Appellate Quarterly (February 2026) – Key Takeaways

On February 18, 2026, McCarthy Tétrault’s National Appellate Litigation Group hosted its first Appellate Quarterly webinar of the year, highlighting five appeals of importance to the business community and the development of the law around the country. Jessica Mank, Simon Bouthillier, Jocelyn Turnbull Wallace, Richard Lizius, and Adam Goldenberg discussed these recent appellate developments and future trends to watch in each region.

Western Canada

Limitation periods can be considered at the class action certification stage (British Columbia)

In Reichert v. Canada (Attorney General), the Court of Appeal for British Columbia held that limitation periods may be considered at the class action certification stage.

In 2011, the RCMP raised concerns internally about the care provided to RCMP members by a registered psychologist under their health benefit plan. The RCMP accessed and disclosed the health records of its members to make a complaint to the College of Psychologists of British Columbia. After discovering that their personal health information had been disclosed in support of the complaint, several RCMP members complained to the Privacy Commissioner in July 2013. In October 2015, more than two years later, they commenced a proposed class action.

The chambers judge found that the limitation period issues could be considered at the certification stage, and refused to certify the class action. On appeal, the Court of Appeal upheld that decision, distinguishing prior authorities that cautioned against addressing limitation periods at certification in considering whether the pleadings disclose a cause of action. The Court of Appeal held that limitation issues may be considered as part of the “preferable procedure” criterion under s. 4(1)(d) of the Class Proceedings Act, from both an access to justice and judicial economy perspective.

Takeaways:

• Courts may consider limitation issues under the s. 4(1)(d) “preferable procedure” analysis at certification without requiring preliminary motions.
• The decision provides a potential new tool for defendants resisting certification in British Columbia.
• It is likely that only in exceptional circumstances will limitation periods be considered in the assessment of whether the pleadings disclose a cause of action under s. 4(1)(a).

Quebec

Leave is not always required to appeal a decision rendered in the context of CCAA proceedings

In Cantore v. Bourassa, the Court of Appeal of Quebec considered when leave to appeal is required under s. 13 of the Companies’ Creditors Arrangement Act (“CCAA”).

Mr. Cantore transferred mining claims to Nemaska Lithium Inc. in 2009 in exchange for a royalty. However, he alleged that misrepresentations and faults made by Nemaska’s former directors and officers caused the mining project to fail and made it impossible for him to collect his royalty. In 2020, the motion judge approved the transactions and issued a reverse vesting order (RVO) which included a broad release in favour of present and former directors and officers, subject to an express carve‑out under s. 5.1(2) of the CCAA. In 2021, Mr. Cantore sued those former directors and officers. The motion judge held that the release barred the claim and that Mr. Cantore’s pleadings lacked specific facts to engage s. 5.1(2) of the CCAA or to establish civil fault.

On appeal, the Court of Appeal of Quebec considered whether Mr. Cantore was entitled to an appeal as of right under Quebec’s Code of Civil Procedure or whether leave was required under s. 13 of the CCAA. The Court applied the three‑part “purpose-focused” test established by the Court of Appeal for Ontario in Essar Steel Algoma Inc. (Re) to determine if the judgment was “made under” the CCAA:

1. Was the order or decision rendered in the context of proceedings under the CCAA?
2. Was the advancement or pursuit of the purposes of the CCAA at the core of the judge’s discretion?
3. Was the judge also supervising the reorganization of the financial affairs of the debtor company (or companies)?

The Court of Appeal of Quebec ultimately concluded that leave was not required. Although the impugned order was rendered in a CCAA court file, the Court found that the judge was not a supervising judge pursuant to the CCAA, and the dismissal of Mr. Cantore’s claims against the former directors did not advance the remedial objectives of the CCAA.

Takeaways:

• Not every decision rendered in a CCAA court file requires leave to appeal.
• Courts will look to the substance and purpose of the order, not merely the procedural context.
• Counsel should keep those criteria in mind at first instance to determine how to frame their pleadings and whether to file them in a civil or CCAA court file.
• The Essar test is the applicable test to determine whether leave to appeal is required under s. 13 of the CCAA.

Atlantic Canada

Courts will not grant declarations of Aboriginal title over privately held fee simple lands absent landowners’ participation in such proceedings (New Brunswick)

The Court of Appeal of New Brunswick’s decision in J.D. Irving Ltd. v. Wolastoqey Nation has important implications for the interaction between Aboriginal title claims and privately held fee simple lands.

The Wolastoqey Nation sought declarations of Aboriginal title over the western half of New Brunswick which included both Crown lands and privately owned lands. The claim specifically named certain industrial private landholders, but left other private land holders unnamed and therefore strangers to the claim. The three industrial landholder defendants (appellants) brought three motions to strike portions of the statement of claim. Although the lower court struck the claims against the private landowners for having no reasonable prospect of success, it left open the possibility of a declaration of Aboriginal title affecting their lands. More specifically, the lower court found that it was not plain and obvious that Wolastoqey Nation was precluded from bringing its claim against the Crown for a declaration of Aboriginal title over the private landowners’ fee simple lands and an order for recovery of the lands in question.

The appellants appealed that decision. On appeal, the Court of Appeal found that a claim for a declaration of Aboriginal title can only be brought against the Crown because it holds a direct legal relationship with the Wolastoqey Nation and therefore the private landowners were rightfully removed from the claim. Further, once private landowners are no longer parties to the action, the Court cannot make a declaration that may impact their fee simple lands as this would violate their procedural fairness rights.

