update announces that the government will seek to modernize the regulatory framework for charities in 2026-27. The government will first initiate a consultation from key stakeholders and relevant agencies in the charitable sector to gather feedback and align with best practices adopted by other G7 countries.

10. Confirmed intention to proceed with previously announced measures

The government confirmed its intention to proceed with a large number of previously announced tax measures. A full list can be found on the government of Canada’s website.

BLG can help

If you have any questions on the impact of the proposed changes in the spring economic update 2026, please reach out to BLG's Tax Group or any of the key contacts below.

Anti-SLAPP and malicious prosecution: Section 137.1 in the context of an alleged sexual assault

Mon, 27 Apr 2026 00:00:00 Z

In Emma Joyce Jansen et al v. J.T et al, 2026 ONSC 1304, the Superior Court of Justice for Ontario considered the test under section 137.1 of the Courts of Justice Act (CJA) in the context of an action for malicious prosecution involving a complaint of sexual assault by a minor.

Key takeaways

In motions under section 137.1 of the CJA, the motion judge does not conduct a deep dive into the record; instead, they conduct a limited weighing of the evidence.
In determining whether the expression relates to a matter of public interest, there is no qualitative assessment of the expression; it does not matter whether it is valuable or vexatious.
An allegation of sexual assault on a child by a person in a position of trust relates to an issue of public interest, and is plainly worthy of protection.
Generally, the complainant who reports a sexual assault will not be considered the entity who initiates the prosecution for the purposes of an allegation in malicious prosecution.

The case: Sexual assault complaint and acquittal lead to malicious prosecution claim

In 2022, the defendant, J.T., made a complaint to the Durham Regional Police Service alleging that the plaintiff, who was a teacher’s aide at the time, sexually assaulted them. Following these allegations an investigation ensued, and the plaintiff was charged with sexual assault and sexual interference.

At her criminal trial, the plaintiff was acquitted, with the trial judge finding J.T.’s evidence to be “fabricated or contrived,” while the plaintiff’s evidence was found to be “reliable and credible.” Following her acquittal, the plaintiff commenced an action against multiple defendants, including allegations for malicious prosecution against J.T.

In response to the plaintiff’s claim, J.T. brought an anti-SLAPP motion under section 137.1 of the Courts of Justice Act.

Court ruling: Anti-SLAPP motion granted under section 137.1

J.T.’s motion was granted, with the plaintiff’s claim and associated crossclaims being dismissed against them.

The function of section 137.1 of the CJAis to screen out lawsuits that unduly limit expression on matters of public interest through the identification and pre-trial dismissal of such actions.

The framework for a motion to dismiss under section 137.1 was established by the Supreme Court of Canada in 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22:

There is a burden on the moving party (the defendant in the action) to satisfy the judge that:
1. the proceeding at issue arises from an expression made by the moving party; and
2. the expression relates to a matter of public interest.
Once that is established, the burden shifts to the responding party (the plaintiff in the action) to satisfy the judge that:
1. there are grounds to believe that the proceeding has substantial merit;
2. the moving party has no valid defence; and
3. the public interest in permitting the proceeding to continue outweighs the public interest in protecting the expression.

The Court rejected the plaintiff’s argument that J.T.’s statements were not in the public interest because they were false and misleading. The Court noted that there has been considerable jurisprudence confirming that reports about alleged sexual abuse to the police and regulatory bodies are expressions on a matter of public interest.

The section 137.1 framework: Burden shifting and public interest

The burden then shifted to the plaintiff to provide grounds to believe the proceeding against J.T. for malicious prosecution had substantial merit. The tort of malicious prosecution requires that the proceedings were initiated by the defendant. The Court highlighted that the general rule is that the police officer who laid the charge is considered to have initiated the prosecution. There are exceptions to that rule, and a complainant who reported an event to the police can be found to have initiated a prosecution.

Citing the Court of Appeal’s decision in Konstan v. Berkovits, 2024 ONCA 510, “the question is whether, through knowingly supplying misinformation or withholding evidence, or through other wrongful conduct, the complainant compromised the police investigation and/or the independence of the decision by police to lay charges.”

The Court noted that while J.T. did make a report of sexual abuse to the police, “the police did more than merely accept J.T.’s allegation at face value.” The police conducted an investigation and told J.T. that whether charges would be laid would be the decision of the police, and not J.T.’s decision. Because J.T. did not initiate the prosecution, the plaintiff’s malicious prosecution claim lacked substantial merit. This finding alone was sufficient to grant the section 137.1 motion and dismiss the plaintiff’s claim against J.T.

Nevertheless, the Court went on to consider the final step on a motion under section 137.1: whether the public interest in allowing the action to continue due to the harm suffered by the plaintiff outweighs its deleterious effects on expression and public participation.

With respect to the harm suffered by the plaintiff, the Court described the causal link between J.T.’s complaint and the harm to the plaintiff as “tenuous,” since J.T did not initiate the prosecution. Furthermore, unlike other cases where “vindictive adults” made a complaint to police, J.T. was a child when the complaint was made.

The Court found no evidence that J.T. had motive to make a false complaint, nor did they publicize this complaint. The Court also found that permitting the plaintiffs’ action to continue against J.T. would have a chilling effect on victims of sexual assault, and would fly in the face of changes in the law relating to the investigation and prosecution of sexually based offences.

The Court was also critical of the plaintiffs’ strategic decision to commence the claim shortly after J.T.’s eighteenth birthday, which required them to undertake their own defence, rather than be provided with a court-appointed litigation guardian.

Alberta's proposed Expedited 120-Day Approvals Act (Bill 30)

Wed, 22 Apr 2026 00:00:00 Z

Background

In March 2026, Alberta’s Premier and Minister of Energy and Minerals attended CERAWeek, one of the world’s leading energy conferences, where they signaled the Government of Alberta’s intention to accelerate the regulatory approval process and position the province as a reliable alternative to unstable global energy sources. Shortly thereafter, on April 14, 2026, the Government of Alberta tabled Bill 30, the Expedited 120-Day Approvals Act (Bill 30).

Regulatory approvals have long been identified as a source of uncertainty and delay for major projects in Alberta. If passed, Bill 30 will give the provincial cabinet the ability to fast-track regulatory approvals for certain major projects, with the primary goal of accelerating major project development in the energy, mining, and industrial sectors.

Key features of the Expedited 120-Day Approvals Act

At the heart of Bill 30 is the concept of a qualified project. Qualified project designation unlocks the Act's core benefit: a mandatory maximum timeline of 120 business days for decisions to be made on all required project approvals.

To apply for qualified project designation, a proponent must provide certain information to the Minister, including the following:

a description of the project and its anticipated timeline;
the minimum capital spending threshold;
a list of required approvals;
the status of any required environmental impact assessment reports under the Environmental Protection and Enhancement Act; and
the status of any planned, ongoing, or completed consultations with Indigenous communities.

Notably, Bill 30 does not alter or circumvent any Indigenous consultation or environmental impact assessment required for a project. Instead, the status of these activities will be explicitly considered as part of the application process. Applicants will have to demonstrate that environmental impact assessment and Indigenous consultation processes have reached an appropriately advanced stage before a project can be expedited under the proposed legislation.

Factors considered for designation

When deciding whether to approve or deny an application for qualified project designation, the Minister may consider a broad range of factors, including:

whether the project strategically aligns with the Government's priorities, goals and outcomes;
whether the project is of strategic importance to Alberta's economy through increased economic activity, investment, jobs, and Government revenue;
whether the project benefits outweigh any residual impacts;
whether the project’s minimum capital spending threshold exceeds $250 million; and
whether the project advances national and provincial security by recognizing provincial autonomy.

Approval, continuance or rescission of designation

If a proponent’s application is approved, an order will be issued designating the project as a qualified project and identifying all required approvals. These orders will trigger the mandatory 120-business day timeline within which all listed approval decisions must be made.

While Bill 30 mandates that approval decisions be made within 120 business days, it does not mandate all approvals be granted. Proponents should not treat designation as a shortcut past substantive regulatory requirements, but rather as a mechanism to impose decisional discipline on regulators.

Notably, the proposed legislation does not currently contemplate any enforcement mechanisms applicable to regulators that fail to make approval decisions within the mandated timeline. If enacted, future regulations made under the legislation may introduce accountability measures or procedural consequences to backstop the timeline requirements, but such regulations are not guaranteed.

Bill 30 also contemplates the possibility that additional approval requirements may arise following the initial qualified project designation and allows for a continuation of the designation where necessary.

However, proponents should be aware that designation is not irrevocable. If the project is materially affected by extraordinary circumstances, the qualified project designation can be rescinded. Bill 30 does not define "extraordinary circumstances," leaving this up to ministerial discretion.

Conclusion

Ultimately, the Government of Alberta expects the acceleration of project approvals to lead to increased investments, bolstered production, and greater access to international markets.

While introducing Bill 30 in the Alberta Legislature, Minister Brian Jean indicated that in the past year approximately $12 billion in capital investments from Canadian-based energy companies has been lost to the United States as a result of uncertain and inefficient approval processes. This piece of legislation is intended to signal the province’s commitment to getting important major projects built in Alberta.

BLG will continue to monitor the progress of Bill 30 as it receives further consideration by the Alberta legislature and will provide further updates as they become available. Our infrastructure, construction, and major projects lawyers are available to answer questions about how Alberta’s Bill 30 may affect those in the industry.

Reach out to any of the key contacts below for assistance.

Lease remedies clauses can limit prospective rent claims after termination

Tue, 21 Apr 2026 00:00:00 Z

More than 50 years after Highway Properties Ltd. v. Kelly, Douglas and Co. Ltd. established the modern framework for commercial landlord remedies, Canadian courts are revisiting how far those remedies extend in current leasing disputes.

This past March the Ontario Court of Appeal in Highbury Narrows Ltd. v. LAF Canada Company considered whether specific provisions of a lease limit a landlord’s ability to recover prospective rent after termination. In Highbury, the Ontario Court of Appeal determined that this commercial landlord’s right to claim future rent after terminating a lease was limited due to the specific provisions in its lease. The lease gave the landlord two distinct options following tenant default: terminate the lease or keep it in force and recover rent as it became due. The Court held that, on the specific wording, the claim for future rent ceased to be available once the landlord terminated.

What you need to know

This is a remedies case first and foremost. The decision does not suggest that claims for future rent are no longer possible. Rather, it confirms that remedy determination begins with analysis of the actual lease provisions agreed upon by the parties.
Election is determinative. The lease gave the landlord two paths following tenant default: terminate the lease, or keep the lease alive and recover rent as it came due. As a result of the landlord proceeding with termination, the Court held the second path, pursuit of future rent, was no longer available.
General “law and equity” language may not be enough. The Court rejected the argument that a general reservation of “other remedies available at law or in equity” preserved a claim for future rent where the more specific lease wording pointed the other way.
Landlords should consider their business strategies when acting on a default. Is the landlord’s primary goal to obtain vacant possession of the premises, or to receive the future rent for the balance of the term.

Background

Highbury Narrows Ltd., the landlord, sued LAF Canada Company, the tenant, and LA Fitness International, LLC, as indemnitor, for default to pay rent under its lease. After terminating the lease, the landlord sought further remedies, including the arrears, future rent for the balance of the term, pool-removal costs and post-termination maintenance-related amounts.

Key facts

The Tenant defaulted in rent payments under a commercial lease. After default, the Landlord terminated the lease and sought arrears, prospective rent for the remainder of the term, pool-removal costs, maintenance-related expenses, signage-related expenses and costs.
Section 19.2 of the lease provided that, upon default, the Landlord had the option either to: (A) terminate the lease and the Tenant’s rights, or (B) keep the lease in effect and recover rent and other charges “as they become due”. Section 19.3 reinforced that if the Landlord did not elect termination, it could recover rental as it became due or relet the premises without terminating the lease.

The motion judge interpreted these provisions as limiting the Landlord, on termination, to rent and expenses due at the date of termination plus a fixed penalty amount, and not prospective rent. The Court of Appeal upheld that interpretation.

The decision in brief

The Court read the lease as creating a deliberate distinction between termination remedies and continuation remedies. If the landlord terminated, it was limited to the amounts the lease specifically made available on termination. If the landlord kept the lease in force, it could continue to recover rent as it became due. On that reading, the lease did not preserve a claim for prospective rent after termination, despite its general reference to other remedies available at law or in equity. The Court stated this general language was not without meaning: it could still capture other remedies, such as injunctive relief or distress, even though it did not preserve a future-rent claim here.

The Court also confirmed that Highway Properties did not create an automatic right to future rent in every commercial lease dispute. It established that such a claim may be available, depending on the specific working of the lease.

Why this matters now

Commercial landlords, tenants and their advisors should keep Highbury in mind when assessing post-default remedy options. The decision reinforces that the Courts will closely examine the remedial structure set out in the lease and will hold parties to what was negotiated and agreed upon by the parties.

