Canada: Changes To Officer Certification Requirements - National Instrument 52-109

Last Updated: October 6 2008
Article by Roger J. Chouinard and Robert O. Hansen

Most Read Contributor in Canada, September 2018

On August 15, 2008, the members of the Canadian Securities Administrators (CSA) issued the final text of new National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, together with related new forms and new Companion Policy 52-109CP (collectively, the New Instrument).1 The New Instrument replaces — and expands upon — current certification and disclosure requirements with respect to financial reporting, and is substantially unchanged from the most recent proposed version published in April 2008.2 Its stated purpose is "to improve the quality and reliability of issuers' annual and interim disclosure." The CSA believes this improvement "will help to maintain and enhance investor confidence in the integrity of our capital markets."

The New Instrument and its expanded requirements will apply to interim and annual filings of all reporting issuers other than investment funds, in all Canadian jurisdictions, in respect of financial periods ending on or after December 15, 2008, provided that all necessary ministerial approvals are obtained. Venture issuers3 will benefit from less onerous requirements under the New Instrument, as discussed below.

This Legal Update summarizes the key changes to existing certification and disclosure requirements for certifying officers — i.e., the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), or persons performing similar functions — implemented by the New Instrument.

Evaluation of the Effectiveness of Internal Control over Financial Reporting

The certifying officers of a reporting issuer, subject to certain exceptions discussed below, will be required to personally certify in their annual certificates that:

  • they have evaluated, or caused to be evaluated under their supervision, the effectiveness of the issuer's internal control over financial reporting (ICFR) as at the end of the financial year; and
  • they have caused the issuer to disclose in its annual Management's Discussion and Analysis (MD&A) their conclusions about the effectiveness of the issuer's ICFR based on such evaluation.

These new certification requirements will be in addition to the current requirements that an issuer's certifying officers certify that, among other things:

  • the issuer's annual filings and interim filings do not contain any misrepresentation;
  • the issuer's financial statements and other financial information in its annual filings and interim filings fairly present the financial condition, results of operations and cash flows of the issuer;
  • they have designed disclosure controls and procedures (DC&P) and ICFR, or caused them to be designed under their supervision;
  • they have, on an annual basis, evaluated the effectiveness of the issuer's DC&P and caused the issuer to disclose the conclusions of their evaluation in the issuer's MD&A; and
  • they have caused the issuer to disclose in its MD&A any change in the issuer's ICFR that has materially affected the issuer's ICFR.

The New Instrument does not require issuers to obtain from their external auditors a report in respect of management's evaluation of the effectiveness of ICFR.

Disclosure of Material Weaknesses

The New Instrument requires a non-venture issuer's certifying officers to identify and disclose in its MD&A a material weakness in the design or operation of its ICFR. Matching the definition adopted by the U.S. Securities and Exchange Commission (SEC), a "material weakness" under the New Instrument is defined as "a deficiency, or a combination of deficiencies, in ICFR such that there is a reasonable possibility that a material misstatement of the reporting issuer's annual or interim financial statements will not be prevented or detected on a timely basis."

If a non-venture issuer determines it has a material weakness that exists at the end of the annual or interim financial period covered by its filings, the New Instrument requires the issuer to disclose in its MD&A for the corresponding period and for each such material weakness:

  • a description of the material weakness;
  • the impact of the material weakness on the issuer's financial reporting and its ICFR; and
  • the issuer's current plans, if any, or any actions already undertaken, for remediating the material weakness.

There is no provision requiring mandatory remediation. However, if the issuer plans to remediate any material weakness, its plans must be disclosed.

Use of a Control Framework

The New Instrument requires that a non-venture issuer use a control framework to design its ICFR. Consistent with the requirements of the SEC, a suitable control framework under the New Instrument is one "established by a body or group that has followed due-process procedures, including the broad distribution of the framework for public comment." The control framework used must be named in both the issuer's interim and annual certificates.

The use of a particular control framework is not mandated. The new Companion Policy includes the following examples of suitable frameworks that could be used by an issuer to design ICFR:

  • Risk Management and Governance: Guidance on Control (COCO Framework) published by The Canadian Institute of Chartered Accountants;
  • Internal Control – Integrated Framework (COSO Framework) published by The Committee of Sponsoring Organizations of the Treadway Commission (COSO); and
  • Guidance on Internal Control (Turnbull Guidance) published by The Institute of Chartered Accountants in England and Wales.

