Federally incorporated issuers will need to apply for an
exemption from corporate legislation in order to take advantage of
the notice-and-access procedure for proxy materials, according
to a notice published by Industry Canada on February 15, 2013
The Notice provides at least a partial solution to conflicts
between the new notice-and-access procedure introduced by the
Canadian Securities Administrators and corporate statutes,
including the Canada Business Corporations Act (CBCA),
some of which we described in a recent client
alert on the topic.
Issuers that submit application materials and pay a $250 fee to
Corporations Canada to use notice-and-access may be granted an
exemption with respect to the distribution of proxy materials to
shareholders for a particular meeting. We understand that renewals
of exemptions for subsequent meetings may be available to issuers
by submitting a letter seeking a renewal rather than by making a
Issuers using notice-and-access who have received an exemption
would no longer be required to deliver paper copies of proxy
materials to intermediaries, unless requested by the beneficial
owners or intermediaries on their behalf.
While this may resolve the conflict between notice-and-access
and the CBCA for management proxy materials, issuers must be aware
that the process will not be available to exempt corporations
from the CBCA requirement to send financial statements (and the
related MD&A) to registered shareholders. In addition, since
the Notice only refers to management proxy materials, it is unclear
if Industry Canada will grant exemptions for dissident proxy
The provincial corporate regulators and the Office of the
Superintendent of Financial Institutions Canada, which is
responsible for regulating issuers governed by other CBCA-based
statutes, such as the Bank Act (Canada) and the
Insurance Companies Act (Canada), have not yet issued
notices regarding exemptive relief for the use of the
notice-and-access procedure by issuers governed by statutes
with provisions that limit the use of this procedure.
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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