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Canada privacy laws: What U.S. businesses need to know

Tue, 10 Mar 2026 00:00:00 Z

If you are a consumer-facing business in the United States or are in the field of advising them on privacy matters, you are aware of the importance of privacy and data protection compliance.

Despite this awareness, too many companies and counsels tend to overlook the need to consider Canadian privacy laws, especially when engaging in cross-border commercial transactions, and overlooking at the same time Québec privacy law which has a strict regime comparable to the GDPR, with fines reaching up to $25 million or 4 per cent of global revenue.

To assume that U.S. and Canadian privacy laws are the same would be misleading. This page offers guidance on how U.S. businesses can navigate Canadian privacy laws. It provides an overview of Canadian privacy legislation, highlights key elements, and concludes with practical considerations to keep top of mind prior to engaging in and during commercial transactions.

Overview – Canada’s privacy laws

Canadian privacy laws do not contain residency restrictions, they apply regardless of the nationality of the individuals when their personal information is processed in Canada, but also regardless of where the data processing occurs – even outside Canada - when personal information of Canadians is processed. As such, U.S. organizations that process Canadian personal information may be subject to both U.S. and Canadian privacy laws.

Canada has a comprehensive federal privacy law, the Personal Information Protection and Electronic Documents Act (PIPEDA). PIPEDA governs how private sector organizations collect, use, and disclose personal information about individuals in the course of commercial activities.

PIPEDA applies across Canada, except in provinces that have enacted privacy laws deemed "substantially similar", notably Alberta (Personal Information Protection Act), British Columbia (Personal Information Protection Act), and Québec (Act respecting the protection of personal information in the private sector) – see BLG guide on Québec private sector Act here for more information. PIPEDA also applies to organizations that transfer personal information across provincial or international borders.

While the privacy laws in the provinces of Alberta and British Columbia are akin to PIPEDA, the privacy laws in the province of Québec are frequently compared to the European General Data Protection Regulation (GDPR) given its strong alignment with the regulation, including in terms of sanctions.

Last, in the employment context, PIPEDA applies only to federally regulated industries, such as banking, airlines, and railways.

Key elements of Canada’s privacy laws

1 – Consent

Canadian privacy laws are built around the principles of transparency and consent. Before collecting, using or disclosing personal information, organizations must ensure individuals understand and agree to the specific purposes for which their data will be used. Consent must be meaningful and clearly communicated in plain language. The form of consent, express or implied, depends mainly on the sensitivity of the information and the context.

That being said, Canadian privacy laws, depending on the province, may provide exceptions to these consent requirements in certain situations such as in an employment context, during a commercial transaction or a business context. These various exceptions highlight the need for businesses to tailor their privacy practices to the province with which they are dealing.

2 – Limitations

U.S. businesses operating in Canada must understand that indiscriminate data collection is not permitted. Canadian privacy laws mandate data minimization, meaning organizations may only collect personal information that is necessary for the identified purpose. Both the amount and type of data must be limited accordingly. Additionally, organizations are required to implement retention policies that ensure personal information is only kept for as long as needed to fulfill its purpose. Once the purpose is met, the data must be destroyed, erased or anonymized, unless retention is required by law.

Canadian privacy laws impose a reasonableness standard that applies regardless of consent. Organizations may only collect, use or disclose personal information for purposes that a reasonable person would consider appropriate under the circumstances. Privacy regulators apply a four-part test to assess this, notably whether: (1) the organization’s purpose represents a legitimate need/bona fide business interest, (2) the process would be effective in meeting this need, (3) there aren’t any less-invasive ways to achieve the same ends at comparable cost and with comparable benefits, and (4) the loss of privacy is proportional to the benefits. This element adds a layer of accountability that goes beyond consent, ensuring that an organization’s privacy practices are not only lawful, but also minimal and reasonable.

3 – Cross-border transfers

While Canadian laws are not as stringent as the GDPR in this area, U.S. businesses must still be aware of the requirements they must meet before transferring personal information of Canadian customers or employees to the United States.

At the federal level, PIPEDA requires organizations to remain responsible for personal information that has been transferred to a third party for processing, including those located outside Canada. PIPEDA requires organizations to use contractual or other means to ensure a comparable level of protection while the data is being processed. As well, the Office of the Privacy Commissioner’s (OPC) federal guideline explains that, in accordance with the obligation of transparency, organizations must notify the individuals concerned that information is being transferred outside Canada along with the fact that there is a risk foreign authorities may access it.

In Québec, the provincial law explicitly states the requirement of organizations to inform the person concerned of the possibility that the information could be communicated outside Québec and requires organizations to conduct a privacy impact assessment (PIA). The transfer may only proceed if the PIA concludes that the information will receive adequate protection considering the generally-recognized principles regarding the protection of personal information. Furthermore, a written contract is also required to govern the transfer, which is discussed further below in Section 6 – Data Processing Agreements. For more detailed guidance, we invite you to consult BLG’s bulletin on cross-border transfers.

4 – Breaches

U.S. businesses should be aware of Canada’s breach notification obligations. Canadian privacy laws require organizations to report to the competent privacy regulator and notify the individual (and any other organization it believes may be able to mitigate harm) of any breach of security safeguards involving personal information under its control if it is reasonable in the circumstances to believe that the breach creates a real risk of significant harm/risk of serious injury to the individual. Organizations must take reasonable measures to reduce the risk of injury and to prevent new incidents of the same nature. Organizations shall also keep and maintain a record of every breach that has occurred under its control, in accordance with specific regulatory requirements.

