Filtered Insights

Canada’s 2026 Chemicals Management Plan notices: What manufacturers, importers and users must know

Tue, 06 Oct 2026 00:00:00 Z

On Aug. 29, 2026, the federal government published two mandatory information-gathering notices under paragraph 71(1)(b) of the Canadian Environmental Protection Act, 1999 (CEPA):

Notice with respect to certain substances under the Chemicals Management Plan — 2026 Phase 1
Notice with respect to certain substances under the Chemicals Management Plan — 2026 Phase 2 (the CMP Notices)

Key takeaways

The CMP Notices are mandatory and cover 200 substances across two reporting phases;
The relevant activity period is the 2025 calendar year;
Phase 1 reports are due March 3, 2027;
Phase 2 reports are due Sept. 8, 2027;
The CMP Notices cast a wide net – reporting can be triggered by substances in imported goods and by manufacturing uses, not only by bulk chemical manufacture or import; and
Supply-chain outreach and data collection should begin well before the applicable deadline.

Overview of the CMP notices

The CMP Notices support federal prioritization, risk assessment and risk management under the Chemicals Management Plan. They require information in a respondent’s possession or to which it may reasonably be expected to have access, which may include making enquiries up the supply chain in certain cases.

Phase 1: covers 184 substances. The reporting period opened Aug. 29, 2026, and closes March 3, 2027; and
Phase 2: covers 16 substances. The reporting period opens March 4, 2027, and closes Sept. 8, 2027.

Together, the CMP Notices cover 200 substances and require affected businesses to report activities during the 2025 calendar year.

Businesses should begin screening their Canadian operations and supply chains now, as the notices apply well beyond traditional chemical manufacturers.

Who is required to report?

A person may be required to respond if, during the 2025 calendar year, they manufactured, imported or used a listed substance above the applicable threshold. Depending on the substance and activity, reporting may be triggered when the substance was present alone, in a mixture or product, in certain manufactured items or used in manufacturing a good, even if the substance is not present in the finished good.

The principal quantity thresholds vary, but in general, the CMP Notices use thresholds of more than 100 kg for Part 1 and Part 4 substances and more than 1,000 kg for Part 2 substances, under Schedule 1 of the CMP notices, which lists the targeted substances. Imports of covered mixtures, products or specified manufactured items are generally assessed at a concentration of at least 0.1 per cent by weight. Part 3 substances are subject to substance-specific applications and criteria. Because scope depends on the substance, activity, concentration, quantity and, in some cases, product category or application, businesses should assess each listed substance against the relevant part of the applicable notice rather than relying on a single enterprise-wide threshold.

The breadth of the CMP Notices means that potentially affected entities may include manufacturers, formulators, distributors, retailers and importers in sectors such as automotive and transportation, construction, electronics, industrial products, consumer goods, cosmetics, food-related products and packaging, and other operations that use chemical inputs. Certain activities and goods may be excluded or differentiated. Review these provisions carefully before concluding that no response is required.

Organizations that are not required to report under the CMP Notices, for example, because they do not meet the required thresholds, or otherwise have an interest in a listed substance, may voluntarily submit a Declaration of Stakeholder Interest and provide any additional information they consider relevant. Organizations with no involvement or interest in any of the listed substances may instead submit a Declaration of Non-Engagement.

What information must be reported?

The required information varies by substance and activity, but may include:

Substance identity and applicable Chemical Abstracts Service Registry Number;
Quantities manufactured, imported or used;
Concentrations and functions of the substance;
Goods, applications and end uses associated with the substance;
Facility information, including releases where requested;
Commercial status and other supply-chain information; and
Information responsive to substance-specific questions in the applicable schedule.

What should businesses do now?

Screen the substance lists. Compare the 200 listed substances against purchasing, import, production, formulation and product-composition records for 2025;
Map relevant activities. Determine whether each substance was manufactured, imported or used, including through mixtures, products, manufactured items or manufacturing inputs;
Engage suppliers early. Request composition, concentration and quantity information from domestic and foreign suppliers, and document follow-up efforts where information is incomplete;
Assess thresholds and exclusions. Apply the criteria in the relevant part of Schedule 1 on a substance-by-substance basis;
Identify information reasonably accessible. Coordinate legal, environmental, procurement, operations, product stewardship and IT teams to locate responsive records;
Prepare and validate the response. Use the applicable Excel Reporting File and submit a separate response for each phase through Environment and Climate Change Canada’s Single Window; and
Address timing and confidentiality. If necessary, request an extension before the applicable deadline and identify information for which a substantiated confidentiality request should be made.

Extensions, confidentiality and enforcement

The Minister may extend the reporting deadline on written request made before the applicable deadline. A respondent may also request that submitted information be treated as confidential under section 313 of CEPA, but the request must include supporting reasons. Businesses should consider confidentiality at the outset so that commercially sensitive formulations, supplier information and trade secrets are identified and supported consistently.

Failure to comply with a section 71 notice is an offence under CEPA and may lead to enforcement action and penalties of up to $500,000 for a first offence. Responses should therefore be complete, accurate and supported by a defensible record of the screening process, assumptions, supplier outreach and data validation. Where information is unavailable, the organizations should document the steps taken to determine whether it was in their possession or reasonably accessible.

How BLG can help

Navigating and responding to section 71 notices can be cumbersome and complicated. BLG’s Environmental and Regulatory Group helps businesses determine whether the notices apply, conduct substance and supply-chain reviews, interpret threshold and data requirements, prepare responses or extension requests and protect confidential business information.

Chemical management obligations increasingly require businesses to obtain reliable information about substances and products across their supply chains. BLG helps clients entering or operating in the Canadian market proactively identify potential reporting obligations, establish supply-chain due diligence processes and develop contractual provisions requiring suppliers to provide and update the information needed for regulatory compliance.

Please contact any of the authors or key contacts listed below to discuss how the CMP notices may affect your organization.

Prediction markets and iGaming update: Forecasting more developments ahead

Tue, 06 Oct 2026 00:00:00 Z

What you need to know

In Canada, prediction markets do not fit in one regulatory box. In Joint Staff Notice 91-307 (the Joint Notice), the Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) have made clear that, unlike the U.S., sports- and entertainment-related event contracts should not be regulated under Canadian securities and derivatives legislation. The Joint Notice draws a line in the sand that securities regulators won’t pass. It now rests with provincial gaming regulators to develop a regulatory pathway for such contracts.
Will Québec follow in Alberta and Ontario’s footsteps? Recent comments from leadership of the Parti Québécois and the Québec Liberal Party have created optimism that Québec may soon open a new iGaming market for regulated operators, similar to the model adopted in Ontario and Alberta.
Supreme Court of Canada (SCC) to hear arguments on international “pooled liquidity” in iGaming. On Oct. 7, 2026, the SCC will hear arguments in respect of the Ontario Court of Appeal’s (ONCA) decision under appeal, which agreed with the Government of Ontario that legal iGaming would remain lawful under Canada’s Criminal Code (the Code) if Ontario residents were permitted to participate in games and betting involving individuals located outside of Canada. BLG was proud to represent NSUS Group Inc. and NSUS Limited, in their capacity as intervenors in favour of Ontario’s position before the ONCA, and will continue such representation at the SCC. The SCC’s decision has the potential to herald a new era of internationally connected online gaming in Canada.

Regulatory background: The existing framework for prediction markets in Canada and where we go next

Prediction markets are the digital exchange platforms through which forecast or “event” contracts are traded. From a Canadian securities regulatory perspective, such contracts are typically viewed as “binary options” under applicable securities regulations, triggering, among other things, the restrictions set out in Multilateral Instrument 91-102 Prohibition of Binary Options (MI 91-102) and its Companion Policy 91-102CP Prohibition of Binary Options, which prohibit advertising, offering, selling or otherwise trading a binary option with a term to maturity of less than 30 days (the Binary Option Restriction). This restriction applies in each Canadian jurisdiction, either pursuant to MI 91-102 or otherwise.

Accordingly, anyone facilitating trading of event contracts in Canada must follow applicable requirements under securities or derivatives legislation, such as registration or recognition requirements. In April 2025, BLG was proud to partner with Interactive Brokers Canada (IBC) as IBC became the first CIRO dealer to obtain securities regulatory approval to offer certain forecast contracts to eligible clients in Canada. The forecast contracts are traded on ForecastEx LLC (ForecastEx), a U.S. Commodity Futures Trading Commission-registered designated contract market (DCM) and a derivative clearing organization (DCO). As of the date of publication, Wealthsimple Inc. is the only other registered dealer to obtain securities regulatory approval to offer certain forecast contracts in Canada.

March 2026 guidance: Affirming application of CIRO requirements

Beyond compliance with the Binary Option Restriction, IBC’s offering was (and is) subject to certain terms and conditions, including the types of events underlying the event contracts being traded.

In March 2026, CIRO issued guidance to confirm that event contracts offered by approved investment dealers are limited to economic, environmental and financial indicators, and must have a term to maturity of at least 30 days, in accordance with the Binary Option Restriction (the Permitted Scope).

In this guidance, CIRO also clarified that political event contracts and contracts relating to unlawful activities remain prohibited. This guidance created a limited securities regulatory pathway for certain types of event contracts, such as those already offered by IBC, but left open the possibility for other types of contracts to be approved in the future. CIRO and the CSA stated that they would continue monitoring developments in prediction markets and event contracts, and issue further guidance as needed.

August 2026 guidance: CSA and CIRO draw a clearer line

In their Joint Notice published in August 2026, the CSA and CIRO provided an important clarification on the types of event contracts that they view as falling outside of securities regulation, being those based on underlying sports or entertainment events. Importantly, CSA and CIRO will continue to assess whether other types of event contracts may be incorporated under the umbrella of securities regulation, so there is still room for an expanded scope of approved event contracts that may be offered by an approved investment dealer in Canada.

Provincial gaming regulators and the pathway for sports/entertainment event contracts

The Joint Notice leaves provincial gaming regulators as the natural governing body for the regulation of sports- and entertainment-related event contracts in Canada. Several such regulators, including British Columbia’s Independent Gambling Control Office, have already made clear that such contracts constitute gambling under the Code, and that any unregulated prediction market operator offering such products within their jurisdiction is doing so illegally. This position is consistent with the view taken by securities and gaming regulators in Europe, such as in France, who, like Ontario, have taken steps to ban access to unauthorized prediction market sites.

The question then becomes, which provincial regulators will provide the regulatory pathway for such event contracts, and how will it be integrated into their existing framework for gaming regulation? As the answers to these questions develop over the coming weeks and months, BLG’s securities and gaming-law professionals remain at the forefront of regulatory developments, and are well positioned to discuss how to navigate this evolving regulatory landscape.

Securities regulators and issuers continue to tackle novel issues

While Canadian securities regulators develop their own distinctive approach to regulating prediction markets, such regulators and Canadian issuers must still grapple with the novel securities law issues attached to the advent of such markets. The most obvious issue is one of regulatory jurisdiction, which we have discussed above. However, there are series of secondary matters specific to the regulation of securities that have arisen, including:

Market surveillance: As noted in a recent paper posted by Robert DeNault (Head of Enforcement at Kalshi) and Daniel Taylor (Arthur Andersen Professor of Accounting at The Wharton School and Director of the Wharton Forensic Analytics Labe at the University of Pennsylvania), the expansion of prediction markets and trading volumes thereon have challenged the capabilities of existing equity-market surveillance systems, including, in respect of:
- monetization of material non-public information (MNPI) – an insider who knows the relevant outcome of an event contract has a direct means of monetizing their MNPI, as opposed to an insider seeking to monetize such knowledge in equity markets, who could only monetize such information indirectly and must bear the risk of stock price drops unrelated to such MNPI. This incentive to directly monetize MNPI immediately upon receiving such information may challenge traditional surveillance techniques designed to detect front-running trades immediately before substantive price movements; and
- materiality thresholds – while securities regulators are adept at identifying material price movement in equity markets by monitoring for substantial share price changes, the binary structure of event contracts results in a narrow trading range between $0 and $1. Accordingly, securities regulators will not be able to solely rely on price changes (in percentage terms or cents) in order to identify economically material trades. As DeNault and Taylor point out, regulators will likely need to develop a new monitoring tool aimed at quantifying the benefit that specific trades provided to the trader.
Use of confidential information and compliance concerns: Canadian issuers are accustomed to ensuring that their trading policies and practices require timely insider reporting and prevent against illegal insider trading. However, issuers must now actively review such policies and practices to ensure that the new venue of prediction market trading is comprehensively addressed. For example, such policies would contemplate that insider trades of an issuer’s stock based on confidential but non-material information must be reported on the System for Electronic Disclosure By Insiders (SEDI). However, such policies would may not contemplate a disclosure obligation for an analogous trade made on a prediction market. This concern applies beyond insiders and includes the misuse of confidential information by employees. Major Canadian financial institutions have already taken steps to implement updated policies and procedures for their employees and we encourage all issuers to reach out to counsel to consider their own respective updates.
Public perception: Securities regulators need to ensure that market participants appreciate that certain event contracts, such as those identified under the Permitted Scope, are subject to securities and derivatives regulation and that others, such as sports- and entertainment-related contracts fall outside of such regulation. A recent study run by CPA Canada found that Canadians who view prediction markets as investments are three times more likely to participate than those who see them as gambling. Accordingly, it is vital to securities regulators to ensure that Canadians appreciate which such contracts fall under the purview of such regulators.

Québec election comments buoy prospects of market opening

Recent political developments suggest that Québec could become the next Canadian province to consider a competitive iGaming market, following a similar model to that adopted by Ontario and Alberta.

On Sept. 9, 2026, the Québec Liberal Party announced a proposal to expand the mandate of the Régie des alcools, des courses et des jeux so that it can license and oversee all online gambling platforms operating in Québec. The proposal notes that it will be important to subject accredited platforms to strict rules regarding advertising, addiction prevention, and the protection of minors. The language of the proposal indicates support for allowing approved private platforms to offer their products in Québec, ending the monopoly currently held by the Société des loteries du Québec (Loto-Québec), which is currently the only authorized public online gaming operator in the province.

The proposal quickly received the public support of Parti Québécois (PQ) leader Paul St-Pierre Plamondon. Following a general election on Oct. 5, 2026, the PQ will now form a minority government, with the Québec Liberal Party forming the official opposition.

The advent of a regulated market for iGaming in Québec is certainly an attractive proposition for many operators, and it will be a key Canadian jurisdiction to watch in the coming weeks and months.

Supreme Court of Canada to hear appeal on international “pooled liquidity”

On Oct. 7, 2026, the SCC will hear arguments in one of the most consequential gaming law cases in recent Canadian history. The appeal concerns whether provincially regulated iGaming operators may lawfully offer games that allow participants located in Ontario to compete or wager against individuals located outside of Canada.

The case arises from a decision of the ONCA, wherein the Court agreed with the Government of Ontario that such "pooled liquidity" arrangements remain consistent with the framework established under the Code. The decision was welcomed by many industry participants, who argued that internationally connected liquidity pools are critical to the competitiveness of online poker and certain other gaming products, as, among other things, access to larger player pools can increase prize pools, improve game availability, and enhance the overall consumer experience.

The SCC's forthcoming decision will be closely watched by gaming regulators, operators and governments across Canada. A decision affirming Ontario's position could remove a significant source of legal uncertainty surrounding internationally connected gaming products and strengthen the attractiveness of Canadian regulated markets.

BLG is proud to represent NSUS Group Inc. and NSUS Limited, as intervenors supporting Ontario's position in the appeal, and will continue that representation before the SCC.

Takeaways

The CSA and CIRO have signalled that sports- and entertainment-related event contracts should not be regulated through Canadian securities laws, placing increased focus on provincial gaming regulators as the pathway for these products in Canada.
Québec's recent election may create momentum for the opening of another regulated provincial iGaming market.
The SCC's forthcoming pooled-liquidity decision could have significant implications for the future development of online gaming in Canada.

BLG's integrated Securities and Capital Markets and Sports & Gaming Law teams are uniquely positioned to assist market participants navigating the evolving landscape for prediction markets in Canada.

For more information regarding prediction markets, event contracts, regulated gaming, or emerging opportunities in the Canadian market, please contact any of the key contacts below.

The authors would like to thank Shivani Kaup, articling student, for her assistance in preparing this article.

“Time is of the essence” in contracts: What the SCC may decide in Cold Ocean Salmon

Tue, 06 Oct 2026 00:00:00 Z

On Oct.14, 2026, the Supreme Court of Canada (SCC) will hear Cold Ocean Salmon Inc. v. Nova Fish Farms Inc., a commercial contract appeal about when delayed performance permits termination. The SCC will consider whether a standard “time is of the essence” clause can make an open-ended obligation, such as acting “as promptly as practicable,” essential to a commercial bargain. The appeal has practical implications for contract termination, specific performance, conditions precedent, and the drafting of commercial agreements across Canada.

The central issue is whether that standard contractual language can make an open-ended timing obligation, such as an obligation to act “as promptly as practicable,” essential to the commercial bargain. If it can, delayed performance may permit the innocent party to terminate the agreement. If it cannot, parties seeking a clear termination right may need to connect the “time is of the essence” clause to a fixed performance deadline or state the termination consequence expressly.

The appeal therefore places two competing commercial values in tension: flexibility in the performance of open-ended contractual obligations and certainty about when delayed performance permits termination.

