In December 2012, we reported that the Canadian Securities
Administrators (CSA) adopted new notice-and-access rules. The new
rules, which came into force on February 13, 2013, allow issuers to
send proxy-related materials to registered and beneficial
posting the relevant materials on a website other than SEDAR;
sending a package to each shareholder containing:
the relevant voting document;
a notice informing beneficial owners that the proxy-related
materials are available online (along with an explanation of how to
access the materials); and
instructions on how to receive a paper copy of such
For more details on the notice-and-access system, see our
December 3, 2012 Update, "CSA Adopts 'Notice-and-
Access' Rules and other Amendments to Improve Issuer
Communications with Investors."
Notice and Access Issues under the CBCA - Industry
Unfortunately, the notice-and-access rules are not entirely
consistent with rules for the delivery of shareholder materials
under certain corporate legislation. For example, the Canada
Business Corporations Act (the
"CBCA"), which governs federally
incorporated companies, requires corporations to send certain
proxy-related materials and annual financial statements to
registered shareholders. The language of the CBCA suggests that
federally incorporated companies may only use notice-and-access to
distribute proxy materials and/or annual financial statements to a
shareholder if that shareholder expressly agreed to accept delivery
in that manner.
On February 15, 2013, Industry Canada announced that
Corporations Canada will grant certain exemptions to CBCA
corporations wishing to use the notice-and-access system for the
delivery of proxy-related materials. The relief to be granted under
such exemption would not be blanket relief, but instead would apply
only in respect of the specific meeting to which such materials
To apply for an exemption, a corporation must pay a fee of $250
and, for the initial application, submit certain materials,
a cover letter, which must provide a description and details of
the exemption being sought;
a statement of facts that includes all material information,
which may affect the Director's decision; and
arguments setting out the reasons for the type of exemption
Guidance on the content of such materials is available in the
Exemption Kit Management Exemption Proxy Solicitation
Requirements published by Industry Canada and available online
Notably, the exemption does not extend to CBCA provisions
issuers to deliver financial statements to shareholders;
intermediaries who hold shares of the issuer on behalf of a
beneficial shareholder forward those proxy-related materials to the
Corporations Canada does not take a position on how an exemption
from the requirements to send proxy related materials would affect
the duties of an intermediary.
Although most provincial corporate statutes do not, on their
face, have the same inconsistencies with the notice-and-access
system as does the CBCA, some commentators are concerned that the
notice-and-access system may be inconsistent with the legal
framework for electronic delivery of documents under applicable
commerce legislation, including (in Ontario) the Electronic
Commerce Act, 2000, which is incorporated by reference under
the Business Corporations Act (Ontario) (the
Ontario Securities Commission staff indicated that they are in
the process of preparing further guidance on the interaction of
notice-and-access rules with existing rules for the delivery of
proxy-related materials under the OBCA and under National
Policy 11-201 - Electronic Delivery of Documents. Until such
guidance is released, it remains unclear whether OBCA corporations
will be entitled to rely on the notice-and-access system in
fulfilling their obligations to send certain proxy-related
materials to registered shareholders.
The content of this article does not constitute legal advice
and should not be relied on in that way. Specific 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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