Three Questions With Jennifer Longhurst

Originally published in Diligence Market Intelligence September 2026.

Shareholder activism in Canada has historically been especially visible at small- and mid-cap companies with seemingly less activity targeting the larger end of the market. Is this changing?

From where I sit, large-cap activism is still robust. While a significant number of campaigns target small-cap and mid-cap issuers, large-cap activism in Canada just looks smaller in absolute terms given how our markets are structured. We have fewer large-cap issuers and fewer Canada-based investors capable of driving that scale of activism, so U.S. activists end up leading most of it.

Elliott Management's engagement at Lululemon Athletica and Browning West's push at CAE are two recent examples, and I expect that trend to continue.

It may also seem relatively less common in Canada because, as in the U.S., large-cap issuers tend to be more sophisticated targets with more robust governance structures in place, and some of Canada's biggest — like financial institutions and other regulated industries such as airlines — also carry foreign-ownership restrictions that can make activism harder, in turn making many large-cap issuers less susceptible to activism.

Lastly, lower liquidity in Canada relative to the U.S. may be playing a role. It’s harder for an investor to stealthily build a meaningful stake without tipping off the market, which is core for activists to create the return needed to make activism economic. That’s even more difficult when there isn’t a high volume of trading.

The opening halves of both 2025 and 2026 saw almost all activist seats secured via settlement at Canada targets. However, most of those won in the second half of last year came via a vote. What’s behind this mid-year gear change?

This is a real pattern and from what I'm seeing in my practice, I'd expect similar dynamics to continue into 2026 and beyond. Settling remains the norm in both Canada and the U.S. Part of that is driven by ISS and Glass Lewis recommendations, which often support some mix of both management's and the dissident's nominees, signaling that a complete win for either side isn't in the cards. So, campaigns rarely go to a vote. But timing matters.

Most AGMs happen in the first half of the year, so when activism surfaces and gets settled, that also typically lands in H1. The campaigns that spill into H2 are often fights that have been waging for months, frequently because a meeting that should have happened in H1 got postponed by the issuer or gets pushed out due to litigation, regulatory proceedings or other events. H2 meetings are also often those that were requisitioned by an investor outside of the usual AGM season, and so also frequently happen in H2.

Proxy contests feel personal at the best of times, and the longer a fight runs, the more defensive tools each side deploys — advance notice bylaws get adopted, meetings get delayed or postponed, regulatory complaints or hearings get brought, litigation ensues, and public campaigns and attacks get dragged out. In these cases, tensions are heightened and parties are much more hostile, so it becomes hard to walk the parties back to a settlement.

How are investors using exempt solicitations in the Canadian market?

All Canadian jurisdictions bar issuers and dissidents from soliciting proxies unless they've first mailed a proxy circular in prescribed form. However, there are two main exemptions in Canada that let investors — but not issuers — solicit without a proxy circular or the usual disclosures.

The first is the public broadcast exemption which permits solicitations through speeches, letters and press releases without mailing an information circular. If the investor is nominating directors, they still have to prepare and file — though not mail — a so-called “skinny circular.” This is the exemption Pershing Square used in its successful 2012 contest to replace a majority of the board at Canadian Pacific Railway, which I was involved in, and has been used regularly since.

The second, lesser-discussed exemption is known as the “fewer-than-15-shareholders” exemption which allows dissidents to privately solicit from up to 15 shareholders, with no prescribed disclosure at all — no circular, no timing restrictions. In my experience, the latter is a particularly good tool for a type of activist we're seeing frequently in Canada and the U.S. — the former founder or CEO with a sizeable existing stake who is trying to get their job back. They own a lot of stock, have strong investor relations, and know the business inside out – ideal conditions for a quiet campaign. I’ve leveraged the exemption in two recent cases where my investor clients successfully replaced the entire board of the target companies relying solely on that exemption.

Given how expensive and aggressive full-blown proxy contests have become and with voter turnout at shareholders’ meetings trending downwards, I expect investors to keep leaning on both of these tools.