Canada: New MSDEP Declaration: Permits May Be Delayed Or Refused

Following the recent amendments to the Québec Environment Quality Act (the "EQA"), the Ministry of Sustainable Development, Environment and Parks ("MSDEP") recently published the form of a new declaration which is now required to be filed as a condition for the issue, maintenance or renewal of an authorization certificate or permit.

The declaration requires the disclosure, among other things, of convictions of the applicant or holder, or one of its directors, officers, certain money lenders or large shareholders¹, of certain penal or indictable offences, of a tax, environmental or criminal nature within the prior 2 to 5 years (varies depending on the offence). As currently drafted, the declaration also requires the disclosure of offences committed by legal persons (a term which is meant to include corporations, municipalities, associations, partnerships, etc.) of which the holder/applicant's directors, officers and shareholders are directors, officers or shareholders.

There is a concern that certain corporations may now have problems securing quality directors where such individuals fear a directorship in a corporation that has convictions will "taint" their directorship in other corporations.

There is also a concern that corporations that have pleaded guilty to certain tax, criminal or environmental-related offences may, from now on, have problems obtaining or maintaining their permits issued under the EQA.

A failure to provide the declaration may cause problems where the transfer of permits is required in a business purchase transaction. Advice is required in each individual circumstance.

The preparation of the 19 page long declaration (which is only currently available in French) will require considerable data collection and expense of time, so we suggest that corporations get ready well in advance where they know Québec permit renewals or new permits will be required.

Footnote

1 The definition of a shareholder only includes, for the purpose of the declaration, a natural person who holds, directly or indirectly, shares that carry 20% or more of the voting rights in the legal person that is not a reporting issuer under the Securities Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.