5 – Biometrics

With the rise of technologies like facial recognition and voice analysis, privacy regulators have begun to address the unique risks posed by biometric data. At the federal level in Canada, the OPC recently issued a new guidance on protecting privacy in biometric initiatives. The OPC guidance for private-sector organizations provides information on privacy obligations under PIPEDA and best practices for processing biometric information, such as identifying an appropriate purpose, obtaining consent, limiting its collection, use, disclosure, and retention, and issuing appropriate safeguards. BLG has analysed this guidance for you here.

While U.S. businesses should certainly read and comprehend the guidance, it is, nonetheless, their responsibility to ensure they understand all their obligations under applicable laws and regulations that apply to them. For example, privacy laws in Québec impose additional and stricter obligations with respect to biometric information. Organizations wishing to use biometrics are required to disclose this fact to the Commission d’accès à l’information (CAI) prior to implementation if they: (1) verify or confirm the identity using a process that captures biometric characteristics, and/or (2) create a database of biometric characteristics or measurements, in which case, disclosure must be made at least 60 days before the database is put into service.

6 – Data processing agreements

U.S. businesses operating in Canada should be aware of a common legal requirement when contracting with third party service providers involving personal information: the need for a data processing agreement (DPA). When a business engages a third party to process personal information on their behalf, Canadian privacy laws require that a DPA be in place. This agreement, either as a standalone contract or an addendum, ensures that service provider processes personal data in compliance with applicable privacy legislation.

Under PIPEDA, organizations remain responsible for personal information in their possession or custody, even when it is transferred to a third party for processing. To meet this obligation, organizations must use contractual means to ensure a comparable level of protection while the data is being processed. A DPA helps clarify the roles and responsibilities of both parties.

In Québec, DPAs are especially critical as these fall under one of the exceptions to obtaining consent, subject to specific legal requirements. The law requires that a DPA be made in writing and specify certain requirements such as: (1) the measures that the processor must take to protect the confidentiality of the personal information communicated, (2) a prohibition on using the data for any purpose other than fulfilling the contract and a requirement to delete it after the contract ends, (3) an obligation to notify the disclosing party without delay of any violation or attempted violation by any person of any obligation concerning confidentiality, and (4) the disclosing party’s right to conduct any verification relating to confidentiality requirements.

7 – Privacy-by-default

Depending on how a business intends to collect personal information, it should be aware of certain default privacy settings required under Canadian privacy laws, particularly in Québec, though similar principles are reflected in federal reports under PIPEDA.

Québec’s privacy law states that an organization that collects personal information using technology that includes functions allowing the person concerned to be identified, located or profiled must first inform the person of the use of such technology and, more importantly, of the means available to activate the functions that allow for such features. The term “profiling” includes the analyzing of a person’s work performance, economic situation, and health. This means that such functions must be deactivated by default, requiring users to take an affirmative action to signify their agreement to activate those functions. While PIPEDA does not contain an equivalent provision, the OPC has emphasized that technologies involving sensitive information such as precise location typically require express (opt-in) consent under their general consent rules.

In addition, under Québec’s privacy laws, an organization that collects personal information when offering to the public a technological product or service having privacy settings must ensure that those settings provide the highest level of confidentiality by default, without any intervention by the person concerned. This rule does not apply to privacy settings for browser cookies. Although PIPEDA does not contain a specific provision on default settings, the OPC has taken the position that these settings should be set in accordance with the reasonable expectations of individuals.

8 – Enforcement

U.S. businesses should be aware of Canada’s privacy enforcement structure. At the federal level, the OPC oversees compliance with PIPEDA. The OPC has the authority to investigate complaints, conduct audits, and issue reports containing non-binding recommendations. It can also enter into compliance agreements with organizations to encourage corrective action. However, the OPC’s enforcement powers are limited in that they cannot issue direct fines or binding orders. To enforce its findings, the matter must be brought before the Federal Court, either by the OPC or the complainant.

By contrast, provincial regulators have more robust enforcement powers. In Québec, the CAI has all the powers necessary for the exercise of its jurisdiction, which includes making an order it considers appropriate to protect the rights of the parties. There are three types of sanctions that the CAI can impose, notably: (1) an administrative monetary penalty of up to $10 million or 2 per cent of global turnover, (2) a penal penalty of up to $25 million or 4 per cent of global turnover, and (3) punitive damages of no less than $1,000 when the violation is intentional or results from gross fault.

In addition to privacy-specific regulators, the Competition Bureau of Canada plays a complementary role in privacy enforcement where privacy intersects with consumer protection and deceptive marketing practices. For instance, the Bureau in 2020 concluded its first privacy-related settlement with Facebook in which it agreed to pay a $9 million penalty for making false and misleading claims about the privacy of Canadians’ personal information on Facebook and Messenger.

Practical considerations and obligations for commercial transactions

This section outlines the practical considerations and obligations for U.S. businesses during commercial transactions in Canada. As a final note, we highlight four essential privacy and data protection elements to keep top of mind.