Key takeaways for commercial parties and contract drafters

A “time is of the essence” clause does not usually create a performance deadline. Instead, it addresses the consequences of missing a timing obligation. Where it applies, delayed performance may entitle the innocent party to terminate the agreement.
The courts below agreed that Nova Fish failed to meet its contractual obligation to act “as promptly as practicable.” They disagreed about the consequence. The chambers judge held that the “time is of the essence” clause allowed Cold Ocean to terminate the agreement. The appellate court held that the “time is of the essence” clause did not apply to performance of an obligation expressed without a fixed deadline and, therefore, termination was not allowed.
The main issue on appeal to the SCC boils down to whether the “time is of the essence” clause needs to be attached to fixed-time obligations. Cold Ocean says that the entire agreement and its commercial context show that the open-ended timing obligations were essential. Nova Fish says that a standard “time is of the essence” clause applies only to fixed deadlines unless the agreement clearly provides otherwise.
The SCC’s decision may reshape both the drafting of commercial agreements and the interpretation and remedies available for breaches of “time is of the essence” clauses.
A decision either way will affect contractual drafting practices nationally. The outcome will likely influence how parties draft deadlines, conditions precedent, approval obligations, notice and cure provisions, and termination rights.

Cold Ocean Salmon v. Nova Fish Farms: Facts and procedural history

The underlying dispute arose from an agreement whereby Cold Ocean agreed to sell Nova Fish its interests in trout-farming sites in Newfoundland and Labrador. Because the sites were located on provincially leased property, the transaction required regulatory approval before the assets could be transferred.

The agreement did not set a specific deadline for obtaining regulatory approval. Instead, it required Nova Fish to submit the necessary applications “as promptly as practicable” after signing and to use “commercially reasonable efforts” to obtain the required approvals. Closing was to occur seven days after the required approvals were obtained. The agreement also contained the boilerplate clause: “Time shall be of the essence of this Agreement.”

Nova Fish did not submit the approval applications until approximately 16 months after the agreement was signed. When Nova Fish obtained approval months later, it advised Cold Ocean that it wished to proceed with closing the transaction. However, Cold Ocean refused to complete, arguing that Nova Fish’s delay breached an essential timing obligation, thereby entitling Cold Ocean to terminate the agreement.

Nova Fish commenced an action seeking specific performance of the agreement (a Court-ordered remedy requiring Cold Ocean to complete) or, in the alternative, damages. On an application for summary trial of the action, the chambers judge found that Nova Fish was in breach of its obligation to proceed “as promptly as practicable” which was “of the essence”. Based on that finding, the Court held that Cold Ocean was entitled to terminate the agreement and dismissed the application for specific performance.

The Court of Appeal of Newfoundland and Labrador upheld the chambers judge’s finding that Nova Fish breached its timing obligations under the agreement. It nevertheless held that the “time is of the essence” clause did not apply to a contractual obligation expressed without a fixed deadline (i.e., “as promptly as practicable” instead of by a specific date). That being the case, Cold Ocean was not entitled to terminate the agreement, and Nova Fish was granted an order for specific performance. Cold Ocean appealed to the SCC.

What the parties say about “time is of the essence” clauses

Cold Ocean: Context and freedom of contract control the analysis

In the materials filed in the SCC, Cold Ocean’s core argument is that the Court of Appeal erred by interpreting the “time is of the essence” clause in isolation from the rest of the agreement. In its submission, even standard contractual language must be read with the agreement as a whole and the commercial circumstances to determine the parties’ objective intention.

Cold Ocean’s argument emphasizes the specific transaction’s performance structure. Nova Fish controlled the regulatory applications needed to trigger the closing date. The agreement required Nova Fish to proceed “as promptly as practicable”, closing was to follow seven days after approvals were obtained, and time was expressly made of the essence.

Cold Ocean contends that there is no legal reason why sophisticated parties cannot agree that breach of an open-ended timing obligation will carry termination consequences. If the agreement as a whole demonstrates that the parties considered prompt performance essential, as they did by expressly qualifying an obligation to be performed promptly, the absence of a fixed deadline for performance should not prevent the Court from giving effect to that intention.

Nova Fish Farms: Settled boilerplate language promotes contractual certainty

Nova Fish argues that a “time is of the essence” clause has an established legal function and should be interpreted consistently. It says the clause addresses the consequences of missing a stipulated deadline but does not make an open-ended standard, such as “as promptly as practicable”, subject to automatic termination consequences.

Nova Fish’s argument emphasizes that a clause intended to provide certainty should not expose a party to termination based on a deadline that cannot be identified in advance. For example, if missing an open-ended performance obligation can trigger termination, a party may not know when it has breached its performance obligation and be subject to termination. The other party may likewise be uncertain about when it acquires a right to terminate.

In Nova Fish’s submission, parties who want a “time is of the essence” clause to apply to an open-ended obligation can say so directly by connecting the clause expressly to that obligation or by stating the termination right in clear terms.

Two possible outcomes at the SCC

The appeal presents the SCC with two competing approaches to interpreting the agreement:

“Time is of the essence” clauses apply to open-ended timing obligations: The SCC allows the appeal and affirms that a “time is of the essence” clause may apply to an open-ended timing obligation where the agreement as a whole demonstrates that it was the parties’ intention.
“Time is of the essence” clauses only apply to fixed-time obligations: The SCC upholds the Court of Appeal’s order and clarifies that a standard “time is of the essence” clause applies only to fixed performance deadlines unless the parties clearly extend it to an open-ended obligation.

Practical implications for commercial contracts, termination rights, and specific performance

Whatever the outcome, this dispute offers an immediate drafting lesson: parties should not rely on general boilerplate to carry a commercially critical termination right if they can state the intended result directly.

1. “Time is of the essence” clauses apply to open-ended timing obligations

If the SCC accepts Cold Ocean’s position, the decision would confirm that the effect of a “time is of the essence” clause depends on the agreement as a whole and is not necessarily limited to obligations containing a fixed calendar deadline:

Parties could rely on a “time is of the essence” clause as applying to open-ended timing obligations. There would be continued use of language such as “as promptly as practicable” or “commercially reasonable efforts”.
Breach of contract claims would be centred on: (i) how open-ended timing obligations should be interpreted in the circumstances; and (ii) whether one party’s contractual performance was completed by the non-specified time.
Disputes would likely focus on what the standard of performance required in the particular commercial circumstances, whether the performing party met that standard, and whether the delay justified termination rather than another contractual remedy.
The decision would reinforce freedom of contract by allowing the parties to define the consequences of delayed performance through the overall structure and context of their agreement.

2. “Time is of the essence” clauses only apply to fixed-time obligations

If the SCC sides with Nova Fish and holds that a “time is of the essence” clause will only apply to fixed-time obligations:

“Time is of the essence” clauses would not give rise to a termination right unless the clause was connected to a specific timeline for performance of an obligation or a stated termination right.
Greater certainty would exist regarding when delayed contractual performance constitutes a breach and triggers the right to terminate.
Parties would need to devote more attention to negotiating and drafting express deadlines and conditions precedent to ensure the intended consequences are captured.

Practical Contract Drafting Checklist

Identify which timing obligations are essential, rather than relying only on a general boilerplate clause.
Use a fixed outside date where commercial certainty is more important than flexibility.
State whether a missed deadline permits termination, triggers a cure period, or gives rise only to damages.
Connect conditions precedent, third-party approvals and “commercially reasonable efforts” or “best efforts” obligations to clear notice and escalation mechanisms.
Address waiver, extensions, and the steps required to restore time as an essential term after a deadline is extended or tolerated.
Align the termination clause, specific-performance provisions, and dispute-resolution process with the agreement’s timing structure.

Why this commercial contract appeal matters

Parties to commercial agreements frequently use boilerplate contractual terms to leave obligations open-ended. Those terms can be useful where regulatory approval, third-party consent, or another uncertain event makes a calendar deadline impractical. The trade-off is that flexibility can make it harder to determine when delay becomes a breach of contract and when a breach permits termination. The SCC’s decision will help determine whether standard “time is of the essence” clauses can convert those flexible obligations into grounds for termination.

We are monitoring the appeal and will publish a further update after the SCC releases its decision. In the meantime, businesses entering, performing, or seeking to exit a commercial agreement should review whether their timing provisions clearly identify the obligation, the deadline or performance standard, and the consequence of delay. If a live transaction or dispute turns on those questions, early advice can help preserve termination rights, avoid an unintended waiver, and shape the evidentiary record before positions harden.

BLG at the SCC – What’s coming in the Supreme Court’s fall 2026 sitting schedule

Mon, 05 Oct 2026 00:00:00 Z

Ceremony to mark the opening of the judicial year

The Supreme Court of Canada held a ceremony today, Oct. 5, 2026, marking the opening of the judicial year, presided by the Chief Justice of Canada and attended by justice system leaders across Canada. The Court revived this tradition last year for the 150^th anniversary of the Court.

This morning’s ceremony took place at the Court’s new temporary home in the West Memorial Building at 344 Wellington Street in Ottawa, next door to the iconic Supreme Court of Canada building at 301 Wellington Street which is currently undergoing a 10-year restoration project. Many of the justices presently on the bench will meet the mandatory retirement age before the Court’s operations return to 301 Wellington.

During the ceremony, the Chief Justice highlighted the architectural features of the Court’s new home, including nine oak arches representing the nine justices of the Supreme Court, as well as a sky light and chandelier in the building’s main lobby representing Court openness and the country’s northern identity. He also spoke about the Court’s case load and noted that by the end of the fall session, the Court will have heard 60 appeals in 2026, which would be the highest since the onset of the pandemic in 2020.¹ The ceremony was also attended by newly-appointed Justice Glenn D. Joyal, who was sworn in as a Supreme Court justice on July 15, 2026, and will be formally welcomed through a ceremony to take place later this month.

Upcoming cases in fall 2026

The Court has released its hearing schedule for fall 2026. BLG lawyers will be appearing in 3 appeals during the fall sittings:

Atlantic Lottery Corporation, et al. v. Attorney General of Ontario (42141), a reference brought by Ontario asking whether its iGaming model would remain lawful under the Criminal Code if Ontario implemented a proposed model to allow Ontario players to participate in games and pooled liquidity with players outside of Canada. Graeme A. Hamilton and Teagan Markin will be appearing for the interveners, NSUS Group Inc. and NSUS Limited, at the hearing scheduled for October 7, 2026.
Canadian Coalition for Firearm Rights, et al. v. Attorney General of Canada (41859), dealing with challenges to federal regulations prohibiting classes of firearms under the Criminal Code brought by firearm owners, businesses, shooting organizations, and advocacy groups. Guy J. Pratte, Nadia Effendi and Matthew Schneider will appear for the intervener, Attorney General of Alberta, at the hearing scheduled for November 9-10, 2026.
Canadian National Railway Company v Alberta Pacific Forest Industries Inc. (42092), a judicial review from the Canadian Transportation Agency which deals with the constitutional right to judicial review and its interaction with the doctrine of adequate alternative remedies in federal regulatory schemes governed by the Federal Courts Act. Guy J. Pratte, Nadia Effendi and Teagan Markin will appear for the appellant, Canadian National Railway Company, at the hearing scheduled for November 12, 2026.

Some of the other significant upcoming cases to watch this fall at the Supreme Court include:

NHK Spring Co., Ltd., et al. v. Tony Cheung, et al. (41451), which will address Canadian courts’ jurisdiction to grant damages arising from an alleged foreign price-fixing conspiracy under the Canadian Competition Act in relation to losses experienced by Canadian customers and business. (Hearing scheduled for October 8, 2026)
Ontario Place Protectors v. His Majesty the King in Right of Ontario and Attorney General of Ontario (41805), a constitutional challenge to Ontario legislation granting broad Crown immunity against civil claims and remedies in relation to Ontario’s redevelopment of Ontario Place in Toronto. (Hearing scheduled for October 15, 2026)
H.N. v. Board of Education of School District No. 61 (Greater Victoria), et al. (41910), revisiting the framework for vicarious liability in considering whether a school board can be held vicariously liable for sexual abuse committed by a volunteer tutor that occurred years later during private visits at the tutor’s home. (Hearing scheduled for November 13, 2026)
GCT Canada Limited Partnership v. International Longshore and Warehouse Union Ship and Dock Foremen, Local 514 (41951), a judicial review from a labour complaint relating to the employer’s inspection of vessels it did not own, which raises issues about the application of vertical stare decisis to administrative tribunals. (Hearing scheduled for December 3, 2026)
Attorney General of Quebec v. Vasil Petrishki, et al. (42018), which raises whether special clerks and registrars appointed under the Bankruptcy and Insolvency Act perform judicial functions that attract the protections of judicial independence under the Quebec Charter of human rights and freedoms and the Constitution Act, 1867. (Hearing scheduled for December 9, 2026)

For more information, reach out to our team

BLG is home to the largest Appellate Advocacy practice in Canada, with offices in Toronto, Ottawa, Vancouver, Calgary and Montréal. For questions about Supreme Court of Canada or other appellate matters, please reach out to one of the team members below.

Investing in Canada’s energy industry: A legal and regulatory guide

Mon, 05 Oct 2026 00:00:00 Z

Canada's energy transition is creating significant opportunities

Canada is experiencing significant investment in traditional oil and gas infrastructure, electricity generation and transmission, LNG facilities, critical minerals and clean energy projects. In the face of geopolitical uncertainty, Canada is a reliable and competitive energy partner. Growing demand, decarbonization initiatives and a diverse energy and resource mix are creating opportunities for both domestic and international investors.

Success often depends on understanding Canada's unique regulatory, environmental and commercial landscape.

What's different about Canada?

Regulatory oversight operates at both the federal and provincial levels

Canada's energy sector is governed through a combination of federal and provincial regulation. Efforts are underway federally and provincially to streamline regulatory approval and reporting requirements.

Indigenous participation is a critical project consideration

Indigenous communities in Canada have unique constitutionally protected rights that have resulted in a focus on Indigenous consultations, partnerships and, in some cases, economic participation. Many projects now incorporate Indigenous equity ownership, such as the recent Williams Treaties First Nations $700 million investment in Ontario’s 300 MW small modular reactor (SMR) project.

Environmental and permitting requirements are changing

A national focus on building new infrastructure has driven both federal and provincial governments to focus on streamlining environmental and permitting requirements. The federal Major Projects Office, created in 2025, is focused on facilitating the advancement of major energy and infrastructure projects that are of national interest. Understanding these requirements and processes at the outset can help avoid delays and support more predictable project execution.

Diverse market opportunities across jurisdictions

Canada does not operate as a single energy market. Provinces have distinct regulatory frameworks, procurement programs, utility structures and investment priorities. Whether developing oil and gas infrastructure, generation assets, pursuing transmission opportunities, investing in critical minerals or participating in clean energy initiatives, understanding regional differences is key.

Projects require multidisciplinary planning

Energy projects often involve a range of legal and business considerations beyond sector regulation, including financing, taxation, construction, labour and employment, environmental compliance and dispute resolution.

Entering or expanding in Canada's energy market?

BLG's Doing Business in Canada Guide provides practical guidance on the legal and business considerations applicable to all organizations entering the Canadian market, including business formation, foreign investment review, taxation, employment, environmental regulation, Indigenous business considerations, privacy, competition law and dispute resolution.

For energy companies, BLG's Energy & Natural Resources group can help navigate sector-specific considerations, including regulatory approvals, Indigenous participation, project development, financing structures and compliance requirements.

Connect with us to discuss the opportunities, regulatory considerations and commercial risks most relevant to your business, project or investment strategy.

To learn more, contact:

Andrew Pozzobon | Co-Leader, Energy & Natural Resources Group

John Vellone | Co-Leader, Energy & Natural Resources Group

Beyond CETA: What EU "associate membership" actually means for Canadian business

Fri, 02 Oct 2026 00:00:00 Z

Last week, a new term entered into the Canadian trade, economic, and political lexicon: “associate member of the European Union.”

Never mind that there is no such status in the complex web of European Union external relations, and that all we have are three lines in a long “State of the Union” speech by the president of the European Commission; the term, and what it might imply, has since taken a life of its own.

So, let’s declutter the discussion.

We already have CETA, so what's the offer?

First things first: Canada will not become a member of the European Union. Not soon, not ever. This is because, to be eligible for membership under Article 49 of the Treaty on European Union, the applicant country must “be a European state.” EU membership, taxes, regulations, and immigration rules are not on the table.

But we already have a trade agreement, do we not? Yes, we do. The Canada-EU “Comprehensive Economic and Trade Agreement,” the CETA, is an ambitious free trade deal that was negotiated by the then-called Harper Government, and brought into force (provisionally) under Trudeau. And it’s working well. More than 98 per cent of trade between the two economies is tariff-free, and trade has increased 75 per cent over the past decade.

There are issues with the CETA: it has not yet been ratified by ten EU members, and so some institutional provisions are not yet in force. But is the CETA a “mess”? Hardly.

If we already have a successful free trade agreement, and membership is not the objective, what is all this about?

A free trade agreement is the lowest level of economic integration between sovereign states; the EU framework represents the highest, before you end up in a federal state. (It could be argued that, in some respects, Canadian provinces have more autonomy than EU member states, but that’s a discussion for another day.)

Between the two extremes, there are different gradations of alignment and liberalization with little or no impact on “sovereignty.” The author of this article has written about the various levels of regulatory liberalization in the financial services sector; the analysis holds for other sectors.

