Canada: 2015 Disclosure Update

Last Updated: February 9 2015
Article by Jason M. Saltzman and Colin Cameron-Vendrig

Most Read Contributor in Canada, November 2017


Each year the Securities and Capital Markets team at BLG is asked what has changed to the continuous disclosure requirements for Canadian public companies.

Significant developments for 2015 include:

  • Updated voting guidelines from Institutional Shareholder Services ("ISS") and Glass, Lewis & Co., LLC ("Glass Lewis") for the 2015 proxy season;
  • Amendments to National Instrument 58-101 that impose comply or disclose rules regarding women on boards and in senior management roles; and
  • The Toronto Stock Exchange (the "TSX") mandating majority voting.

Proposals that could have a significant impact in 2015 include:

  • Proposed amendments to current disclosure and governance obligations for venture issuers;
  • The Canadian Securities Administrators ("CSA") providing proposed guidelines, not rules, to "regulate" proxy advisory firms; and
  • A national cooperative capital markets regulator becoming closer to a reality.

Canadian Proxy Voting Guidelines for 2015

ISS and Glass Lewis released updated guidelines for the 2015 Canadian proxy season that provide as follows:


Former CEO Independence – Five Year Cooling Off Period

ISS will deem a former CEO to be independent for the purposes of serving on the board or any key committee, including the audit committee, after a five year cooling off period unless there is a relationship with the issuer, or an executive officer of the issuer, which could reasonably be perceived to interfere with the exercise of his/her independent judgment.

Advance Notice Policies

ISS clarified that it will generally recommend that investors withhold votes from directors in situations where an advance notice by-law has been adopted by the board but has not been placed on the voting agenda for the upcoming shareholders' meeting.

By-law Amendment

ISS clarified that it will generally oppose any by-law amendment if the full by-law text is not either included in the meeting materials or referenced in an easily accessible location such as SEDAR.

Private Placements

ISS added several criteria to expand on their case-by- case approach to analyzing private placements. Some of the new factors include whether the rationale for the private placement is detailed; the dilutive effect on shareholders; any discount or premium to the share price prior to the announcement; and the market's response following the announcement.

Glass Lewis

Majority Voting

Glass Lewis has revised their approach on majority voting policies for TSX listed companies to reflect the new TSX majority voting requirement. Accordingly, Glass Lewis will now recommend that shareholders withhold votes from all members of the governance committee for an uncontrolled issuer that lacks such a policy.

Shareholder Rights Plans

Glass Lewis will consider supporting a rights plan with a trigger threshold that is not unreasonably low (i.e. lower than 20%) provided that it incorporates the following provisions in its qualifying offer clause: (i) there is no requirement that it be an all-cash offer; (ii) there is no requirement that the offer remain open for more than 90 business days; (iii) the offeror is allowed to amend, reduce and change the terms of  the offer; (iv) no fairness opinion is required; (v) there is a low or no premium requirement; and (vi) the board does not have discretion to amend the material terms of the plan unilaterally.

Advance Notice Policies

Glass Lewis will generally support advance notice policies that are reasonable and not unduly restrictive for shareholders. Glass Lewis will generally recommend that shareholders vote for policies that require a nominating shareholder to provide notice not less than 30 days and not more than 70 days prior to the date of the annual meeting. If these notice periods are not provided, Glass Lewis may consider recommending that shareholders vote against such policies. In addition, Glass Lewis will also consider recommending voting against an advance notice policy if it does not allow for the commencement of a new time period for shareholder nominations in the event of an adjournment or postponement of the annual meeting.

Women on Boards and in Senior Management

All of the securities regulatory authorities in Canada, other than in Alberta and British Columbia, amended National Instrument 58-101 Disclosure of Corporate Governance Practices (the "NI 58-101 Amendments") to require certain disclosure regarding the representation of women on boards and in senior management roles.

The NI 58-101 Amendments do not impose targets or quotas, but require all non-venture issuers to disclose each year in either their annual information forms or in their management information circulars:

  • whether the issuer has adopted director term limits or other board renewal mechanisms, and if not, why not;
  • whether the issuer has a written policy regarding the representation of women on the board, and if not, why not;
  • whether the board or the nominating committee considered the level of representation of women in the director identification and selection process, and if not, why not;
  • whether the issuer considers the representation of women in executive positions when making executive officer appointments, and if not, why not;
  • whether the issuer has targets for the representation of women on its board and in executive officer positions, and the annual and cumulative progress in achieving such targets, and where there are no such targets, why not; and
  • the number and proportion of women on the board and in executive officer positions of both the issuer and each of its "major" subsidiaries.

TSX Requires Majority Voting for  Director Elections

The TSX approved final rules which made majority voting for uncontested meetings mandatory, either through the adoption of a policy or amendment to articles or by- laws, for fiscal years ending on or after June 30, 2014.
The new rules provide as follows:

  • Each director of a listed issuer must be elected by a majority of the votes cast with respect to his or her election.
  • A listed issuer must adopt a majority voting policy which provides for the following:

    • Any director must immediately tender his or her resignation to the board if he or she is not elected by at least a majority.
    • The board shall determine whether or not to accept the resignation within 90 days after the meeting, provided that resignations should be accepted other than in exceptional circumstances.
    • The listed issuer must promptly issue a news release with the board's decision and must fully state the reasons if a resignation is not accepted.