1 – NDAs require specific customization

Standard non-disclosure agreements (NDAs) may not meet the legal requirements in provinces like Québec where the law mandates specific language to protect personal information during a transaction. As generic templates often fall short of compliance, legal counsel familiar with the province’s privacy regime should review and tailor NDAs to ensure they reflect legislative obligations.

2 – Privacy due diligence is critical

During the due diligence phase of a transaction, it is essential to identify and assess specific legal privacy requirements. Even if a target organization may have a robust privacy framework, including detailed policies and procedures governing the processing of personal information from customers and employees, a thorough risk and gap analysis based on applicable provincial laws and regulatory guidance must be conducted by local counsel. This review may reveal compliance issues that can either be remediated post-closing or justify the inclusion of additional indemnity provisions in the share or asset purchase agreement.

3 – Post-closing notification obligations

Following a transaction, the acquiring entity may be required to notify affected individuals of changes in the possession or control of their personal information. Notifications must clearly inform individuals of the nature of the change, the new entity’s identity, and how their personal information will be used going forward. This may even trigger a requirement to obtain new informed consent if the purpose differs from those originally disclosed. Local legal advisors play a key role in crafting these communications to ensure they are tailored to the specific groups affected, written in plain language, and compliant with applicable provincial and federal obligations.

4 – Ongoing privacy management post-transaction

After closing, the new entity must promptly address any privacy risks identified during the due diligence process to avoid penalties and reputational damage. The new entity must establish an ongoing privacy management process, including proper training for its privacy officer and all personnel who process personal information. A local lawyer can provide ready-to-use templates and can help adapt existing policies and processes to ensure optimal compliance.

BLG can help

We hope that this article, including the four key privacy points, are carefully considered during your company’s next commercial transaction in Canada.

For tailored guidance, please reach out to BLG’s privacy team. We are here to help you navigate the evolving legal landscape.

Canada extends clean economy ITC filing deadlines

Fri, 06 Mar 2026 00:00:00 Z

Over the past few years Canada has introduced a series of “clean economy” investment tax credits (ITCs) designed to support Canada’s transition towards a net-zero economy by 2050. These new ITCs (described here) represent a major tax policy expenditure by the Canadian government, with tax credit rates as high as 60 per cent of qualifying expenditures.

The general rule for claiming clean economy ITCs in any given taxation year is that the prescribed form must be completed and submitted to the Canada Revenue Agency within the later of (1) one year following that year’s tax return filing due date (generally 6 months after the taxation year-end), and (2) Dec. 31, 2025, with no discretion for the Canada Revenue Agency to accept claims received after that deadline. This time limit may be ready attainable for most clean economy ITC claimants. However, in a number of cases it could be a challenge for taxpayers faced with interpretational uncertainty in understanding the rules and/or practical difficulties in ensuring compliance (in particular with the labour requirements in s. 127.46 of the Income Tax Act (Canada)) to meet this deadline.

In its omnibus legislation to implement various provisions of the federal budget of November 4, 2025, the federal government helpfully included provisions to extend the time in which taxpayers may file their clean economy ITC claims. Specifically, Bill C-15 proposes to amend the following provisions:

for the carbon capture, utilization and storage (CCUS) ITC, s. 127.44(17);
for the clean technology ITC, s. 127.45(3)
for the clean hydrogen ITC, s. 127.48(4);
for the clean technology manufacturing ITC, s. 127.49(3) ; and
for the clean electricity ITC, draft s. 127.491(6).

In each case, the amendment extends the deadline for filing clean economy ITC claims for any particular taxation year to the later of (1) one year after the tax return filing due date for that year, and (2) Dec. 31, 2026. For each particular clean economy ITC, the proposed amendment is applicable retroactively to the date on which expenditures for that particular clean economy ITC first became ITC-eligible. While this measure will be helpful for claimants of all clean economy ITCs, it will likely be of greatest assistance for taxpayers claiming the CCUS ITC, since that particular clean economy ITC has the earliest eligibility date (Jan. 1, 2022).

With Bill C-15 having cleared the House of Commons and now before the Senate, the enactment of this measure would seem fairly certain. The government is to be commended for taking action to give taxpayers more time to complete and verify their clean economy ITC claims, which is in the interests of both taxpayers and tax administrators.

Permanent establishment and remote work: OECD's 2025 update and your organization

Fri, 06 Mar 2026 00:00:00 Z

Since COVID-19, remote and hybrid work have permanently reshaped where people work, leading to real tax consequences for employers. On Nov. 19, 2025, the Organisation for Economic Co-operation and Development (OECD) released updates to the Model Tax Convention and its Commentary, introducing a clearer framework for assessing when a remote employee's home office may constitute a "permanent establishment" (PE) of their employer in another jurisdiction. Canadian organizations with cross‑border workforces may wish to review their existing structures and policies in light of these updates.

We note that the updates relating to the establishment of a PE are not changes to the treaty provisions themselves but rather to the Commentary.

What you need to know

The new two-part test

The updated Commentary to Article 5 introduces a structured analytical framework that focuses on two key factors, both of which are highly relevant in determining whether a fixed place of business PE exists.

First, the employee must work from a home office — or other non-traditional location — in a foreign country for at least 50 per cent of their total working time over any rolling 12-month period.
Second, there must be a genuine commercial reason for that person being physically present in that country, meaning their presence actually advances the employer's business there. For example: active client engagement, hands-on supplier management, or a role that requires meaningful local market participation.