What CETA leaves on the table

Take EU regulations: it is true that they are complex and that, in some sectors, they could discourage Canadian business from seeking business opportunities in European countries. A free trade agreement does not tackle these “non-tariff barriers” in all cases. That’s why we enter into mutual recognition agreements, not just for goods, as exemplified by the Mutual Recognition Agreement between Canada and the European Union (EU), but also for services and professions, such as the EU-Canada Mutual Recognition Arrangement for Architects illustrates.

We could extend mutual recognition or enter into other arrangements to reduce or remove regulatory barriers in much the same way. The point is, a trade agreement is just the bare minimum, and there is much we can do to enhance and liberalize trade between Canada and the EU before we hit the ceiling.

That is not all. Closer attention to the European Parliament speeches indicates that the “associate member” gambit is both more and less ambitious than mere regulatory alignment/harmonization/recognition. Here is President von der Leyen:

We will create a tech alliance. We will integrate defence industrial bases. We will make the Arctic a flagship joint project. We will work on energy, critical minerals and batteries. On AI, quantum, cyber and economic security.

The real opportunity: Energy, critical minerals and strategic investment

Take energy. For more than a decade, we have known about the EU’s strategic vulnerability in energy. For most of that time, energy diversification was not a priority. We have also known, for most of that time, that developing an Eastern terminal for LNG exports did not have full commercial support. Without reading too much into the speech, it is at least an opening for greater alignment of our export possibilities with the EU’s import needs.

What if the EU and Canada agreed to joint strategic public investment in EU-oriented energy export infrastructure? So it goes for critical minerals. And batteries. And data security.

None of this is certain: much remains to be worked out. And even the most active integration short of actual membership, which is not possible, is not going to override the basic facts of geography: the United States is and will remain our biggest market. The objective is not to replace that market, but to open new ones.

In that sense, the “associate member” offer is an opportunity, and not just for governments and policymakers and diplomats to travel and negotiate, but for the Canadian business community to identify:

existing regulatory blockages in EU trade, to seek ways of reducing them;
both private and public investment opportunities in high-profile sectors, to engage European interests; and
ambitious and achievable market access objectives, in both goods and services, to have options when faced with U.S. tariffs or other barriers.

Keep up with new developments

Follow developments on BLG’s Tariffs and Trade Resource Centre and The Tariff Home Companion podcast. Our International Trade and Investment lawyers have advised clients through every phase of this dispute, including on origin qualification, remission requests, classification and scope determinations, contractual risk allocation and refund preservation.

Alberta Court of Appeal clarifies the scope of pure economic loss in construction negligence claims

Thu, 01 Oct 2026 00:00:00 Z

The Alberta Court of Appeal has provided important guidance on the treatment of pure economic loss claims arising from construction defects. In Murray v Windsor Brunello Ltd, 2026 ABCA 275, the ABCA confirmed that courts must distinguish between claims involving negligent supply of defective structures and claims involving negligent performance of professional services, as each attracts a separate duty of care analysis.

What you need to know: Pure economic loss claims arising from construction defects

This decision reinforced three important principles:

Pure economic loss is not a single doctrine. Courts must identify the category of pure economic loss at issue and apply the corresponding analytical framework.
The “real and substantial danger” requirement remains central to defective structure claims, but it does not govern claims for negligent performance of professional services.
Contract and tort duties may coexist. In the absence of contractual language limiting tort liability, professionals may face concurrent liability in both contract and negligence, for the same underlying conduct.

Background

This dispute arose from the construction of a custom residence in Wheatland County, Alberta. The homeowners alleged that deficiencies in the design and installation of large window and sliding door systems caused structural deflection, resulting in doors that became increasingly difficult to operate, and ultimately failed to function as intended. They brought their claim in contract and negligence.

Following trial, the homeowners obtained judgment of over $958,000, including pre-judgment interest, against the project and construction manager for breach of contract. However, the trial judge dismissed the negligence claim against the engineering consultant, finding that the losses constituted pure economic loss and the defects did not create the type of “real and substantial danger” required for recovery under the “defective structures” branch of negligence law.

Alberta Court of Appeal decision

The ABCA agreed that the homeowners’ defects claim involving the house itself constituted a claim for pure economic loss rather than ordinary property damage. Applying the Supreme Court of Canada’s decision in Winnipeg Condominium Corp No 36 v Bird Construction Co, the ABCA held that where one component of a complex structure adversely affects another component of the same structure, the resulting repair costs are a pure economic loss recoverable in negligence only if the defect creates a “real and substantial danger”.¹ The ABCA further held that the trial judge correctly concluded that the deflection of the residence’s doors and windows did not create a “real and substantial danger”. Therefore, no duty of care arose under the category of negligent supply of a defective structure.

However, the ABCA determined that the analysis should not have ended there. The homeowners had also advanced a claim against the engineering consultant for negligent performance of professional services – a distinct category of pure economic loss. The ABCA emphasized that claims for negligent performance of a service turn on undertaking, reliance, proximity, and foreseeability rather than the “real and substantial danger” test applicable to defective structures.

The ABCA found that the trial judge expressly determined that the engineering consultant undertook to provide engineering services to the homeowners, which the homeowners reasonably relied on. The trial judge also found that injury to the homeowners was reasonably foreseeable. These findings established the necessary proximity and foreseeability for a duty of care.

Importantly, the ABCA rejected the proposition that the existence of a contractual relationship precluded a negligence claim. Relying on BG Checo International Ltd v British Columbia Hydro and Power Authority and subsequent case law, the ABCA confirmed that there is no general prohibition against concurrent liability in contract and tort.² Tort claims may be limited or excluded by contractual terms, but, absent such limitations, both causes of action may coexist.

The ABCA concluded that the trial judge erred by importing the defective structures analysis into the negligent performance of services claim. The two categories are not mutually exclusive and must be analyzed independently. Because proximity and foreseeability were established on the facts found at trial, the engineering consultant was liable for negligent performance of professional services.

How BLG can help with construction disputes

BLG’s Construction Disputes team reviews the latest court decisions to keep organizations informed about changes that may affect their business. We provide practical advice on what these developments mean for construction projects, contracts, disputes and potential liability. We can also help organizations assess risk, respond to claims and resolve disputes at every stage of a project. Contact us to discuss how this decision may affect your organization.

Devoir de bonne foi du donneur d’ouvrage : la Cour d’appel confirme une indemnité de 15,7 M$ pour l’entrepreneur

Mon, 28 Sep 2026 00:00:00 Z

Dans un arrêt unanime rendu le 22 septembre 2026, la Cour d’appel du Québec confirme la décision de l’honorable Enrico Forlini, j.c.s. dans l’affaire PG4 c. Énergir, 2024 QCCS 4179, aux termes de laquelle une somme de 15 670 101 $ a été octroyée à l’entrepreneur en raison de conditions de sol et de roc imprévues.

Le plus haut tribunal de la province rappelle au passage que les droits contractuels des parties doivent être exercés conformément aux exigences de la bonne foi et à leur devoir de cohérence, tout en apportant plusieurs éclaircissements sur le fardeau de preuve incombant à l’entrepreneur placé en pareilles circonstances.

Le contexte

Le litige concernait un projet d’extension du réseau gazier d’Énergir S.E.C. (« Énergir ») sur une distance d’environ 52 km dans la région de Thetford Mines (le « Projet »).

Malgré les difficultés rencontrées en raison des conditions de chantier imprévisibles et manifestement différentes de celles anticipées, PG4 parvient à livrer le Projet dans les délais requis après avoir déployé, à la demande d’Énergir, d’importantes mesures d’accélération.

Au terme de la réalisation du Projet, PG4 subit une perte considérable et réclame à Énergir les coûts additionnels encourus en lien avec l’instabilité des sols sur le tracé et la présence de roc imprévue.

Le jugement de première instance

Le juge de première instance conclut d'abord que les documents d’appel d’offres étaient déficients et qu’Énergir a manqué à son obligation d’information envers PG4.

Il rejette également le moyen de défense fondé sur le non-respect de la procédure de réclamation. PG4 ayant mis en œuvre des mesures d’accélération coûteuses en se fiant aux assurances d’Énergir quant à l’examen éventuel de sa réclamation, le juge de première instance estime qu’Énergir a manqué à ses devoirs de collaboration et de cohérence en refusant de considérer la réclamation de PG4 à la fin du Projet. Il conclut qu’une fin de non-recevoir doit être opposée au moyen de défense d’Énergir.

Le juge de première instance accueille donc la réclamation de PG4 pour perte de productivité, concluant que les conditions de sol et de roc imprévues ont gravement perturbé l’exécution et la planification des travaux. Il accorde également la réclamation d’heures additionnelles, notant que l’utilisation des coûts réels plutôt que des taux de soumission est justifiée lorsque les conditions diffèrent significativement de celles estimées à l’appel d’offres.

Autrement dit, il accueille l’action à 100 %, à l’exception des frais de préparation de la demande de compensation.

En appel : la bonne foi comme limite au formalisme contractuel

Selon la Cour d’appel, c’est à bon droit que le juge de première instance a retenu qu’Énergir, qui était parfaitement au courant que le processus contractuel visant les travaux additionnels n'avait pas été suivi, a signalé qu'elle demeurait ouverte aux discussions sur la demande de compensation de PG4.

La Cour d’appel conclut que la faute d’Énergir résidait non pas dans le refus de payer la réclamation de PG4, mais plutôt dans son défaut de respecter sa promesse de considérer la réclamation monétaire en contrepartie d’une accélération des travaux.

C’est donc à bon droit que le juge de première instance a appliqué l’arrêt Hydro-Québec c. Construction Kiewit cie, 2014 QCCA 947, qui consacre le principe selon lequel une partie qui crée des attentes légitimes chez son cocontractant et qui l'amène à agir à son détriment ne peut ensuite revenir à la lettre du contrat sans contrevenir aux exigences du devoir de loyauté et de la cohérence.

Le « ripple effect » en matière de perte de productivité reconnu par la Cour d’appel

La Cour d’appel ne voit pas d’erreur révisable dans les les conclusions sur la perte de productivité, lesquelles retiennent l'analyse de l'experte de l'entrepreneur fondée sur le concept de « ripple effect » ou de l’effet domino.

Ainsi, les conditions imprévues liées au roc et à l'instabilité du sol ayant entraîné des répercussions sur l’ensemble des activités liées à l’excavation, la Cour d’appel accepte ainsi que la perte de productivité puisse résulter d'une désorganisation globale du chantier plutôt que d'événements isolés et facilement quantifiables.

Cette conclusion revêt une importance particulière pour les réclamations visant les pertes de productivités ou les coûts d’impacts.

Les principes en matière de quantification des dommages rappelés par la Cour d’appel

La Cour d’appel conclut finalement que le juge de première instance avait raison d'accorder des dommages-intérêts calculés en fonction des dépenses réellement engagées et non en fonction des taux initialement prévus à la soumission.

Ce faisant, le juge de première appliquait correctement l'approche adoptée par la Cour dans l'affaire Ville de Québec c. Groupe Aecon Ltée, 2018 QCCA 1019 (voir le paragraphe 15), notamment lorsque, comme en l'espèce, il y a un écart significatif entre les conditions anticipées et celles rencontrées.

Ce qu’il faut retenir

La bonne foi, encore une fois. Un donneur d’ouvrage qui crée chez l’entrepreneur une attente légitime quant au traitement futur de sa réclamation ne peut répudier sa parole ou ses gestes en invoquant subséquemment, de façon abusive, les dispositions du contrat.
Le « ripple effect » et la perte de productivité. Lorsque les problèmes rencontrés impactent l’ensemble des travaux sur le chantier, l’entrepreneur n’a pas à démontrer, « heure par heure » ou « roche par roche », la perte de productivité engendrée par chacune de ces perturbations.
L’importance des communications au cours du chantier. La réaction rapide de l’entrepreneur et les informations communiquées au donneur d’ouvrage dès la découverte des conditions différentes au chantier demeurent déterminantes pour permettre à l’entrepreneur de faire ultérieurement valoir une réclamation.

Ontario Court of Appeal: Insurance coverage analysis turns on nature of loss, not coverage grant selected

Mon, 28 Sep 2026 00:00:00 Z

In Panasonic Canada Inc. v. XL Specialty Insurance Company, 2026 ONCA 633, the Ontario Court of Appeal held that a ransomware endorsement applied to losses arising from a ransomware attack, even though the insured did not pay a ransom and sought coverage under other coverage grants in the base policy.

The decision underscores that endorsement wording may govern ransomware-related losses based on the nature of the loss, regardless of the specific coverage grant invoked by the insured.

Facts

Panasonic incurred approximately US$2 million in costs responding to a ransomware attack that involved unauthorized access to its network and the exfiltration of confidential information.

Panasonic did not pay a ransom and sought indemnity under several first-party, third-party, and data breach response coverages in its cyber policy. The parties disputed whether the claim was subject to the policy's US$1.5 million retention or the US$3 million retention contained in Endorsement #023, the Ransomware Sublimit Endorsement (the Endorsement).

Lower court's decision

The application judge held that Panasonic's claim was subject to the US$1.5 million retention in the base policy.

The application judge found that the losses were covered under the base policy and that Panasonic was not looking to the Endorsement for its grant of coverage. The judge interpreted the Endorsement as applying only to claims made under the Endorsement itself and concluded that the higher retention did not apply. Panasonic was therefore entitled to recover the amount of its claim exceeding the US$1.5 million retention.

Court of Appeal's decision

Standard of review

The Court held that the interpretation of the Endorsement was reviewable on a correctness standard under Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co. because 1) the Endorsement formed part of a standard-form insurance contract; 2) its interpretation had precedential value; and 3) there was no meaningful factual matrix unique to the parties. The Court therefore interpreted the policy wording afresh.

Application of the Endorsement

The Court emphasized that endorsements must be read together with the policy as a whole. Because the Endorsement expressly stated that it “changes the policy,” the Court rejected the application judge's conclusion that the Endorsement's definitions were relevant only when coverage was sought under the Endorsement itself.

Instead, it held that the Endorsement governed any loss falling within the definition of “Ransomware Event Loss,” which captures any loss “arising out of, in connection with, or in any way involving” a cyber-extortion threat.

The Court found that Panasonic’s losses arose out of or were connected with a cyber-extortion threat. They therefore constituted a “Ransomware Event Loss” and were subject to the Endorsement's retention provisions.

Because Panasonic's agreed loss amount was less than the US$3 million retention, the claim was wholly self-insured. The Court allowed the appeal, declared that the US$3 million retention applied, and dismissed the application.

Takeaway

The decision highlights the importance of analyzing an insurance policy as a whole, including any endorsements that modify or restrict coverage. Even where an insured seeks coverage under provisions in the base policy, endorsements may govern the loss and determine the applicable retentions, sublimits, or other limitations. It is therefore necessary to determine whether a loss falls within the scope of a specific endorsement, regardless of the coverage grant under which indemnity is sought.

In the cyber insurance context, this means that sublimits related to extortion events may apply to non-extortion costs such as breach counsel fees, forensic investigation, data restoration, credit monitoring or even business interruption.

New Churchill Falls agreement: Key terms for Newfoundland and Labrador, Québec and Canadian power markets

Mon, 28 Sep 2026 00:00:00 Z

On Sept. 17, 2026, Newfoundland and Labrador’s House of Assembly, sitting in a special session, voted to move forward with a definitive cooperation and implementation agreement dated Aug. 17, 2026 (the DCIA)¹ between Newfoundland and Labrador Hydro (NLH), Hydro-Québec (HQ), and Churchill Falls (Labrador) Corporation Limited (CF(L)Co).

The Government of Newfoundland and Labrador, Hydro-Québec and the Federal Government first announced the agreement on Aug. 17, 2026. The agreement provides the framework to replace the 1969 Churchill Falls Power Contract and pair the redevelopment of Churchill Falls with the Gull Island project, new transmission pathways through Québec, a rebate for Newfoundlanders and Labradorians, and significant federal financing and permitting support. The package would expand Newfoundland and Labrador’s retained power, provide certain supply-related assurances to Hydro-Québec, establish defined export channels into U.S. markets, and support a federally backed wind component and transmission build in Labrador West.

The DCIA faces political uncertainty in Québec. The next provincial election is scheduled for Oct. 5, 2026. While the current provincial government supports the agreement, the Parti Québécois has indicated that it would conduct a due diligence review if it forms government.

Notwithstanding the political risks at play and the fact that the DCIA remains subject to the negotiation and execution of long-form definitive agreements (collectively, the Definitive Agreements), the agreement represents a potentially significant reset of the commercial, operational, and intergovernmental framework governing the Churchill River hydroelectric assets. Below are some of the key aspects of the DCIA as it stands today.

