In a much anticipated development, the Canadian Securities Administrators provided an update on the status of their proposals to regulate take-over bids and shareholder rights plans. While not publishing any detailed amendments at this time, all CSA members have joined together to announce that they are taking a harmonized approach that will ultimately result in amendments to take-over bid rules across Canada.
Mandatory “permitted bid” features
Specifically, the regulators propose to introduce amendments to the current take-over bid regime that would require all formal bids for Canadian public targets to contain the following mandatory features:
- a minimum bid period of 120 days (60 days longer than the standard permitted bid period);
- an irrevocable minimum tender condition requiring that more than 50% of the outstanding securities owned by persons other than the bidder and any joint actors be tendered and not withdrawn before the bidder can take up under the bid; and
- a 10-day bid extension period after the minimum tender condition is achieved and the bidder announces its intention to take up and pay.
While CSA Notice 62-306 clarifies that the 120-day period could be waived (to a minimum of 35 days) by the target board, provided it is in a non-discriminatory manner in the face of multiple bids, if applicable, it is not clear whether the remaining two features could be subject to a board waiver Continue Reading
In preparing and filing the preliminary prospectus, we have recently noticed that regulators are commonly responding with requests for further disclosure from issuers with mining properties in emerging markets. Often, the information requested is of the nature that you would expect should be included an annual information form (AIF) except that the nature of the information sought is not actually covered by the scope of required AIF disclosure.
As we’ve discussed in previous posts, regulators have in recent years increased the scrutiny over emerging market issuers. Specifically, the OSC undertook a targeted review of issuers with significant business operations in emerging markets in 2011 and released a notice outlining areas of concern in March 2012. Meanwhile, in November 2012, the OSC released a guide to assist boards and management of emerging market issuers in addressing the risks of doing business in emerging markets and satisfying their governance and disclosure obligations. The TSX and TSX-V also issued a consultation paper in December 2012 intended to identify the potential risks with listing emerging market issuers and to provide guidance to issuers with respect to applicable listing considerations. Continue Reading
On June 26, 2014 the Supreme Court of Canada recognized for the first time a First Nation’s aboriginal title over an area outside a reserve in Tsilhqot’in Nation vs. British Columbia.
Since then much has been written on whether the decision would have an adverse impact on natural and infrastructure development across Canada, with some columnists and think tanks being alarmed at the consequences the decision may have on projects. Continue Reading
Two weeks after the highly publicized Tsilhqot’in v. British Columbia decision, the Supreme Court of Canada has released another prominent decision in the area of Aboriginal law. The issue in Grassy Narrows First Nations v. Ontario (also referred to as Keewatin v. Ontario) was a narrow but important one – does a province (rather than the federal government) have the authority to approve logging, mining and other activities on Crown lands that are subject to treaty rights? The Court’s answer can be summarized as “yes, but only if the province has met its duty to consult.”
What is the significance of the case to industry?
The stakes in the case were high – a ruling against the province would have cast doubt on the validity of provincial approvals for forestry, mining and other activities on Crown lands that were surrendered by treaty. By rejecting that outcome, the Court has provided a pragmatic framework for dealing with surrendered lands, while ensuring that provinces respect treaty rights. This ruling should allow industry participants to breathe a little easier knowing that existing provincial approvals on surrendered lands are valid, provided the province’s duty to consult has been fulfilled. Continue Reading
While lawyers, analysts and journalists are depicting the Tsilhqot’in Nation v. British Columbia decision as “monumental”, “landmark”, “groundbreaking” and “historical”, the active participants (developers, Aboriginal groups and government) are asking: What does it mean? What does this change?
Despite the earth having apparently moved, one important principle has not changed following this decision. For parties desiring certainty in acquiring rights over lands claimed by First Nations, best practice remains to obtain consent from the affected groups, typically by way of a negotiated and binding agreement. However, the bargaining power now vested in groups that have viable claims to Aboriginal Title is undeniable. Where such a claim exists, the ability of governments to override Aboriginal concerns is significantly constrained.
There are no shortcuts to achieving a full understanding of the impact of this case, and to properly do so, one should (at a minimum) begin with the Calder case, decided by the Supreme Court of Canada in 1973. Indeed, any well-rounded study of the relevant issues involves tackling the cultural, legal, constitutional and above all, historical aspects of the problematic and contentious relationship between Aboriginal peoples and Canada, beginning well over a century ago…
As a starting point, or an alternative to delving into the complexities of Aboriginal law, we have prepared below a set of brief Q&As addressing the questions we are being asked about the case.