Smaller issuers can make use of Internal Control over Financial Reporting – Guidance for Smaller Public Companies published by COSO. This is particularly relevant in light of the requirement that a venture issuer that chooses to file the full certificate (rather than the venture issuer basic certificate described below) for a financial period must use a control framework to design its ICFR.

Scope Limitations

Under the New Instrument, a non-venture issuer may limit the scope of its design of DC&P and ICFR to exclude controls, policies and procedures of a proportionately consolidated entity or a variable interest entity in which the issuer has an interest, but not sufficient access to design and evaluate DC&P or ICFR for the entity, or of a business that the issuer acquired not more than 365 days before the end of the financial period to which the certificate relates.4 If the scope is so limited, an issuer must disclose this limitation in its MD&A and provide summary financial information of the entity or business in the issuer's financial statements.

Venture Issuer Basic Certificate

The additional certification requirements discussed above are mandatory for non-venture issuers only. The New Instrument does not require venture issuers to include representations in their certificates pertaining to the establishment and maintenance of DC&P and ICFR, including any related MD&A disclosure. In fact, this significant change is already in effect for venture issuers in all jurisdictions of Canada in respect of financial periods ending on or after December 31, 2007.5

The New Instrument includes distinct forms of annual and interim certificates for venture issuers. These certificates contain an explanatory note to the reader identifying the material differences as compared to the full certificates required to be filed by non-venture issuers.

Alternative Certificate for Use Following Certain Transactions

Recognizing the considerable resources that an issuer must commit to complete an initial public offering or a reverse takeover, or to become a non-venture issuer, the New Instrument permits such issuers to file an alternative form of certificate for the first financial period ending after any such transaction.6 The alternative form of certificate is similar to the venture issuer basic certificate in that (i) it does not require the certifying officers to make representations relating to the establishment and maintenance of DC&P and ICFR, and (ii) it includes an explanatory note to the reader that sets out the differences between the alternative certificate and the full certificate generally required for non-venture issuers.

Exemptions for Cross-Border and Certain Other Issuers

The requirements of the New Instrument do not apply to (i) issuers that comply with U.S. federal securities laws implementing the annual and quarterly certification requirements under the Sarbanes-Oxley Act of 2002, provided that the issuer files on SEDAR its corresponding U.S. documents as soon as practicable after they are filed with or furnished to the SEC, and (ii) certain other foreign issuers, certain exchangeable security issuers and certain support issuers.

Expanded Guidance

The new Companion Policy is significantly expanded, and provides important guidance that is intended to assist issuers and certifying officers in designing, evaluating and certifying DC&P and ICFR. This guidance is with respect to, among other things:

  • individuals who may sign certificates in particular circumstances or on behalf of certain types of issuers;
  • considerations for the design and evaluation of operating effectiveness of DC&P and ICFR, including self-assessments, compensating controls and mitigating procedures;
  • evaluating the operating effectiveness of DC&P and ICFR;
  • an issuer's ICFR when using outside service providers;
  • identifying and disclosing deficiencies in ICFR or material weaknesses;
  • the role of directors and audit committees in relation to DC&P and ICFR;
  • certain long term investments; and
  • certification of revised or restated annual or interim filings.


1. A copy of the New Instrument is included in Notice of National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, which may be obtained at .

2. For a summary of the proposed changes released on April 18, 2008, see our McCarthy Tétrault Legal Update — Canadian Securities Administrators Propose Revised Certification Requirements — Proposed National Instrument 52-109, published June 3, 2008 on our website.

3. A venture issuer is defined in the New Instrument as "a reporting issuer that, as at the end of the period covered by the annual or interim filings, as the case may be, did not have any of its securities listed or quoted on any of the Toronto Stock Exchange, a U.S. marketplace, or a marketplace outside of Canada and the United States of America other than the Alternative Investment Market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc."

4. This limitation is only applicable to an annual certificate relating to the financial year in which the issuer acquired the business and an interim certificate relating to the first, second or third interim period ending on or after the date the issuer acquired the business.

5. Pursuant to existing blanket orders and similar exemptive relief and guidance issued by each CSA jurisdiction that will be revoked once the New Instrument comes into force on December 15, 2008.

6. Form 52-109F1 — IPO/RTO, Certification of Interim Filings Following an Initial Public Offering, Reverse Takeover or Becoming a Non-Venture Issuer and Form 52-109F2 — IPO/RTO, Certification of Interim Filings Following an Initial Public Offering, Reverse Takeover or Becoming a Non-Venture Issuer.

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 Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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