New Churchill Falls agreement: Key takeaways on power pricing, generation, exports, federal financing and ratepayer rebates

The existing Churchill Falls pricing arrangement would be repriced before the current contract expires, increasing the price from approximately $0.002/kWh to approximately $0.018/kWh in 2027, with annual payments subject to a CPI-based adjustment mechanism.
The Churchill Falls power generating facility (CF) is expected to see a 23.5 per cent increase to its installed capacity through an upgrade of all turbine-generator units at CF. NLH would receive access to up to 2,350 MW, increasing to 2,750 MW if the Wind Project (as described below) proceeds. HQ would receive access to up to 6,915 MW, increasing to 8,515 MW if the Wind Project proceeds. The potential expansion of CF will also be studied.
The development, construction, and operation of a new hydroelectric power generating facility on the Churchill River, which would be located downstream from CF and ~100KM southwest of the Town of Happy Valley-Goose Bay (the Gull Island Project or the GI Project) that is expected to provide an installed capacity between approximately 2,250 MW and 2,700 MW, depending on the final configuration.
The HQ-NLH purchase and sale framework provides NLH with defined export/offtake options, including up to 280 MW at a blended export benchmark price combining pricing from nodes in New England (1/3), New York (1/3), and Ontario (1/3); up to 240 MW priced using a pricing framework that is equivalent to HQ’s Champlain Hudson Power Express (CHPE) contract; and up to 200 MW priced using a pricing framework that is equivalent to HQ’s New England Clean Energy Connect (NECEC) contract.
Federal participation includes $10 billion in financing, with the broader package characterized as nearly $70 billion in clean energy investment supporting approximately 14,000 MW of power and 23,000 construction jobs.
Upon finalization of the Definitive Agreements, Newfoundland and Labrador ratepayers would receive a 15 per cent rebate on the first 2,000 kWh/month, estimated to save the average customer $351 per year.

Material terms

Schedule B of the DCIA outlines the comprehensive material terms that will serve as the basis for the drafting of the Definitive Agreements. Some of the most significant terms relate to the HQ-NLH Purchase and Sale Agreement and the Gull Island Project.

Under the existing (1969) agreement, HQ purchases power for $0.002/kWh. Annex D sets out the annual payments that would apply under the new power purchase agreements (PPA) with CF(L) Co (the New CF PPAs). Under those agreements, the effective price increases from $0.002/kWh to approximately $0.018/kWh in 2027, with target payments subject to a CPI-based adjustment mechanism.

CF is expected to see a 23.5 per cent increase (approximately 1,275 MW) to its installed capacity through an upgrade of all turbine-generator units at CF (the CF Upgrades). NLH would receive access to up to 2,350 MW, increasing to 2,750 MW if the Wind Project (as defined below) is completed; HQ would receive access to up to 6,915 MW, increasing to 8,515 MW with the Wind Project.

The parties have also agreed to study the potential expansion of CF as relating to a new powerhouse and related interconnection facilities adjacent to the existing facility.

HQ-NLH Purchase and Sale Agreement

Schedule B of the DCIA sets out five pricing mechanisms for the HQ-NLH Purchase and Sale Agreement under which NLH may elect to sell power to HQ and HQ must purchase that power:

Synthetic Export Price: up to 280 MW, priced as a blended “synthetic” export benchmark, which will be comprised of: 1/3 New England + 1/3 New York (Astoria delivery point) + 1/3 Ontario (PQAT interface), and winter capacity pricing (as outlined in Annex H of the DCIA), net of transmission charges that would otherwise be payable.
CHPE Equivalent Pricing: up to 240 MW at an agreed upon capacity factor, priced on a net basis equivalent to HQ’s CHPE contract, but not back-to-back (and excluding CHPE penalties/deductions); NLH’s delivery obligation is limited to the Newfoundland & Labrador and Québec interface (LAB‑HQT).
NECEC Equivalent Pricing: up to 200 MW at an agreed upon capacity factor, priced on a net basis equivalent to HQ’s NECEC contract, likewise not back-to-back (and excluding NECEC penalties/deductions); delivery is limited to LAB‑HQT.
Discounted PPA Price: any volumes priced at 95 per cent of the applicable PPA pricing (i.e., the New CF PPA for NLH’s CF entitlements; the relevant CF Upgrades PPA; and the relevant GI PPA), available when NLH has unplanned unused energy after serving domestic load.
Premium PPA Price (CF only): any volumes of NLH’s CF entitlements only, priced at 1.5x the New CF PPA price, based on the payment schedule set out in Annex D of the DCIA and subject to the CPI-based adjustment mechanism.

However, the pricing mechanisms listed above do come with certain conditions. At least three years’ prior notice is required for sales at the Synthetic Export, CHPE Equivalent, NECEC Equivalent or Premium PPA Prices and for reallocations among those regimes; absent such notice, sales occur at the Discounted PPA Price. NLH may recapture previously sold volumes on at least three years’ prior notice solely to serve domestic load, with continued payment under the prevailing pricing regime during the notice period. NLH may not engage in short-term arbitrage among the pricing regimes. Any changes must comply with the three-year notice requirement and the applicable MW limits.

NLH retains its 265 MW Labrador to New York transmission reservation through Québec’s open-access transmission system, of which NLH may offer any portion to HQ for a minimum one-year term. If HQ accepts, HQ is responsible for paying the associated transmission charges. HQ’s obligation is subject to one-year prior written notices to reclaim or relinquish. Where HQ accepts all or a portion of the 265 MW, the parties will collaborate to renew such transmission rights (including by exercising rollover rights).

Gull Island

The Gull Island Project includes the development, construction and operation of a new hydroelectric power generating facility on the Churchill River; the Gull Island Project will be owned and operated by a new joint venture entity, 60 per cent of which will be owned by NLH and 40 per cent of which will be owned by HQ and is expected to provide an installed capacity of approximately 2,250 MW or 2,700 MW (depending on the final configuration).

HQ and Société d’énergie de la Baie James (a HQ subsidiary) shall lead the development and construction of the Gull Island generating facility; the 735 kV line from Gull Island to Churchill Falls (including the associated substation); and the 735 kV line from Gull Island to Romaine 4.

The terms of the DCIA provide NLH with significant incentive payments related to Gull Island, namely:

$500 million NPV upon execution of the Definitive Agreements;
$500 million NPV one year after execution of the Definitive Agreements;
$300 million NPV two years after execution of the Definitive Agreements; and
$2.2 billion NPV in installments to satisfy the equity requirements of the GI Project (NLH never to be out of the money; meaning that incentive payments shall be paid by HQ concurrently with any capital call funding deadline).

The $3.5 billion NPV package is intended to fund NLH’s equity contribution to the Gull Island Project and prevent NLH from being out of pocket for those contributions. NLH may use all or a portion of the $3.5 billion NPV to meet its equity contribution for the NL Transmission Assets, provided that it remains responsible for its equity contribution to the Gull Island Project. If NLH’s aggregate equity requirements for the Gull Island Project and/or the NL Transmission Assets are less than the $3.5 billion NPV, HQ must pay the difference to NLH six months after the Gull Island Project is fully commissioned.

Federal participation

The Federal Government announced $10 billion in federal financing to upgrade/expand Churchill Falls, develop Gull Island, support co‑investment with the Innu of Labrador in a new Labrador onshore wind project, and build associated transmission. For Newfoundland and Labrador, additional federal supports total $3.5 billion (2026 NPV), including up to a 40 per cent equity stake in a Labrador wind project (estimated $1 billion NPV), $1 billion (NPV) for a Labrador West transmission line, a federal loan guarantee for Gull Island construction costs, and $1.5 billion (NPV) in support for Gull Island, Churchill Falls, and transmission.

The Federal Government describes the package as nearly $70 billion in clean energy investment and the largest clean energy investment in North American history, delivering approximately 14,000 MW of power, supporting 23,000 jobs during construction, and contributing $31 billion to GDP through the early 2040s.

New wind project

The parties to the DCIA also agreed to study the potential development, construction and operation of a new 2,000 MW wind farm project that would be located in Newfoundland and Labrador (the Wind Project). If it goes ahead, the Wind Project would be owned by a new special purpose entity.

Newfoundland and Labrador electricity rebate, local employment and labour commitments

Upon finalization of Definitive Agreements, Newfoundland and Labrador will implement a 15 per cent “Churchill River Electricity Rebate” on the first 2,000 kWh/month for all provincial ratepayers, estimated to save an average of $351 per year.

The agreement includes labour and benefits commitments. For the Gull Island Project, the greater of (i) 85 per cent of total construction person‑hours, and (ii) 20 million person hours must be worked in Newfoundland and Labrador. The parties will also establish a hiring protocol that is consistent with the Canadian Charter of Rights and Freedoms and implements existing commitments made with the Innu Nation of Labrador followed by first consideration for employment in the following order: qualified Labradorians, qualified Newfoundlanders, qualified residents of Québec, and qualified residents from the rest of Canada. Peak construction employment is expected to reach approximately 5,000 workers.

Water management principles

The parties also intend to enter into an amended and restated water management agreement with respect to the Churchill River. Annex G of the DCIA sets out certain water management principles, including that the water management agreement’s core objective is to optimize short-term and long-term production on the Churchill River, with indemnification for production facilities adversely impacted by optimization; terms that allow suppliers to contract for access to greater generating or transmission capability than their own to facilitate debanking; and minimum annual and monthly CF production shall be enabled based on annual inflows and upstream plant availability to reliably meet downstream commitments and environmental rules.

This amended and restated water management agreement is noteworthy as the DCIA indicates that the New CF PPAs, the CF Upgrades PPAs, and the GI PPAs will include provisions consistent with the principles noted above (i.e., in Annex G of the DCIA) and the terms and conditions of the amended and restated water management agreement.

Definitive agreements, March 2027 deadline and Major Projects Office referral

The parties will work to negotiate the Definitive Agreements during the term of the DCIA, which ends on March 31, 2027, unless mutually extended, terminated earlier, or if the Definitive Agreements are executed earlier. Once the Definitive Agreements are executed, the projects are expected to be referred to Canada’s Major Projects Office.

BLG’s Energy group has deep expertise advising provincial and territorial governments, project proponents and utilities on transmission projects and interties. Please connect with any of the key contacts below for further guidance on how the DCIA may impact your organization.

Productivity Mega Deduction could reshape mining flow-through financings

Thu, 24 Sep 2026 00:00:00 Z

The federal government’s proposed Productivity Mega Deduction (PMD) may have significant implications for Canada’s mining sector, particularly for companies that rely on flow-through share financings. (See the latest article “Canada proposes new Productivity Mega Deduction”.)

While much of the discussion surrounding the PMD has focused on immediate expensing of capital property, the draft legislation also introduces 100 per cent deduction for qualifying Canadian development expenses (CDE), which can be renounced through flow-through shares for mining companies. For mining issuers and investors, that change could increase the attractiveness of qualifying CDE in a flow-through financing context.

PMD increases attractiveness of CDE in mining financings

In mining, Canadian exploration expense (CEE) has historically been more attractive as it is 100 per cent deductible. CEE generally relates to earlier-stage exploration work to identify or evaluate a mineral resource.

However, qualifying CDE historically provided a deduction of 30 per cent on a declining-balance basis, which was later enhanced for many expenditures under the Accelerated Investment Incentive (AII). CDE generally covers late-stage development work on a known mineral resource, including certain mine development expenditures. The definition of CDE has not changed but the timing of its deduction has shifted.

The PMD would generally allow an immediate 100 per cent deduction for CDE that is:

Incurred on or after Sept. 15, 2026 (Announcement Day);
Not successored; and
Not acquired from a non-arm’s length person or partnership.

The draft legislation also expressly accommodates certain CDE renounced under the existing flow-through share rules. Under these proposals, qualifying CDE incurred by a mining issuer and renounced under a flow-through share agreement entered on or after Announcement Day may become immediately deductible for investors.

However, the proposed changes do not expand the existing look-back rules. For current flow-through share planning, CDE lacks a practical look-back rule. The existing CDE references in the look-back rule apply to oil and gas CDE, but those expenditures can no longer support flow-through share financings. Mining CDE must therefore generally be incurred before it is renounced.

The timing of deductions has often influenced how mining issuers structured and marketed flow-through financings. If qualifying CDE becomes immediately deductible for investors, expenditures traditionally viewed as less attractive than CEE for flow-through financing purposes may warrant fresh consideration when planning exploration and development programs and evaluating financing alternatives.

At the project level, earlier deductions may improve cash flow and net present value, particularly for development-stage projects with significant upfront spending before commercial production. That said, this is a timing advantage rather than a separate subsidy, and its value will depend on the issuer’s ability to claim or monetize the deduction and on the investor economics of a particular financing.

Oil and gas benefits remain at the corporate level

The PMD may also be relevant to oil and gas companies because many expenditures that now qualify as CDE could potentially become immediately deductible under the proposed rules.

However, the PMD does not appear to change the existing flow-through share restrictions applicable to oil, gas and coal exploration and development expenditures. Those restrictions were introduced in 2022 to remove fossil fuel exploration and development expenditures from the flow-through share regime for agreements entered after March 2023.

As a result, while the PMD may improve deductions available to oil and gas companies at the corporate level, its flow-through financing implications are expected to be concentrated in the mining sector.

What mining issuers should consider now

For mining issuers, the PMD may broaden the range of expenditures that can be financed through flow-through shares:

Broader expense eligibility: Companies that have historically concentrated on generating and renouncing CEE may wish to reconsider the role that qualifying CDE can play in future financing strategies;
Immediate investor write-offs: Qualifying mining CDE renounced under agreements entered on or after Announcement Day, could offer investors an immediate 100 per cent deduction rather than the historical 30 to 45 per cent declining-balance rate; and
Sector-specific impact: While oil and gas companies benefit at the corporate level, flow-through advantages remain restricted largely to the mining sector.

Canada Investment Summit 2026: Turning investment commitments into economic growth

Wed, 23 Sep 2026 00:00:00 Z

The Summit brought together international investors from nearly 30 countries, representing more than $100 trillion in assets, and generated nearly $500 billion in new investment commitments.

The critical challenge is converting this momentum into active development and long-term economic growth.

To explore what comes next, Borden Ladner Gervais LLP (BLG), PwC Canada, Ontario Centres of Innovation and Ontario Vehicle Innovation Network convened a closed-door discussion with senior leaders from government, industry and the investment community on the legal, commercial and strategic conditions required to move investment commitments toward execution.

Top investment themes driving Canada's economic growth

1. The growing importance of economic sovereignty in investment decision-making

Geopolitical uncertainty, shifting trade relationships and supply-chain disruptions have increased demand for strategic domestic capacity, resilient supply-chains and diversified export markets.

This shift affects strategic sectors that combine economic growth, national resilience and long-term global demand. National-interest considerations may affect deal timing, regulatory review, procurement eligibility, supply-chain requirements, data governance, financing conditions and government support.

For businesses and investors, these issues demand proactive counsel regarding foreign investment review, national security, procurement eligibility, supply-chain structuring, data governance and access to government programs.

2. The need for greater execution certainty to move projects from announcement to delivery

Capital is available for Canadian projects. Investors, lenders and project proponents will now focus on whether those projects can move through financing, regulatory review, permitting, procurement, construction and commercialization on predictable timelines.

Project certainty will remain central. Businesses and investors should assess timelines, permitting requirements, infrastructure availability, Indigenous consultation, stakeholder alignment, financing structures and commercial risk allocation before capital is committed. These issues can affect valuation, financing, closing conditions, public funding eligibility and project feasibility.

3. Sector opportunities will require tailored execution strategies

Summit-related opportunities may arise across defence and aerospace, major infrastructure, energy, critical minerals, technology, AI, advanced manufacturing and food supply chains. Each sector requires a tailored approach. Key considerations include:

Defence and aerospace: controlled-goods, security-clearance, procurement, intellectual property and supply-chain provenance issues.
Energy and critical minerals: coordinated permitting, environmental assessment, Indigenous consultation, offtake arrangements and financing structures.
Technology, AI and digital infrastructure: privacy, cybersecurity, data sovereignty, intellectual property, export controls and public funding conditions.

For senior business leaders and investors, the key question is whether a project is ready for execution. Legal planning at the outset can help project teams identify execution risks, test diligence assumptions and align project strategy with regulatory, financing, procurement and commercial requirements.

Navigating this transition from theoretical capital to tangible infrastructure requires experienced counsel to ensure execution certainty.

How BLG can help: Converting Canada Investment Summit commitments into operational assets

Turning the capital allocations and policy shifts announced at the Summit into shovel-ready projects requires navigating complex regulatory environments, multi-jurisdictional approvals and evolving financing structures.

BLG operates at the intersection of public policy, private capital and operational delivery. As a full-service national firm, we convene the necessary stakeholders and deploy the legal strategies required to move major mandates from initial capital allocation to commercial operation.

Strategic legal advisory across the capital lifecycle

Our national teams bridge the gap between strategy and execution across key project phases:

Foreign investment and supply-chain compliance: Securing national security clearances, navigating statutory investment reviews and protecting international trade corridors require proactive regulatory engagement. Our teams align cross-border capital with Canadian statutory requirements across defence and national security files and complex transportation and logistics networks.
Asset acquisition and site control: Scalable land rights, reliable power access and structured project financing are essential for long-term yield. We assemble the real estate foundations, municipal approvals and delivery models required for large-scale infrastructure projects, specialized commercial real estate portfolios and expanding data centres and digital infrastructure.
Resource development and energy transition: Moving major industrial initiatives forward requires managing grid interconnection, environmental assessments and operational risk. We structure project finance and joint ventures across energy and power projects while de-risking extraction through targeted strategies in the mining sector.
Consent and economic partnership: Sustainable project delivery in Canada depends on authentic economic partnership. We design equity models, navigate duty-to-consult obligations and negotiate long-term agreements backed by deep experience in Indigenous law.