This update also comes at a time when the commercial lease remedies are under active judicial consideration. On February 18, 2026, the Supreme Court of Canada heard Aphria Inc. v. Canada Life Assurance Company, et al. and reserved judgment on whether a commercial landlord that refuses to accept a tenant’s repudiation and keeps the lease alive must mitigate its losses. We previously wrote on the Court of Appeal decision in July 2025. The Supreme Court’s decision in Aphria is expected in fall 2026. Together, Highbury and Aphria underscore that remedy selection, lease drafting and post-default strategy remain central issues in commercial leasing disputes.

Practical takeaway

Highbury is a reminder to carefully review the lease as part of your business strategies when considering your remedies after a tenant defaults.

Riddle v. Ivari: SCC rules on the annulment of a declaration of death in life insurance claims

Mon, 20 Apr 2026 00:00:00 Z

On April 10, 2026, the Supreme Court of Canada (SCC) clarified procedural rules and provided guidance on the evidentiary burden for seeking the annulment of a declaratory judgment of death. The Court confirmed that the declaratory judgment of death, also called a declaration of death, is a fiction that has to yield to evidence of the return of a person, and explained what this return meant within the meaning of the Civil Code of Québec (CCQ). The Court also confirmed the rules pertaining to service to declared deceased individuals of proceedings for annulment of their own declaratory judgement of death.

Context

One day, Ms. Riddle’s husband told her that he was leaving on a business trip to Toronto – and he never returned. Evidence later revealed that Ms. Riddle’s husband had left the country to ultimately flee to Iran. Eight years after this date, as provided by the CCQ, Ms. Riddle requested a declaratory judgment of death to the Superior Court, and although Ivari opposed in its capacity of life insurer of Ms. Riddle’s husband, the Court issued such declaratory judgment of death.

Ivari therefore filed its own originating application in annulment of the declaratory judgment of death. Ivari did not serve its proceedings to Ms. Riddle’s husband, presumably deceased.

The trial judge and the Court of Appeal both concluded that Ivari had met the burden of proof of establishing the return of Ms. Riddle’s husband.

Ruling

While considering that the failure to serve the proceedings upon Ms. Riddle’s husband constitutes a breach of the guiding principles of Canadian law, which should not be trivialized, the Court unanimously found that the failure to serve in this case did not compromise the integrity of the judicial process, nor create prejudice that would warrant for the nullity of the decisions.

The Court confirmed that the underlying principles to the notion of service are associated with universal fairness and the rights of being heard, both of which cannot be disregarded by applying the principle of proportionality (Article 18 C.C.P.). Ultimately, the Court explained that the breach of the obligation to serve will be sanctioned in relation to the context of the breach, and of the consequence of the failure for the parties as well as the judicial process itself. In most cases, the breach of service will undermine the integrity of the judicial system, but not in this case, given the absence of prejudice of the presumably deceased.

Invited by Ms. Riddle to pronounce that the person seeking the annulment of the declaratory judgment of death needs to provide certain and unquestionable proof that the person presumed death is currently alive, the Court rather confirmed that unless another burden of proof is indicated by the Québec legislator (in the Code or Statutes), the applicable burden of proof to civil proceedings remains the balance of probabilities. Qualifying the return as “a person’s active and physical reappearance in a particular place,” the Court found that the trial judge had correctly considered the evidence that Ms. Riddle’s husband was alive after the pronouncing of the declaratory judgment of death.

Takeaway

Riddle v. Ivari serves as a good reminder to Québec practitioners regarding the rules of service of proceedings. The ruling also clarifies the concept of return under the CCQ, and the evidentiary burden to establish this return in the context of proceedings in annulment of a declaratory judgment of death.

DIY with OEO: But first, read the updated CIRO Guidance

Fri, 17 Apr 2026 00:00:00 Z

After an extensive, two-stage consultation by the Canadian Investment Regulatory Organization (CIRO), on March 12, 2026 the self-regulatory agency published the updated Guidance on Order Execution Only (OEO) account services and activities (the Updated OEO Guidance). The Updated OEO Guidance replaces the previously published 2021 Guidance Note 3400 21 003 and addresses the evolving needs of the growing do-it-yourself (DIY) investor population.

For context, BLG’s Sept. 3, 2025 bulletin summarized CIRO’s proposed overhaul of the OEO model, which sought to refine the overly broad recommendation prohibition, expand the permissible scope of decision‑making supports, and introduce principles‑based safeguards to protect investors. The Updated OEO Guidance aligns closely with those proposals, now formally adopting a principles‑based framework and confirming that OEO dealers may offer a broader suite of factual, educational, and tool‑based supports – so long as they avoid endorsing specific investment actions.

Data sovereignty and the CLOUD Act: What Canadian organizations should know

Mon, 13 Apr 2026 00:00:00 Z

Data sovereignty has re-emerged as a central concern for Canadian organizations navigating an increasingly complex geopolitical and regulatory environment. At present, the underlying concern involves the power of U.S. government authorities, through the 2018 U.S. Clarifying Lawful Overseas Use of Data Act (CLOUD Act), to access the personal information of Canadians. At its core, the issue of data sovereignty raises a practical and pressing question: to what extent can foreign governments access personal information about Canadians when that data is processed using global infrastructure?

While often framed as a question of where data is stored, data sovereignty is better understood as a question of control, which is shaped by legal jurisdiction, corporate structure, and service provider relationships. As reliance on cloud computing and AI services grows, and as tensions between Canada and the United States sharpen policy debates around cross-border data flows, organizations are being forced to reassess long-standing assumptions about data residency, risk, and compliance.

This BLG Insight examines the legal and practical dimensions of data sovereignty, including the impact of U.S. lawful access laws, and offers guidance on how Canadian organizations can assess and manage these risks.

Key takeaways

As of 2026, decision-makers across Canada should remember what follows as they address data sovereignty in a changing legal and geopolitical landscape:

Data sovereignty is about control, not just location. Storing data in Canada does not, by itself, prevent access under foreign laws; who controls the data matters more than where it is located.
U.S. law remains a central risk factor. Under the CLOUD Act, U.S. authorities may compel U.S.-based companies — or foreign subsidiaries under U.S. control — to produce data, even if that data is stored in Canada and relates to non U.S. persons.
Corporate structure and operational control are critical. A Canadian entity that is wholly owned and managed in Canada will generally fall outside the scope of the CLOUD Act, but Canadian subsidiaries operating under meaningful U.S. parent control may still be subject to U.S. lawful access obligations.
A risk-based approach is required, focusing on legal exposure, data sensitivity, and operational realities. Organizations should assess exposure to foreign laws together, rather than applying blanket localization rules.
PIAs are increasingly expected. In Québec in particular, transferring personal information outside the province triggers a legal obligation to conduct a PIA that evaluates, among others, the applicable foreign legal framework.
Transparency is mandatory. Organizations must clearly inform individuals when personal information may be processed outside Canada and could be accessed by foreign courts or authorities.
Data minimization and retention limits reduce exposure risk. Collecting only necessary data, favouring encrypted, de identified or anonymized datasets, and securely destroying data once no longer required significantly limits exposure to foreign access.

Legal considerations relevant to data sovereignty

The term “data sovereignty” means ensuring that data collected, stored, or otherwise processed in Canada remains primarily subject to Canadian law. For organizations considering data sovereignty, the main question is not simply where data is stored (often referred to as “data localization”), but how the jurisdiction, corporate structure, and operational control collectively influence the lawful access risks posed by foreign governments.

The applicability of the CLOUD Act is a critical component of this analysis. The CLOUD Act permits U.S. authorities to compel the production of data that is within the “possession, custody or control” of a covered entity. A covered entity includes U.S. based companies and foreign companies subject to U.S. jurisdiction. A covered entity may also be a foreign subsidiary of a U.S. parent company, where the parent exercises substantial control over the subsidiary’s operations and retains sufficient possession, custody, or control over the data. In a nutshell, a U.S. company, or a foreign subsidiary operating under U.S. control, may be compelled to produce data even if that data is stored in Canada.

This means that the jurisdiction in which a company is incorporated may influence data sovereignty, but only in light of the specific factual circumstances involved. For instance, an entity incorporated in Canada that is wholly owned and managed in Canada will generally fall outside the scope of the CLOUD Act. By contrast, if a Canadian subsidiary operates under the direct control of a U.S. parent company, such as via integrated systems or shared management, U.S. lawful access requirements may still apply, regardless of the physical location of the data.

Canadian privacy regulators have consistently cautioned against relying solely on data localization to address data sovereignty risks. Instead, they emphasize the need to implement reasonable security safeguards based on context and to adopt a risk-based approach, weighing exposure to foreign laws like U.S. surveillance alongside cybersecurity threats and data sensitivity.

How to manage your data sovereignty risks

In light of the above considerations, Canadian organizations should adopt a proactive and risk-based approach to managing data sovereignty, which might include some of the following measures:

Risks assessment

Privacy regulators also recommend assessing the risks that could jeopardize the integrity, security, and confidentiality of users’ personal information processed by service providers operating outside of Canada to limit personal information risk exposure to foreign government access. A privacy impact assessment (PIA) is a critical tool to determine where data is processed, stored, and who has access to it. As part of this exercise, organizations should map data flows and identify service providers that may be subject to foreign legal regimes.

Québec has led the way in Canada and requires organizations entrusting a person or body outside Québec with the task of collecting, using, communicating, or keeping such information on their behalf to conduct a PIA. The PIA must especially consider the legal framework applicable in the jurisdiction in which the information would be transferred, including the personal information protection principles applicable in that jurisdiction, in light of generally recognized principles regarding the protection of personal information inspired by the OECD Privacy Guidelines, the U.S. Federal Trade Commission’s Fair Information Practice Principles (FIPPs), Canada’s federal Personal Information Protection and Electronic Documents Act (PIPEDA), and the European Union’s General Data Protection Regulation (GDPR); see Cross-border transfers of personal information outside Québec: Requirements for businesses.

Transparency

Be transparent and inform users of risks about personal information handling practices, especially that their personal information may be processed in other jurisdictions and that it may be accessed by the courts, law enforcement, and national security authorities of other countries. This is a requirement under Canadian personal information protection laws that has always been emphasised by privacy regulators. In practice, this might involve updating privacy policies and vendor disclosures to clearly address cross-border processing and lawful access risks.

Data minimization and retention

Limitations to data collection and retention can also serve as effective data sovereignty safeguards to mitigate risk exposure. Data minimization is a fundamental principle of Canadian personal information protection laws that can significantly reduce privacy and cyber risks (see Less is more – Data minimization and privacy/cyber risk management).

When collecting and retaining only personal information that is strictly necessary, access by foreign governments would be limited solely to data stored. Data minimization is not only a question of volume, but also of the nature of the data. As a result, organizations should consider using encrypted, aggregated, deidentified, or anonymized datasets whenever possible to reduce identification risks. In addition, information should only be retained for the legally and effectively required periods of time, and then promptly, securely destroyed to limit the timeframe during which personal information may be accessed.

Conclusion

In an era of cross-border cloud infrastructure and geopolitical uncertainty, data sovereignty for Canadian organizations is ultimately about control, not just physical location. A practical response is therefore risk-based: understand and document data flows, assess exposure through PIAs, require clear transparency to individuals, and reduce the amount and identifiability of data through minimization, retention limits, and strong safeguards. Taken together, these measures can help organizations manage sovereignty risk while continuing to benefit from global technology services.

Seizing opportunity in the Canadian M&A market amid cross-border trade policy uncertainty

Fri, 10 Apr 2026 00:00:00 Z

Despite early optimism, 2025 was a mixed year for Canadian M&A. The aggregate value of deals rose by over 70 per cent to approximately C$530 billion between 2024 and 2025. However, the overall number of deals dropped around 8 per cent, from 2,673 deals in 2024 to 2,454 deals in 2025.¹ A key constraint facing the M&A market, and one that persists in the early part of 2026, is the uncertain outlook for the Canada-U.S. trade relationship. The U.S. administration’s position on the future of the Canada-U.S.-Mexico Agreement (CUSMA) remains unclear. The U.S. currently has a range of sector-specific tariffs in place, including 10 per cent on most non-CUSMA products, 50 per cent on steel and aluminum, 50 per cent on copper, 25 per cent on autos, 10 per cent on non-CUSMA compliant potash and energy products, and 35 per cent on softwood lumber. There is a looming possibility that these tariffs could be increased or that new trade policy changes could result in negative impacts on additional industries. M&A success in this environment requires Canadian businesses and their counsel to place increased emphasis on trade-related considerations during the dealmaking process.

This article outlines key processes and deal terms that should be top of mind when negotiating M&A deals in the current environment.

