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Alberta Eases Director Residency Requirements

Very soon, an Alberta corporation will no longer be required to have any Canadian citizens on its board of directors.  In addition, director resident information will no longer be collected.  The move is a feature of Bill 22, Red Tape Reduction Implementation Act, 2020 (“Bill 22”), which received Royal Assent on July 23, 2020.  The parts of Bill 22 that include these new director residency and information requirements are expected to be proclaimed in force on March 29, 2021. 

Bill 22 is part of a larger Government of Alberta mandate to attract business by reducing costs and regulatory burden for Alberta businesses.  The removal of the director residency requirements should be a welcome change for non-Canadian entities seeking to incorporate in Alberta. Finding a Canadian citizen to serve on one’s board had become a deterrent for some. These changes, combined with Alberta’s historically lower tax rates, friendly business environment and well regarded corporate laws, are aimed to help restore the “Alberta Advantage”.  

Until this change takes effect, businesses incorporated under the Business Corporations Act (Alberta) are required to have a minimum of 25% of their directors be Canadian residents and formal business cannot be conducted at board meetings unless 25% of the present directors are Canadian. Alberta will join Quebec, Nova Scotia, New Brunswick, Prince Edward Island and British Columbia as the Canadian provinces to not require any Canadians on a board of directors.  Notably, the Alberta legislature also chose not to mimic recent amendments to the Business Corporations Act (British Columbia) and the Canada Business Corporations Act requiring corporations to maintain a register indicating significant control over the corporation, including beneficial ownership information and shareholder rights to appoint directors. 

As noted, the Government of Alberta is making a concerted effort to attract business and investment in the Province.  Other recent and upcoming changes include: reducing the corporate tax rate, simplifying the limited partnership certificate filing and disclosure requirements, and establishing the Invest Alberta Corporation.   

To discuss the prospect of establishing a business in Alberta or if you have any questions about the effect of recent and upcoming legislative amendments, please contact your trusted McCarthy Tétrault advisor or one of the authors.



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