Strategic next steps for project proponents and institutional investors

Execution delay erodes asset yield. Before deploying capital or finalizing project structures, connect with our national project execution partners to audit your regulatory strategy, assess structural risks and accelerate your capital deployment timeline.

New AI safety standard relevant to Canadian school boards

Wed, 23 Sep 2026 00:00:00 Z

As of September 2026, Microsoft has signed a new AI Safety and Privacy Standard (the Standard) that establishes detailed contractual protections for certain AI products used in U.S. schools.

The Standard does not presently give Canadian school boards a right to those protections, but it indicates what Microsoft has accepted as contractually feasible for educational AI. American school boards can use the Standard to:

seek equivalent protections from Microsoft and other AI vendors;
strengthen conventional data protection agreements for AI services; and
inform their own AI governance, particularly for student-facing and higher-risk uses.

Canadian school boards should pay particular attention to the Standard’s provisions on AI training, strict data minimization, profiling, AI memory and personalization, human oversight, AI companions, agentic AI and material product changes.

What is the Standard?

The Standard is contained in a binding memorandum of agreement between the National Academy for AI Instruction and Microsoft Corporation. Microsoft is currently the only participating AI provider identified in the signed agreement.

Beginning Nov. 1, 2026, U.S. school boards may ask Microsoft to incorporate protections meeting or exceeding the Standard into their existing Microsoft agreements. A school board does not become a party to the Academy’s agreement: its rights arise under its own amended agreement with Microsoft.

The Standard applies to authenticated generative AI products primarily designed and marketed for education, and excludes general-purpose productivity, collaboration, search, cloud and workplace-assistance products.

The Standard contains ten principles addressing:

use of student and educator data for AI training;
data minimization;
customer control, retention and deletion;
human oversight and explainability;
accountability and enforcement;
security;
transparency for families;
equity and accessibility;
feature changes and vendor lock-in; and
continuing responsibility for data after termination.

No training on school data

The Standard prohibits using student, educator or customer data to develop, fine-tune, update, benchmark or otherwise improve an AI model. The prohibition cannot be avoided by de-identifying or aggregating the data. School data also cannot be used to create synthetic training data. The restriction applies to historical data, extends to subprocessors and survives termination indefinitely.

Microsoft must provide, on request, an annual confirmation signed by a senior officer that school data was not used for AI training outside a narrow safety exception, and that such data or AI learnings did not cross from the exempted safety systems into other models or products.

Strict data minimization

The Standard permits the vendor to process only data “strictly necessary” to provide the specific educational product.

The Standard also restricts behavioural tracking, keystroke logging, passive attention monitoring, long-term profiling, precise location tracking, biometrics, gaze tracking and emotional inference.

Data minimization is integral to the safety of AI products. Data from students and educators not only assists AI to learn, but is also one mechanism of understanding human potential, and in the case of a school board, the human potential of students residing in that district.

Control over changing products

The Standard recognizes that AI products evolve during the contract term. Material new features involving new data, new processing or autonomous action require notice, and the vendor must allow the board’s administrators to enable or disable them.

Significance for Canadian school boards

Canadian availability and product scope remain unclear

While Microsoft’s express commitment applies only to U.S. educational entities, Canadian school boards can reasonably ask Microsoft and other AI vendors to explain why equivalent protections should not apply to Canadian students and educators.

Knowing that the Standard excludes AI products not primarily designed for education, Microsoft may argue that ordinary Microsoft 365 Copilot and Copilot Chat are outside the Standard’s scope. School boards should require clarification over the products and features covered by protections equivalent to those found in the Standard when contracting with Microsoft.

The Standard is valuable contractual leverage

Microsoft has accepted that detailed restrictions on training, derived data, memory, profiling, product changes and agentic functionality can be addressed by contract.

School boards should give the provision forbidding the use of data to train AI special attention. The Standard reveals that a comprehensive AI training clause might address:

fine-tuning and benchmarking;
prompts, outputs and metadata;
de-identified, aggregate and derived data;
synthetic data generation;
product improvement; and
subprocessors.

The Standard may influence expectations

While the Standard does not establish Canadian law, it does identify emerging areas of risk that school boards should understand for the purpose of policy development and potential liability.

For example, principle 4 states that educators are prohibited from using AI for:

automated grading without human review;
automated disciplinary decisions or recommendations;
automated placement, ability grouping or special education referrals;
emotional or psychological assessment; and
surveillance for behavioural prediction.

The Standard also:

prohibits the use of AI companions designed to foster emotional attachment or dependency, simulate friendship, prolong engagement beyond the learning task, or encourage sensitive disclosure;
requires agentic AI features to be capable of being turned off for students; where those features can take action outside the provider’s systems, they must be off by default unless an authorized administrator enables them with limited permissions, human oversight and audit logging; and
requires the customer to disable persistent memory or personalization that is not governed by the customer’s configured retention and deletion policies or equivalent controls. Where the product retains student data between sessions, it requires individuals, upon request and where applicable, to be able to see and erase the stored information, and turn off memory without losing access to the service.

These provisions may inform what parents, teaching staff, school principals, trustees, auditors and regulators expect school boards to have considered, even where the Standard itself does not apply.

Conclusion

AI contracting, governance, operational implementation and oversight should be addressed together. Strong contractual terms will not correct inappropriate application or weak oversight, and sound governance parameters will not compensate for inadequate vendor commitments and implementation. A robust governance framework and compliant contractual terms will still require ongoing oversight to ensure safety in a changing regulatory and liability landscape.

BLG lawyers would be pleased to assist your school boards with AI governance, privacy and security assessments, Microsoft Copilot deployments and AI-specific vendor contracting. Reach out to the authors or any of the key contacts below.

On the Sault Dock-et: Court of Appeal for Ontario updates test for leave to appeal

Mon, 21 Sep 2026 00:00:00 Z

What is the test for leave to appeal in civil matters to the Court of Appeal for Ontario?

The guiding principles were laid down over fifty years ago in the seminal decision of Sault Dock.¹ Under the Sault Dock test, a proposed appeal must raise an “arguable” question “of general interest to the public or a broad segment of the public”. Sault Dock identified several kinds of questions that might merit granting leave, while also recognizing that there may be “special circumstances” that would warrant granting leave to facilitate error correction.

In the recent decision of Knauff v Ontario (Human Rights Tribunal), 2026 ONCA 653 a five-judge panel of the Court of Appeal confirmed that Sault Dock remains the governing test, while providing an updated framework for the test. The two components of the updated framework are arguability and public importance, both of which were central to the Sault Dock test. Under the updated framework, these two components must be assessed separately; there is no longer a distinct category of “special circumstances” for error correction; the same test applies regardless of the nature of the jurisdiction exercised by the Divisional Court (original or appellate); and the concept of “public importance” remains an expansive one.

Key takeaways

Knauff provides helpful guidance to parties, regardless of whether they are bringing or responding to a motion for leave to appeal.
Knauff confirms that the Sault Dock test remains the governing test for leave to appeal but provides an updated framework to evaluate whether the two components of arguability and public importance have been satisfied. Knauff also confirms that the same framework applies whether the Divisional Court was exercising original or appellate jurisdiction.
Knauff confirms that “public importance” is not a closed list. Matters of public importance can arise in many circumstances, such as evolving areas of law with unsettled legal issues and questions relating to the “behaviour of corporations and their directors” that are subject to the Ontario Business Corporations Act.
It remains to be seen whether the updated framework will result in leave being granted more often (or in different kinds of cases), or whether Knauff simply codified a framework that the Court of Appeal was already applying. A review of the Court of Appeal’s decisions from the preceding 12 months demonstrates that the Court of Appeal granted leave to appeal from decisions of the Divisional Court in a range of legal areas beyond the realm of traditional “public law”.²

Background

Over the last fifty years, motions seeking leave to appeal to the Court of Appeal from decisions of the Divisional Court have been governed by the Sault Dock test. Under the Sault Dock test, a proposed appeal needed to raise an issue that was both “arguable” and of “public importance” in order to satisfy the Court of Appeal that leave ought to be granted. Sault Dock provided several non-exhaustive categories of arguable cases, such as “the interpretation of a statute or Regulation of Canada or Ontario including its constitutionality” and “the interpretation, clarification or propounding of some general rule or principle of law”. Sault Dock also recognized a residual category of other cases where leave might be appropriate, including those where the Divisional Court made a clear error.

In the decades after it was decided, Sault Dock did not receive material consideration in the caselaw because the Court of Appeal does not typically provide reasons when deciding leave to appeal motions. However, in December 2024, a panel of the Court of Appeal in West Whitby expressed concern about whether Sault Dock was being properly interpreted, especially in light of changes to the legal landscape over the last five decades, and questioned whether the Sault Dock categories were being interpreted too rigidly.³ In another decision issued two weeks later, a different panel of the Court of Appeal in Davis stated that Sault Dock continued to govern, absent a decision of a five-judge panel, and that West Whitby was merely a “helpful discussion and application” of the existing Sault Dock framework.⁴ In West Whitby, the Divisional Court exercised original jurisdiction while in Davis the Divisional Court exercised appellate jurisdiction—but neither decision referred to that difference as a relevant factor in discussing the framework.

In light of the decisions in West Whitby and Davis, the party seeking leave to appeal in Knauff asked the Court of Appeal to assemble a five-judge panel to reconsider Sault Dock.

The Court of Appeal’s decision

In Knauff, a unanimous five-judge panel affirmed that “the essential message of Sault Dock should be maintained”. In reaching this conclusion, the Court provided an “updated framework” for how the Sault Dock test is applied. Simply put, under this updated framework, there must be a question of law or mixed law and fact that is “arguable” and of “public importance”. These two central components — “arguability” and “public importance” — must be considered sequentially.

Arguability focuses on whether there is a real, arguable question of law or mixed law and fact at issue. A proposed appeal may face difficulty in satisfying this component if, for instance, it is about a purely factual question,⁵ involves a decision that attracts a high degree of deference on appeal or is moot. Notably, Knauff recognizes that: “Even where the Divisional Court has correctly identified and applied the existing law, an arguable question may still arise if that law, or the general principles that underlie it, should be reconsidered, expanded, qualified, clarified or changed.”

Public Importance is only considered if a proposed appeal raises a question that is arguable. There is no closed list of questions that qualify as being of “public importance”. Knauff affirms that although questions of public law “often fit this description,” matters of public importance “are not limited to that field.” Simply put, the “broader the category of persons affected by the resolution of the legal issue involved, and the more fundamental the interest that is affected, the more the question has the quality of public importance.” A related dimension is the legal importance of a question, i.e., whether it “goes to the development, progress, coherence, stability and predictability of the law, and thus the law’s ability to deliver justice in Ontario”.

In addition to explaining how these components relate to one another and how they are to be applied, Knauff provides two important clarifications to Sault Dock. First, it clarifies that the source of the Divisional Court’s jurisdiction, i.e., whether the Court was exercising original or appellate jurisdiction, does not change the leave analysis. The same framework applies in both cases. Second, there is no longer a special category of residual circumstances where leave may be appropriate. Rather, if the Divisional Court has made a clear error, this is something to be considered within the confines of the public importance component.

In applying the revised framework, the Court of Appeal dismissed Mr. Knauff’s motion for leave to appeal. The Court concluded that his motion did not satisfy the arguability component because the Divisional Court had applied “the well-established and undisputed test for mootness” and exercised its discretion not to hear his judicial review application despite it being moot.

SCC clarifies when administrative errors are “irregularities” requiring annulment of election

Fri, 18 Sep 2026 00:00:00 Z

In Sinclair-Desgagné v. Canada (Chief Electoral Officer), 2026 SCC 31, the Supreme Court of Canada, in a 6-3 decision, annulled the 2025 federal election in the electoral district of Terrebonne, Québec, after concluding that a mail-in ballot was not counted because of a serious administrative error by Elections Canada. The majority held that an “irregularity” under s. 524(1)(b) of the Canada Elections Act includes a serious administrative mistake, even where the mistake is honest and unintentional. Because the lost vote equalled the one-vote margin of victory, the election result was left in doubt and the election was annulled.

The decision is significant not only because it resulted in the rare annulment of a federal election, but because it clarifies how courts should balance electoral integrity and voter enfranchisement under the Canada Elections Act. The majority emphasized that serious administrative errors by election officials can undermine the right to vote even where there is no bad faith, fraud, or statutory breach. The majority's reasons also reinforce a voter-centred interpretation of s. 3 of the Charter, placing emphasis on protecting an individual’s right to vote, which could have implications for s. 3 jurisprudence more broadly.

Background

The dispute arose from the April 28, 2025 federal election in Terrebonne, Québec. Following a judicial recount, Liberal candidate Tatiana Auguste was declared elected by a margin of a single vote over Bloc Québécois candidate Nathalie Sinclair-Desgagné.

Before the election, an Elections Canada employee had mistakenly printed an incorrect postal code on return envelopes for mail-in voting kits, an error that affected at least 40 electors. The employee discovered the error more than three weeks before election day but did not report it to supervisors or contact the affected electors. Although some ballots bearing the incorrect postal code were successfully delivered, one elector’s ballot was returned undelivered by Canada Post after the election and was never counted.

Sinclair-Desgagné challenged the election under s. 524(1)(b) of the Canada Elections Act, which provides that an eligible elector or candidate may apply to contest the election in their electoral district on the grounds that there were irregularities, fraud or corrupt or illegal practices that affected the result of the election, and where the grounds are established, the court may annul the election. Sinclair-Desgagné argued that the postal code error, coupled with Elections Canada’s failure to take corrective action after discovering it, constituted an irregularity that affected the result of the election, justifying an annulment of the election.

The Quebec Superior Court dismissed the application, finding that the error was merely an inadvertent human mistake without dishonesty or malicious intent, which did not constitute the type of serious error capable of undermining the integrity or honesty of the electoral process. The Superior Court therefore concluded that neither the error nor the actions of the Elections Canada employee after discovering it qualified as an “irregularity.” The Superior Court also stated that even if there had been an irregularity it would have been unreasonable to annul the election result in the circumstances. Sinclair-Desgagné appealed to the Supreme Court of Canada as of right under s. 532(1) of the Canada Elections Act.

The majority decision

Writing for the majority, Justice Jamal (on behalf of himself, Chief Justice Wagner, and Justices Côté, Rowe, Kasirer, and O’Bonsawin) applied and clarified the three-part framework established in Opitz v. Wrzesnewskyj, 2012 SCC 55. Under that framework, a court must determine:

Whether there was an irregularity;
Whether the irregularity affected the result of the election by affecting the vote count; and
Whether the court should exercise its discretion to annul the election.

Step one: What constitutes an “irregularity”?

The majority rejected the view that an irregularity requires fraud, dishonesty, bad faith, or intentional wrongdoing. In the majority’s view, the text and purpose of s. 524(1)(b), interpreted in light of the constitutional right to vote under s. 3 of the Charter, supports a broader view. The majority emphasized that s. 3 protects each citizen’s meaningful opportunity to participate in the electoral process and that the Canada Elections Act must be interpreted in a manner than advances that enfranchising purpose. As a result, the majority focused on whether Elections Canada’s error and conduct interfered with an individual elector’s ability to exercise their right to vote.

The majority held that irregularities include:

breaches of statutory provisions designed to establish an individual’s entitlement to vote; and
serious administrative errors capable of undermining the integrity of the electoral process by directly affecting an individual’s right to vote.

The majority held that the lower court erred by treating the absence of wrongful or reprehensible intent as effectively dispositive of whether an irregularity had occurred. In the majority’s view, this improperly conflates irregularities with the separate ground of fraud or corrupt practices. Having rejected the notion that intentional misconduct is required, the majority found that the error in this case constituted an irregularity. Although no statutory provision had been breached, Elections Canada discovered the error with sufficient time to take corrective action but failed to do so. The majority concluded that the error directly affected an elector’s right to vote and therefore constituted an irregularity.

Step two: Did the irregularity affect the result?

The majority held that the second step focuses on whether the irregularity affected the vote count, rather than the election outcome.

In an important clarification, the Court stated that principles of ballot secrecy prevent courts from relying on evidence of an elector’s actual voting preference when assessing whether an irregularity affected the result. The question is whether a vote was improperly lost or counted, not which candidate would have received the vote.

The majority further rejected arguments based on ss. 239(2) and 240 of the Canada Elections Act, which place responsibility on mail-in voters to ensure their ballots are received on time. The majority held that those provisions are designed to address contingencies outside Elections Canada’s control, such as postal delays or voter inaction. They do not exonerate Elections Canada from the consequences of its own correctable errors.

The majority held that the second step is met because of the direct causal link between the irregularity and the lost vote that was not counted.

Step three: Should the election be annulled?

In considering whether to exercise its discretion to annul the election, the majority relied on the two factors identified in Opitz: whether the number of affected votes casts doubt on the true winner of the election, and whether the irregularity calls into question the integrity of the electoral process.

The majority assessed the first factor by applying the “magic number” test recognized in Opitz. Under that approach, an election should be annulled where the number of affected votes equals or exceeds the winner’s margin of victory. Here, one vote was affected, and the margin of victory was one vote. Accordingly, even without attributing the lost vote to any one candidate, there was doubt as to the true winner of the election.

The majority held that, in these circumstances, it would be unreasonable not to annul the election. Despite reiterating that step 3 is a matter within the court’s discretion, the majority appeared to do away with that discretion where the “magic number” test is met, saying it is “determinative” and where met it “requires that the election be annulled”.

