Industry, investors divided on proposed Ontario capital market reforms – The Northern Miner

James R. Brown

Oct 5, 2020

Some of the capital markets reforms being proposed by Ontario’s Capital Markets Modernization Taskforce (the Taskforce) are intended to make larger, cross-border mining issuers’ lives “easier,” Osler partner James Brown tells The Northern Miner. In her article, author Kelsey Rolfe explores how the Taskforce was formed to make recommendations to the Minister of Finance regarding the effectiveness and competitiveness of Ontario’s capital markets. The Taskforce, which was set up in February 2020, released a set of 47 proposals, some of which could potentially impact mining issuers if implemented. The Taskforce sought comments by September 7, 2020, with a view to delivering a final report to the Minister of Finance by the end of 2020. James says that the impact of the proposed changes depends on the size of the mining issuer.

“[For] larger issuers that are cross-border, some of the proposals are intended to make their lives easier,” James tells The Northern Miner.

James pointed in particular to the proposal to incorporate a well-known seasoned issuer model for capital-raising, which would give “certain public companies a less burdensome registration process for a shelf prospectus.”

“[That’s] a proposal we think is going to be helpful to reduce regulatory burden,” James tells The Northern Miner.

James also says that conversely, “many junior miners won’t be able to take advantage of that system because they choose not to file annual information forms due to cost-constraints or other reasons, cutting them out of the short-form prospectus system.”

In Osler’s submission to the Taskforce, James noted that any move to semi-annual reporting would need to be harmonized across Canada to be effective.

“While many of the proposals present interesting ideas for Ontario’s capital markets, simply making changes in Ontario alone isn’t helpful,” James tells The Northern Miner. “Virtually all public companies in Canada report in more than one jurisdiction, so unless the changes are harmonized across the country, there is little benefit to making changes in Ontario to mining issuers, big or small, where they continue to have to comply with different standards in another province or territory.”

James added that Ontario should “attempt to more closely align its rules with the U.S., including those around testing the waters prior to a prospectus offering, as the U.S. markets provide a major source of capital for Canadian issuers.”

“We don’t want Canadian companies to decide, ‘I’m not going to bother with Canada because [it’s] too difficult, I’m only going to go public in the U.S. All that does is it prejudices Canadian investors.”

For more information, read author Kelsey Rolfe’s article “Industry, investors divided on proposed Ontario capital market reforms” on October 5, 2020, in The Northern Miner.