Where either factor is absent, a fixed place of business PE will generally not arise, although the analysis remains fact‑specific.

What counts as a "commercial reason"?

The updated Commentary is explicit that employee preference, talent retention goals, and office cost savings do not qualify as commercial reasons. Nor do occasional visits to clients — the OECD commentary specifically notes that quarterly meetings, without more, would generally fall short of the standard. What does qualify is presence that materially facilitates the employer's business in that jurisdiction: regular local client interaction, supplier oversight, time zone coverage that meaningfully improves service delivery, or collaboration with local institutions.

However, even where no commercial reason exists, the PE analysis is not automatically closed. All relevant facts and circumstances must still be weighed, and other indicators could nonetheless support a PE finding.

Dependent agent PE

It should also be noted that the 2025 update does not alter the dependent agent PE analysis, which remains a separate and, in many cases, more significant source of PE risk where employees are habitually involved in contract negotiation or conclusion on behalf of their employer in other jurisdictions.

Takeaway: What this means in practice

The updated Commentary can impact certain arrangements for cross-border employers.

Historically, where, for example, a U.S. employer had Canadian employees working from home in Canada performing a sales function, the prevailing advice was that those employees would not, in and of themselves, create a Canadian permanent establishment, provided the employer did not have the home workspace at its disposal.

Following the Nov. 19, 2025 update to the OECD Commentary, this conclusion is no longer as robust. Where a Canadian‑based employee performs core sales activities from home on a regular and sustained basis, and where there is a commercial reason for those activities to be carried on in Canada, the risk that the home workspace could be viewed as constituting a fixed place of business permanent establishment has increased, even if the formal indicia of employer control over the workspace have not materially changed.

For other organizations, the new framework confirms that cross-border employees working remotely for personal reasons without any real local business purposes should not inadvertently create greater PE exposure than under previous guidance. Companies that maintain small foreign subsidiaries for just one or two employees may also find it worth revisiting whether those entities are still necessary.

While OECD Commentary is not binding on Canadian courts, it is a well-established interpretive tool in applying Canada's tax treaties. Further, if the Canada Revenue Agency (CRA) accepts and assesses taxpayers on the principles in the updated Commentary, deviation from those rules could result in costly dispute procedures before a court will evaluate the applicability of the updated Commentary in Canada. As of the date of publication, the CRA has not issued a formal administrative statement expressly confirming whether it will adopt or apply the revisions to the OECD Commentary on PEs. However, Canada has not filed a reservation or observation objecting to the updates to the commentary on PEs. Historically, Canadian courts and the CRA have treated OECD Commentary as a persuasive, though not determinative, aid to treaty interpretation.

Organizations should use this update as an opportunity to audit their cross-border remote work arrangements, build rolling 12-month work-location tracking into their HR and tax processes, and document the business rationale for any arrangements that approach or exceed the 50 per cent threshold.

BLG can assist

BLG's Tax Group and Labour and Employment Group regularly advise Canadian and multinational organizations on cross-border tax structuring, permanent establishment risk, and global mobility matters. If you have questions about how these changes apply to your workforce, please reach out to a member of one of those groups.

Hold the housewarming party: Three FHSA considerations before making a down payment

Thu, 05 Mar 2026 00:00:00 Z

The First Home Savings Account (FHSA) emerged as a federal policy response to the growing housing affordability challenges faced by first time home buyers, particularly younger Canadians. Legislation establishing the FHSA received royal assent in late 2022, formally embedding the account into Canada’s registered savings framework.

Since its launch, the FHSA has been administered by the Canada Revenue Agency (CRA) who has provided guidance via interpretive updates and technical clarifications. A review of these interpretive documents provides insight into some of the planning that can be considered when leveraging the tax-free nature of the FHSA.

Previous BLG articles relevant to the subject of FHSAs include Canada’s First Home Savings Account and Mr. Grenon’s legendary RRSP and its implications for Registered Plan Trustees.

1. Combination with Home Buyers’ Plan (HBP)

The FHSA was first introduced in the 2022 federal budget and included FHSAs as a measure of supporting first-time home buyers and to encourage tax-free savings for a down payment on a newly purchased home.

The original draft income tax legislation (August 9, 2022), provided that although the HBP would continue to be available, an individual could not utilize both the HBP and the FHSA for the same purchase. This effectively resulted in a taxpayer having to make a choice as to which approach would be best for their particular circumstances.¹ Later legislative amendments removed those restrictions, which no longer appear in the Income Tax Act (ITA).²

Under the currently enacted version of the legislation an individual can withdraw amounts under both the HBP and FHSA for the same home purchase. This intention has been made clear in CRA Doc No 2023-0965261E5-T (unofficial translation), in which the CRA acknowledges:

Parliament's intent was to allow an individual to benefit from both the FHSA and the HBP for the same qualifying home. When the FHSA measures were announced in the 2022 Budget, it was announced that it would not be possible for an individual to make both a FHSA withdrawal and a Registered Retirement Savings Plan (RRSP) withdrawal under the HBP for the acquisition of the same qualifying home. However, this restriction has been dropped and does not appear in the Act.³

The revised FHSA framework is better aligned with its core objective: giving first-time home buyers access to more tax-free funds, while also offering flexibility through additional tax-deductible contributions.