The dissent

Justices Karakatsanis and Martin, with Justice Moreau concurring, would have dismissed the appeal.

The dissent agreed that the Opitz framework governed the analysis but disagreed on the interpretation and application of the first step of the test. The dissent emphasized that where the alleged irregularity is an administrative error, the reviewing court must look to both the seriousness of the conduct and its impact on the integrity of the electoral process. To be sufficiently serious, it must belong to the same category as fraud, corruption, and illegality. To impact the integrity of the electoral process, it must undermine public confidence in the legitimacy and finality of elections.

In the dissent’s view, the postal code mistake was an unintentional minor error affecting only one voter and was neither sufficiently serious nor capable of undermining public confidence in the electoral process.

The dissent placed significant weight on the statutory special-ballot regime. It emphasized that ss. 239(2) and 240 expressly assign mail-in voters the responsibility to ensure their ballots are received. In the dissent’s view, the risk that a mailed ballot may not arrive is a foreseeable consequence of the special-ballot system, regardless of whether the source of the problem is Elections Canada, Canada Post, or the voter.

Electors who choose to vote by mail accept the risks inherent in that process and bear the responsibility of taking available steps, such as tracking their ballot. The dissent therefore considered it illogical to characterize conduct as an “irregularity” when the statute simultaneously makes the voter responsible for countering the risks of that conduct.

In interpreting what constitutes an “irregularity, the dissent also looked to s. 3 of the Charter, but emphasized that s. 3 is not limited to protecting an individual elector's ability to vote, but also safeguards the collective democratic interests of all voters through legitimate, and final election results. Annulling an election affects every elector in the riding because a by-election does not recreate the original election. Political circumstances change, turnout may differ, and voters may make different choices. Accordingly, the threshold for establishing an irregularity must be high and account for the integrity of the electoral process as a whole, and not only the impact on the individual voter.

The dissent cautioned that characterizing this type of error as an “irregularity” would set a low threshold and risk undermining the stability, certainty, and finality of election results.

Key takeaways

A serious administrative error can constitute an “irregularity” under the Canada Elections Act, even if it is inadvertent and does not involve fraud, bad faith, or a breach of a statutory provision.
Although the test under s. 524(1)(b) is a discretionary one, where the “magic number” test is satisfied—that is, where the number of votes affected by an irregularity are equal to or greater than the margin of victory—it requires that the election results be annulled.
The majority emphasized that the decision does not lower the threshold for electoral challenges. The Opitz framework remains stringent, and election annulments will continue to be extremely rare.
The decision provides important guidance for future electoral challenges and confirms that courts will scrutinize serious administrative errors that prevent electors from voting.
The decision may have implications beyond election challenges by reinforcing a broad, voter-centred interpretation of s. 3 of the Charter and affirming that electoral legislation should be interpreted consistently with its enfranchising purpose.

Canada proposes new Productivity Mega Deduction

Thu, 17 Sep 2026 00:00:00 Z

On Sept. 15, 2026, the federal government announced a proposed Productivity Mega Deduction (PMD) that would significantly expand immediate expensing for capital investments by Canadian businesses. The announcement stems from the inaugural Canada Investment Summit, where Prime Minister Mark Carney unveiled broader measures to encourage domestic and foreign investment.

Draft legislative proposals released with the announcement provide important details regarding eligible taxpayers, qualifying property and applicable limits. Providing further context on these rules, BLG partner Steve Suarez authored the article “Ottawa gets it on tax policy, gamechanger ‘mega deduction’ shows” in The Globe and Mail.

If enacted as proposed, the PMD allows taxpayers to deduct the full undepreciated capital cost of eligible property in the taxation year it becomes available for use, rather than deducting the cost over time under the capital cost allowance (CCA) system. The PMD is therefore a timing measure: it does not increase the total deduction available over the life of an asset, but it accelerates tax relief.

Beyond timing, the PMD serves as a crucial competitiveness measure. The federal government states that accelerated CCA measures announced in Budget 2025 reduced Canada’s marginal effective tax rate on new business investment from 15.4 per cent to 13 per cent and that the PMD further reduces that rate to 6.4 per cent. The same release compares the proposed Canadian rate with a 2026 U.S. rate of 16.9 per cent and, an OECD average of 19 per cent and as the lowest among G7 countries with an average (excluding Canada) of 26 per cent.

For multinational groups deciding where to locate new projects, a lower marginal effective tax rate may improve the relative attractiveness of Canadian investment, particularly for capital-intensive sectors such as manufacturing, infrastructure, technology, transportation, energy and resource development.

The broader policy rationale is straightforward. Canada faces persistent concerns about weak productivity growth and underinvestment in productivity-enhancing assets. For businesses with significant upfront capital costs, earlier deductions can improve cash flow, reduce the after-tax cost of capital and help support investment decisions that might otherwise be deferred or made outside Canada.

The proposed permanent nature of the PMD is a distinct structural advantage. Temporary incentives may accelerate investment already planned; a permanent rule can be built into longer-term capital allocation, project modelling and investment location decisions. The federal government has described the earlier Productivity Super-Deduction as covering about 15 per cent of capital asset investments, while the PMD extends immediate expensing to approximately two-thirds of such investments.

The PMD is part of a broader federal agenda to attract investment and improve Canada’s competitiveness. Related measures include a proposed “one project, one review, one year” framework for major project approvals, and the Canada Revenue Agency prioritizing advance income tax ruling requests for investments over $1 billion. The deduction also follows recent tax policy reversals, including cancelling the proposed capital gains inclusion rate increase and the government’s plan to repeal Canada’s digital services tax.

Which taxpayers and property qualify?

The proposed rules apply to eligible depreciable property acquired on or after Sept. 15, 2026. Corporations and partnerships may qualify. For individuals, trusts and partnerships with non-corporate members, the deduction is limited to income from the business or property where the asset is used. Therefore, these taxpayers cannot use it to create or increase a loss from that source.

Most prescribed CCA classes qualify, subject to specific exclusions. Excluded property generally includes:

Certain Class 1 and Class 3 buildings: most buildings and structural improvements, although manufacturing and processing buildings may still benefit from separate temporary immediate expensing measures;
Property in Classes 14 and 14.1: certain intangible property, including limited-period licences, franchises, concessions, goodwill and similar property;
Property in Class 51: certain natural gas distribution pipeline property;
Certain passenger vehicles and other specified vehicles, unless they satisfy the proposed Canadian assembly and new-use conditions;
Qualified Liquefied Natural Gas (LNG) liquefaction equipment; and
Industrial mineral mines and certain timber limits.

Property that does not qualify for immediate expensing may still be eligible for the Accelerated Investment Incentive.

Rules for used property

Used property may qualify, but generally not if the taxpayer or a non-arm’s-length person previously owned it, or if the property was acquired in a transaction that preserves prior CCA history. These conditions target the incentive toward new third-party investments rather than internal transfers among related groups.

Special rules apply to vehicles. Certain used or foreign-assembled passenger vehicles and other specified Class 10 or 10.1 vehicles are excluded. Taxpayers may also elect to exclude a Class 10.1 vehicle from immediate expensing in their timely filed return for the acquisition year.

Immediate deduction for Canadian development expenses

The proposals also permit an immediate deduction for qualifying Canadian development expenses incurred on or after Sept. 15, 2026. The new rules exclude successored expenses and the cost of Canadian resource property acquired from a non-arm’s-length person or partnership. Flow-through share expenses may qualify only when taxpayers renounce them under an agreement entered on or after that date.

What businesses need to consider

Businesses contemplating significant capital expenditures should assess whether planned investments qualify, when the property will become available for use and whether any taxpayer-specific limitations apply. Taxpayers must pay particular attention to used property, related-party acquisitions, tax-deferred transfers, vehicles, partnerships, LNG facilities, Canadian development expenses and flow-through share arrangements.

From a planning perspective, taxpayers should revisit current and proposed capital budgets to identify assets expected to become available for use on or after Sept. 15, 2026. They must also confirm whether any exclusions or limitations could affect the timing or amount of the deduction. For resource issuers and investors, the treatment of Canadian development expenses renounced under flow-through share agreements will be particularly important.

BLG’s Tax Group will continue to monitor the proposals as they proceed through the legislative process.

CPL cancellation in B.C.: Court of Appeal clarifies protective actions and abuse of process

Tue, 15 Sep 2026 00:00:00 Z

A certificate of pending litigation (CPL) can effectively freeze title to real property before the underlying claim has been proven. In British Columbia real estate litigation, a CPL can impede a sale, refinancing, development, or other transaction involving the property. Because of those consequences, the Land Title Act requires litigants who register CPLs to diligently advance the underlying proceeding. Section 252 of the Land Title Act permits a property owner or other interested party to apply for cancellation of a CPL where no step has been taken by the plaintiff in the underlying claim for one year.

In 1316215 BC Ltd. v. Davis, 2026 BCCA 338, the Court of Appeal for British Columbia considered whether a s. 252 application could be sidestepped through procedural manoeuvring, specifically by the plaintiff filing a second “protective” proceeding and a second CPL.

While the Court of Appeal accepted that a plaintiff may commence a second “protective” proceeding in certain circumstances, it held that litigation strategy has limits. A litigant cannot use a fresh action and a new CPL to deprive a property owner of a crystallized right to seek cancellation of an existing CPL under s. 252 of the Land Title Act.

This decision provides important guidance on the purpose of s. 252 of the Land Title Act, the limits of protective proceedings, and the circumstances in which a litigant’s use of a second CPL may constitute an abuse of process.

Understanding CPLs and s. 252 of the Land Title Act: What you need to know

A CPL permits a litigant claiming an interest in land to register that claim against title while the litigation remains unresolved. Because a CPL can prevent or impede transactions affecting the property, it is presumptively prejudicial to the property owner.
A CPL is not a “set it and forget it” remedy. Section 252 of the Land Title Act protects against dormant litigation by permitting a cancellation application where no step has been taken in the underlying proceeding for one year.
Cancellation is not automatic. The court retains discretion to preserve the CPL where the presumed prejudice to the property owner is not serious or is outweighed by circumstances that would make cancellation unjust.

Background of the dispute

The dispute arose from allegations that a property in Squamish was jointly owned, had been sold without the alleged co-owner’s knowledge, and that the sale proceeds were used to acquire a property in Lake Country. An action advancing proprietary claims was commenced, and CPLs were registered against both properties.

More than a year passed without any litigation step being taken in that action. The owner of the Squamish property, 1316215 BC Ltd. (1316), then applied under s. 252 of the Land Title Act to cancel the CPL on the basis of that inactivity.

Before that application was heard, the plaintiff commenced a second action naming additional defendants. She then registered a second CPL against the same property, subsequently removed the original CPL, and discontinued the first action. Those steps eliminated the original proceeding and CPL to which 1316’s pending s. 252 application related, thereby preventing the application from being determined in the ordinary course.

Analysis

The Chambers Judge’s decision

The chambers judge recognized that while a multiplicity of proceedings involving the same issues may constitute an abuse of process, this is not always the case. Courts have accepted that a second proceeding may be commenced as a “protective action,” including where it is brought out of an abundance of caution and there is no intention to pursue both proceedings to judgment.

The judge found that there was evidence that the plaintiff only discovered the identity and alleged involvement of certain additional defendants after the first action was underway. In those circumstances, and given the potential limitation concerns, the commencement of a second action was a permissible protective measure.

1316 argued that commencing the second action and registering a fresh CPL improperly frustrated its pending application under s. 252. The chambers judge rejected that argument, concluding that the second action was a legitimate protective action and that the registration of the second CPL did not constitute an abuse of process.

The Court of Appeal decision

On appeal, the central issue was not whether the second action had been commenced for a legitimate protective purpose. It was whether the subsequent registration of a fresh CPL, discontinuance of the original proceeding, and removal of the first CPL improperly defeated 1316’s accrued right to have its s. 252 application determined. The Court of Appeal concluded that those steps constituted an abuse of process and allowed the appeal.

Can a second action and CPL be filed as protective measures?

The Court of Appeal distinguished between the purpose for commencing a protective action and the manner in which the action is subsequently used. A second proceeding may be justified by limitation concerns or the identification of additional parties. That legitimate purpose, however, does not insulate the litigant’s later procedural choices from scrutiny.

In the Court of Appeal’s view, it was neither necessary nor appropriate, for the plaintiff to proceed as she did. After commencing the second action, the plaintiff could have sought to amend the first action, pursued joinder applications, or preserved the status quo until the existing cancellation application was determined. There was no compelling protective basis to register a new CPL, discontinue the first action, and remove the original CPL before 1316’s pending application could be heard.

When does the right to seek cancellation of a CPL crystallize?

Section 252 reflects the principle that a litigant who obtains the benefit of a CPL must diligently pursue the underlying claim. Once no litigation step has been taken for one year, the property owner or other interested party may apply for cancellation.

The Court of Appeal emphasized that once the statutory preconditions for a s. 252 application have been met, the property owner’s right to seek cancellation has “crystallized.” Although the court retains discretion to refuse cancellation, the property owner is entitled to have the application heard and determined on its merits.

By registering a new CPL, discontinuing the first action, and removing the original CPL, the plaintiff effectively deprived 1316 of its accrued right to pursue cancellation under s. 252. The Court of Appeal held that this frustrated both the purpose of the statute and the integrity of the CPL regime.

When can filing a second CPL constitute an abuse of process?

The abuse in this case arose from the manner in which the plaintiff used the second action and the second CPL.

The Court of Appeal held that the plaintiff proceeded with full knowledge of the effect her actions would have on 1316’s pending application to cancel the CPL. In doing so, she intentionally disregarded and effectively thwarted 1316’s crystallized right to have its application to cancel the first CPL determined on the merits. It concluded that “[t]he manner in which Ms. Davis chose to proceed was so outside the range of reasonable strategic choices to qualify as an abuse of process.”

The Court of Appeal restored the lost s. 252 application

The Court of Appeal remitted the matter to the Supreme Court with directions to assess the new CPL as though the original s. 252 application had proceeded in the ordinary course.

In effect, the Court of Appeal sought to restore 1316 to the position it would have been in had the plaintiff not frustrated the statutory process. The Court described this as a “just and proportionate” remedy that both protected the integrity of the CPL regime and preserved 1316’s right to have its s. 252 application determined on its merits.

What does the decision mean for B.C. real estate litigation?

For property owners, developers, lenders, and other real estate stakeholders, the decision reinforces the importance of monitoring both the litigation record and the property’s transaction calendar. The ability to seek cancellation under s. 252 may become critical if a CPL threatens a sale, financing, development milestone, or other time-sensitive transaction.

Parties relying on a CPL should likewise ensure that the underlying claim continues to advance. If a second proceeding becomes necessary because of limitation concerns or newly identified parties, counsel should consider whether amendment, joinder, or preservation of the existing proceeding would protect those interests without interfering with an accrued cancellation right.

Key takeaways for B.C. property owners, developers, lenders and CPL plaintiffs

Because a CPL is an extraordinary pre-judgment mechanism that secures an unproven claim by tying up a property owner’s title, the party who obtains it must diligently advance the underlying claim.
Section 252 protects against dormant litigation. If no litigation step has been taken for one year, a property owner may seek cancellation of a CPL, reflecting the concern that property not remain tied up indefinitely.
A fresh action and CPL do not necessarily reset the clock. Once a property owner has accrued the right to seek cancellation under s. 252, a plaintiff cannot sidestep that process by registering a new CPL through a duplicative proceeding.
A proper protective action will not immunize or insulate later litigation conduct.
Courts will closely scrutinize litigation tactics that seek to defeat crystallized statutory rights or the integrity of the CPL regime. Steps that knowingly frustrate an opposing party’s accrued procedural rights may cross the line into abuse of process, and the question is whether a tactic is outside the range of reasonable strategic litigation choices.

BLG can assist

CPL disputes often require urgent coordination between litigation strategy and the commercial timetable for the property. If a CPL is affecting a proposed sale, financing, development, restructuring, or other transaction, early assessment of the available cancellation and preservation remedies may be critical. For advice concerning CPLs, real estate disputes, abuse of process, or remedies under the Land Title Act, please contact any of the key contacts below.

CRA releases updated CRS guidance: CRS 2.0 and other matters

Fri, 11 Sep 2026 00:00:00 Z

On July 2, 2026, the Canada Revenue Agency (CRA) published its updated Guidance on the Common Reporting Standard (Updated CRS Guidance).

The Updated CRS Guidance includes:

Long-awaited changes addressing the legislative amendments to Part XIX of the Income Tax Act (CRS) relating to the amendments to the Common Reporting Standard set out in the Standard for Automatic Exchange of Financial Account Information in Tax Matters, as amended and approved by the Council of the Organisation for Economic Co-operation and Development in June 2023 (commonly referred to as CRS 2.0, Amended CRS or ACRS); and
Other changes, referred to by the CRA as “small clarifications”, pertaining to CRS compliance.

The changes in the Updated CRS Guidance relating to CRS 2.0 generally take effect on Jan. 1, 2027. All other changes generally take effect by July 2, 2026.

