Canada: Alberta Court Of Appeal Upholds The Sharing Of Compelled Information With Foreign Authorities

In Beaudette v. Alberta (Securities Commission), 2016 ABCA 9, the Alberta Court of Appeal confirmed that the Alberta Securities Commission (the "ASC") may share information compelled from Alberta residents with authorities abroad such as the Securities and Exchange Commission (the "SEC") and the US Department of Justice (the "DOJ").


The governing statutes of the ASC and other securities commissions in Canada grant powers to compel testimony and documents through summonses.1 These compulsion powers are meant to serve the regulatory function of securities commissions, they are not meant to assist criminal investigations.

To avoid infringing Charter protections against self-incrimination,2 compulsion powers under securities legislation are restricted in two principal ways. First, the compulsion must be directed towards a legitimate regulatory purpose, not for the predominant purpose of obtaining evidence from the testifier that will be used against him/her in criminal proceedings.3 Second, a testifier is provided with "use immunity", which protects against the compelled testimony being used against him/her in a separate proceeding, and "derivative use immunity", which protects against the use of evidence derived from the compelled testimony against him/her.4

In 2014, the Alberta legislature passed Bill 3 which broadened the ability of the ASC to exchange information with other authorities. Section 46(1) of the Alberta Securities Act5 (the "Act") authorizes enforcement staff to provide information to governmental or regulatory authorities in Canada and elsewhere, unless "it would not be in the public interest to do so." Notably, the ASC is not required to enter into any agreement with the receiving authority before providing this information.6

Use Immunity (Canada) vs. The Right to Silence (U.S.)

The protection against self-incrimination takes on a very different form in Canada and the United States, as described by the Ontario Court of Appeal:

In Canada, a person has the right not to have any incriminating evidence that the person was compelled to give in one proceeding used against him or her in another proceeding .... Thus, in Canada, a witness cannot refuse to answer a question on the grounds of self-incrimination, but receives full evidentiary immunity in return. In the United States, a witness can claim the protection of the Fifth Amendment and refuse to answer an incriminating question. Once the answer is given, however, there is no protection.7

An individual summonsed to give evidence to a Canadian securities regulator, in circumstances where the information may also be of interest to the SEC, is in a very tenuous position. Under Canadian law, the individual is generally not permitted to decline to answer the Canadian regulator's questions. However, the compelled information may be shared with the SEC and/or the DOJ, who may use the information against the individual in criminal proceedings in the US because they are taken to have waived their Fifth Amendment right to silence.

The Circumstances in Beaudette

The ASC issued a summons to Mr. Beaudette to give evidence in connection with a possible stock manipulation of the securities of an issuer called Sunpeaks. Due to the fact that Sunpeaks was traded on the OTC Bulletin Board, any information regarding stock manipulation would potentially be of interest to the SEC. Mr. Beaudette did not appear in response to his summons and the ASC applied for a finding of civil contempt.

Mr. Beaudette challenged the use of the summons power as being contrary to section 7 of the Charter. Mr. Beaudette argued that the ability to share compelled testimony with foreign regulators, such as the SEC, without a guarantee that he would be afforded use and derivative use immunity in the United States was inconsistent with the principle of fundamental justice that protects against self-incrimination.

The Alberta Court of Queen's Bench dismissed Mr. Beaudette's Charter application8 and he appealed.

Summons Power is Prima Facie Constitutional

The Alberta Court of Appeal upheld the constitutionality of the summons and information sharing powers under the Charter. The Court reinforced the following established legal principles:

  1. Legislation allowing securities regulators to compel testimony is not inherently inconsistent with the Charter, it is only when it is used improperly (i.e. compelling testimony for an improper purpose, such as use in a criminal proceeding) that a Charter breach may occur;9 and
  2. The Charter does not apply to the actions of foreign regulators in investigating and prosecuting offences within their jurisdiction (i.e. whether they used compelled testimony against an accused in a foreign proceeding).10

Weighing in the balance was the fact that Mr. Beaudette did not have any evidence that 1) the ASC had any intention of turning over the compelled testimony to the SEC, or 2) the compelled testimony would actually be used by the SEC.11 In addition, the possibility of the involvement of the DOJ, which would be responsible for laying any criminal charges, was entirely speculative.

