Authors
Partner, Disputes, Toronto
Counsel, Disputes, Toronto
As governments across Canada announce their frameworks to reopen the economy, and provinces begin to gradually ease emergency restrictions, companies forced to close amid the COVID-19 pandemic will increasingly be in a position to resume operations. Since provincial states of emergency remain in place and public health guidance continues to impact companies for the foreseeable future, companies must adjust to operating within the context of the pandemic and adapt their operations.
Below we summarize key considerations companies should keep in mind in managing risk as they prepare to reopen and resume their activities under the “new normal”.
Keep apprised of new developments
Governments across Canada have committed themselves to a phased approach to restarting the economy. Emergency restrictions will be lifted in stages, and guidance for each stage will differ. In addition, governments have indicated that companies and the public should be prepared if reopening measures have to be scaled back quickly should there be widespread transmission following the lifting of emergency restrictions.
Companies should continually monitor government orders and directives to ensure compliance in an evolving state of affairs. This may include requirements to adjust their operations as needed. Companies should further be aware that as measures are put in place or lifted in real time, there may be some delay in publication of government orders, requiring companies to keep apprised of both formal orders and government announcements. Companies should seek clarity where necessary and take a conservative approach where there is a lack of clarity.
A list of emergency measures to date can be found here, and a list of reopening measures that have been implemented or announced to date can be found here. These are updated regularly.
Consider how government orders apply to your company
Companies should carefully consider how government reopening directives apply to their own companies, including any constraints on their operations. Not all companies will fall within the scope of those allowed by government to reopen. In addition, the majority of company reopenings are subject to certain constraints including maintaining physical distancing, curb-side pick up and other measures to operate in a safe manner. In many cases, governments have taken steps to publish industry-specific guidance. Companies should stay informed of all the government directives and guidance, and consider how to implement any necessary changes. This may be of particular concern to multi-jurisdictional companies, as measures may vary across provinces.
Government directives are often framed in general terms. Accordingly, whether any given company falls within their scope – and is thus permitted to resume operations – may at times be a matter of interpretation. Advice or clarity should be sought where it is unclear how a given order or set of guidelines applies to your company.
Continue to maintain safeguards
In all cases, companies should continue to maintain measures to limit the spread of COVID-19 both in the short-term and long-term. Physical distancing practices remain an essential piece of all reopening plans across the country, and companies should consider how they will promote and enforce these measures in their daily operations.
This includes not only formal requirements under emergency orders and restrictions on reopening, but also normal course health and safety obligations, which remain in force. Companies remain subject to their obligations pursuant to applicable occupational health and safety legislation as well as the Criminal Code and under the common law. Where companies fail to protect the health and safety of customers and employees, they may be subject to significant civil, regulatory and/or criminal liability.
For more information on ensuring safe work environments for employees, and other employment-related issues, please see our post The Employer’s COVID-19 Return to the Workplace Playbook, which outlines key considerations for employers when determining when and how to reopen their physical workspaces.
Be aware of risks and responsibilities
Companies should exercise caution when reopening to ensure they continue to comply with government orders and other regulatory requirements. Failure to comply with government emergency orders may result in regulatory liability including fines and imprisonment for management, and serious breaches of health and safety obligations may result in criminal liability. For further information, see our post here.
As well, if one’s company is a reporting issuer under Canadian securities laws, it must be conscious of its disclosure obligation as operation changes may be triggered. For further information, see our post here. Similarly, if operating within a regulated sector, companies should be conscious of sector-specific requirements.
While companies affected by COVID-19 are justifiably eager to begin operating again and over time return to a new normal, they should do so in a prudent manner. Companies should seek advice from counsel or clarity from government, or both, if it is unclear how the government orders in force at any given time apply to them, and to ensure they are compliant with restrictions in place upon reopening.
Communicate
Companies need to be sensitive to how the state of operations could impact all stakeholders: employees, customers, clients, suppliers, and regulators. As plans are operationalized, communicate intentions and expectations clearly to all those affected. Communication can bring clarity and can reduce anxiety expected from uncertainty. For further information, please see our posts:
- Board oversight during the COVID-19 pandemic: A checklist for directors
- Questions for directors to ask during the COVID-19 pandemic
- Room to move: delaying continuous disclosure obligations in 2020
- COVID-19 and financial distress: How directors can prepare
- Q1 disclosure in the age of COVID-19
- Canadian securities law issues raised for Canadian public companies by the COVID-19 pandemic