2. Double deduction strategy

The ability to access both the HBP and the FHSA raises a unique situation where a double tax deduction can be utilized. More specifically, a taxpayer can withdraw funds from an RRSP under the HBP, contribute those same funds to an FHSA (subject to FHSA contribution limits and conditions), and then make a qualifying FHSA withdrawal tax-free to purchase a home. The funds contributed to the RRSP receive a deduction when they are first contributed to the RRSP, and those same funds when withdrawn under the HBP and deposited into an FHSA will be eligible for another deduction. The individual could then withdraw these amounts from his or her FHSA tax-free for the purpose of acquiring a qualifying home, subject to satisfying conditions under the ITA.⁴

The CRA has confirmed the viability of this strategy within CRA Views Doc 2023-0965261E5-T, which states (translated):

It is also possible for an individual to use amounts withdrawn from his or her RRSP under the HBP to contribute these amounts to a FHSA when all the conditions for the application of the HBP and the FHSA are otherwise met. In such a case, the individual could then withdraw these amounts from his or her FHSA for the purpose of acquiring the qualifying home, provided that all the conditions are met.⁵

This effectively increases the total pool of tax advantaged capital available for a first home purchase beyond what either program could achieve on its own and allows an additional tax deduction without the need to contribute (or have available cash) to contribute to the FHSA. The FHSA qualifying withdrawal is permanently tax‑free but note that HBP repayment obligations remain fully applicable and are not altered by this strategy.

The CRA statements provide comfort for advisors and taxpayers that the double deduction strategy is not abusive, is consistent with the legislative purpose under the ITA and is unlikely to be challenged solely on anti‑avoidance grounds if statutory conditions are met.

3. Timing of marriage or common-law partnership

Opening an FHSA

The marital status of a taxpayer at the time of opening or making a qualifying withdrawal under an FHSA is important.

An FHSA generally has a 15-year window for contributions and making a qualifying withdrawal. An individual’s marital status can change over the course of the plan, and particularly, a spouse’s (or common-law partner's) ownership of a home can affect the tax-free nature of a qualifying withdrawal or eligibility for opening an account.

Individuals who are about to enter into a spousal or common-law relationship should consider opening an FHSA if they qualify, even if they do not have immediate plans to purchase a qualifying home. This is because the home ownership status of a spouse or common law partner will affect FHSA eligibility.

Only a qualifying individual can open an FHSA. A qualifying individual is an individual who is a resident of Canada, at least 18 years of age and a first-time home buyer. Specifically, an individual is considered a “first-time home buyer” only if they did not at any time in the current calendar year or the past four calendar years inhabit as a principal place of residence a qualifying home that was owned, whether jointly with another person or otherwise, by the individual or owned by their spouse or common-law partner at the time the FHSA is opened.

The definition of “qualifying individual” prevents an individual from opening an FHSA after they have entered into a spousal or common-law relationship if their spouse or common-law partner already owns a housing unit, regardless of whether that individual has any ownership interest in that housing unit.

It is therefore advantageous to open an FHSA before this time as the holder of an FHSA can later roll their FHSA into their RRSP tax-free without impacting unused RRSP deduction room or unused FHSA participation room.⁶ An individual may transfer property from their FHSA to a RRSP (or Registered Retirement Income Fund (RRIF)) without any immediate tax consequences, as long as it is a direct transfer and there is not an excess FHSA amount.⁷

This effectively allows an additional $40,000 contribution room for an individual’s RRSP, so long as they do not make a withdrawal (or qualifying withdrawal) for 15 years. The amounts contributed to the FHSA reduce the taxable income of the individual, similar to an RRSP, which allows an immediate tax-deferral advantage.

Contributing to an FHSA

Opening the account prior to entering into marriage or a common-law relationship does not taint an FHSA account. So long as an individual opened an FHSA before residing with their spouse or common-law partner (in a home owned by the spouse or common-law partner), they can continue to contribute to their FHSA and deduct contributions from their taxable income, reducing the tax paid in the year the deduction is claimed. This offers meaningful upfront tax savings even if the purchase of a qualifying home is not imminent.

Furthermore, an FHSA holder who has entered into a spousal or common law relationship with a homeowner after opening the FHSA can, subject to the limits within the ITA, still make a “qualifying withdrawal” from their FHSA to purchase a housing unit in which both they and their spouse will reside. Contributions and a tax-free qualifying withdrawal can still be made long after an FHSA holder has regularly resided with a spouse or common-law partner. This approach may be particularly important for young Canadians who are looking to purchase a new home together.

Although this position has not been explicitly confirmed by the CRA, it has been acknowledged that “the “qualifying withdrawal” definition does not consider the home ownership status of the FHSA holder’s spouse or common law partner.”⁸ Further, given the context, it would be an absurd result to allow the opening of an FHSA account but then also prevent contributions.

This publication is not legal or financial advice and provides general information only. If you have any questions about the FHSA, please feel free to reach out to your BLG lawyer or any of the key contacts listed below.

The author would like to thank Robert Rizzuti for his contributions to this article.

