Andrew MacDougall, John M. Valley
May 8, 2020
Last updated on May 19, 2020
For further information on the changes below, please contact one of the authors above or any member of our Corporate Governance Group.
The COVID-19 pandemic has prompted a flurry of activity by Canadian regulatory and governmental bodies to permit delays in complying with continuous disclosure requirements. However, corporate law restrictions will limit some of the flexibility afforded under securities legislation and stock exchange rules.
Delaying the annual meeting
TSX and TSX-V
Both the Toronto Stock Exchange and the TSX Venture Exchange have waived their requirement that companies hold their annual meeting within six months following the end of their fiscal year; provided that the annual meeting is held on or before December 31, 2020.
Canadian securities law does not impose a deadline for holding an annual meeting. However, it does prescribe disclosure which is required to be included in the proxy materials sent to shareholders. In the case of executive compensation disclosure, National Instrument 51-102 requires the disclosure to be filed within 140 days following the issuer’s fiscal year end, or 180 days following the issuer’s fiscal year end in the case of venture issuers. However, blanket rulings issued by each Canadian securities regulator on May 1 (the May 1 Rulings) now provide relief from the filing requirement provided that a press release is issued and the disclosure is included in a proxy circular that is filed on or before December 31, 2020.
Canadian corporate laws impose a deadline for holding an annual meeting that is linked to a period of 15 months from the corporation’s last annual meeting. For corporations with December 31 fiscal year ends that held their last annual meeting in May of last year, that 15-month period will end this August.
Many corporate statutes require that the annual meeting actually be held within that 15-month period. By government order, the deadline for holding a meeting required to be held under the Companies Act (Nova Scotia) is 90 calendar days after the last date of the declared state of emergency in Nova Scotia. The BC Registrar of Companies will allow companies incorporated under the Business Corporations Act (British Columbia) to delay their annual meeting for a period of up to six months. However, the provincial and territorial governments in Alberta, New Brunswick, Yukon, Nunavut and Northwest Territories have yet to provide similar extensions and, accordingly a court order would be required to permit a corporation subject to the corporate legislation of these jurisdictions to delay holding its annual meeting past the 15-month deadline.
In Alberta, temporary relief from convening an in-person annual meeting has been granted by ministerial order. However, the automatic postponement in Alberta is only available if the deadline for holding the annual meeting under the corporate statute happens to land on a date during the provincial state of public health emergency, which is currently in effect until June 15, 2020.
Although the Business Corporations Act (Québec) also requires that the annual meeting be held within the 15-month period following the last annual meeting, it would not be possible to hold the meeting more than six months following the fiscal year end as a result of the statutory requirement to place before shareholders audited financial statements for a fiscal year ended not more than six months before the annual meeting.
Under the Canada Business Corporations Act (CBCA) and Business Corporations Act (Prince Edward Island), corporations are required to call an annual meeting within the 15-month period or, if earlier, within six months following the end of the company’s preceding fiscal year. As a meeting is called by sending a notice of meeting to shareholders entitled to notice, and as the record date for determining shareholders entitled to notice cannot precede by more than 60 days the date of the meeting, in those jurisdictions the meeting could be held almost 60 days after the deadline for calling the meeting. For corporations with December 31 fiscal year ends which held their last annual meeting in May of last year, the meeting must be called by the end of June and could be held towards the end of August. A corporation governed by the CBCA or the Business Corporations Act (Prince Edward Island) looking to delay calling their meeting to a later date would need to obtain a court order in order to do so. Glacier Media Inc. and GVIC Communications Corp. obtained a court order extending the deadline for their annual meetings to the end of this year.
In other Canadian jurisdictions, the annual meeting only needs to be called within the 15-month period. Those jurisdictions also require that the record date not be more than 60 days prior to the meeting date and, accordingly, corporations in such jurisdictions which held their annual meetings in May 2019 can wait until August to send a notice of meeting which may be held as late as October. In Ontario, temporary relief from the annual meeting deadline was initially granted by government order and subsequently enacted by a statutory amendment. However, the automatic extension in Ontario is only available if the deadline for holding the annual meeting under the corporate statute happens to land on a date when the provincial state of emergency is in effect, or within 30 days following the termination of the provincial state of emergency. As the duration of the state of emergency is uncertain, it is unclear whether the amendment will provide any effective relief for corporations governed by the Business Corporations Act (Ontario). As a practical matter, the meeting will still need to be called within the 15-month period and any delay in holding the meeting beyond 50 days from that date would require fixing a new record date and, with it, the cost associated with updating and resending the management information circular and other proxy materials to the shareholders of record on that new record date.
If a corporation has a December 31 fiscal year end and is required under its corporate statute to hold its annual meeting within 15 months of the date of its last annual meeting or to call its annual meeting within six months of its fiscal year end, it will be necessary to take action soon to set a record and meeting date or, if available, to seek a court order permitting a delay in the meeting date.
Delaying the financial statements
Securities law filing requirements
On March 23, 2020, securities regulatory authorities across Canada issued blanket rulings (the March 23 Rulings) providing flexibility to issuers who need it to delay filing their audited annual or unaudited interim financial statements and related MD&A. For any filing deadline between March 23 and June 1 inclusive, an issuer can take up to an additional 45 days to complete the filing if the issuer:
- prior to the normal filing deadline, issues a news release in which the issuer
- states that it is relying on the blanket rulings and its management and other insiders are subject to an insider trading black-out
- discloses the estimated date by which the disclosure is expected to be filed
- provides an update on any material business developments since the date of the last annual financial statements or interim financial reports that were filed (or confirms there have been none)
- no later than 30 days after the first day of the extension period (and every 30 days thereafter) issues, and files on SEDAR as soon as reasonably practicable, a news release providing an update on any material business developments since the date of the last update release.
Securities law delivery requirements
If an issuer is relying on the March 23 Rulings to delay filing their audited annual financial statements and related MD&A, they can also delay delivery of those materials to shareholders beyond the deadlines for delivery required under National Instrument 51-102. Where the issuer has chosen to deliver the audited annual financial statements and related MD&A only to those who requested them, the March 23 Rulings provide for a delay of up to 45 days from the deadline for sending them (i.e., up to 55 days from the date they would originally have been required to be filed on SEDAR, being May 23, 2020 for an issuer with a December 31 fiscal year end). Where the issuer has chosen to deliver the audited annual financial statements and related MD&A to all its registered shareholders and beneficial owners, it need not send them until it sends out its management information circular for its annual meeting.
However, the May 1 Rulings provide additional relief with respect to the requirement to send the audited annual financial statements and MD&A. For issuers that sent request forms to registered and beneficial shareholders in 2019 in respect of the issuer’s 2020 annual financial statements and MD&A, materials need only be sent to shareholders who requested them on or before December 31, 2020. Issuers that did not send such a request form in 2019 are not required to send an annual request form this year, but such issuers are required to send audited annual financial statements and MD&A to all of the issuer’s registered shareholders and beneficial owners on or before December 31, 2020.
Corporate law delivery requirements
Under section 155 of the CBCA, directors of a public corporation must place before their shareholders at any annual meeting comparative audited financial statements relating to a period ended not more than six months before the annual meeting. Those financial statements are required to be sent to registered shareholders prior to the annual meeting under CBCA section 159. If the annual meeting of a CBCA corporation is held more than six months after its fiscal year end, the corporation also would need to provide audited financial statements for an interim period since the end of the fiscal year to satisfy this requirement. However, the Director under the CBCA is empowered under section 156 to grant an exemption from such requirement if the Director reasonably believes that the detriment that may be caused to the corporation by the requirement outweighs its benefit to the public.
Similar obligations exist under the corresponding provisions in the corporate statutes of all other Canadian jurisdictions, although the Business Corporations Act (Québec) does not require those financial statements be sent to registered shareholders prior to the annual meeting. However, public corporations governed by the statutes in British Columbia and Ontario would not need to arrange for an audit of the interim financial statements to be placed before the meeting and sent to shareholders as a result of differences in the statutory language. In addition, in Ontario by government order public and non-public corporations holding their annual meeting between March 17, 2020, and the 120th day after the termination of the state of emergency in Ontario only need to provide the annual financial statements for the preceding year. For most of the remaining jurisdictions, there is authority to seek an exemption from the obligation to provide audited interim financial statements similar to the authority afforded under the CBCA.
The authors would like to acknowledge the invaluable assistance of Emery White in preparing this Update.
 See Business Corporations Act (British Columbia), s. 182(1); Business Corporations Act (Alberta) s. 132(1); Business Corporations Act (Québec), s. 163; Business Corporations Act (New Brunswick), s. 85(1); Companies Act (Nova Scotia), s. 83(1); Business Corporations Act (Yukon) s. 134(1); Business Corporations Act (Nunavut) s. 134(1); Business Corporations Act (Northwest Territories) s. 134(1).
 See Business Corporations Act (Québec), s. 225
 Glacier Media Inc. (Re), 2020 BCSC 591 (CanLII)
 See Business Corporations Act (Saskatchewan), s. 127(a); The Corporations Act (Manitoba), s. 127(a); Business Corporations Act (Ontario), s. 94(1); Corporations Act (Newfoundland and Labrador), s. 217(a). Certain of these statutes also provide that the notice of meeting cannot be dated more than 50 days prior to the date of the meeting.
 Business Corporations Act (British Columbia) s. 185.; Business Corporations Act (Alberta) s. 155 and s.159; Business Corporations Act (Saskatchewan) s. 149 and s. 153; The Corporations Act (Manitoba), s. 149, s.153 and s. 154; Business Corporations Act (Ontario), s. 154; Business Corporations Act (New Brunswick), s. 100 and s.103; Corporations Act (Newfoundland and Labrador), s. 258 and s. 262; Companies Act (Nova Scotia), s. 121(1); Business Corporations Act (PEI), s. 125 and s.128; Business Corporations Act (Yukon) s. 157 and s. 161; Business Corporations Act (Nunavut) s. 157 and s. 161; Business Corporations Act (Northwest Territories) s. 157 and s. 161.
 In Quebec, the financial statements to be placed before shareholders under s. 225 of the Business Corporations Act (Quebec) must be for a fiscal year ended not more than six months before the annual meeting and there is no authority under the statute to seek relief from such requirement.
 The exceptions are New Brunswick and Yukon.