Key takeaways

Canadian M&A deal value surged 70 per cent to C$530 billion in 2025, while deal volume declined 8 per cent to 2,454 deals.
U.S. tariffs ranging from 10 to 50 per cent across multiple sectors and ongoing CUSMA uncertainty now demand heightened focus on cross-border exposure throughout the deal lifecycle
Buyers need forensic analysis of targets' supplier networks, customer dependencies, country of origin compliance, and contractual mechanisms for absorbing trade-related cost shocks
Parties must explicitly define whether trade policy changes constitute material adverse change, including objective criteria for "material," duration requirements, and alignment with interim operating covenants to avoid inadvertent breaches
Three emerging mechanisms shield deal value beyond closing: trade impact indemnities for unquantifiable risks, earnouts that defer payment until trade uncertainty resolves, and minority equity retentions that align vendor interests with post-closing performance
Success hinges on thoughtfully negotiating who bears trade policy risk at each deal stage, from signing through post-closing integration, rather than accepting standard boilerplate provisions

Due diligence

In the current environment, purchasers and their counsel conducting due diligence should have a heightened focus on the target’s exposure to trade policy risk, including a thorough assessment of the target’s suppliers, customers, and business partners, and an assessment of their compliance with the applicable country of origin laws. Particular attention should be paid to whether these parties are located, or have relevant operations, in jurisdictions where shocks from changes to trade policy are likely. Such changes – including new tariffs, non-tariff barriers, or the termination of a free trade agreement – may materially impact the target’s economics and the overall deal value.

Purchasers and their counsel should also review the target’s key contracts for provisions that address changes to the parties’ rights and obligations in the case of impacts from trade policy changes, including whether such provisions result in renegotiation and/or termination rights and, if so, the threshold for triggering such rights. They should also determine whether there are mechanisms in the contracts allocating any increased costs resulting from policy changes, which party bears the burden of the increased costs, whether there is a limit on the extent of their liability, or whether the terms may be renegotiated.

Deal protections

Representations and warranties

Purchasers should insist that vendors include representations and warranties regarding the target’s key contracts in the purchase agreement and ensure that they are indemnified for any inaccuracies. Purchasers’ counsel should be attentive to whether the representations are qualified, and if so, the nature of the qualification (e.g., knowledge, materiality, and scope). In a purchase agreement with an interim period between signing and closing, it is a common closing condition to include a bring-down of the representations and warranties, which requires vendors to certify that the representations and warranties remain true and accurate at the time of closing. Here as well, purchasers’ counsel should be attentive to any further qualifications, particularly where such qualifications in the bring-down certification are in addition to a qualified representation or warranty. To the extent that trade policy changes during the interim period render any particular representation and warranty inaccurate, then vendors may be unable to satisfy the bring-down condition and purchasers may be able to walk away from the deal.

Interim operating covenants

An interim operating covenant governs how the target must be operated between signing and closing.² It typically imposes a general obligation on the target to operate in the ordinary course, along with specified obligations (such as preserving business relationships) and prohibitions (such as selling or transferring assets above a threshold). The purpose of the interim operating covenant is twofold: first, to ensure that the business the purchaser bargained for at signing is essentially the same as the business it acquires at closing; and second, to minimize the moral hazard of the vendor acting in its own interest at the purchaser’s expense during the interim period. Interim operating covenants are relevant in the context of unforeseen trade policy changes because such changes may prompt the target to take mitigating steps (such as cutting production, terminating employees, changing suppliers, or ending customer contracts) that may be a breach of the interim operating covenant.

Canadian courts have generally accepted that reasonable, temporary measures taken in response to external shocks do not constitute a breach.³ However, these decisions have been highly fact specific. It is therefore important to recognize the inherent tension between purchasers (who typically want a narrower scope of permitted actions) and vendors (who tend to want greater operational flexibility) and to negotiate the scope of the covenant accordingly. The parties may also consider requiring the vendor to obtain the purchaser’s consent before taking measures in response to trade policy changes that fall outside the negotiated scope of the covenant. Thoughtfully managing the tension created by divergent priorities of purchasers and vendors is essential to achieving an informed and balanced allocation of risk for trade policy changes during the interim period.

Material adverse change clauses

A material adverse change (MAC) clause is a common closing condition. It enables the purchaser to walk away from the deal if there has been a MAC in the interim period between signing and closing. In Fairstone, the court defined a MAC as “an unknown event that substantially threatens the overall earnings potential of the target in a durationally-significant manner.”⁴Typically, the MAC clause will include a carve out whereby certain events are excluded from the definition. The general practice is for the vendor to retain business-specific risks while the purchaser assumes systemic risks.⁵

When negotiating the MAC clause in the current environment, the parties need to determine whether impacts from changes to trade policy during the interim period will be allocated to the vendor (by including them in the general definition of a MAC), the purchaser (by carving them out), or whether trade risks will be shared through a tailored allocation. The parties also need to specify objective criteria for determining whether a change is “material” and “adverse,” such as measurable financial or operational metrics, and include an explicit duration requirement to clarify how long a trade-related impact must persist before it constitutes a MAC. Finally, it is imperative to align the risk allocation between the MAC clause and the interim operating covenant, ensuring that systemic risks carved out from the MAC clause (such as trade policy changes) do not inadvertently reappear as breaches of the interim operating covenant.

Reverse break fees

A reverse break fee is a negotiated payment that the purchaser pays to the vendor in the event that the purchaser causes the transaction not to close. The fee is typically payable only where the reason for not closing is outside the vendor’s control (such as the purchaser failing to obtain financing or the requisite board or shareholder approvals, or the occurrence of a MAC). Where the purchaser is unable to close, the reverse break fee compensates the vendor for the lost time, expenses, and opportunity costs associated with the failed transaction. Vendors and their counsel should carefully consider the inclusion of a reverse break fee as a means of managing transactional risk arising from trade policy changes that prevent a deal from closing, along with the specific mechanics and the quantum of the fee.

Post-closing risk sharing

Given that cross-border trade uncertainty is likely to persist in the medium term, parties and their counsel should also be attentive to the risk of post-closing trade policy changes impacting the target.

Trade impact indemnities

A trade impact indemnity is a specialized indemnity under which the vendor agrees to compensate the purchaser for losses, costs, or liabilities incurred by the target as a result of post-closing trade policy changes. It provides a practical solution where the trade‑related risk is potential and difficult to quantify at the time of signing the purchase agreement, such that a purchase price adjustment would be impractical. It also allows the parties to preserve their negotiated purchase price, while ensuring that the vendor receives full value for the target unless a trade policy change occurs which triggers the indemnity. Key considerations when drafting the indemnity include defining trigger events (such as new tariffs, duties, or sanctions), determining the scope of indemnification (including any exclusions), setting the duration of the indemnity, and establishing any baskets (whether a true deductible or tipping) or other limits on the quantum of indemnification.

Earnouts

An earnout is a provision that defers part of the purchase price until the post-closing period, making it contingent on the satisfaction of specific post-closing conditions. An earnout will often be based on financial metrics of the target for the post-closing period such as revenues, net profits, or operating cash flows, each of which could be impacted by trade policy changes that have a material impact on the business. Earnouts can therefore provide an additional mechanism for allocating this post-closing risk and require the purchaser to pay full value for the target business only if the success of the target business post-closing is not adversely affected by trade policy changes. Key considerations when drafting an earnout include defining clear earnout metrics, providing the vendor with clear information about the results of the target business relevant to the earnout metrics and audit rights, and tailoring the duration of the earnout to the time horizon in which the parties anticipate the trade risk to persist.

Minority equity retentions

A minority equity retention requires the vendor and/or certain key employees of the target to retain an equity interest in the target business post-closing. This can reduce the purchaser’s exposure to any post-closing trade policy changes by sharing the downside (and the upside) of the target business with the vendor and other key employees. Where vendors or certain key employees remain in senior management positions and hold an equity interest at the target business post-closing, it incentivizes them to navigate post-closing trade policy changes in a manner consistent with the interests of the purchaser as a shareholder. A minority equity interest can be structured as an equity rollover where the vendor reinvests a portion of their proceeds into the purchaser or a new entity created to hold the target business. It can also be structured so the vendor simply retains a minority equity stake in the target business post-closing. In any minority equity retention, the parties and their counsel should consider the rights and obligations of the parties as shareholders of the target business post-closing, including entering into shareholder agreements containing negotiated buy/sell rights which may be exercisable by the purchaser to acquire the target’s shares from the vendor and the key employees after a negotiated period in which no adverse trade policy changes have occurred.

Takeaway

Addressing trade policy risk in Canadian M&A transactions is critical to minimizing uncertainty and preserving deal value. By incorporating robust due diligence, tailored purchase agreement provisions, and appropriate post-closing mechanisms, parties can effectively mitigate these risks and safeguard their strategic objectives.

For more information on cross-border trade policy, successfully conducting M&A in the current environment, or any of the other topics referenced in this article, please reach out to any of our authors below or your usual BLG contact.

This article was prepared with the assistance of Deva Middleton, articling student.

CRA announces release of its report on the Regulation 105 waiver process consultation

Thu, 09 Apr 2026 00:00:00 Z

On April 7, 2026, the Canada Revenue Agency (the CRA) announced the publication of its Consultation on the Income Tax Regulation 105 Waiver Process report, dated March 31, 2026 (the Report).

The CRA held an external consultation in the form of an online questionnaire from June 30 to August 29, 2025, on the Regulation 105 waiver process, which generally mandates the remittance of a 15 per cent withholding tax on payments made to non-residents for services provided in Canada. The CRA invited non-residents subject to Regulation 105, tax advisors, and Canadian businesses to share feedback on the Income Tax Regulation 105 waiver process.

The CRA recognized a need for change in the waiver process and indicated that overall, participants expressed dissatisfaction. The key findings of the report include:

Long wait times, which are the most difficult part of the waiver process
The disproportionate effort required to apply for a waiver compared to the level of compliance risk
Cash flow and payroll challenges faced when requesting a reduction or waiver of withholding
Dissatisfaction with withholding requirements when no Canadian tax is owed (for instance, due to a tax treaty) and the need to gross-up payments in such circumstances

The key areas for improvement noted by the CRA are as follows:

Online submission and application tracking (most common suggestion)
Enhanced support and guidance
Industry-specific exemptions
Adoption of attestation-based processes
Expanding eligibility for the simplified waiver process

At present, the CRA is reviewing the feedback gathered and is assessing potential changes to improve the Regulation 105 waiver process. Importantly, the CRA has indicated that changes will be introduced gradually to enhance efficiency and improve ease of use, starting with administrative measures in the near term (in late spring 2026), to be followed by enhancements to the digital experience over the longer term.

Further details on implementation and engagement opportunities will be communicated by the CRA as plans progress.

Bill C-15 receives royal assent: What it means for Canada’s transfer pricing rules

Wed, 08 Apr 2026 00:00:00 Z

On March 26, 2026, Bill C-15 (Budget 2025 Implementation Act, No. 1) received Royal Assent, bringing into force significant amendments to Canada’s transfer pricing rules under section 247 of the Income Tax Act. These changes have been anticipated since Budget 2025 was released in November 2025, but Royal Assent marks the point at which the proposals become binding law and provides certainty as to how transfer pricing audits and disputes will be approached going forward.

While the amendments are often described as a major shift, their significance lies less in the introduction of new concepts and more in how Parliament has reshaped the legal framework governing their application.

What you need to know about Bill C-15

OECD principles are now embedded in the statute

Many taxpayers have long structured and documented their intercompany arrangements by reference to the OECD Transfer Pricing Guidelines, and the CRA has relied on those guidelines as a matter of administrative practice. However, Canadian courts have consistently held that OECD guidance could not override the text of section 247 itself.

Bill C‑15 changes that dynamic. The amended provisions expressly incorporate OECD‑style concepts into the legislation, including a focus on economic substance, actual conduct, and the “economically relevant characteristics” of transactions. Courts are now directed to apply the arm’s‑length principle in a manner consistent with OECD guidance, rather than treating that guidance as merely persuasive.

Removal of the recharacterization rule

One of the most notable structural changes is the repeal of the former recharacterization rule. Under the prior regime, the CRA’s ability to disregard or replace a transaction was narrowly constrained, a limitation that played a central role in the Cameco litigation.¹

The amendments replace that structure with a single adjustment rule that applies where the actual conditions of a transaction differ from arm’s‑length conditions. In those circumstances, the CRA may determine that the transaction would not have occurred, or that an alternative transaction would have occurred, between arm’s‑length parties.

Expanded CRA adjustment authority

Although the new rules do not give the CRA unfettered discretion, they materially expand the range of circumstances in which transfer prices may be adjusted. The statutory framework now places greater emphasis on substance and conduct, and less weight on legal form alone, reducing the scope for defences that rely primarily on contractual structuring.

Documentation deadlines and penalty thresholds

Bill C 15 requires companies to keep more detailed transfer pricing documentation that explains who does what in a related party transaction, where key decisions are made, which entity bears risks, and how profits are intended to follow those activities. The time to provide that documentation after a CRA request has also been shortened to 30 days, which makes it more important to have materials prepared in advance.

At the same time, penalties now apply only where transfer pricing adjustments exceed higher thresholds. This means smaller adjustments are less likely to attract penalties, even though the CRA has broader authority to challenge pricing overall.