Modern slavery compliance in Canada: Essential guidance for the 2026 reporting landscape

Wed, 04 Mar 2026 00:00:00 Z

Canada's modern slavery regime operates through two distinct but interconnected mechanisms: the Fighting Against Forced Labour and Child Labour in Supply Chains Act (the Supply Chains Act), which sets reporting requirements, and the import ban on goods produced in whole or in part with forced or child labour. Both aspects are evolving, and as the third reporting cycle approaches, businesses should pay close attention to the shift in expectations and regulatory focus affecting both their annual reporting duties and their import compliance obligations. The upcoming reporting deadline under the Supply Chains Act is May 31, 2026.

Key takeaways

What are the most critical changes for 2026 compliance? While the Supply Chains Act itself does not prescribe a baseline compliance standard or require goal setting, Public Safety Canada (PSC) in its guidance now expects entities to demonstrate measurable progress year-over-year and set specific short, medium, and long-term goals, moving beyond basic reporting to active due diligence frameworks. Coupled with other developments such as a shifting market baseline, organizations should carefully assess where their existing frameworks fall on the spectrum in planning their due diligence frameworks moving forward.
How did enforcement escalate in 2025? Parallel to PSC reporting requirements evolving, Canada Border Services Agency (CBSA) detention actions related to forced and child labour jumped to nearly 50 shipments in 2025 compared to minimal enforcement in previous years, while the government committed $617.7 million over five years for enhanced border enforcement capacity.
What new legislative requirements may affect imports? Bill C-251 proposes presumptive import bans on goods from designated countries and entities, requiring importers to prove supply chain compliance before entry. However, Bill C-251 is not yet in force and remains under parliamentary consideration.
Which compliance standards now represent market baseline? 96.6 per cent of reporting entities have embedded responsible business conduct into management systems, while 84.1 per cent maintain formal due diligence processes, signaling a shift in market practices.
When must organizations submit their next reports? The third reporting deadline is May 31, 2026, with PSC launching new assessment tools by March 31, 2026, to evaluate compliance quality.

Quick refresher: Understanding the basics of Canada's modern slavery regime

Federal Financial Institutions Legislative and Regulatory Reporter – January 2026

Tue, 03 Mar 2026 00:00:00 Z

The Federal Financial Institutions Legislative and Regulatory Reporter provides a monthly summary of Canadian federal legislative and regulatory developments of relevance to federally regulated financial institutions. It does not address Canadian provincial financial services legislative and regulatory developments. In addition, purely technical and administrative changes (such as changes to reporting forms) are not covered.

