Presented on April 21 by Finance Minister Joe Oliver,
Canada's 2015 Federal Budgetincludes two
commitments of special interest to public companies. These relate,
respectively, to the proposed Cooperative Capital Markets
Regulatory System and to corporate governance modernization,
notably in the area of board diversity.
The Cooperative Regulator: Draft Legislation and Regulation
With respect to the Cooperative Capital Markets Regulatory
System, the Government of Canada committed to move ahead in
consultation with the participating provinces and territories
(currently British Columbia, New Brunswick, Ontario, Prince Edward
Island, Saskatchewan and Yukon). Mr. Oliver noted that progress has
already been made on the legislative framework and on harmonized
rules and referred to several developments that are expected over
the summer of 2015, including:
The release of updated draft capital markets legislation and
regulations, for public comment; and
The appointment of the Capital Markets Regulatory
Authority's initial board of directors.
The Budget speech reiterated what the Government has identified
as the advantages of the cooperative system, including
responsiveness, expertise, consistency and complementary federal
legislation on criminal and systemic risk issues.
In the Budget, the Government announced its intention to amend
the Canada Business Corporations Act to implement a
"comply or explain" disclosure model for board gender
diversity. Such a standard is already in place for TSX-listed
companies and has also been recognized by most provincial
In addition to board diversity, the Government plans further
CBCA amendments to modernize director election processes and
communications with shareholders. In an effort to promote corporate
transparency, bearer instruments will be banned. Parallel
amendments will be introduced in federal legislation governing
co-operatives and not-for-profits.
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.
While most are well aware that the sale of a business is generally a complex process, even sophisticated business owners are surprised by just how much cost and effort is required to complete the sale.
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