Takeaway: What this means in practice

Importantly, the transfer pricing provisions enacted in Bill C-15 are materially consistent with what was announced in Budget 2025.

For many multinational groups, day-to-day transfer pricing practices may not change overnight, particularly where OECD based analyses were already in place. The more significant impact will be felt in audit strategy and litigation risk. Outcomes that turned on the limits of the former statutory framework—most notably in Cameco—are far less likely under the new rules.

Royal Assent to Bill C-15 therefore represents a meaningful shift in the legal framework for transfer pricing in Canada, even if the underlying economic principles are familiar.

BLG can assist

BLG’s Tax Group regularly advises Canadian and multinational organizations on transfer pricing policy design, documentation, audit defence, and dispute resolution. We work with clients to assess how the Bill C-15 amendments affect existing cross border arrangements, compliance processes, and litigation risk, and to identify practical steps in light of the new statutory framework.

ONCA weakens entire agreement clauses in contract interpretation

Wed, 08 Apr 2026 00:00:00 Z

Entire agreement clauses are often treated as a contractual safety net: once the definitive agreement is signed, prior drafts, negotiations, and understandings are meant to fall away. Courts have long recognized limited exceptions to that rule, most notably the use of surrounding circumstances as part of the factual matrix to resolve genuine ambiguity in the contract’s language.

In Project Freeway Inc. v ABC Technologies Inc., 2025 ONCA 855, the Ontario Court of Appeal acknowledged the rule and the exceptions, but it endorsed reliance on a letter of intent as an interpretive aid even though the letter of intent was non‑binding and specifically excluded by the entire agreement clause. The court treated the letter of intent as part of the factual matrix of the agreement.

The decision raises a pointed question: when a document is clearly identified as not forming part of the parties’ agreement, how far can it be used to inform what that agreement means?

What you need to know

Entire agreement clauses are strong evidence that the agreement is the final expression of the parties’ agreement. They generally prevent the admission into evidence of other agreements, understandings or negotiations that may vary or contradict the express terms in a written agreement.¹
Entire agreement clauses are particularly important where there is extensive back and forth negotiations between parties. They help to ensure that terms that were previously considered and rejected do not override the final agreement.
Historically, the factual matrix was broad, but “not unlimited”. The factual matrix did not include evidence of negotiations “except perhaps in the most general of terms”, because only the final document records the actual agreement between the parties.²
Even when considering the factual matrix, negotiations have generally been inadmissible.

Facts of Project Freeway

The case centred on a dispute between a vendor, Project Freeway Inc., and purchaser, ABC Technologies Inc., over the amount of additional earn out payments following the close of a share purchase agreement.

In October 2022, the parties entered into a non-binding letter of intent to describe the terms of the eventual share deal (Letter of Intent). The Letter of Intent contained covenants, but not final terms, relating to an eventual Earn Out payment (as defined below), including:

The purchaser would not take any action to intentionally impair the vendor’s ability to earn Earn Out payments, including agreeing not to divert resources, contracts with customers, or direct business opportunities away from the business in a manner that materially impairs the ability to achieve the Contribution Margin Targets;
The purchaser would not act in bad faith to intentionally impair the vendor’s ability to earn Earn Out payments, provided that the purchaser not be prohibited in any way from closing, merging or consolidating any of the acquired facilities of the business with any of the purchaser or its affiliate facilities;
The purchaser will maintain an adequate amount of working capital for the business consistent with the purchaser’s other business units; and
A sale of the business, or failure to follow the operating covenants in the eventual purchase agreement in a manner which materially impairs ability of seller to earn Earn Out payments, will result in the acceleration of the Earn Out payments.

On December 21, 2022, the purchaser and vendor entered into the final share purchase agreement (SPA). The purchaser paid a base purchase price of US$165,000,000, with an additional US$26,461,000 to be paid out in three tranches over two years based on financial performance (Earn Out). The SPA further provided for an acceleration of the Earn Out payment in specific circumstances, including if prior to the end of the Earn Out period:

The Purchaser […] (B) directly or indirectly, sells, transfers or licenses a material portion of the assets of the Business of the Target Companies in one or a series of transactions to any Person other than an Affiliate of the Purchaser. For greater certainty, the Parties agree that the foregoing clause shall not limit the Purchaser’s right to complete mergers, amalgamations or other internal reorganizations with or among the WM Group and Affiliates of the Purchaser, and shall specifically exclude a change of control of the Purchaser Guarantor; [Emphasis added.]³

The SPA also included an Entire Agreement clause which specifically excluded the Letter of Intent:

This Agreement […] constitute[s] the entire agreement among the Parties with respect to the transactions contemplated by this Agreement, and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties with respect to such transaction, including the Letter of Intent […]. [Emphasis added]⁴

Following the SPA’s close on March 1, 2023, the purchaser entered into two transactions:

The Sale Lease Back Transaction: the purchaser sold lands and buildings to a third party, then entered into long-term leases for the properties.
The Factoring Transaction: the purchaser sold customer accounts to HSBC. The purchaser had other existing factoring agreements with HSBC and joined this transaction to the existing agreements.

The vendor did not provide written consent for either transaction. However, two of the vendor’s executives facilitated site visits for the Sale Lease Back transaction prior to the SPA’s close.

In November 2023, the purchaser provided the vendor with the first Earn Out statement, indicating the requirements for the accelerated Earn Out had not been met. The vendor subsequently objected on the basis that the Sale Lease Back was material and triggered the accelerated Earn Out.

The decision of the trial court

The core issue on the application was whether the Sale Lease Back and Factoring transaction were “material” such that they triggered the accelerated Earn Out payment.⁵ The SPA left a gap by failing to define “material.” As a result, the Entire Agreement Clause, and the extent to which it restrained the use of the Letter of Intent as an interpretative tool, was considered by the Court.

The vendor argued that the Sale Lease Back transaction fell under a plain reading of “material” and triggered payment; the value or the transaction represented approximately 59 per cent of the SPA purchase price. The purchaser argued that “material” could not just mean “expensive”, its meaning had to be tied to the Earn Out itself. They argued these were non-substantive, ordinary financing transactions which had no impact on the business beyond to generate on-hand cash. The purchaser further argued that the application judge should look to the Letter of Intent as “objective evidence of the parties at the time of the definitive agreement”. The vendor argued that the entire agreement clause precluded consideration of the Letter of Intent.

The judge at first instance held that the Letter of Intent could be considered as “objective evidence” of the parties understanding at the time of the definitive agreement and that the entire agreement clause did not preclude her from considering “admissible evidence of the surrounding circumstances at the time of the contract formation”.⁶ This conclusion was reached even though the Letter of Intent was explicitly non-binding, the parties had only agreed on certain covenants related to the Earn Out, had not fully negotiated the terms, and the SPA was signed two month later. The application judge held that the covenants in the Letter of Intent supported the purchaser’s interpretation of “material”. The application judge found that the Sale Lease Back and Factoring transactions were ordinary course financing transactions with no impact on the operation of the business. Accordingly, the accelerated Earn-Out Payment was not triggered.

The decision of the Court of Appeal

In short reasons, the Ontario Court of Appeal dismissed the vendor’s appeal.

The Court of Appeal held that reliance on the Letter of Intent did not offend the Entire Agreement Clause because it was part of the factual matrix and, thus, a permissible consideration. The application judge was entitled to use the Letter of Intent as an “interpretative aid to identify what the agreement between in the SPA was, so that she could apply the entire agreement in resolving the issue before her”.⁷

Analysis

While courts are permitted to consider the factual matrix, or the surrounding circumstances, of a contract, evidence of negotiations has still been held by several Courts to be inadmissible. The most recent Supreme Court of Canada case on this issue, Corner Brook (City) v Bailey, did not decide the matter. Rather, the Supreme Court of Canada noted that the inadmissibility of negotiations “sits uneasily” in the factual matrix analysis, but left that issue “for another day”, noting that there should be “a case where it has been fully argued.”⁸

Project Freeway is one of the first appellate level decisions to endorse reliance on a document that was otherwise excluded by an Entire Agreement clause. While previous appellate decisions have bypassed limits on the use of broadly defined “negotiations” or “surrounding circumstances”⁹, the Court’s specific reliance on the Letter of Intent here goes further. This may have been driven by necessity due to the fact the term “material” was not defined. Had the court not used the Letter of Intent, it is not clear how the term “material” would have been interpreted.

In Project Freeway, it seems that the court has made a very fine distinction, suggesting that it is permissible to use a Letter of Intent to interpret the SPA without offending the Entire Agreement Clause, but it would be impermissible to incorporate or add a term. Even when considered through this lens, this distinction is interesting since the Entire Agreement clause superseded prior understandings, negotiations and discussions, including the Letter of Intent.

Key takeaways

Pre-contract drafts that include draft provisions or terms that are, at the time, not intended to form part of the final agreement, may require exclusionary clauses indicating the point-in-time nature of the terms, and explicitly precluding the terms as drafted from intervening on the final agreement.
When drafting final agreements, commonly used terms, such as “material”, should be defined, even if their meaning seems obvious, to avoid subsequent disputes. Final agreements should also be evaluated within the context of any pre-contractual agreements, and where there are differences, the supremacy of the final agreement terms may require specific identification.
Entire agreement clauses must be drafted with precision and specificity, and parties should consider explicit exclusions of all previous negotiations, pre-contract drafts, and agreements-in-principle.
Parties may consider very clear exclusionary language to ensure prior negotiations or drafts are not subsequently used as interpretative aids for the final agreement. Whether that will withstand scrutiny, remains to be seen.

Major access to information and privacy reform comes to Ontario

Mon, 06 Apr 2026 00:00:00 Z

Bill 97 (the Plan to Protect Ontario Act (Budget Measures), 2026) will introduce significant amendments to Ontario’s freedom of information and privacy framework by updating both the Freedom of Information and Protection of Privacy Act (FIPPA) and the Municipal Freedom of Information and Protection of Privacy Act (MFIPPA). For municipal institutions, school boards, colleges and universities, hospitals, and Crown agencies, these reforms are best understood as a legislative response to sustained operational pressure under the existing access and privacy regime.

Institutions across these sectors are managing increasing request volumes; broader and more complex electronic records; repeat, overlapping and AI-driven requests; and heightened expectations around speed and completeness – often without additional resources or structural support. Bill 97 reflects an acknowledgment that the previous framework, while well‑intentioned, was increasingly difficult to administer consistently and defensibly. Similar reforms in other provinces suggest a broader policy trend toward access regimes that remain principled but are better aligned with modern institutional realities.

We have summarized the Bill 97 reforms in this Insight. Bill 97 has been released in tandem with two important new regulations under the Enhancing Digital Security and Trust Act, 2004. For our commentary on these bills, please see Ontario introduces cyber and educational technology regulations.

Timelines that better reflect institutional realities

Bill 97 will recalibrate statutory timelines by shifting most deadlines under FIPPA and MFIPPA to business days rather than calendar days. The basic period for answering a request will increase from 30 days to 45 business days. For institutions operating with limited freedom of information (FOI) staffing, shared privacy roles, or decentralized records management, this change alone significantly reduces artificial deadline pressure.

The legislation will also expand institutions’ ability to extend timelines, including the option for a second extension in defined circumstances, such as unexpectedly large record volumes or unforeseen consultation or staffing challenges. These changes are particularly important for school boards, municipalities, and health organizations that routinely receive broad, multi‑year, requests for large volumes of electronic records.

Staged access plans: A practical tool for large requests

The introduction of staged access plans will be one of the most operationally significant reforms in Bill 97. Institutions will be able to respond to large or complex requests by proposing a structured, phased approach to search, review, and disclosure.

An institution will be permitted to propose a staged access plan where:

Searching for records would unreasonably interfere with employees’ regular duties;
The request is “overly broad” due to the period covered;
The volume of records and preparation effort would unreasonably interfere with operations; or
The requester has made multiple requests that, taken together, unreasonably interfere with operations.

The plan must be set out in writing and must:

Divide the request into distinct categories of records, identifying the areas of the institution to be searched; and
Establish a schedule indicating whether and when access decisions will be made for each category, and when records (or portions) will be disclosed or produced.

Requesters will have 30 business days to respond by either accepting the plan, proposing amendments, or narrowing the scope of the request, otherwise the requester may appeal.

A requester may appeal the initial decision to propose a plan, and the first amendment to a plan, to the Information and Privacy Commissioner (IPC). The requester’s duty to respond is mandatory. If the requester does not respond appropriately within the statutory timeframe (and does not appeal where permitted), the request will be deemed abandoned.

Once a plan is proposed, the statutory response clock pauses while the requester responds. A response will restart the clock, and the institution can propose another plan so long as the response clock has not been exhausted.

Institutions may amend a staged access plan as needed. While the initial proposal — and the first amendment only — is subject to appeal, subsequent amendments are not appealable, giving institutions significant flexibility to adjust plans in response to operational realities.

Fee estimates as scope and timing controls

Bill 97 tightens, standardizes, and aligns fee estimate rules with staged access response-clock processes. Specifically:

Institutions will be expressly required to inform requesters of their right to request a fee waiver;
Institutions will be expressly required to issue fee estimates before the response clock expires;
Fee estimates will pause the response clock.

In short, fee estimates will operate as a more formal, procedural control point, aligned with staged access and response-clock mechanisms.

Politically sensitive records (FIPPA)

The amendments will add a new provision to FIPPA, such that FIPPA will no longer apply to records in the custody or under the control of a minister, a minister’s office, or a parliamentary assistant acting in that capacity. Once in force, the amendments will generally exclude ministerial and parliamentary assistant records from FIPPA, except for records under ministerial control that are also in the custody or control of an institution, which will continue to be subject to FIPPA.

Exclusion for cybersecurity‑sensitive records

Both FIPPA and MFIPPA will exclude, and therefore not apply to, records “prepared or collected under” the Enhancing Digital Security and Trust Act, 2024 (EDSTA). This exclusion will apply to the following such records:

Records containing the names of employees designated as primary points of contact for ensuring cybersecurity within each public sector entity and their alternates.
Assessments or evaluations of a public sector entity’s status or progress with respect to cybersecurity or summaries of such assessments or evaluations.
Records containing the names of software applications that have been purchased or otherwise acquired by school boards, that are owned or operated by third parties, and that are authorized to access a student’s personal information.
Any other records the disclosure of which could reasonably be expected to compromise cybersecurity for a public sector entity.

For institutions increasingly targeted by ransomware and other cyber threats – particularly school boards and hospitals –, this change will provide powerful statutory backing by removing specified security sensitive records from the public right of access. The protection is implemented by way of a jurisdictional-limiting exclusion, which invites a more institution-favourable analysis should exclusion claims be challenged.

The exclusion hinges on a statutory linkage to EDSTA. Questions may arise as to whether a record must be explicitly required or generated under EDSTA authority, or, alternatively, merely related to cybersecurity work undertaken in response to EDSTA obligations.

Aligning MFIPPA privacy governance with FIPPA

When FIPPA was amended in 2025 to require mandatory breach reporting and notification, mandatory privacy impact assessments, and to otherwise modernize the FIPPA privacy compliance regime, MFIPPA was not likewise amended. Bill 97 rectifies this imbalance by amending MFIPPA to:

Introduce mandatory privacy breach reporting to the IPC, and notification to affected individuals where there is a real risk of significant harm;
Require municipal institutions to prepare privacy impact assessments (PIAs) before collecting personal information, and to update PIAs where there are significant changes to use or disclosure;
Impose an express statutory duty to implement reasonable administrative, technical, and physical safeguards to protect personal information;
Require municipal institutions to maintain records of privacy breaches and to report breach statistics annually to the IPC;
Expand the IPC’s oversight role, including authority to review institutional information practices where there are reasonable grounds to believe MFIPPA has been contravened, and to make compliance orders; and
Introduce whistleblowing protections, permitting individuals to confidentially notify the IPC of suspected contraventions of MFIPPA.

These changes will significantly expand MFIPPA institutions’ operational privacy obligations, increase the IPC’s supervisory role, and require a more structured, proactive approach to privacy governance, breach response, and risk management across the municipal public sector.

Conclusion and practical next steps

Bill 97 will bring both blessings and burdens for Ontario institutions.

On the access to information side, the reforms acknowledge the operational strain institutions have been under for years, and provide meaningful relief through longer timelines, staged access plans, clearer fee estimate mechanics, and targeted exclusions. Properly used, these tools should help institutions manage volume, complexity, and expectations in a more sustainable way.

At the same time, the bill does not simply reduce obligations. For municipal institutions, the new MFIPPA privacy governance provisions introduce a more formal, proactive compliance framework: mandatory breach reporting and notification, documented privacy impact assessments, explicit safeguard obligations, breach record keeping, and enhanced IPC oversight. These requirements will require focused work to implement, at a moment when many institutions are facing tight budgets, staffing constraints, and competing operational priorities.

Practical steps institutions should be considering now include:

Reviewing and updating FOI procedures to reflect business day timelines, staged access plans, extensions, and fee estimate pauses;
Training FOI and program staff on when and how to use staged access plans and extensions defensibly;
For municipal institutions, assessing current privacy practices against the new MFIPPA requirements, including PIAs, breach response, safeguards, and record keeping;
Identifying pragmatic, proportionate ways to meet new obligations without over engineering processes or duplicating effort.

Bill 97 creates an opportunity for institutions to reset both access and privacy practices in a more sustainable way. With thoughtful planning and proportionate implementation, the reforms can reduce pressure where relief was clearly intended, while strengthening privacy governance in a way that is manageable rather than overwhelming.

Ontario introduces cyber and educational technology regulations

Mon, 06 Apr 2026 00:00:00 Z

On March 23, 2026, the Ministry of Public and Business Service Delivery and Procurement published two regulations under the Enhancing Digital Security and Trust Act, 2024 (EDSTA). O. Reg. 51/26 (Cyber Security) and O. Reg. 52/26 (Digital Technology Affecting Individuals Under Age 18) will both come into force on July 1, 2026. These regulations impose new governance, reporting, and transparency obligations on a broad range of Ontario public sector institutions, including universities, colleges, school boards, hospitals, and children’s aid societies.

O. Reg. 51/26 – Cyber security

O. Reg. 51/26 applies to “prescribed public sector entities,” which include colleges, universities, most public hospitals, school boards, children’s aid societies, and other specifically named public sector entities.

Key updates

1. Cyber security maturity assessments: Prescribed public sector institutions must conduct cyber security maturity assessments at regular intervals, which track the institution’s status or progress regarding cyber security. The regulation does not prescribe how the assessment must be performed, but states that it must be “carried out in accordance with industry standards or best practices endorsed by the Chief Information Security Officer of the Ministry”.

First assessments must occur by July 1, 2027, and every two years thereafter. If an institution completes a cyber security maturity assessment between July 1, 2025, and July 1, 2026, the institution is deemed to have completed it on July 1, 2026, and must complete its second assessment by July 1, 2028.

A summary of each assessment must be provided to the Ministry within 30 days of completion, which must include (1) the name and a description of the model or framework used in the assessment, (2) any overall or component cyber security maturity score, and (3) a summary of areas for future improvement.

2. Point of contact: The regulation requires each prescribed public sector entity to designate a senior management employee as the primary cyber security point of contact. This individual must have decision making authority over cyber security and will be responsible for liaising with the Ministry and approving summaries of cyber security maturity assessments. For many institutions, this will require a governance conversation: the role may be assigned to a CIO, CISO, or another executive.

3. Incident reporting: Prescribed public sector institutions must also report “critical cyber security incidents” to the Ministry within 72 hours of “confirming” the incident occurred. “Critical cyber security incident” is defined broadly and includes incidents that impact “digital information” collected, used, retained, or disclosed by an institution or the infrastructure housing or transmitting such data. It also includes a materiality threshold. To meet the reporting threshold, one of the following criteria must be satisfied:

The incident results in a significant adverse impact to the delivery of public services by the entity;
The incident poses a risk to public safety;
The incident requires or results in significant efforts to recover digital information or related infrastructure or activation of cyber security incident response plans by the entity; or
The incident poses a significant risk of harm to the reputation of and public confidence in the entity.

The “confirmation” requirement and materiality threshold ought to rule out cyber events and low severity incidents, though compliance with the reporting requirement is an important consideration that institutions should build into their incident response plans. Bearing mind that “activation of a cyber security incident response plans” triggers a reporting duty, institutions should also ensure their plans clearly define an activation point.

What does O. Reg. 51/26 mean for public sector institutions?

O. Reg. 51/26 encourages enhanced cyber security by requiring institutions to perform maturity assessments and report such assessments to the province. Cyber incident reporting already occurs informally today, but formal reporting will come with important confidentiality protections that the province has proposed in bills amending the Freedom of Information and Protection of Privacy Act and the Municipal Freedom of Information and Privacy Act (MFIPPA). See our companion article: Major access and privacy reform comes to Ontario.

The province will receive reports not as an enforcement body, but as a provider of security funding and as a potential agent for cross-institutional, province wide collaboration. There is therefore reason for institutions to view these new obligations positively, though cyber incident reporting must not invite heavy post-reporting obligations that draw critical resources away from the response. Institutions must be prepared to manage this potential for disruption.

O. Reg. 52/26 – Digital technology affecting individuals under age 18

O. Reg. 52/26 applies to all school boards in Ontario and applies to all personal information in digital form of students under the age of 18.

Key requirements

The regulation prescribes certain notice requirements relating to disclosures of student personal information to a board’s software providers. Notices must be in writing and can be delivered electronically. For students under the age of 16, notices must be sent to parents. For students between the ages of 16 and 18, notices must be sent to the students. The notice must include:

The specific personal information being disclosed;
The legal authority for the disclosure;
The purpose of the disclosure;
The name of the application and vendor;
Contact information for a Board representative who can answer questions about the disclosure; and
An explanation of complaint and oversight rights.

Boards will be required to provide the notice as early as feasible in the school year. If new software is implemented during the school year, notice of disclosure must be provided as soon as feasible.

What does O. Reg. 52/26 mean for public sector institutions?

The regulation reflects growing concern about educational technology platforms and their data practices, particularly where third party vendors are involved. Boards should anticipate and be prepared for parental scrutiny. Conducting privacy impact assessments that comply with the requirements that will soon be set out in MFIPPA will help.

In addition to developing a plan to formally implement an MIFPPA-compliant privacy impact assessment program, boards will need to ensure that they have a complete inventory of all software used by a board and the personal information disclosed to each software provider by September 2026. This mapping task is a priority.

Conclusion

These regulations are an incremental update to Ontario privacy and data security law. They meaningfully change how public institutions are expected to manage cyber security and, particularly in the education sector, how they deploy and oversee digital tools affecting children.

Taken together, O. Reg. 51/26 and O. Reg. 52/26 is another indication that Government and regulators expect demonstrable accountability for public sector digital governance, privacy, and cybersecurity.

For additional questions, please reach out to one of the key contacts listed below.

2026 Update to the new interpretation of the Canada Health Act

Thu, 02 Apr 2026 00:00:00 Z

In January 2025, former Federal Minister of Health, the Honourable Mark Holland, released a Letter to provinces and territories on the importance of upholding the Canada Health Act – 2025. We wrote about it here. In short, Minister Holland released an interpretation of the Canada Health Act (CHA) that charging patients for services provided by any health professional that are typically covered by the province when delivered by a physician, is a violation of the CHA’s prohibitions on extra-billing and user charges. Provinces and territories that do not prevent patients from being charged for medically necessary services by non-physician health professionals, including nurse practitioners, risk reductions in future Canada Health Transfer payments.

Health Canada released its 2026-2027 departmental plan on March 13, 2026, which included its intention to implement the vision outlined in the “new Canada Health Act Services Policy” (the CHA Policy) based on Minister Holland’s 2025 letter. As part of this plan, Health Canada indicated its intention to “[h]elp [provinces and territories] implement the Canada Health Act Services Policy, effective April 1, 2026, which confirms that medically necessary services provided by regulated health care providers (e.g., nurse practitioners) are insured under the Canada Health Act.”

Although details of the implementation plan are currently sparse, the implications for both the public and the private sectors are significant. Practically, and in the long term, the magnitude of the impact will depend on how the provinces or territories with implement the policy. In the short term, both hospitals and the private sector should be preparing for potential impacts.

What does this mean for the private sector?

The CHA broadly establishes a framework mandating provinces and territories to establish insurance plans to cover “medically necessary” services in order to qualify for transfer payments from the federal government. Although the term “medically necessary” is not defined in the legislation and each province has discretion to define the scope of their plans, traditionally these have been primarily hospital and physician services. Healthcare professionals or businesses are allowed to charge patients for services that are not covered under provincial insurance plans under this framework.

As non-physician providers’ roles expand, the private sector has increasingly provided services through these practitioners and charged patients directly, based on the interpretation that non-insured services fall outside the CHA’s extra-billing and user-charge prohibitions. Provinces implement and enforce these prohibitions through their own legislation, including Ontario’s Commitment to the Future of Medicare Act.

However, businesses that are relying on the past interpretation of what are considered “insured services” in provinces where they operate, will need to monitor provincial signals and actions closely moving forward. The federal government has made its position clear on this issue. It considers charging patients for services provided by other health professionals to be a violation of the CHA’s prohibition on extra billing and user charges where those services would be covered if provided by physicians. The federal government expects that provinces and territories will report such prohibited charges starting in December 2028.

Assuming provinces implement this directive by essentially insuring the same basket of services, whether provided by physicians or nurse practitioners, companies would risk being found in violation of a province’s prohibitions on extra billing and user charges if they charged a fee directly to patients for these services.

Virtual care carve out?

Virtual services continue to be an area of technological, entrepreneurial, and policy evolution. Minister Holland signalled in his letter that the federal government’s position is to promote the use of virtual services, and Minister Holland encouraged all jurisdictions to continue down the path of insuring those services.

Provinces continue to take different positions on insuring virtual services, creating space for the private sector to charge patients directly for these services. Many of the major virtual care providers in Canada charge patients or their employers for medically necessary services provided by nurse practitioners. This may be problematic under the new interpretation of the CHA Policy unless a carve out is created for virtual care. In Quebec, provincial laws allow for employer paid virtual care. It remains to be seen whether other provinces will take a similar approach.

What does this mean for hospitals and other publicly funded organizations?

Currently, hospitals and other healthcare organizations such as primary care teams, have integrated nurse practitioners primarily through an employment relationship and a salaried compensation model.

To the extent that the vision in Minister Holland’s letter is implemented provincially by allowing nurse practitioners to bill a provincial insurance plan directly, hospitals and other publicly funded health care organizations may be able to enter into alternative arrangements with nurse practitioners moving forward. From a financial perspective, this might involve a shift from a primarily salaried based model to either a fee for service model or a mixed compensation model.

Such a change would invite a review of the relationship between nurse practitioners and hospitals. Consideration could be given to moving away from an employment model and towards a privileges model or a mixed model. The evolution of the model will depend on a number of organizational specific factors, including whether nurse practitioners are members of a union.

On April 1, 2026 Ontario Minister of Health Sylvia Jones announced that there were currently no plans to change OHIP billing codes to allow nurse practitioners to bill OHIP on a fee-for-service basis.

Conclusion

Minister Holland’s 2025 letter articulated the federal government's position that charging patients for services that would be covered by provincial insurance plans if they had been provided by physicians is a violation of the CHA, a position that has just been endorsed in Health Canada’s 2025-2026 Departmental Plan. The exact implications for the private and public sectors and the timelines for those impacts will depend on how the provinces respond to this position.

BLG is ready to assist both the public and the private sectors in this evolving landscape and to strategically advise on their options.

*Thank you to articling student Dr. Rami Shoucri for his assistance with this bulletin.

Federal Financial Institutions Legislative and Regulatory Reporter - February 2026

Thu, 02 Apr 2026 00:00:00 Z

The Reporter provides a monthly summary of Canadian federal legislative and regulatory developments of relevance to federally regulated financial institutions. It does not address Canadian provincial financial services legislative and regulatory developments. In addition, purely technical and administrative changes (such as changes to reporting forms) are not covered.

February 2026

Published	Title and Brief Summary	Status (if applicable)
Office of the Superintendent of Financial Institutions (OSFI)
February 26, 2026	Targeted Fast-Track Approvals Framework for New Entrants OSFI has published a streamlined, targeted fast-track approvals framework for new entrants. OSFI intends to modernize its approach to how specific entities enter the federally regulated financial system. The framework is expected to launch in June 2026 for eligible applicants; it would be offered to the following entities: Provincial credit unions that are seeking continuance as a federal credit union; Entities with technologically innovative or emerging banking models – for example, fintechs or crypto-asset custodians – seeking to incorporate as a bank or as a federally regulated trust and loan company. Other types of entities would continue to follow existing guides and processes; OSFI will use insights from this targeted approach to inform a broader rollout in the future.	Framework expected to launch in June 2026.
February 24, 2026	Update on Capital Requirements for Federally Regulated Property and Casualty Insurers – Letter OSFI has announced that, effective immediately, it is reducing capital requirements for domestic infrastructure debt. This applies to Canadian property and casualty insurance companies that are not mortgage insurance companies, and foreign property and casualty companies operating in Canada on a branch basis, collectively referred to as property and casualty insurers. The capital reductions are laid out in Appendix 1 to the letter.	Effective February 24, 2026.
February 19, 2026	Registered Pension Plans (RPP) and Other Types of Savings Plans – Coverage in Canada (2023) This article shows coverage in Canada by Registered Pension Plans (RPPs) and other savings vehicles that contribute to retirement wealth. Registered Retirement Savings Plans (RRSPs), Tax-Free Savings Accounts (TFSAs), and First Home Savings Accounts (FHSAs) are included. It concludes that the number of active RPP members has increased since the beginning of the century, with the number of women increasing faster than the number of men. It also shows that the number of active RPP members as a percentage of employees has decreased. The proportion of active RPP members in Defined Benefit plans has seen the steepest decrease. At the same time, tax-incentive vehicles show sustained interest from taxpayers, with TFSAs having become the preferred option over the past decade, capturing a growing share of contributions, while RRSPs have declined.	Published February 19, 2026.
February 13, 2026	Benchmarking Canadian Bank Capital Ratios to International Peers – Technical Note – February 2026 OSFI periodically conducts benchmarking exercises of Canadian Systemically Important Banks’ (SIBs) capital and profitability metrics as part of its mandate to assess both the resilience and competitiveness of the Canadian banking system. Conclusions drawn from the exercise include: Canadian SIBs are well-capitalized and have strengthened in recent years; OSFI’s capital supervisory expectations are broadly consistent with international peers, notwithstanding lower binding requirements; Canadian SIB capital ratios and risk weights are in line with international peer ranges with certain exceptions; Canadian SIBs have strong profitability compared to international peers.	Published February 13, 2025.
Bank of Canada
February 9, 2026	Retail Payments Activities Act: Annual Reporting Now Live on PSP Connect In its email bulletin to stakeholders, the Bank of Canada reminds payment service providers (PSPs) that annual reports under the Retail Payment Activities Act (RPAA) are due by March 31, 2026. It points PSPs to the following resources to assist in the preparation and submission of their annual reports: Step-by-step guide to annual reporting Pre-recorded information session on annual reporting requirements Supervisory policy on annual reporting Supervisory policy on annual reporting of retail payment activity metrics	Deadline for submitting annual reports is March 31, 2026.
Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
February 25, 2026	Beneficial ownership: Understanding your Requirements FINTRAC has issued a video presentation explaining beneficial ownership and providing insight into its role in protecting against money laundering and terrorist financing. This presentation outlines beneficial ownership requirements by defining who qualifies as a beneficial owner, clarifying what constitutes beneficial ownership information, describing how to verify the accuracy of collected information, and specifying when to file a Beneficial Owner Discrepancy Report.	Published February 25, 2025.
February 19, 2026	Government Announces New Measures to Help Protect Canadians and Businesses Against Extortion The Government of Canada has announced measures intended to increase its ability to detect, disrupt, and prevent extortion. These measures are meant to improve how financial intelligence is collected, thus providing law enforcement with better tools to trace criminal networks and support investigations. FINTRAC is at the centre of these efforts, which will include: Prioritizing financial intelligence resources to tackle extortion; Launching the Countering Extortion Partnership with financial institutions, government, and law enforcement; Assigning financial intelligence experts to support police; Providing financial institutions with clear guidance on how to detect extortion transactions; Publishing intelligence on how criminals move and hide extortion money. The announcement is accompanied by the following documents and backgrounders: Letter from the Minister of Finance and National Revenue to the Director and Chief Executive Officer of FINTRAC; FINTRAC Backgrounder: Targeted indicator profiles on laundering the proceeds of extortion; FINTRAC Backgrounder: Establishment of a new liaison function to support efforts countering extortion; FINTRAC Backgrounder: Working in partnership with the private sector to counter extortion.	Published February 19, 2026.
Payments Canada
February 12, 2026	Rule Amendments Support Expanded Membership and Access to Critical National Infrastructure Payments Canada has finalized a series of amendments to its rules for the Automated Clearing and Settlement System; these changes are effective February 9, 2026. Payments Canada has grouped these changes under the following themes: Expanded access and risk-based membership (Rule D1); Refined return procedures (Rules A4, A10, B10 and G3); Efficiency improvements and retirement of legacy components (Rules A1, B2, and K1, L1). Other rules amended effective February 9, 2026: Rule D3 (Indirect Clearer Requirements); Rule F1 (Rules applicable to Automated Funds Transfer (AFT) Transactions); Rule F4 (Rules applicable to Automated Funds Transfer (AFT) Transactions using ISO 20022 messages.	Rule changes are effective February 9, 2026.
Bank for International Settlements (BIS)
February 26, 2026	Basel Committee: Consolidated Guidelines and Sound Practices The Basel Committee on Banking Supervision has published a new section of its website containing a consolidated version of its guidelines and sound practices for banks and supervisors. This new format is not intended to introduce new expectations; the content has been reorganized in a modular format in an effort to increase the accessibility of the materials. The Basel Committee has published this initially in draft form, and it is soliciting feedback from stakeholders.	Comments are due June 26, 2026.
Financial Action Task Force (FATF)
February 24, 2026	Cyber-Enabled Fraud – Digitalisation and Money Laundering, Terrorist Financing and Proliferation Financing Risks FATF has published a paper, Cyber-Enabled Fraud – Digitalisation and Money Laundering, Terrorist Financing and Proliferation Financing Risks, which outlines the latest emerging risks related to technological innovation and fraud. The paper calls for stronger implementation of global standards to tackle fraud, including through international cooperation and asset recovery, information sharing, and continuing to adapt to the risk environment and international resolve to address the issue. In particular, the paper discusses how the FATF Standards can be used to combat fraud, through: Payment transparency; Asset recovery; Regulation of Virtual Assets; Unmasking Beneficial Ownership (BO); Domestic and international partnerships; Employing advanced technology.	Published February 24, 2026.
Financial Stability Board (FSB)
February 19, 2026	Strategic Review of FSB Crisis Preparedness Activities In response to episodes of turmoil and financial crises that have tested FSB’s resolution framework (anchored by its Key Attributes of Effective Resolution Regimes for Financial Institutions) since it was adopted in 2011, FSB has announced that it is undertaking a strategic review of its crisis preparedness activities. The stated aims of the strategic review are: Strengthen and, where necessary, adapt the FSB’s crisis preparedness activities to respond to changes and emerging vulnerabilities in the global financial system; Enhance the FSB’s crisis preparedness activities to consider all stages of a crisis, from early intervention measures through recovery and resolution to post-stabilization restructuring; Refine internal processes and organizational structure to achieve the FSB’s strategic objectives for crisis preparedness; and Strengthen the central role of the Key Attributes of Effective Resolution Regimes for Financial Institutions as the international standard for resolution regimes for financial institutions.	Published February 19, 2026.
February 4, 2026	Vulnerabilities in Government Bond-backed Repo Markets FSB has issued a report, Vulnerabilities in Government Bond-backed Repo Markets, that explains how repo markets function, outlines key features of repo markets around the world, assesses ways to monitor vulnerabilities and associated data gaps, and concludes with relevant policy implications. The report assesses vulnerabilities in government bond-backed repo markets and possible contagion channels to the broader financial system. It highlights how quickly repo markets were impacted in several recent episodes of market stress and warns that, given the importance of repo markets within the global financial system, it is critical to preserve their functionality, particularly during periods of stress. It identifies vulnerabilities in repo markets that could pose risks to the broader financial system, and suggests several steps for authorities to consider in response to these vulnerabilities; these include: Closing data gaps; Strengthening surveillance capabilities; and Addressing vulnerabilities related to liquidity imbalances and leverage (this can include taking into account the FSB’s recommendations on leverage in nonbank financial intermediation (NBFI) and Global Securities Financing Transactions exercise, as well as other relevant international standards).	Published February 4, 2026.
International Association of Insurance Supervisors (IAIS)
February 12, 2026	Application Paper on Operational Resilience Objectives and Toolkit IAIS has published the final version of its Application Paper on operational resilience objectives and toolkit. The Application Paper is intended to support supervisors and insurers in understanding how to assess and address operational resilience in light of the Insurance Core Principles risk management and other relevant requirements. The Application Paper provides operational resilience objectives and provides a toolkit of supporting practices and tools. The key objectives of the Application Paper are: The relationship between operational resilience, governance and operational risk management; The key elements of a sound approach to operational resilience; Specific objectives for insurance supervisors.	Published February 12, 2026.
Legislation
February 26, 2026	Bill C-15, Budget 2025 Implementation Act, No. 1 Among its provisions to implement the 2025 Federal Budget, the following measures of Bill C-15 affect federally regulated financial institutions. Division 9 of Part 5 repeals the Consumer-Driven Banking Act and enacts a new Consumer-Driven Banking Act to ensure that individuals and businesses can safely and securely share their data with the participating entities of their choice. That Act addresses, among other things, accreditation, national security, data sharing, security safeguards, consent, authentication, liability, complaints, administration and enforcement and screen scraping. The Division also makes related amendments to the Access to Information Act, the Financial Consumer Agency of Canada Act and the Budget Implementation Act, 2024, No. 1. Division 10 of Part 5 amends the Trust and Loan Companies Act, the Bank Act and the Insurance Companies Act to extend the period during which federal financial institutions governed by those Acts may carry on business. Division 11 of Part 5 amends the Trust and Loan Companies Act, the Bank Act and the Insurance Companies Act to, among other things, modernize prudential limits by repealing certain provisions that impose limits on federally regulated financial institutions with respect to debt obligations and borrowing, consumer and commercial loans and investments in real property and equity. Division 12 of Part 5 amends the Bank Act, the Trust and Loan Companies Act and the Insurance Companies Act to allow for the electronic delivery of certain documents to shareholders, members and policyholders without their consent, while ensuring that they receive paper copies if they request them. Division 13 of Part 5 amends the Trust and Loan Companies Act, the Bank Act and the Insurance Companies Act to increase the equity threshold related to the public holding requirement from $2 billion to $4 billion and to make changes to other provisions that include that threshold. Division 14 of Part 5 amends the Trust and Loan Companies Act, the Bank Act, the Insurance Companies Act and the Office of the Superintendent of Financial Institutions Act to, among other things, (a) clarify the powers of the Superintendent of Financial Institutions in respect of the adherence by federally regulated financial institutions to their policies and procedures to protect themselves against threats to their integrity or security; (b) provide the Superintendent of Financial Institutions with powers to issue directions of compliance in respect of unsafe or unsound practices in the conduct of the affairs of those financial institutions; and (c) provide that the Superintendent of Financial Institutions is not prevented from disclosing information to any federal government agency or body for purposes related to the Superintendent’s regulation or supervision of financial institutions. Division 15 of Part 5 amends the Bank Act to raise the amount of funds that can be withdrawn immediately from a retail deposit account after the deposit of a cheque or other instrument and to remove the delay for the withdrawal of funds deposited by a cheque or other instrument that is not deposited in person. Division 16 of Part 5 amends the Bank Act to, among other things, (a) prohibit the activation of certain capabilities for a personal deposit account in Canada without the express consent of the natural person in whose name the account is kept; (b) permit a natural person in whose name such an account is kept to deactivate certain account capabilities; (c) permit a natural person in whose name such an account is kept to adjust certain transaction limits on the account; (d) require institutions to establish policies and procedures for detecting and preventing consumer-targeted fraud and mitigating its impacts; and (e) require institutions and the Commissioner of the Financial Consumer Agency of Canada to prepare annual reports on consumer-targeted fraud. Division 17 of Part 5 amends the Canada Deposit Insurance Corporation Act, the Bank Act and the Financial Consumer Agency of Canada Act to support the growth of federal credit unions, including by way of amalgamation or asset acquisition and by permitting them to engage in motor vehicle leasing in certain circumstances. Division 18 of Part 5 makes amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act consequential to amendments to the Special Economic Measures Act. Division 37 of Part 5 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to (a) clarify that all regulations made under that Act are to be made on the recommendation of the Minister of Finance; (b) clarify that paragraph 36(3.‍01)‍(b) of that Act applies to donations that are not charitable donations; and (c) prohibit the disclosure of reports, or the information contained in them, related to discrepancies in information discovered in the course of verifying the identity of persons having beneficial ownership or control of an entity. It also amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations to (a) clarify that paragraph 138(5)‍(b) of those Regulations applies to donations that are not charitable donations; and (b) clarify the application of those Regulations to mortgage administrators, mortgage brokers and mortgage lenders. Division 45 of Part 5 enacts the Stablecoin Act, which imposes duties on persons that create stablecoins and make them available for purchase, directly or indirectly, by persons in Canada. That Act sets out the objects of the Bank of Canada in respect of stablecoin and requires the Bank to maintain a public registry of stablecoin issuers. That Act also addresses, among other things, the redemption of stablecoins by issuers, the reserve of assets that issuers must maintain to fulfill their redemption obligations and the policies that they must establish. The Division also makes consequential and related amendments to the Access to Information Act, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Retail Payment Activities Act.	First Reading in the Senate February 26, 2026. Part 5, Division 9 in force on Royal Assent. Part 5, Division 10 in force on Royal Assent. Part 5, Division 11 in force on proclamation. Part 5, Division 12 in force on Royal Assent. Part 5, Division 13 in force on Royal Assent. Part 5, Division 14 in force on Royal Assent. Part 5, Division 15 in force on proclamation. Part 5, Division 16 in force on proclamation. Part 5, Division 17 in force on proclamation, except ss. 337, 339(1), 340, 343, 344, 348, 349, 351 in force on Royal Assent. Part 5, Division 18 in force on Royal Assent. Part 5, Division 37 in force on Royal Assent, except s. 584 deemed to have come into force on October 1, 2025 immediately after the coming into force of section 8 of the Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, made on December 16, 2024 and registered as SOR/2024-267. Part 5, Division 45, s. 600 (enacting the Stablecoin Act) in force on proclamation; ss. 601 to 605 in force on proclamation.
February 25, 2026	Bill C-12, Strengthening Canada’s Immigration System and Borders Act Bill C-12 would enact provisions put forward by Bill C-2, Strong Borders Act that are aimed at combating transnational organized crime, money laundering and the immigration system. Bill C-12 would amend several Acts and regulations impacting financial institutions. Part 9 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to, among other things, (a) Increase the maximum administrative monetary penalties that may be imposed for certain violations and the maximum punishments that may be imposed for certain criminal offences under that Act; (b) Replace the existing optional compliance agreement regime with a new mandatory compliance agreement regime that, among other things, (i) Requires every person or entity that receives an administrative monetary penalty for a prescribed violation to enter into a compliance agreement with the Financial Transactions and Reports Analysis Centre of Canada (the Centre), (ii) Requires the Director of the Centre to make a compliance order if the person or entity refuses to enter into a compliance agreement or fails to comply with such an agreement, and (iii) Designates the contravention of a compliance order as a new violation under that Act; (c) Require persons or entities referred to in section 5 of that Act, other than those already required to register, to enroll with the Centre; and (d) Authorize the Centre to disclose certain information to the Commissioner of Canada Elections, subject to certain conditions. Part 9 also makes consequential and related amendments to the Retail Payment Activities Act and the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations and includes transitional provisions. Part 10 amends the Office of the Superintendent of Financial Institutions Act to make the Director of the Financial Transactions and Reports Analysis Centre of Canada a member of the committee established under subsection 18(1) of that Act. It also amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to enable the Director to exchange information with the other members of that committee.	Second Reading in the Senate February 5, 2026; reported without amendment by Standing Senate Committee on National Security, Defence and Veterans Affairs February 25, 2026. Part 9 largely in force on Royal Assent, with certain sections in force on proclamation. Part 10 in force on Royal Assent.
February 26, 2026	Bill S-6, Federal Law–Civil Law Harmonization Act, No. 4 Bill S-6 is the fourth in a series of enactments drafted in the course of the harmonization of federal statutes by the Department of Justice of Canada resulting from the coming into force of the Civil Code of Québec in 1994. Among the Acts amended by Bill S-6 are Acts governing financial institutions: the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act and the Trust and Loan Companies Act. The amendments are made in order to ensure that each language version takes into account the common law and the civil law.	First Reading February 26, 2026.
February 10, 2026	Bill C-13, Act to implement the Protocol on the Accession of the United Kingdom of Great Britain and Northern Ireland to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership Bill C-13 implements the Protocol on the Accession of the United Kingdom of Great Britain and Northern Ireland to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, done July 16, 2023. It includes consequential amendments to the definition of “regulated foreign entity” in sections 2 of the Bank Act, Insurance Companies Act and Trust and Loan Companies Act respectively.	Reported with amendments by House of Commons Standing Committee on International Trade February 10, 2026. Act comes into force by proclamation.