January 2026

Published	Title and Brief Summary	Status (if applicable)
Office of the Superintendent of Financial Institutions (OSFI)
January 29, 2026	Consultative Document on Credit Risk Management OSFI is seeking early stakeholder input on the Credit Risk Management Guideline (CRM Guideline) that it is developing, and it has issued a consultative document for this purpose. OSFI intends that the CRM Guideline: Strengthen credit risk management of all exposures at federally regulated financial institutions by applying international best practices for lending, account and portfolio management and addressing areas where there may be gaps in existing regulatory guidance. Promote greater regulatory and supervisory efficiency by consolidating and clarifying OSFI’s existing credit risk-related expectations, including in key credit segments like real estate secured lending (RESL) and wholesale credit. Modernize OSFI’s guidance to enable agile responses to emerging credit risk areas, such as non-bank financial intermediation and sound counterparty credit risk management.	Comments are due July 29, 2026.
January 29, 2026	Consultative Document on a Proposed Senior Leader Regime OSFI is in the process of reviewing its suitability and accountability expectations for senior leaders of federally regulated financial institutions, and it is seeking input from stakeholders. OSFI considers senior leaders to be members of the board of directors and senior management, including the “c-suite,” heads of oversight functions, heads of business platforms, or anyone else reporting directly to the CEO or the board. OSFI is looking to modernize the regime, with particular emphasis on accountability (the clear assignment of senior leader responsibilities, oversight, and an obligation to be answerable for decisions, conduct, and outcomes) within institutions. While federal statutes and OSFI guidance incorporate elements of suitability and accountability, OSFI considers that the rapidly evolving landscape requires stronger measures, especially with respect to accountability, to complement the existing framework.	Comments are due October 31, 2026.
January 29, 2026	Liquidity Adequacy Requirements (LAR) – Guideline (2026) OSFI has issued Liquidity Adequacy Requirements (LAR) – Guideline (2026) for banks, bank holding companies and trust and loan companies. The liquidity metrics set out in this guideline provide the framework within which the Superintendent assesses whether a bank, a bank holding company or a trust and loan company maintains adequate liquidity pursuant to the Bank Act and Trust and Loan Companies Act. For this purpose, the Superintendent has established two minimum standards: the Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR). These standards – in conjunction with additional liquidity metrics where OSFI reserves the right to apply supervisory requirements as needed, including the net cumulative cash flow (NCCF), the operating cash flow statement (OCFS), the liquidity monitoring tools and the intraday liquidity monitoring tools – when assessed as a package, provide an overall perspective of the liquidity adequacy of an institution. The LAR Guideline should be read together with the Basel Committee on Banking Supervision's (BCBS) Principles for Sound Liquidity Risk Management and Supervision and OSFI's Guideline B-6: Liquidity Principles.	Effective May 1, 2026.
January 29, 2026	Guide to Administrative Monetary Penalties OSFI has issued a guide, aimed at federally regulated financial institutions and their senior management, which provides an overview of select provisions of the legislative framework for the administrative monetary penalties (AMPs) set out in sections 24 to 37.01 of the Office of the Superintendent of Financial Institutions Act, and information on the AMP assessment process. It outlines OSFI’s AMP procedures and its approach to assessing the statutory penalty criteria.	Published January 29, 2026.
January 29, 2026	Deferral of the Public Consultation on Guideline B-15 Disclosure Expectation for Financed Emissions Related to Off-Balance Sheet Assets under Management OSFI has issued a letter that notes that, on January 8, 2026, it paused the planned public consultation on the disclosure expectation for financed emissions related to off-balance sheet assets under management (AUM) under Guideline B-15. In connection with this pause, OSFI will also be deferring the implementation for this expectation to a future date. It does note that it still expects financial institutions to quantify and manage their climate-related transition risks, including for off-balance sheet AUM.	Published January 29, 2026.
January 8, 2026	Postponement: Consultation on Revised Guideline B-12 on Interest Rate Risk Management OSFI has stated, on its page Modernizing policies, guidance, and supervision for regulatory efficiency, that it is postponing its consultation on revised Guideline B-12 on Interest Rate Risk Management, which will be rescheduled for a later date.	Published January 8, 2026.
January 8, 2026	Climate Risk Forum – Winding-Down OSFI will wind down its Climate Risk Forum. OSFI has indicated that this step reflects the sector's growing maturity, streamlines engagement, and allows OSFI to focus on core supervisory priorities while maintaining clear expectations through existing guidance.	Published January 8, 2026.
Bank of Canada
January 19, 2025.	Retail Payments Supervision: How to Complete an Annual Report: A Step-by-Step Guide Annual reporting by payment service providers (PSPs) under the Retail Payment Activities Act will be due on March 31, 2026. Annual report requirements are laid out in section 21 of the Act and in sections 18 and 19 of the Retail Payment Activities Regulations. To assist PSPs in their preparation, the Bank of Canada has issued a guide to completing an annual report. It explains the questions PSPs will need to answer in PSP Connect and helps identify the documents and information needed to complete and submit the annual report.	Published January 19, 2025. Annual reports are due March 31, 2026.
Bank for International Settlements (BIS)
January 6, 2026	Implementation of the Principles for Effective Risk Data Aggregation and Risk Reporting (BCBS 239 Principles) The Basel Committee on Banking Supervision has issued a newsletter that summarizes key themes and challenges related to banks' risk data aggregation and risk reporting practices (RDA). It does not represent supervisory guidance or expectations but is for informational purposes only. Key themes of the newsletter include: Adapting to a changing operating environment; Governance and data; Addressing data challenges; Cross-border implementation; Leveraging emerging technologies and compensating controls.	Published January 6, 2026.
Financial Stability Board (FSB)
January 21, 2026	Good Practices for Crisis Management Groups (Revised Version) In 2021, FSB published a practices paper aimed at promoting good practices for Crisis Management Groups (CMGs) of Global Systemically Important Banks (G-SIBs). CMGs have been in place for over 10 years as part of the post global financial crisis coordination infrastructure. FSB’s Key Attributes of Effective Resolution Regimes for Financial Institutions set out that home and key host authorities of all G-SIBs should maintain CMGs with the objective of enhancing preparedness for, and facilitating the management and resolution of, a cross-border financial crisis affecting the G-SIBs. Pursuant to the Key Attributes, CMGs focus on a broad range of crisis management issues, including but not limited to crisis management-related information sharing, recovery and resolution planning, and the assessment of resolvability of a particular G-SIB. This new version of the practices paper includes a supplementary note on implementation observations following the 2023 bank failures on communication with host authorities not members of a CMG.
International Association of Insurance Supervisors (IAIS)
	IAIS publishes its Roadmap 2026-2027 IAIS has published its Roadmap 2026-2027, which outlines its strategic priorities and workplan for the next two years. Guided by the Strategic Plan 2025-2029, the Roadmap reflects the IAIS’ commitment to addressing structural shifts in the insurance sector, tackling climate-related risks and natural catastrophe protection gaps, adapting to increasing digital innovation and cyber risks and supporting the consistent implementation of global standards. Its planned activities are organized according to IAIS’ core objectives: Monitor and respond to key risks and trends in the insurance sector; Set and maintain globally recognized standards for supervision that are effective and proportionate; Support members by sharing good supervisory practices, promoting understanding of supervisory issues and facilitating capacity building; Assess comprehensive and globally consistent implementation of global standards.

Disclaimer

This Reporter is prepared as a service for our clients. It is not intended to be a complete statement of the law or an opinion on any subject. Although we endeavour to ensure its accuracy, no one should act upon it without a thorough examination of the law after the facts of a specific situation are considered.

To view the Reporter for previous months, please visit our Banking and Financial Services publications page.

BC Budget 2026: PST expansion increases costs for commercial real estate

Mon, 02 Mar 2026 00:00:00 Z

Background

Subject to Royal Assent of Bill 2 and final regulations, effective Oct. 1, 2026, British Columbia will expand the provincial sales tax (PST) to apply to several professional services commonly used in commercial real estate. As a result, buying, selling, managing, and developing commercial properties, such as office, retail, and industrial buildings, will generally become more expensive across B.C.

