The move towards eliminating the amount of paper involved in
shareholder meetings of Canadian public companies has begun.
Canadian issuers may use the new "notice-and-access"
regime adopted by the Canadian Securities Administrators (the
"CSA") for meetings that take place on or after March 1,
2013 (provided this method of delivering proxy-related materials is
permitted by the issuer's governing statute). In a nutshell,
issuers will be able to send to shareholders (both registered and
beneficial holders of the issuers), a much reduced package of
materials, together with the document required to cast their vote.
These materials will direct shareholders to a website where they
may access the complete proxy circular. In other words, the
shareholders get "notice" of the meeting, together with a
brief summary of the business of the meeting and will be advised
how they may "access" the proxy circular. The
notice-and-access regime is set out in the amendments to the
CSA's National Instrument 54-101 (Communication with Beneficial
Owners of Securities of a Reporting Issuer).
Highlights of the notice-and-access regime include the
provisions set out below:
Issuers are not required to use notice-and-access. It is
entirely optional. Notice-and-access is not available to investment
The first time an issuer uses notice-and-access, it must file a
notification on SEDAR at least 25 days before the record date for
notice. In subsequent years, this notice need only be filed three
business days before the record date.
The record date for the meeting must be at least 40 days before
the meeting. Under the paper based system, the record date can be
as little as 30 days before the meeting. The CSA believes that at
least 40 days is required under notice-and-access to provide
sufficient time for the website posting and delivery
The issuer must send to shareholders a notice package that
contains a proxy or voting instruction form as well as a notice
that sets out:
basic information about the meeting and the matters to be voted
how to obtain a paper copy of the information circular (and if
applicable, annual financial statements and annual management
discussion and analysis (MD&A)); and
a plain language explanation of the notice-and-access
The notice package must also be posted on SEDAR and on another
website (such as the issuer's website) and remain posted there
for one year.
The issuer must post the information circular and related
materials on a website other than SEDAR (such as the issuer's
With the exception of the notice and relevant voting package,
issuers are generally prohibited from including other material in
the notice package. However, issuers may use notice-and-access to
deliver their annual financial statements and annual MD&A.
Dissidents may also use the notice-and-access regime.
Enhanced disclosure of the proxy voting process in the
information circular sets out:
whether the issuer is using notice-and-access (and whether the
issuer will send paper copies of the information circular to
certain shareholders notwithstanding its use of
whether the issuer is sending proxy-related materials directly
to its NOBOs (non objecting beneficial owners); and
if the issuer does not intend to pay for intermediaries to
deliver proxy-related materials to OBOs (objecting beneficial
owners), state that the OBO may not receive proxy-related materials
unless the OBO's intermediary assumes the cost of
The amendments to NI 54-101 include a number of other changes to
the communication process between issuers and their shareholders.
The CSA is continuing its review of the proxy voting system and is
expected to announce further initiatives early in 2013. For more
information on the proxy voting system in Canada see www.shareholdervoting.com.
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.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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