Proposed Changes To The CBCA: Directors Duties And Disclosure Obligations

On April 8, 2019, the Federal Government introduced Bill C-97, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2019 and other measures, which includes proposed changes to the Canada Business Corporations Act (CBCA). The changes will have varying impacts on federally incorporated businesses in Canada. The most significant and noteworthy provisions are as follows.

Directors and Officers—Best Interests Considerations

The CBCA requires directors and officers, in discharging their duties to the corporation, to "act honestly and in good faith with a view to the best interests of the corporation." Until the 2008 decision of the Supreme Court of Canada (SCC) in BCE Inc. v 1976 Debenture Holders, it was often believed that acting in the best interests of the corporation was tantamount to acting in the best interests of the shareholders of the corporation. However, the SCC confirmed that "directors owe their duty to the corporation, not