The Canadian Securities Administrators yesterday published proposed amendments to disclosure rules intended to tailor and streamline the disclosure required of venture issuers. According to the CSA, the proposed amendments are designed to focus venture issuers’ disclosure on information that reflects the expectations of venture issuer investors, while eliminating disclosure of less value.
To that end the proposal would, among other things (i) allow the MD&A requirement for interim financial periods to be satisfied through the filing of a streamlined “quarterly highlights” report where a venture issuer lacks significant revenue; (ii) implement a tailored form of executive compensation disclosure for venture issuers that would reduce the number of individuals for whom disclosure would be required to a maximum of three and reduce the number of years of disclosure to two; (iii) decrease the circumstances under which a venture issuer would have to file a business acquisition report by increasing the asset and investment test thresholds under which an acquisition would be considered “significant” from 40% to 100%; and (iv) reduce to two years the number of years of audited financial statements required in an initial public offering prospectus for an issuer seeking to become a venture issuer. With respect to certain of the proposals, issuers would be able to choose to comply with the existing requirements applicable to all reporting issuers or to comply with the new venture-specific requirements.
As we’ve previously discussed, the CSA’s earlier proposal to create a comprehensive regulatory regime for venture issuers, which would have consisted of a stand-alone rule and included corporate governance requirements, was shelved in 2013. While the CSA have retained some of the disclosure-related elements of the previous proposals, the amendments proposed today are intended to make targeted changes to existing rules.
The CSA are accepting comments on the proposal until August 20, 2014.
Last week, at the official opening ceremony of the Prospectors and Developers Association of Canada (PDAC) International Convention, Trade Show & Investors Exchange in Toronto, Ontario, Canada’s Minister of Natural Resources Joe Oliver provided an update on the federal government’s commitment to adopt a G8 initiative requiring disclosure of payments by Canadian mining and oil and gas companies to foreign and domestic governments.
In his address, Minister Oliver encouraged the provinces and territories of Canada to implement, through their own securities regulators, transparency and accountability by way of mandatory reporting standards for Canadian extractive companies. He noted that if adequate standards were not implemented by the provinces and territories, the federal government would enact legislation by April 1, 2015 to move the initiative forward. Continue Reading
Settling international investment disputes has changed for Canadians. With the coming into force of the Settlement of International Investment Disputes Act (the Act) on November 1, 2013, Canada has now ratified the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the Convention). The Convention is a multilateral international treaty which entered into force on October 14, 1966, and which has now been ratified by 150 of its 158 signatory countries (as of November 1, 2013). This facilitates international investment by providing a mechanism for settling disputes between governments and foreign investors. Although Canada signed the Convention in 2006 and passed the Act in 2008, ratification was delayed until all provinces and territories also passed implementing legislation.
Ratification means that Canada can join the International Centre for Settlement of Investment Disputes (the Centre), established in Washington D.C. by the Convention under the auspices of the World Bank. Canadian international investors can now take advantage of this forum for the conciliation and arbitration of investment disputes between countries that are parties to the Convention (Contracting States) and investors who are nationals of other Contracting States. Consent of the parties is required and cannot be unilaterally withdrawn once given. Continue Reading
On December 10, after three unsuccessful attempts in three years, Quebec’s National Assembly adopted Bill 70, An Act to Amend the Mining Act.
This success was made possible because the minority government received the support of the National Assembly’s third party, Coalition Avenir Québec (CAQ). The CAQ is keen to burnish its “common sense” credentials in the hope that it will be seen by the electorate as a credible alternative to the two parties that have dominated Quebec politics for nearly 50 years, the Parti Québécois and the Liberals.
Bill 70 was a quickly-adopted compromise. While the Bill did not introduce any conceptual surprises, it is fair to say that not all of its provisions were scrutinized in detail. As a result, some post-adoption assistance from government is required, preferably in the short term. Continue Reading
Last week, the Resource Revenue Transparency Working Group (Working Group) published a report entitled “Recommendations on Mandatory Disclosure of Payments from Canadian Mining Companies to Governments”, which resulted from more than a year of multi-stakeholder consultations, expert guidance, and a public comment process across Canada. The Working Group, which is comprised of Canada’s two largest mining industry groups (the Mining Association of Canada and the Prospectors and Developers Association of Canada) and two civil society transparency groups (Revenue Watch Institute and Publish What You Pay (Canada)) had originally issued a set of draft recommendations in June 2013 for the purposes of furthering consultations with stakeholders. The draft was issued two days after Prime Minister Stephen Harper announced that Canada was adopting a G8 initiative requiring disclosure of payments by Canadian mining and oil and gas companies to foreign and domestic governments.