Takeaways:

• Aboriginal title claims are fundamentally and structurally claims against the Crown, not private parties.
• Courts will not grant declarations of Aboriginal title over private fee simple lands because courts cannot make declarations that impact private landowners who are not parties to the action.
• Findings versus declarations. Courts may make findings of Aboriginal title over private lands to ground Crown liability in damages but cannot issue declarations that would become binding on those lands and impact the rights of existing private landowners.
• The decision underscores the importance of reconciliation that accounts for both Indigenous rights and the interests of non-Indigenous landowners.

Federal Courts

The federal government has broad authority to regulate toxic substances

In Canada v. Responsible Plastic Use Coalition, the Federal Court of Appeal upheld the federal government’s decision to list “plastic manufactured items” as a “toxic substance” under the Canadian Environmental Protection Act (“CEPA”).

In 2021, the Governor in Council listed “plastic manufactured items” as a “toxic substance” under Schedule 1 of the CEPA. A group of respondents with an interest in the plastic industry challenged this order. CEPA involves a two-step process to regulate a substance: (1) the substance must first be listed as a “toxic substance” under s. 90(1), then (2) it can be regulated under s. 93(1). The order under appeal only concerned the first step – it dealt only with listing and not with actual regulation. A “toxic substance” is defined under s. 64 of the CEPA as one that “is entering or may enter the environment” in quantities that “have or may have an immediate or long-term harmful effect” on the environment, or on human life or health.

The Federal Court found that the order was too broad because not all plastics enter the environment and cause harm. Moreover, the word “substance” is singular and the Federal Court found that “plastic manufactured items” were not a “substance” under the CEPA. The Attorney General appealed that decision.

On appeal, the Federal Court of Appeal overturned the Federal Court’s decision and upheld the underlying order. The Court of Appeal rejected arguments that the listing was overbroad or unconstitutional. Under the CEPA’s two‑step regulatory scheme, listing a substance as “toxic” does not itself impose prohibitions, it merely opens the door for future regulation. The Court of Appeal concluded that the Federal Court had misunderstood the scheme: the CEPA only required that the substance may enter the environment and may cause harm; any regulation is left for the second step, where the list would likely be narrowed.

The Court of Appeal also addressed the challenge of reviewing regulation-making decisions where no formal reasons are required, holding that reviewing courts may look to contextual documents such as regulatory impact analysis statements (RIAS) and scientific assessments.

Takeaways:

Environmental Law

• Plastic-manufactured items may be listed as a “toxic substance” under the CEPA.
• Listing plastic manufactured items as a “toxic substance” does not infringe on provincial jurisdiction, but operative regulations themselves might, and may be challenged.
• The decision reinforces the breadth of federal environmental regulatory authority while leaving open the possibility of future challenges to specific downstream regulations.

Administrative Law

• Subordinate legislation is reviewed on the reasonableness standard.
• A reviewing court should always start with the reasons under review, not its own independent analysis of the statutory scheme. That means that reviewing courts must be careful not to "make [their] own yardstick and then use that yardstick to measure what the administrator did“.
• Courts reviewing regulation-making decisions may rely on context absent formal reasons.

Constitutional Law

• The environment is a matter of shared jurisdiction between the federal and provincial governments.
• The mere potential for a power to be misused does not render it unconstitutional.

Supreme Court of Canada

“Material change” under securities legislation should be interpreted broadly

Lundin Mining Corp. v. Markowich is the Supreme Court of Canada’s first major securities law decision in a decade. In Lundin, the Supreme Court adopted a broad interpretation of “material change”.

The case arose from a rockslide at Lundin Mining Corporation’s Chilean mine and the company’s allegedly delayed disclosure of the incident. The central issue before the Supreme Court was whether the rockslide constituted a “material change” requiring immediate disclosure under Ontario’s Securities Act. Lundin disclosed the rockslide approximately one month after the incident in a news release as part of a routine operational update. Lundin’s share price declined 16% after the disclosure.

Mr. Markowich, a minority shareholder in Lundin, sought leave to commence a proposed class action against Lundin and several of its officers and directors. Mr. Markowich alleged that the instability and rockslide were “material changes” that Lundin failed to disclose in a timely manner under s. 75(1) of the Securities Act.

In a 8-1 decision, the majority of the Supreme Court held that “material change” should be interpreted broadly and has two components. First, there must be “a change in the business, operations, or capital of the issuer”. This includes developments that do not go to the “core” of the issuer’s business and that do not “significantly” or “substantially” alter the issuer’s operations. Second, the change must be “material”, meaning that it “would reasonably be expected to have a significant effect on the market price or value of the securities” of the issuer.

The Supreme Court also addressed the test for leave under s. 138.8(1) of the Securities Act, holding that the required “plausible analysis” is not a plausible statutory interpretation, but rather a plausible application of the legislation (which must be interpreted correctly) to the facts.

In dissent, Justice Côté held that the majority’s interpretation was overly broad and risked over-disclosure and increased compliance burdens. She instead held that “material change” should be confined to changes in the issuer’s core or high‑level business, operations, or capital.

Takeaways:

• Disclosure obligations continue to be flexibly construed by the courts: a “change is a change”.
• Materiality remains the key limiting principle in disclosure obligations.
• Courts must correctly interpret securities legislation when assessing whether there is a reasonable possibility of success at the leave stage.
• The s. 138.8(1) leave test requires a plausible analysis of the applicable legislative provisions and some credible evidence, not a mere plausible interpretation.