Amendments to Venture Issuer Disclosure

The CSA is reviewing comments on proposed amendments to current disclosure and governance obligations intended to streamline and tailor disclosure requirements and to enhance the substantive governance requirements for venture issuers. The proposed amendments include:

  • for venture issuers without significant revenue, allowing the requirement for management's discussion and analysis for interim financial periods to be satisfied by a streamlined and focused report on quarterly highlights;
  • implementing a new tailored form of executive compensation disclosure;
  • reducing the instances in which a business acquisition report must be filed through changes to significance thresholds;
  • requiring audit committees to have a majority of independent members; and
  • amending the prospectus disclosure requirements to reduce the number of years of audited financial statements required for venture issuers becoming reporting issuers and to conform the disclosure requirements to the proposed amendments related to continuous disclosure.

CSA "Guidance" to Proxy Advisory Firms

In April 2014, the CSA published proposed National Policy 25-201 Guidance for Proxy Advisory Firms (the "Proposed Policy") to address the regulation of proxy advisory firms. For the most part, the Proposed Policy merely provides guidance in the form of suggestions that proxy firms "may consider" rather than rules that must be followed.

Conflicts of Interest

To address conflicts of interest, the CSA suggests that proxy advisory firms may consider taking steps such as establishing policies and procedures, internal safeguards and controls and a code of conduct. The CSA notes that it expects such firms will disclose conflicts of interests  to their clients and will publicly disclose the policies and procedures they set up though does not actually require that either of such disclosures be made.

Transparency and Accuracy of Vote Recommendations

The Proposed Policy requires that proxy advisory firms implement appropriate practices to promote transparency and accuracy of recommendations, but it merely suggests that such firms "may consider" establishing  and disclosing policies and procedures that describe the approach used in its analysis, as well as safeguards to increase the accuracy and reliability of information relied on when making recommendations. The CSA does not require, or even recommend, that such firms consult with issuers before making recommendations to ensure that information relied upon is accurate.

Development of Proxy Voting Guidelines

Despite the influence that ISS and Glass proxy voting guidelines often have, the CSA did not require, but rather just "encourages", proxy advisory firms to consult with market participants prior to setting  such voting guidelines.

Corporate Governance Practices

Some market participants have raised concerns that given the influence that proxy advisory firms have, issuers often feel compelled to adhere to proxy voting guidelines set by proxy advisory firms. While the CSA recognized such concerns, it did not mandate how proxy advisory firms should address such concerns, but rather reminded issuers that they may engage with their own shareholders to explain why the issuer has or has not adopted certain policies.

Communications with Clients, Market Participants, the Media and the Public

While nothing is mandated, the CSA stated that when a proxy advisory firm issues its vote recommendations, such firms should communicate the following in their reports to clients:

  • any actual or potential conflicts of interest;
  • approach or methodology used, and factors considered;
  • identification of factual information as well as information flowing from analytical models and assumptions;
  • a description of the extent to which proxy voting guidelines are used and reasons for any deviation;
  • the nature and outcome of any dialogue or contact with an issuer;
  • limitations or conditions in the research and analysis used; and
  • a statement that any vote recommendation and underlying research and analysis is intended solely as guidance.

Cooperative Capital Markets Regulatory System

The federal government and the governments of Ontario, British Columbia, Saskatchewan and New Brunswick announced in September 2014 that they signed a memorandum of agreement formalizing the terms of a Cooperative Capital Markets Regulatory System.

The Capital Markets Regulatory Authority (the "Authority") will administer both the federal and provincial securities acts and will act in accordance with a single set of regulations. The Authority will be comprised of a Regulatory Division responsible for the policy, regulatory operations, advisory services and enforcement functions and an independent Tribunal which will adjudicate enforcement and administrative proceedings.

The uniform Provincial Capital Markets Act, which will be enacted by each participating province and which will replace existing provincial securities legislation, purports to harmonize the approaches taken by the various signatory provinces. The complementary federal Capital Markets Stability Act addresses those areas under federal jurisdiction, equipping the Authority with national data collection powers to monitor activity in capital markets and providing the Authority with the requisite tools to "manage systemic risk related to capital markets on a national basis". The federal statute will also enact capital markets related offences currently included in the Canadian Criminal Code. Both the provincial and federal statutes empower the Authority to make regulations.

While the proposed Provincial Capital Markets Act is largely consistent with existing provincial securities laws, it adopts a "platform approach" to capital markets regulation. This involves setting out the broad strokes of capital market law in the Provincial Capital Markets Act, while reserving the detailed requirements (including some of those currently set out in provincial securities law) for the regulations to be adopted by the Authority.

About BLG

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions