Skip to content.

Timely Topics - September 2022 Edition

Timely Topics with McCarthy Tétrault curates the latest market trends on a monthly basis to help you stay informed of developments that can affect your business. This content is current as of September 6, but please connect with us if you have any questions on any of the topics below.

Here are this month’s trending topics:


1. Canada’s Increase in Bankruptcies: What Does it Mean?

With the US already seeing major signs of recession, experts are saying Canada is headed in the same direction. One clear indicator is the increase in bankruptcies filed by Canadian businesses which saw a 34% increase in Q1 2022 compared to the same time last year, representing the highest year-over-year increase in 30 years. Labour shortages, inflation, higher interest rates, supply chain disruptions, and the end of government pandemic relief measures are all contributing to the increase. Check out this recent article in Canadian Lawyer which features our partner, Lance Williams, on the trends in restructurings and insolvencies, including the rise of real estate restructurings in British Columbia, which were previously a rarity.

View spotlight%20icon

For an overview of Canadian insolvency proceedings, check out our Doing Business in Canada publication. Please connect with our Bankruptcy & Restructuring team if you’d like to discuss options and solutions for your business. 

2. The Dawn of AI Law: The Canadian Government Introduces Legislation to Regulate Artificial Intelligence in Canada

From healthcare to manufacturing to financial services, AI is becoming more integral to the sectors that drive the Canadian economy. Following in the footsteps of the US and Europe, Canadian legislators are poised to move beyond policy frameworks to adopt hard law relating to AI. Bill C-27, The Digital Charter Implementation Act, 2022, was introduced in Parliament for its first reading in June and is Canada’s second attempt at reforming federal privacy law. It introduces the Artificial Intelligence and Data Act (“AIDA”), an entirely new law which aims to regulate the development and use of AI in Canada. If adopted, the AIDA will become Canada’s first law specifically dedicated to regulating AI. The AIDA would introduce significant penalties that are greater in terms of magnitude than those found in Bill 64, Quebec’s recent Act to Modernize Legislative Provisions respecting the Protection of Personal Information.

View spotlight%20icon

New privacy legislation means that organizations across sectors should plan for a significant compliance effort. Please connect with a member of our Cyber/Data team to discuss what the proposed legislation could mean for your business. 

3. The Rise of Shareholder Activism in Canada and the U.S.: It’s Time to “Listen and Engage”

Shareholder activism continues to evolve across North America. 15+ years ago, leadership teams and boards were thought to be largely immune from activism, while today, they are encouraged to identify potential vulnerabilities and proactively mitigate the risks. In the U.S., new regulations (Rule 14a-19) from the Securities and Exchange Commission introducing universal proxies are expected to change the rules for proxy contests, and the implications for directors. In contrast, Canadian proxy solicitation rules have long permitted the use of universal ballots.  As the rules of the game continue to evolve, along with the tools and tactics used by issuers and activists engaged in activism-related situations, it is more important than ever for the key players to understand the surrounding landscape and how they may be impacted.

Conversations around ESG activism also continue to dominate headlines, with ESG-related campaigns enjoying mixed success. Nonetheless, it is anticipated that climate change, along with certain other priority ESG issues – including those relating to human capital, human rights, supply chain resiliency, cyber security and diversity – will remain dominant themes in upcoming activist campaigns. For a great overview and update on key trends and developments in shareholder activism, please check out this recent interview, Latest Shareholder Activism Developments in Canada and the U.S. with 13D Monitor, featuring our partner, Jennifer Longhurst.

View spotlight%20icon

Please connect with our Critical Situations & Shareholder Activism group to discuss the evolving key issues that affect your business, including in the areas of majority voting, early warning beneficial ownership reporting, ESG activism and universal proxies. 


4. Employee E-Consent: What You Should Know

A recent decision by the Supreme Court of Canada to deny leave to appeal in Battiston v. Microsoft Canada Inc., 2021 ONCA 727 has reinforced an Ontario Court of Appeal decision that held that employee consent via an internal e-consent process is valid and enforceable, and can apply to agreements that limit incentive compensation during common law notice periods.

What does this mean for employers? Well, employers who utilize automatic e-consent processes to communicate the terms of their incentive plans should note that proving employee agreement is important. Therefore, maintaining records of who consented, when and to what agreement is vital to the electronic process.  

View spotlight%20icon

Click here to read to our analysis of a similar case in which an employer’s e-consent procedure was upheld to be enforceable. Please connect with our National Labour & Employment group if you’d like to discuss your organization’s e-consent procedures. 


5. Is Canada’s Healthcare System in Crisis?

The healthcare industry is at an inflection point. The pandemic highlighted long-standing issues within Canada’s healthcare system, including supply chain challenges and staffing shortages. Healthcare groups are calling for a collaborative approach from federal, provincial and territorial governments fix Canada’s collapsing healthcare system. Those in the industry, including physicians, are asking policy makers to treat this crisis with urgency.

In the face the current crisis, the industry is also transforming. The role of “digital health” has been magnified by the pandemic. The market has seen changing patient preferences, rapidly evolving care models, and technological innovations. It was estimated that there are over 3,300 health tech start-ups in Canada. There is also ongoing regulatory reform in Canada affecting the industry, including, for example, relating to privacy and personal health information and Artificial Intelligence.

View spotlight%20icon

Our Health Industry Group has a finger on the pulse of the sector. If you’re interested in discussing the industry’s challenges and opportunities, please reach out to our Healthcare Group

This newsletter is designed to provide general information only. This newsletter does not provide legal advice on specific issues. You are encouraged to consult with legal counsel should you require assistance in addressing a particular issue or concern.


◄ August 2022 Edition


October 2022 Edition ►

Subscribe below to receive Timely Topics