This article summarizes certain key compliance changes that financial institutions (including investment funds, securities dealers, portfolio managers, custodians, banks, trust and loan companies, credit unions and insurance companies) should be aware of.¹

Compliance changes under CRS 2.0

New fields on the CRS return

CRS 2.0 requires the following new fields to be included in the CRS return for each reportable account, beginning with reporting for the 2027 calendar year:

For account holders that are passive non-financial entities with one or more reportable controlling persons, the financial institution must provide:
1. the role(s) by virtue of which each reportable person is a controlling person of the account holder, and
2. whether a valid self-certification has been provided for each reportable person²;
In the case of any equity interest held in an investment entity that is a legal arrangement, the role(s) by virtue of which the reportable person is an equity interest holder;
Whether the account holder has provided a valid self-certification;
The type of account;
Whether the account is a preexisting account³ or a new account⁴; and
Whether the account is a joint account (and if so, the number of joint account holders).

Transitional relief applies to accounts already opened as of Jan. 1, 2027 (each referred to as an Existing Account), but solely with respect to the new reporting fields in (a)(i) and (b) described above. These fields do not need to be completed for an Existing Account if such information is not available in the electronically searchable data maintained by the financial institution. The transitional relief is limited and may only be used by financial institutions for the 2027 and 2028 reporting periods.

Custodial account reporting relief

Under the current CRS rules, a financial institution that maintains a custodial account must report on the CRS return the total gross proceeds from the sale or redemption of financial assets that are paid or credited to the account during the reporting period.

Under CRS 2.0, a financial institution is exempted from reporting this information if it reports such information in the return filed for purposes of Part XXI of the Income Tax Act (CARF) relating to the Crypto-Asset Reporting Framework (unless the financial institution elects out of this reporting exemption for CRS). This measure helps prevent duplicative reporting under CRS and CARF for certain financial accounts related to crypto-assets.

Missing self-certifications

In exceptional circumstances where a financial institution cannot obtain a self-certification for a new account in time to meet its CRS obligations for the reporting period during which the account was opened, CRS 2.0 requires financial institutions to apply the due diligence procedures for preexisting accounts until the self-certification is obtained and validated.

Reliance on AML/KYC documentation

The Financial Action Task Force Recommendations — International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation, adopted in February 2012 and as amended from time to time (FATF Recommendations) are the international standards for the measures that countries should adopt domestically to implement anti-money laundering and know your customer (AML/KYC) rules. However, not all countries, including Canada, have enacted domestic AML/KYC legislation entirely consistent with the FATF Recommendations.

Information gathered for Canadian AML/KYC purposes is often used for CRS compliance purposes. For example, information gathered for AML/KYC purposes may be used to determine the controlling persons of an entity account holder or to assess the reasonableness of a self-certification. Under the current rules, financial institutions may rely on documentation collected for Canadian AML/KYC purposes to satisfy their CRS obligations.

Pursuant to CRS 2.0, financial institutions will no longer be able to rely on information collected and maintained pursuant to their AML/KYC procedures for their CRS due diligence obligations, if the financial institution’s AML/KYC procedures are not substantively consistent with the FATF Recommendations. To date, the CRA has not provided any guidance on the extent of the substantive discrepancies (if any) between Canadian AML/KYC rules and the FATF Recommendations, therefore, financial institutions are left to independently determine whether continued reliance on their AML/KYC documentation for CRS compliance purposes will be acceptable.

Multiple tax residences

An account holder (or an account holder’s controlling person) may be a tax resident in two or more jurisdictions based on the domestic laws of such jurisdictions. The CRA’s previous administrative position was that account holders with multiple tax residences may rely on an applicable tie-breaker rule in a tax treaty to resolve cases of dual tax residence.

Beginning in 2027, a dual resident account holder must provide all the jurisdictions of tax residence (i.e., without applying any tie-breaker rule in a tax treaty) on a self-certification and the financial institution must report all such jurisdictions on the CRS return.

To date, the CRA has not released updated self-certifications to address this change – the instructions in the current version of the CRA’s self-certifications indicate that account holders can rely on tie-breaker rules. We would expect, similar to other jurisdictions that have already implemented CRS 2.0, that the CRA’s next version of the self-certifications will be updated to indicate that account holders can no longer rely on the tie-breaker rules.

Preexisting accounts – reasonable efforts to obtain missing date of birth or TIN

Under the current CRS rules, financial institutions do not need to report the date of birth or TIN for preexisting accounts, if such information is neither (i) in the financial institution’s records nor (ii) otherwise required to be collected by the financial institution under the Income Tax Act.

Even though financial institutions do not need to report such information in those circumstances, they still have an obligation to use reasonable efforts to obtain the TIN or the date of birth (as applicable) with respect to a preexisting account by the end of the second calendar year following the year in which the preexisting account is identified as a reportable account. Pursuant to CRS 2.0, financial institutions will now also be required to use reasonable efforts to obtain the TIN or date of birth (as applicable) of a preexisting account whenever it is required to update the information relating to the account pursuant to AML/KYC procedures.

New types of non-reportable persons – publicly-traded entities and their related entities

Non-reportable persons are not reportable for purposes of CRS (regardless of their tax residency status). Under the current CRS rules, the list of non-reportable persons includes, but is not limited to, (i) a corporation the stock of which is regularly traded on one or more established securities markets or (ii) any corporation that is a related entity of the former.

CRS 2.0 expands the two above-noted categories beyond corporations, in order to capture all entities (e.g., trusts and partnerships) that have stock that is regularly traded on an established securities market and their related entities.

Updating the list of non-reporting financial institutions

A financial institution that is a non-reporting financial institution (NRFI) is not subject to CRS compliance obligations.

Under the current CRS rules, a governmental entity or international organization is a NRFI. CRS 2.0 limits the situations where such an entity can benefit from the NRFI status. In particular, a governmental entity or international organization will not be a NRFI in any of the following scenarios:

With respect to a payment that is derived from an obligation held in connection with a commercial financial activity of a type engaged in by a specified insurance company, custodial institution or depository institution; or
With respect to the activity of maintaining central bank digital currencies for account holders which are not financial institutions, governmental entities, international organizations or central banks.

New type of excluded account – incorporations and contributions of capital

Financial institutions do not have CRS compliance obligations with respect to an “excluded account”.

CRS 2.0 introduces a new type of “excluded account”, which is an account established in connection with a contribution of capital to, or the incorporation of, a corporation. In order for an account to fall within this new type of “excluded account”, the account must meet all of the following requirements:

The account is used exclusively to deposit amounts that are to be used for the purpose of the incorporation of, or the making of a capital contribution to, a corporation in accordance with applicable law;
Any amounts held in the account must be blocked until the financial institution obtains an independent confirmation regarding the incorporation or contribution of capital;
The account is closed or transformed into another account in the name of the corporation after the incorporation or contribution of capital;
Any repayments resulting from the failed incorporation or contribution of capital (net of service provider and similar fees) must be made solely to the persons who contributed the amounts; and
The account cannot have been established more than 12 months before that time.

Other compliance changes

Missing TIN

An account holder must provide a reasonable explanation on their self-certification if the account holder is not eligible to obtain a foreign TIN (e.g., the account holder’s jurisdiction does not issue a TIN to its residents) or is otherwise unable to secure a foreign TIN (e.g., the account holder has requested a TIN from its jurisdiction but has not yet received it as at the time the account is opened).

The CRA recommends that financial institutions have procedures in place to follow-up with the account holder and document any actions taken to support the financial institution’s “reasonable efforts” that were made to obtain the missing TIN.

Entity account holder certifies it has no residence

For a self-certification to be valid, the account holder must certify its jurisdiction(s) of tax residence. If an entity account holder (such as a partnership) certifies that it has no residence for tax purposes, the CRA’s previous administrative position was that the financial institution can rely on the address of the entity’s principal office to determine the entity’s jurisdiction of tax residence.

Under the Updated CRS Guidance, if an entity account holder certifies it has no residence for tax purposes, the financial institution should treat the account as not having a valid self-certification. In such circumstances, the CRA recommends that the financial institution should discuss with the account holder about what other information to consider for determining its tax residence (address of the entity’s principal office, place of effective management of the entity’s business, jurisdiction in which the entity is established, etc.) or refer the entity to seek professional tax advice. Accordingly, financial institutions cannot solely rely on the location of the entity’s principal office in these circumstances.

Securities of a fund issued in client name – written communications

Where securities of a fund are issued in the name of the beneficial investor (i.e., securities are issued in client name), the fund and the investor’s dealer both have obligations under CRS. In these circumstances, the fund and the dealer may take advantage of the “client name relief” (provided certain requirements are met), whereby the parties share the CRS compliance obligations as follows (see our article, New year, new compliance obligations: CRA releases updated CRS guidance, for more information):

Due diligence (this must be completed by the dealer) – The dealer collects a self-certification from the account holder, and communicates to the fund whether the account is reportable or non-reportable.
Reporting (this may be completed by either the dealer or the fund) – Whichever party is responsible for the reporting (the Filer) is required to inform the party that is not responsible for the reporting (the Non-Filer), in writing, that the Filer will perform the reporting.

In the Updated CRS Guidance, the CRA provides examples of “written communications” or “information in writing”, and such examples consist of electronic communications, notifications and notations. The CRA also makes it clear that any such communications are considered records, and they are therefore subject to the record keeping (including retention period) requirements imposed under CRS.

How financial institutions can prepare for the new changes

Financial institutions should consider taking the following action steps to prepare themselves for the compliance changes under CRS:

Update your policies and procedures – Your polices and procedures for CRS compliance should be updated to reflect the compliance changes. Given the changes impact only CRS at this time, financial institutions that have obligations under Part XVIII of the Income Tax Act (FATCA) should consider how this may impact their FATCA compliance procedures;
Prepare training sessions for your compliance team – Financial institutions are expected to have periodic trainings on CRS compliance. Financial institutions should begin planning training sessions in advance of the 2027 implementation date for CRS 2.0, as well as preparing the training materials for these sessions. Attendance logs and copies of all training materials should be retained, as they are often requested during an audit by the CRA of a financial institution’s CRS compliance program;
Update your computer systems to reflect the new CRS return – For financial institutions that rely on computer systems to prepare their annual CRS returns, it will be important to update the computer system to incorporate the new reporting fields required by the new CRS return. For example, financial institutions may complete due diligence by collecting a valid self-certification or by using publicly available information – it will now be important for financial institutions to track how the due diligence was completed in order to satisfy the new fields on the CRS return. For Existing Accounts where the new information to be reported on the CRS return is not in the computer system, financial institutions may need to manually review the client file to determine the required information to complete the applicable new field(s); and
Understand the differences between your AML/KYC procedures and the FATF Recommendations – CRS 2.0 emphasizes that financial institutions are required to follow the FATF Recommendations when complying with CRS, rather than their AML/KYC procedures which are established for the purposes of complying with the Canadian AML/KYC legislation. CRS compliance professionals should understand how the FATF Recommendations differ from the obligations under Canadian AML/KYC, in order to know whether information obtained for AML/KYC purposes can or cannot be used for CRS purposes.

For help assessing the impact of the Updated CRS Guidance on your financial institution, please contact the individuals below.

Authors: Grace Pereira, Tony Zhang, Brian Malczyk, Alex Gall

From duties to import bans: The Canada–U.S. tariff war after the collapse of negotiations

Fri, 11 Sep 2026 00:00:00 Z

Just after midnight on Aug. 22, 2026, the United States began collecting 50 per cent duties on approximately US$20 billion (C$27.6 billion) worth of Canadian goods under Section 338 of the Tariff Act of 1930 (the Tariff Act). Our earlier insight examined this Depression-era provision after the underlying proclamations were signed in July.

Within hours, Prime Minister Carney made an announcement that Canada would match the U.S. duties “dollar for dollar.” On Aug. 25, the Department of Finance released the details of Canada’s response: counter-tariffs of 15 per cent, 25 per cent and 50 per cent on C$27.6 billion worth of U.S. goods, effective on Sept. 8, together with a C$7.5 billion support package.

Between those announcements, President Trump stated that tariffs on all Canadian cars, trucks, and automotive parts would increase to 50 per cent on Jan. 1, 2027, and that Canadian steel would also be subject to that rate.

Canada’s counter-tariffs took effect on Sept. 8.

Within hours, the President signed five further Section 338 proclamations: three impose outright import bans on specified Canadian alcoholic beverages, dairy products and motorcycles, effective Sept. 29, and two recalibrate the existing 50 per cent tariff lists, effective Sept. 15, adding products, removing others, and reversing the July carve-out for goods already subject to Section 232.

The President directed the removal of Canadian-origin products from a federal procurement channel the White House values at more than US$50 billion a year.

This update situates developments since the collapse of negotiations in the arc of the dispute we have tracked since November 2024 and considers what may come next for Canadian businesses.

1. How we got here

The most recent iteration of the Canada-U.S. trade dispute began on Nov. 25, 2024. That was when the then president-elect announced his intention a 25 per cent tariff on all goods imported from Canada and Mexico, citing concerns about fentanyl and border security.

The measures and responses that followed included tariffs imposed under the International Emergency Economic Powers Act, the resumption of the tariff dispute in March 2025, Section 232 measures targeting steel, aluminum and automobiles, Canada’s WTO challenge, and successive rounds of Canadian counter tariffs. Canada ultimately withdrew most of its counter-tariffs in September 2025.

These events are chronicled in our Tariffs and Trade Resource Centre.

Two developments this summer reshaped the bilateral dynamics.

First, at the first CUSMA joint review on July 1, the United States declined to renew the agreement in its current form. CUSMA remains in force, but the parties are now on a cycle of annual reviews rather than securing a further 16-year term.

Second, on July 20, the President signed three proclamations under Section 338 of the Tariff Act, citing provincial bans on U.S. alcoholic beverages, Canada’s administration of tariff-rate quotas for cheese, and Canada’s 25 per cent tariff on non-CUSMA-qualifying U.S. vehicles.

The accompanying annexes extended well beyond those three sectors, covering products such as furniture, cement, plywood, apparel, cosmetics, toys and hockey equipment. The duties apply irrespective of whether the goods qualify as originating under CUSMA. As originally proclaimed, they did not apply to goods already subject to Section 232 measures but, as discussed below, that carve-out was reversed on Sept. 8.

The July proclamations set Aug. 19 as the effective date, reflecting Section 338’s minimum 30-day notice period. On Aug. 18, amid reports of progress in the negotiations, the President suspended the effective date by three days, to Aug. 22. The suspension proclamation recorded that Canada had “expressed a commitment” to remove the measures at issue.

2. The collapse: Two accounts

Late on Friday, Aug. 21, Prime Minister Carney announced that Canada was suspending negotiations and recalling its negotiators to Ottawa. He stated that, in the preceding days, the United States had proposed new terms that were “unfair, uneconomic, and called into question the reliability of any deal.”

At a press conference the following morning, the Prime Minister added that the United States had “asked too much and offered too little.” He said that the late-stage demands implicated Canada’s relationships with other trading partners, its automotive sector, and its cultural and French-language protections. He also confirmed that Canada had been prepared to remove its remaining counter-tariffs on steel, aluminum and automobiles had the United States lowered its own. When asked on Tuesday about Canada’s account of the eleventh-hour demands, the President replied, “I don’t deny anything.”

In various interviews in the following days, U.S. officials offered a different account. Shortly after midnight, the United States Trade Representative posted that Canada had “declined to finalize the trade deal under the terms agreed earlier this week” and that “new demands and walk backs of other commitments by Canada” had upended the balance struck earlier in the week. According to an X post by the United States Trade Representative, the U.S. offer included significant tariff reductions on steel, aluminum, automobiles and lumber, cooperation on aerospace, critical minerals and forced-labour enforcement, and the launch of formal CUSMA negotiations.

No agreement was reached, no further negotiations were scheduled and, according to the United States Trade Representative, the United States was “moving forward with measures that respond to Canadian retaliation.” Those measures arrived on Sept. 8.

3. Canada’s response

Canada’s countermeasures, announced on Aug. 25 and in force since 12:01 a.m. on Sept. 8, have three notable features.

First, the countermeasures are rate-matched, not merely value-matched. The targeted products are drawn from those covered by the U.S. Section 338 and Section 232 measures, with each product generally subject to the same tariff rate that the United States applies to the corresponding Canadian product.

The Sept. 8 list contains roughly 700 items and covers C$27.6 billion in annual imports, and imposes tariffs of:

50 per cent on steel and aluminum products;
25 per cent on furniture, clothing and apparel, appliances, dairy products, cheese, fish and seafood, and certain steel and aluminum derivatives; and
15 per cent on other products such as air conditioning units and tool parts.

Second, the government’s stated rationale has shifted. The Minister of Finance made clear that the primary objective is to improve the competitive position of Canadian producers relative to U.S. products in the Canadian market. As the government had stated in respect of steel sector counter-tariffs, it would be illogical to force Canadian producers to compete with U.S. imports, when Canadian products are denied entry into the U.S. market.

This is a candid acknowledgement of the leverage problem we identified in January 2025. Retaliation against U.S. imports is unlikely, on its own, to move the United States. At the same time, there is no question that Canadian retaliatory measures to date are having both an economic and a political impact – and, likely, a strategic one as well. Retaliatory measures of this sort typically pursue multiple objects, and Canada’s latest measures are not different.

Third, the implementation framework is familiar. Existing counter-tariffs, including those on automobiles, remain in place, while goods already in transit when the measures took effect on Sept. 8 were exempt.

The tariff remission framework also remains available to provide exceptional relief. The Canadian Government has also paired the countermeasures with a C$7.5 billion support package. The package includes regional liquidity support, a new Business Development Bank of Canada financing stream, a C$2 billion Canada Strong Diversification Fund, C$3.5 billion in worker supports, and additional flexibility under the Large Enterprise Tariff Loan Facility. These measures build on approximately C$25 billion in support announced since 2025.

4. The U.S. response: from duties to import bans

Canada’s counter-tariffs took effect at 12:01 a.m. on Sept. 8.

The United States responded the same day, on two fronts. In the morning, the President directed the General Services Administration, working with the USTR, to take steps to remove Canadian-origin products from GSA’s Multiple Award Schedules (long-term contracts through which federal agencies buy commercial goods and services) unless Canada restores “full and fair reciprocity” for U.S. suppliers in Canadian government procurement. That evening, he signed five further proclamations under Section 338.

Three of the five are import bans. Section 338 permits the President, where a foreign country “maintains or increases” its discrimination after additional duties have been imposed, to exclude that country’s products from importation altogether. The President has now invoked that power. Effective 12:01 a.m. on Sept. 29, specified Canadian products currently subject to the 50 per cent duty (most alcoholic beverages, certain dairy and related products, and motorcycles) will be prohibited from entry into the U.S market. The White House frames the alcohol ban as a response to Canada having “maintained and in fact increased” its discrimination against U.S. alcoholic beverages; the ban closely mirrors the provincial bans on U.S. alcohol in place since early 2025, and follows Saskatchewan’s 50 per cent markup on U.S. alcohol, which took effect the same day as Canada’s counter-tariffs. The USTR described the package as “a natural consequence of Canada’s continued discriminatory treatment” of U.S. exports.

The other two proclamations recalibrate the underlying tariff lists, effective Sept. 15, for the motor vehicle and alcoholic beverage actions. Each removes some products from the 50 per cent duty and adds others. The White House cites rock salt and cement among the removals, and all-terrain vehicles and additional dairy products among the additions; cheese, mattresses and motorboats also appear to be new entrants.

Two further features deserve attention.

First, the modified duties “apply in addition to” Section 232 duties, reversing the July carve-out under which goods already subject to Section 232 measures were excluded from Section 338 coverage. On the face of the Sept. 8 announcement from the White House, Canadian aluminum bars and tubes, and fabricated steel structures newly added to the list may attract both layers.

Second, the additions were made without a fresh 30-day notice period. Section 338 requires that additional duties take effect no earlier than 30 days after the President’s finding of discrimination. The administration’s position appears to be that supplementing an existing proclamation, which the statute expressly permits, is not a new imposition.

Canada’s reaction has so far been measured. Minister LeBlanc called the measures “unjustified,” said the government was assessing them, and confirmed he was in contact with Ambassador Greer. Hours earlier, the Prime Minister had told Canadians in a video address that Canada’s pivot away from the United States “will come at a cost,” though not one approaching “the cost of standing still.”

5. What comes next

Escalation. The President’s announcement concerning Jan. 1, 2027 would raise tariffs on all Canadian cars, trucks and automotive parts to 50 per cent, doubling the current headline tariff rate on automobiles and applying the announced 50 per cent rate expressly to automotive parts.

Because U.S. duties on Canadian steel are already 50 per cent, the practical significance of the President’s reference to steel remains unclear. The four-month lead time resembles a negotiating deadline more than a settled policy decision. Automotive businesses and supply-chain participants should not, however, plan on the assumption that the increase will be withdrawn or postponed.

The Sept. 8 measures show that the U.S. administration is prepared to use the full range of Section 338, from duties to outright bans. They also show a willingness to move beyond tariffs altogether: the procurement directive targets a channel that Section 338 does not reach, and that Canadian suppliers have generally treated as insulated from the tariff dispute.

Litigation. Unlike Section 122, which limits tariffs imposed under that provision to 150 days, Section 338 contains no comparable express time limit and, according to the U.S. Government’s interpretation, permits duties of indefinite duration.

Some U.S. scholars have questioned whether the provision survived the 1962 Trade Expansion Act, and legal challenges are widely expected. Importers exposed to the duties or bans should consider taking steps now to preserve their ability to seek refunds, rather than waiting for the courts to resolve those potential challenges.

CUSMA. The annual review cycle has effectively transformed CUSMA from a relatively settled framework into an ongoing negotiation. The United States Trade Representative’s proposed package purportedly included the launch of formal CUSMA negotiations, but that offer appears to have lapsed with the breakdown of the broader talks. Canadian officials reportedly see “little chance” of negotiations resuming before the U.S. midterm elections in November 2026.

Meanwhile, the U.S.–Mexico track continues: the U.S. Commerce Secretary travelled to Mexico on Sept. 9 to meet President Sheinbaum. Canada risks watching the agreement’s future being negotiated bilaterally around it.

6. What Canadian businesses should do now

Revisit the origin of your exports. The Section 338 duties apply regardless of whether goods qualify for preferential treatment under CUSMA. Canada’s counter-tariffs, by contrast, apply to goods considered to originate in the United States under the applicable marking rules. The analysis differs on each side of the border, and the answer for U.S.-assembled goods containing foreign inputs may not be straightforward.

Use the lead time before Sept. 15 and Sept. 29. The recalibrated U.S. lists take effect on Sept. 15 and the import bans on Sept. 29. Goods classified in newly added subheadings should be re-costed now; goods deleted from the lists should be checked for whether they were removed outright or merely narrowed to a statistical suffix. Goods in the banned categories cannot enter after 12:01 a.m. on Sept. 29, and shipments should be timed accordingly.

Preserve potential refund rights. Importers subject to the U.S. Section 338 duties should consider taking the steps necessary to preserve potential refund claims pending any litigation challenging those measures.

Review existing and future contracts. Business should examine tariff pass-through, price-adjustment and force majeure provisions in existing agreements and address tariff allocation expressly in new contracts – advice we first gave in March 2025 that has not aged.

Review U.S. federal procurement exposure. Canadian suppliers holding GSA Multiple Award Schedule contracts, and their U.S. resellers, should review origin documentation and contract terms.

BLG can assist

BLG’s International Trade and Investment Group has advised clients through every phase of this dispute, including on origin qualification, remission requests, classification and scope determinations, contractual risk allocation and refund preservation. For assistance, contact any member of our team, and follow developments on our Tariffs and Trade Resource Centre and The Tariff Home Companion podcast.

B.C. presale contracts declared unenforceable due to REDMA disclosure failures

Thu, 03 Sep 2026 00:00:00 Z

Developers marketing presale units in British Columbia must continue to disclose material developments throughout the life of a project or risk losing the ability to enforce their purchase agreements.

In KingSett Mortgage Corporation v. Lumina Eclipse Limited Partnership, 2026 BCSC 1598 (Lumina Eclipse), the British Columbia Supreme Court held that a developer's failure to disclose material developments affecting a condominium project rendered 39 presale agreements unenforceable against the purchasers, notwithstanding that the project was subsequently completed over the course of a Companies' Creditors Arrangement Act (CCAA) proceeding.

The decision provides important guidance on the scope of a developer's continuing disclosure obligations under the Real Estate Development Marketing Act (REDMA), the circumstances in which post-contract disclosure failures can engage s. 23 of REDMA and the interaction between REDMA and the CCAA. It also confirms that subsequent project completion or an insolvency proceeding will not necessarily cure earlier disclosure failures or protect pre-sale agreements from being rendered unenforceable.

What developers and purchasers need to know

REDMA is consumer protection legislation which regulates the marketing of presale development properties.
REDMA is built around a straightforward concept: purchasers are entitled to receive accurate and up-to-date information about the material facts of a development before and during the period in which they remain contractually committed to purchasing a unit. Material facts may include, among other things, construction stoppages and significant delays.
A developer's obligation to disclose material facts under REDMA continues after a presale agreement is signed.
A failure to disclose later-arising material facts can render a presale agreement unenforceable against the purchaser.
CCAA is a federal insolvency statute that grants courts broad discretion to stay proceedings and creditor rights while a debtor undertakes a restructuring or concludes strategic sales for the benefit of stakeholders. The objective of the CCAA is to facilitate an efficient and fair restructuring process, preserve and maximize asset value, protect the public interest and balance the competing interests of debtors, creditors and other stakeholders.

Background: The Lumina Eclipse presale development

This case arose from the 329-condominium unit development called Lumina Eclipse in Burnaby, B.C. After purchasers entered into presale agreements between 2021 and 2023, the project began experiencing serious financial and construction difficulties.

During construction, the project encountered significant financial and operational challenges, including a $12 million CRA judgment, suspension of warranty coverage, suspension of the building permit, cessation of construction activity, substantial delays and eventual CCAA proceedings. Throughout this period, the disclosure statement was not amended to disclose these changes to purchasers.

In January 2025, the project was petitioned into a proceeding under the CCAA by its primary secured creditor, Kingsett Mortgage Corporation. In the initial order granted in the CCAA proceeding a stay of proceedings was granted (among other things) to allow construction of the development to restart. The initial order stayed all proceedings and the exercise of rights against the respondents and relieved the respondents from any obligation to file or deliver new disclosure statements or amendments under REDMA while the stay remained in effect. By March 2025 the building was deemed substantially complete, and the purchasers were asked to close on their presale agreements.

The purchasers sought a declaration that certain presale condominium agreements are unenforceable due to alleged breaches of s. 23 of REDMA. The purchasers argued that the developer's failure to disclose material developments affecting the project, including its financial difficulties and construction setbacks, constituted breaches of REDMA that rendered the presale agreements unenforceable under s. 23. The respondents argued that the presale agreements remained enforceable notwithstanding the project's financial and construction difficulties. They contended that the alleged disclosure deficiencies did not fall within the circumstances that would render the agreements unenforceable under s. 23 of REDMA and that the relief sought was inconsistent with the remedial purpose of the CCAA and the initial order under the CCAA.

What is a material fact under REDMA?

In Lumina Eclipse, the Court adopted the three-part framework for assessing materiality from Bosa Properties (Esprit 2) Inc. v. Kim, 2012 BCSC 1013, which is based on: (i) common sense; (ii) the statutory and regulatory disclosure framework; and (iii) whether a fact or proposal affects or could reasonably be expected to affect the value, price or use of the unit or development property. The Court did not reference the leading British Columbia Court of Appeal case regarding "material facts", being Woo v. Onni Ioco Road Five Development Limited Partnership, 2014 BCCA 76, in its reasoning. Applying the three-part framework, the Court found that all three factors established that the following events all constituted material facts:

a $12 million CRA judgment;
suspension of new‑home warranty coverage;
suspension of the building permit;
cessation of construction;
significant changes to completion timing; and
other developments affecting the project’s financial and operational condition.

When must a developer amend a disclosure statement?

A central issue was whether the undisclosed developments constituted “material facts” for the purpose of REDMA. The Court concluded that they did.

The Court emphasized that the materiality analysis is objective. The question is whether the information could reasonably be expected to affect the value, price or use of the development property or unit.

Applying that test, the Court found that the CRA judgment, suspension of warranty coverage, suspension of the building permit, cessation of construction activity, significant delays and other financial developments all constituted material facts. In these circumstances, the project was objectively different from the project purchasers thought they were buying into and the Superintendent's own disclosure requirements specifically call for disclosure of exactly this kind of information. These events affected project viability, financial stability, anticipated completion and the developer’s ability to perform its obligations.

The Court rejected arguments that materiality should be assessed with hindsight. The fact that the project was eventually completed did not alter whether the information was material when disclosure should have occurred. Materiality was assessed at the time disclosure was required, not after the project’s outcome became known.

Having determined that the relevant events were material facts, the Court turned to the disclosure obligations imposed by s. 16.

Section 16 requires a developer to immediately file an amendment to a disclosure statement when it becomes aware that the disclosure statement contains a misrepresentation or otherwise fails to comply with REDMA.

The Court found that timely amendments were not made despite the occurrence of multiple material developments. Some matters remained undisclosed for many months and were not included in a formal amendment until the monitor filed a further amendment in November 2025.

The Court found that the failure to file timely amendments to reflect the material facts constitutes a misrepresentation and the developer breached its continuing disclosure obligations as subsequent events had presented an outdated picture of the development that no longer reflected the actual circumstances known to the developer.

Can a post-contract disclosure breach make a presale contract unenforceable?

The most significant aspect of the judgment concerns the Court’s interpretation of s. 23.

The respondents argued that s. 23 should apply only where a disclosure defect existed when the original purchase agreement was executed.

The Court focused on the language of s. 23, which applies where a developer has breached “any provision of Part 2.” Because s. 16 forms part of Part 2, the Court concluded that continuing disclosure breaches may engage s. 23.

The Court also relied on the wording of s. 23(2)(a), which refers to material facts that “were or would have been” reasonably relevant to purchasers. According to the Court, that language supports the conclusion that later-arising material facts may also engage the statutory provision where disclosure obligations are not satisfied.

The Court held that s. 23 applies broadly to any breach of Part 2 of REDMA, including a developer's continuing obligation to amend disclosure statements and after purchase agreements have been executed. In this regard, the Court held that REDMA’s ongoing disclosure regime would be substantially weakened if post-contract disclosure failures carried no meaningful consequence.

The Court held that neither of the statutory exceptions in s. 23(2) applied. The undisclosed project developments constituted a misrepresentation of material facts that were reasonably relevant to a purchaser's decision to enter into the purchase agreement, preventing the respondents from relying on s. 23(2)(a). The respondents were also unable to rely on s. 23(2)(b) because it was highly unlikely the developer was not aware of the material facts and the misrepresentations were never corrected through an amended disclosure statement within the timeframe required by REDMA.

Due to the developer’s breach of its continuing disclosure obligations, and failure to establish any of the exceptions contained in s. 23(2) of REDMA, the purchasers’ presale agreements were found unenforceable against them by the developers.

Can CCAA proceedings override REDMA unenforceability?

The decision is particularly significant because the project was subsequently placed under creditor protection under the CCAA, with construction of the project substantially completed over the course of that CCAA proceeding. Despite this positive outcome, the Court nevertheless held that neither the CCAA proceeding generally nor relief set out in the initial order granted therein can cure or override the consequences of the earlier REDMA breaches.

The relevant disclosure failures occurred before the CCAA proceeding commenced, and therefore the applicable pre-sale agreements were already rendered unenforceable from the outset. The Court clarified that although CCAA courts have broad discretion to stay proceedings, suspend remedies and restrain the exercise of contractual rights, they do not go as far to make a contract already rendered unenforceable by operation of another statue to be treated as enforceable against the purchasers under the CCAA. The Court also commented that there is no conflict or frustration between CCAA and REDMA as REDMA determines whether the developer possessed an enforceable right against the purchasers, while the CCAA governs the administration of the ensuing insolvency proceeding and treatment of rights and claims within that proceeding.

The Court declared the purchase agreements unenforceable, but did not declare them void, cancelled or rescinded. It also did not determine the purchasers’ entitlement to recover approximately $3.6 million in deposits. Those issues were left for a later hearing.

Immediate implications: Why this decision matters for developers and lenders

The decision immediately affects 39 purchasers whose deposits total approximately $3.6 million and whose purchase contracts total approximately $30.5 million.

The Court's reasoning is not unique to those purchasers. The disclosure failures identified by the Court were project-wide disclosure issues. The development consists of 329 units. As a result, the potential financial implications for the project extend well beyond the 39 contracts directly before the Court.

More broadly, the decision significantly highlights the legal and financial consequences of failing to promptly amend disclosure statements when material developments arise during construction. Developers, lenders, monitors and insolvency professionals involved in distressed presale projects should examine this decision closely.

Potential appeal issues

Given the significance of the ruling, the decision may be appealed. Potential appellate issues include whether s. 23 applies to post-contract disclosure breaches, the interpretation of the phrase "was or would have been reasonably relevant" in s. 23(2)(a) and the interaction between REDMA and the CCAA. Appellate guidance may further clarify how REDMA provisions operate where a development project is subject to insolvency proceedings.

Key takeaways: What the decision means for B.C. development projects

Developers should treat REDMA disclosure as a continuing compliance obligation throughout the marketing and construction of an event or other matter. Events that occur after a purchaser signs an agreement may require an amendment to the disclosure statement if they constitute a material fact or material change. Importantly, legal consequences under REDMA do not arise merely because a material fact exists. Rather, they can flow from a developer's failure to disclose that material fact in accordance with REDMA's continuing disclosure requirements. Where there is uncertainty as to whether a particular development constitutes a material fact, developers should generally err on the side of disclosure and promptly assess whether an amendment to the disclosure statement is required.

Particular attention should be given to:

significant construction delays or work stoppages;
material financing difficulties;
suspension or loss of warranty coverage;
suspension, cancellation or material alteration of building permits;
other developments that could reasonably affect a purchaser’s decision to complete the purchase.

A contractual right to extend completion dates will not necessarily address a separate failure to comply with REDMA. Nor should a developer assume that completing the project, obtaining occupancy or entering an insolvency restructuring will cure an earlier disclosure breach.

Developers and insolvency professionals should therefore consider establishing a documented process for regularly reviewing project developments against their REDMA disclosure obligations. Material events should be promptly assessed with legal counsel, and any required disclosure amendment should be prepared and filed without delay.

If you have questions about REDMA or presale disclosure obligations in British Columbia, please reach out to any of the key contacts below.