How May These Provisions Be Used?

While the Alberta Court of Appeal decided in Beaudette that these provisions themselves do not prima facie violate the Charter, it did not provide much in the way of guidance as to how they may be used by securities regulators.

The Ontario Court of Appeal has observed in this context that the protection against self-incrimination under the Charter is witness-specific and fact-specific.12 When Conrad Black challenged the authority of a corporate inspector to compel testimony, the Ontario Court of Appeal found that the dangers associated with self-incrimination in the U.S. were too speculative, notwithstanding that David Radler, an alleged co-conspirator, had pleaded guilty in the U.S.13 The result in that case was partly influenced by the failure of the parties to follow a process aimed at attempting to resolve conflicts arising from the different approaches to self-incrimination in Canada and the U.S. that had been established by the judge below.14 Under Ontario's legislation, there may be room for creativity in attempting to address competing interests and conflicting foreign laws. Because provincial securities legislation varies in subtle but important ways, and the Charter analysis is highly dependent on the facts, advice must be carefully tailored.15

Interestingly, in the current draft of the Provincial/Territorial Capital Markets Act, which will likely be implemented in British Columbia, Ontario, Saskatchewan, New Brunswick, PEI and the Yukon in 2017 at the earliest, there is an express provision that requires regulators to enter into an agreement with that foreign authority setting conditions on the use of shared information.16 The proposed statute does not prescribe what conditions must be included. However, Canadian regulators may wish to include a condition that provides them with the ability to exercise control over the use and derivative use of the information to ensure that witnesses are willing to testify without raising Charter challenges because their rights against self-incrimination are adequately protected.17


The Beaudette decision affirms the summons and information sharing powers in the Act. However, there are individual circumstances in which specially adapted protections may be warranted.


1. See e.g. Securities Act, RSO 1990, c S.5, s. 13; Securities Act, RSBC 1996, c 418, s. 144.

2. Canadian Charter of Rights and Freedoms, being Schedule B to the Canada Act 1982 (UK), 1982, c. 11, ss. 7, 13.

3. R. v. Jarvis, [2002] 3 S.C.R. 757 at para. 88.

4. British Columbia Securities Commission v Branch, [1995] 2 S.C.R. 3 at para. 7 [Branch].

5. RSA 2000, c S-4.

6. Section 46(3) provides that the ASC may enter into such an arrangement or agreement.

7. Catalyst Fund General Partner I Inc. v. Hollinger Inc., 2005 CarswellOnt 5659 at para. 4 (C.A.) [Hollinger].

8. Beaudette v Alberta (Securities Commission), 2015 ABQB 57.

9. Branch.

10. R. v. Hape, 2007 SCC 26 at para. 48. The Charter would apply to the actions of Canadian regulators in assisting with a foreign investigation and/or prosecution; but not to independent acts undertaken by foreign regulators.

11. In these circumstances, the "full panoply" of Charter rights are not engaged. If the testifier can establish some actual risk that the compelled testimony may be shared with, and used by, the foreign regulator, it may be appropriate for a court to make an Order setting up a framework to reduce this prospective risk:.

12. Hollinger at para. 12.

13. Hollinger at para. 9.

14. Catalyst Fund General Partner I Inc. v. Hollinger Inc., 2005 CarswellOnt 2193 (SCJ).

15. See also A. v. Ontario Securities Commission, 2006 CanLII 14414 (Ont SCJ); 2006 CanLII 22120 (Ont SCJ).

16. Capital Markets Act: A Revised Consultation Draft, August, 2015 ( s. 194, which states that: "Before the Authority discloses information to a person, authority, entity or agency outside Canada, the Authority must enter into an agreement, arrangement,  commitment or understanding with the person, authority, entity or agency regarding the conditions of that disclosure." [CMA].

17. Black, Re, 31 O.S.C.B. 10397 at para. 232.

To view the original article please click here.

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
Check to state you have read and
agree to our Terms and Conditions

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.

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 by clicking here .

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.


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.