Employers often use fixed-term employment agreements to limit their future severance costs owed to employees. Although that may be an effective approach in theory, the Ontario Court of Appeal’s recent decision in Howard v. Benson Group Inc, 2016 ONCA 256, reminds employers that an improperly drafted fixed-term employment agreement can be a costly approach in practice. (more…)
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In McGillivray Restaurant Ltd. v. R., the Federal Court of Appeal (FCA) recently provided welcome news to the Canadian tax community concerning the appropriate legal test for determining whether a person has “de facto control” (control in fact) over a corporation for tax purposes. The FCA’s clarification in McGillivray should have the practical effect of providing a higher level of certainty and comfort to taxpayers seeking advice on this important and pervasive issue in a variety of circumstances. (more…)
There was no error in granting partial summary judgment on more than $5 million dollars in gas facility invoices, the Alberta Court of Appeal held in SemCAMS ULC v Blaze Energy Ltd, 2016 ABCA 113, despite the gas producer’s objections that a trial was needed to determine the amounts owing. While the producer is free to pursue an audit of the disputed amounts and a counterclaim for any adjustments, it faces a current liability for the amounts invoiced. (more…)
Yesterday, the Supreme Court of Canada issued a unanimous decision in Daniels v Canada (Indian Affairs and Northern Development), 2016 SCC 12 declaring that non-status Indians and Métis are “Indians” under s 91(24) of the Constitution Act, 1867. The case has significant implications for non-status Indians and Métis people, reinforcing their rights to access federal programs and to negotiate for hunting, harvesting and land rights. While the case establishes clear federal jurisdiction, it also affirms that provincial jurisdiction may also apply if it does not impair the core federal power. (more…)
On April 5, 2016, the Foreign Corrupt Practices Act (FCPA) Unit of the U.S. Department of Justice’s (DOJ) Criminal Division announced a one-year pilot project designed to “motivate companies to voluntarily self-disclose FCPA-related misconduct.” The pilot project is significant, because it marks the formalization of long standing DOJ guidance encouraging voluntary disclosure and full cooperation for corruption violations and is the first time the DOJ has made a commitment as to the value of self-reporting. (more…)
The Extractive Sector Transparency Measures Act (ESTMA) has been in force since June 1, 2015. Entities that are listed on a Canadian exchange or meet certain size requirements and are engaged in the commercial development of oil, gas and minerals are required by ESTMA to file an annual report disclosing certain cash and in kind payments made by them to domestic and foreign governments. Reports required under ESTMA must be filed within 150 days of the entity’s financial year end, and must be accompanied by an attestation by an officer or director of the reporting entity. (more…)
Large law and accounting firms ostensibly bear little resemblance to traditional, small-scale partnerships. Nevertheless, in the recent Ontario Superior Court decision in Tim Ludwig PC v BDO Canada LLP, 2016 ONSC 2225, a partner’s expulsion serves as an important reminder that the bedrock principles of 19th century partnership law continue to apply to all partnerships today. (more…)
It’s Not Just About Tax Evasion
The “Panama Papers” story hit the international press this week. An anonymous source leaked 11.5 million documents from Mossack Fonseca, the Panamanian firm believed to be the world’s fourth largest provider of offshore legal services. The documents reveal the use of offshore holdings by thousands of entities and individuals around the world, including Canadian companies and residents of Canada. (more…)
Canadian corporate statutes require approval by a special majority of shareholders (two-thirds) of the “sale, lease or exchange of all or substantially all of the property of a corporation other than in the ordinary course of business.” In the current economic climate, where many corporations are selling assets in order to access capital, it is increasingly important that parties to an asset sale transaction carefully consider whether the transaction will trigger the shareholder approval threshold. (more…)
Are going private transactions on the rise? Conditions are ripe for an increased number of private equity-led buyouts of public companies.
In a “lower for longer” commodity price environment, Canadian energy and energy-services companies are facing difficult circumstances in preserving value. Total declines in market capitalization among Canadian oil and gas companies during the period from July 2014 to February 2016 are estimated to exceed $230 billion, based on available data from S&P Capital IQ (chart below). Management teams have been particularly hard hit: approximately $11.4 billion of those losses are attributable to shares and options held by management and other insiders.