Disclaimer

This Reporter is prepared as a service for our clients. It is not intended to be a complete statement of the law or an opinion on any subject. Although we endeavour to ensure its accuracy, no one should act upon it without a thorough examination of the law after the facts of a specific situation are considered.

Pay Equity Act: Key points for private sector employers and considerations for M&A

Thu, 02 Apr 2026 00:00:00 Z

Overview

The Ontario Pay Equity Act requires private sector employers to establish and maintain compensation practices that provide for pay equity in their establishment(s). For most employers, this requirement is triggered on the day they hire or hired their tenth employee.

To meet the minimum requirements and to show that pay equity has been achieved, employers MUST have carried out each of these activities for each of their establishments:

Determine job classes, including the gender and job rate of job classes.
Determine the value of job classes based on factors of skill, effort, responsibility and working conditions.
Conduct comparisons for all female job classes to an equal or comparable male job class using either the job-to-job or proportional value method.
Adjust the wages of underpaid female job classes so that they are paid at least as much as an equal or comparable male job class or classes.

Further, the Pay Equity Act requires the following private sector employers to post a pay equity plan:

Private sector employers that had 100 or more employees on January 1, 1988; and
Private sector employers who employed 10 to 99 employees on January 1, 1988, and chose to post a plan before December 31, 1993.

Pay Equity Act considerations in M&A transactions

The obligations under the Pay Equity Act are often overlooked in M&A Transactions. However, considerations under the Pay Equity Act should be one of the main labour and employment-related considerations in a transaction considering (1) the potentially liabilities associated with non-compliance with the Pay Equity Act; and (2) specific statutory obligations that must be met in a “sale of business”.

Retroactive liability

Under the Pay Equity Act, an employer can be ordered to pay retroactive adjustments to the date the adjustment should have first been paid. There is no limitation period prescribed by the Pay Equity Act. This means that employers may be ordered to pay retroactive adjustments (plus interest) from the time the non-compliance occurred, which can be as early as 1988, depending on when the employer became subject to the Pay Equity Act. These retroactive adjustments are payable to all affected employees, including former employees.

In turn, if the seller has not complied with the Pay Equity Act, this potential retroactive liability may be transferred to the purchaser. Such considerations would be especially important in share purchase transactions where the entity that is sold continues to operate on a status quo basis.

Further, the Pay Equity Act explicitly notes that if an employer who is bound by a pay equity plan “sells a business”, the purchaser must make any compensation adjustments that were to be made under the plan in respect of those positions in the business that are maintained by the purchaser, and further the purchaser must do so on the date on which the adjustments were to be made under the plan.

Given that the term “sells a business” broadly includes leases, transfers and any other manner of disposition, the retroactive adjustments required under an already established pay equity plan can also be transferred to purchasers for other types of transactions, such as asset purchases.

Changes required to the pay equity plan

Following a transaction, an existing pay equity plan may no longer be appropriate due to:

changes in workforce composition;
the addition of new job classes; or
structural changes to the organization.

Where that occurs, a new pay equity plan may be required. In non-unionized workplaces, the employer prepares the new plan. In unionized workplaces, the employer and bargaining agent must jointly develop it.

This issue is often assessed after closing, once the impact of the transaction on the workforce is known, but it should be considered during due diligence.

Key transaction considerations

In light of the above, parties to a transaction should consider:

whether the seller has complied with its pay equity obligations and whether outstanding adjustments remain;
what contractual protections should be included in the purchase agreement, including representations, warranties, and indemnities; and
whether the transaction may require post-closing adjustments to the purchaser’s own pay equity practices.

The future is now: CIRO’s compliance report for 2026

Wed, 01 Apr 2026 00:00:00 Z

The Canadian Investment Regulatory Organization (CIRO) released its latest annual compliance report (the Report) which details areas of focus for CIRO-regulated dealers in 2026 and beyond. As always, we encourage firms to use the Report as a checklist to conduct a gap analysis of regulatory and compliance priorities.

Where Dealer Members may wish to focus

In anticipation of CIRO’s enhanced focus on the following topics in upcoming CIRO dealer member (Dealer Member) examinations, firms may wish to revisit and, if necessary, enhance, their existing policies and procedures, documentation, and training in the following areas:

AI use is a significant focus of the regulators. Dealer Members will want to ensure that they understand and have documented their AI use in all aspects of their business and operations. Dealer members should implement appropriate policies and controls to address risks, including privacy. Based on our experience to date assisting firms registered with the Canadian Securities Administrators (CSA), legal and compliance staff should carefully consider how firms respond to use, disclosure and governance-related inquiries in connection with AI. Dealer Members should also consider when the use of AI might trigger a material business change with CIRO.
Cybersecurity remains an ever-present focus during examinations. Dealer Members should ensure that their cybersecurity policies, procedures and processes remain in line with regulatory requirements and best practices, including with third-party providers.
The joint CIRO/CSA Client Focused Reforms KYC, KYP and Suitability Sweep released in December 2025 (the CFR Sweep), sets the standards CIRO will use in upcoming compliance reviews. Dealer Members should ensure their KYC, KYP and suitability policies, procedures and processes align with this guidance.
With the expected pending release of CIRO’s rule amendments on incorporated advisors for investment dealers, Dealer Members should expect increased CIRO focus on Dealer Member employment/ agent arrangements with registered representatives.
CIRO’s new proficiency model took effect on January 1, 2026, ushering in new rules, guidance, and exam requirements.
On March 12, 2026, CIRO published Guidance Note GN-3200-26-001: Guidance on order execution only account services and activities (the New OEO Guidance). OEO Dealer Members should review this publication to confirm that their current OEO platforms remain compliant and to explore how their platforms may be modified or expanded under the New OEO Guidance. BLG will be publishing a client insight on the New OEO Guidance shortly, so please stay tuned.

Dealer operations and risk management

Cyber

Having experienced first-hand a cyber breach this year, CIRO stresses the importance of cybersecurity in the Report, highlighting the changing nature and increased sophistication of cyberattacks as well as the evolving ability to detect threats. The Report also notes that CIRO has received a steady flow of incident reports from dealers alongside an increase in threats involving third-party service providers. CIRO points firms to its expectations for managing risks related to the use of third-party service providers in Guidance Note GN-2300-21-003: Outsourcing Arrangements.

Crypto

CIRO continues to transition crypto asset trading platforms (CTPs) into membership, pairing due‑diligence reviews with early field exams to validate controls and ensure their systems meet regulatory expectations. On Feb. 3, 2026 CIRO published Guidance Note 26-0033: Notice on CIRO's Digital Asset Custody Framework, communicating expectations for custody of digital assets by dealers, standardizing segregation practices, and introducing a tiered crypto custodian model that includes limits on customer assets and minimum capital requirements for crypto custodians in a given tier. As CTPs evolve, CIRO’s regulatory sandbox initiative, “Innovate Safe”, offers opportunities for firms to test new product and service offerings. Crypto‑collateralized retail lending services and stablecoin‑based settlement models are both currently under consideration.

AI

Dealers should be prepared for scrutiny of their use of AI by CIRO’s Financial and Operations Compliance team. The regulators will want to understand the extent to which dealers are using AI as well as to review operational controls to ensure the AI is working as designed. As noted above, our experience suggests that legal and compliance staff should carefully consider how firms respond to use, disclosure and governance-related inquiries in connection with AI. Dealers should also consider whether any use of AI or automation is a material business change requiring advance written notification to CIRO and/or an update to firm registration information via Form 33-109F5 Change of Registration Information. Based on our experience, the scope of what may be considered a “change of business” has increased in recent years, which has resulted in extended review periods and a broadened scope of regulatory approval for activities contemplated by CIRO dealers.

Trading

Short selling remains a key area of focus for CIRO, particularly as amendments to Universal Market Integrity Rules (UMIR) 3.3 took effect in April 2025. UMIR amendments require participants to have a reasonable expectation to settle on settlement date before placing any short‑sale order. The Report highlights the need for participants to update their policies and procedures to reflect these new UMIR requirements.

CIRO identified deficiencies regarding extended failed trades. Firms may wish to revisit CIRO’s 2024 guidance on UMIR Requirements Related to Short Selling and Failed Trades, in particular regarding reporting the required details and using the trade date as the start of the 10-day reporting timeline.

Client focused reforms KYC, KYP and suitability sweep findings

As noted above, CIRO and the CSA have published the results of their CFR Sweep. The Report highlights the need for Dealer Members to have policies and procedures tailored to their firm’s business model and which are detailed and actionable. CIRO expects these policies to contain firm-specific details on the processes implemented to address the CFR requirements.

We welcome the news that CIRO is currently developing guidance to assist firms in responding to the CFR Sweep. Concurrently, Business Conduct Compliance (BCC) examinations will continue to focus on assessing whether Dealer Members have taken steps to identify and remedy any gaps in CFR compliance. Firms who have yet to do so may wish to revisit our detailed analysis of the CFR Sweep and resulting actions they can take here.

Finfluencer arrangements

In December 2025, CIRO and the CSA published a joint Staff Notice containing guidance for dealers forming arrangements with finfluencers. The Report reminds CIRO dealers of their various responsibilities in connection with finfluencer arrangements, including the requirement to perform adequate due diligence, establish written agreements (including referral arrangements), and ensure finfluencers are well informed about the dealer, its products and/or services. Any claims or statements made by finfluencers must be fair, balanced, substantiated and not misleading. BCC examinations have been bolstered to include a review of controls with respect to arrangements with finfluencers.

Business conduct compliance (BCC) reviews

Drawing from the findings of recent BCC reviews, Dealer Members should be aware of the following deficiencies as discussed in the Report:

Conflicts of interest

failures in the identification and management of conflicts of interest, including findings that certain firms do not maintain centralized conflict of interest repositories;
findings of asymmetries between client disclosures and internal records on conflicts;
failures to ensure conflict-related client disclosures are clear and timely;
failures to keep updated, written procedures in support of the identification, management, and disclosure of conflicts;
deficiencies with respect to due diligence in connection with referral arrangements, the assessment of referral-related conflicts of interest, and the corresponding disclosure required to be made to clients;
gaps in supervisory practices, including inadequate reviews of outside activities and assessments for potential conflicts of interest;

Other

incidents where client communications are made through non-approved channels; and
inadequate daily and monthly trading supervision, including findings that certain systems produce incomplete reports.

Anti-money laundering (AML) compliance

Under the MOU between CIRO and FINTRAC, the two organizations cooperate and share information. During BCC examinations CIRO use a risk-based approach to evaluate AML compliance. The most common deficiency found by CIRO is a failure to conduct the required biennial AML Compliance Effectiveness Review. BLG conducts these AML effectiveness reviews and would be happy to assist. Please contact us should you require assistance.

Registration and proficiency

The national delegation to CIRO of CSA-registration functions for investment dealers, mutual fund dealers, and associated individuals is complete in all jurisdictions, except British Columbia and Manitoba. CIRO also received delegated authority in most jurisdictions to review acquisition notices under sections 11.9 and 11.10 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations where a CIRO Dealer Member is involved. Any such proposed transactions require notice to be provided to CIRO, and for CIRO to provide its non-objection, prior to closing.

Firms are required to provide notice in writing to CIRO before making any material changes to their business activities. CIRO’s Business Changes for Dealer Members webpage provides additional information that may assist firms in assessing when this is required. BLG recommends that Dealer Members take a well documented and reasoned approach when evaluating whether a change is a material change to its activities or operations. We are happy to assist Dealer Members in providing guidance on what, in our experience, constitutes a “material change”.

The Report also reminds Dealer Members of the new assessment‑centric proficiency model that took effect on Jan. 1, 2026; information on the new IDPC rules, guidance, and exam requirements can be found on CIRO’s Proficiency page. Dealer Members are encouraged to communicate these new requirements to their personnel, maintain policies that ensure timely completion of Conduct Training for Approved Persons, and consult CIRO’s Guidance Notice on Proficiency Exemption Requests prior to applying for any proficiency exemption requests.

CIRO rules consolidation, dual registration & integration

We anticipate that CIRO-registered firms will also want to review and provide feedback on the future of CIRO rules. Concurrent with the publication of the Report, CIRO published its consolidated rules for final comment as well as proposed rules to amend CIRO’s dual registration model – stakeholder feedback on both proposals are due June 12. CIRO also finalized its new oversight of mutual fund dealers with a head office in Québec, which includes the oversight of financial filings.

What’s next

CIRO’s Report pinpoints areas of improvement and offers firms a clear roadmap to strengthen their compliance architecture. Proactively addressing these issues helps dealers navigate future regulatory examinations more smoothly while demonstrating a genuine commitment to regulatory best practices. Contact any of the authors below or your usual BLG lawyer if you have any questions about this update or should you require assistance, including in updating your policies and procedures, employee training, or on any privacy, cyber or AI-related matters.

Relief for venture issuers: CSA adopts semi-annual reporting pilot

Wed, 01 Apr 2026 00:00:00 Z

Venture issuers who meet certain conditions and criteria can now file financial statements and related MD&A on a semi-annual basis (the SAR Pilot) under the Canadian Securities Administrators’ (CSA) new Coordinated Blanket Order 51-933 – Exemptions to Permit Semi-Annual Reporting for Certain Venture Issuers (the Blanket Order). The Blanket Order introduces a voluntary pilot project that is intended to reduce the regulatory burden and costs associated with frequent interim reporting for smaller issuers and will be monitored by the CSA to inform future rule making.

What you need to know

Eligible issuers listed on the TSX Venture Exchange (TSXV) or the Canadian Securities Exchange (CSE) may elect to file interim financial statements and related MD&A on a semi-annual, rather than quarterly, basis.
Participation in the SAR Pilot is voluntary and subject to prescribed eligibility criteria and conditions, including a revenue cap and disclosure history requirements.
Issuers that opt into the SAR Pilot remain subject to existing timely disclosure and material change reporting obligations under Canadian securities laws and exchange rules.
The SAR Pilot is a multi-year initiative that will inform a broader CSA rule-making project on semi-annual reporting.

Background

Prior to the release of the Blanket Order, all reporting issuers were required to file interim financial reports and accompanying MD&A for each of the three, six and nine-month interim periods of a financial year. While quarterly reporting provides investors with more frequent financial information, the CSA has acknowledged that, for certain smaller issuers, the cost and administrative burden of quarterly reporting may outweigh its benefits.

In developing the SAR Pilot, the CSA considered feedback received through several prior consultations dating back to 2011, in which stakeholders consistently raised concerns about the disproportionate impact of quarterly reporting requirements on smaller issuers. At the same time, the CSA sought to balance these concerns against the potential risks of reduced reporting frequency, including information asymmetry and reduced market transparency.

The SAR Pilot

The Blanket Order provides exemptions from the requirement to file interim financial reports and related MD&A for the first and third quarters of a financial year, permitting semi-annual reporting. To rely on these exemptions, an issuer must, among other things:

be a venture issuer with securities listed on the TSXV or the CSE;
have been a reporting issuer in Canada for at least 12 months;
have annual revenue of no more than $10 million, as reflected in its most recently filed audited annual financial statements;
be up to date with all required periodic and timely disclosure filings; and
issue and file a news release on SEDAR+ announcing its election to rely on the SAR Pilot and identifying the first interim period for which it will not file quarterly financial disclosure.

Issuers relying on the SAR Pilot must still file interim financial statements and MD&A for the six-month interim period and comply with applicable certification requirements. The Blanket Order also provides related relief from certain MD&A form requirements that are tied to quarterly reporting.

The exemptions provided for in the Blanket Order are subject to a number of restrictions. An issuer participating in the SAR Pilot must cease their reliance on the Blanket Order where the issuer changes its financial year end or files a base shelf prospectus. Further, an issuer relying on the Blanket Order must not file a shelf prospectus supplement or distribute securities under an existing shelf prospectus supplement. Finally, where an issuer has filed a short form prospectus, it must not rely on the exemptions during the period of distribution.

Generally, these restrictions are intended to prevent extended or irregular gaps in financial disclosure or to ensure that investors continue to receive up-to-date financial information in connection with required disclosure under the prospectus regime.

Issuers should also be aware that the exemptions in the Blanket Order do not apply to disclosure requirements that arise in connection with specified prospectus and circular disclosure, including take-over bid and issuer bid circulars. The SAR Pilot is not meant to alter prospectus or prospectus-level disclosure expectations in transactional contexts.

Practical considerations for issuers

The SAR Pilot reflects a long‑running debate in Canadian capital markets regarding the appropriate balance between timely disclosure and the regulatory burden imposed on smaller public companies. From an issuer perspective, the ability to move to semi‑annual reporting may provide meaningful cost and resource relief, particularly for early‑stage and smaller venture issuers with limited operating histories or revenue. This is especially true for exploration-stage mining companies. For some issuers, this relief could make remaining public or accessing the public markets more attractive.

At the same time, issuers should carefully consider how reduced reporting frequency may be perceived by investors, analysts and other market participants. Quarterly reporting has traditionally been viewed as a key mechanism for providing timely insight into an issuer’s financial performance and risk profile. Issuers considering reliance on the SAR Pilot should therefore assess not only their eligibility, but also their investor base, trading liquidity and anticipated capital‑raising requirements. While the Blanket Order preserves timely and material change disclosure obligations, some issuers may choose to maintain more frequent voluntary disclosure through enhanced news releases or investor communications to satisfy stakeholder expectations and/or mitigate any market concerns.

From a broader capital markets perspective, the SAR Pilot will serve as an important test case. If successful, it may support the CSA’s broader objective of tailoring regulatory requirements to issuer size and complexity without materially impairing investor protection. Conversely, if reduced reporting frequency is associated with diminished transparency or market confidence, further expansion of semi‑annual reporting may face resistance. The CSA’s ongoing monitoring of the SAR Pilot will therefore be closely watched by both issuers and investors alike.

Next steps

The Blanket Order came into effect on March 19, 2026. In Ontario, it is subject to an 18‑month sunset period, after which a local rule is intended to maintain the availability of the exemptions on a permanent basis, subject to Ministerial approval. In all other CSA jurisdictions, the Blanket Order does not include an expiry date.

The CSA has indicated that it will monitor the SAR Pilot closely and use data and stakeholder feedback to inform a future rule‑making initiative on semi‑annual reporting. Market participants should expect further consultation as this process evolves.

For more information, see CSA Notice of Coordinated Blanket Order 51‑933 – Exemptions to Permit Semi‑Annual Reporting for Certain Venture Issuers (March 19, 2026).