Analysis

What changed

BC Budget 2026 expands the scope of PST to cover several professional services that were previously not subject to this tax. While the PST rate itself is not changing, the tax will apply to a wider range of services that businesses regularly rely on.

In practical terms, this means many professional service fees that were previously paid without PST will now include PST starting Oct. 1, 2026.

Services newly subject to PST (Effective Oct. 1, 2026)

PST will apply at rate of 7 per cent to the following services:

Non-residential real estate services, including:
- commissions related to buying and selling non-residential real estate;
- trading services;
- rental property management services; and
- strata management services.
Architectural, engineering, and geoscience services. Note: PST will apply to only 30 per cent of the purchase price of those services, resulting in an effective PST rate of 2.1 per cent on the full fee.
Accounting and bookkeeping services.
Security and private investigation services.

Businesses that provide these services will be required to register for PST (if they are not already registered), and to collect and remit PST on their fees as well as disbursements billed to clients, unless specific exemptions apply.

Legal framework

These changes are implemented through Bill 2, the Budget Measures Implementation Act, 2026, which amends the Provincial Sales Tax Act (subject to Royal Assent). The Minister of Finance has also issued administrative guidance in Notice 2026-001, confirming the scope of taxable services and registration obligations.

Practical commercial real estate impacts

Although PST is charged by service providers, the added costs are often passed on to property owners, tenants and in some cases consumers.

Transaction costs

PST will now apply to brokerage commissions on commercial real estate transactions, increasing closing costs for purchasers and vendors.
Whether PST applies may depend on when services are performed, not necessarily when agreements are signed or invoices are issued. For example, brokerage contracts entered into in 2025-2026 but completed after Oct. 1, 2026 may still attract PST.

Operating costs

Property management and strata management fees will be subject to PST. Whether tenants ultimately bear these costs will depend on the wording of their lease agreements.

Development costs

Although architectural, engineering, and geoscience services are only partly taxable, the effective PST may increase soft costs on development projects.

What does not change

For clarity, the PST rate remains 7 per cent, and residential real estate commissions are outside the scope of this expansion.

What is still unclear

How PST will be allocated between landlords and tenants under existing net lease provisions.
Whether further exemptions or clarifications will be introduced by regulation.
How PST will apply to mixed-use properties where services relate to both residential and non-residential components.

What you can do now

Budget for added tax on listed services for work performed on or after Oct. 1, 2026.
Review contracts and leases to see who pays service costs and taxes (especially in net leases and management agreements).
Consider timing for major projects or transactions where professional fees are significant.
Service providers: get ready to register, update invoicing, and adjust pricing so you can charge and remit PST where required.

This publication is of a general nature only. If you have any questions or require advice regarding specific transactions or circumstances, please contact one of the authors listed below.

Beyond BC: Court of Appeal upholds broad reach of provincial privacy laws

Mon, 02 Mar 2026 00:00:00 Z

BC privacy commissioner’s findings that facial recognition software company, Clearview AI, contravened privacy laws upheld on appeal

On Feb. 18, 2026, the Court of Appeal for British Columbia issued its decision, Clearview AI Inc v British Columbia (Information and Privacy Commissioner), 2026 BCCA 67 (the BC Appeal Decision) in which it upheld the Office of the Information and Privacy Commissioner of British Columbia’s (the Commissioner) decision (Order P21-08) (the OIPCBC Decision)¹ that U.S.-based Clearview AI Inc. (Clearview) had contravened BC’s Personal Information Protection Act (PIPA) through its facial recognition tool.

This appeal follows the Supreme Court of British Columbia’s highly-anticipated December 2024 decision², which also upheld the Commissioner’s decision on judicial review, and reaffirms the following key principles of Canadian privacy law:

The collection of personal information of British Columbians is likely to create a real and substantial connection between a foreign organization’s activities and the province, meaning that PIPA will be constitutionally applicable to that foreign organization.
- This is particularly the case where an organization’s business model depends on the systematic collection of personal information about individuals from online sources, even where an organization has ceased doing business in BC.³
Due to the quasi-constitutional status of privacy laws, it is reasonable for privacy commissioners to narrowly interpret exemptions (such as the “publicly available” exemption) to the requirement to obtain consent from individuals for the collection, use, or disclosure of their personal information.
- The exemptions to consent under PIPA do not create a competing “dual rights” regime where the rights of individuals to the protection of their personal information ought to be balanced with the rights of organizations to collect and use personal information for reasonable purposes. As the Court notes, “the legislation does not aim to balance competing rights, it balances a need with a right.”⁴
Regardless of whether an exemption to the general consent requirement applies, an organization’s collection, use, and disclosure of personal information must still be for purposes that a reasonable person would consider appropriate in the circumstances.
- This overarching “reasonableness” requirement is viewed by Canadian privacy regulators as a critical gateway under applicable privacy laws and a legal boundary that protects individuals from inappropriate data practices of companies, separating those legitimate information management practices that organizations may undertake in compliance with the law, from those areas in which organizations cannot venture, otherwise known as “No-go zones”.

Background

Clearview provided facial recognition services to third parties, such as law enforcement, other government agencies and private sector entities, allowing them to match faces to the images contained within Clearview’s searchable biometric database. Clearview developed its facial recognition tool by “scraping” billions of facial images of individuals – including individuals in Canada – without their consent from various online sources, such as social media platforms.

In February 2021, following a joint investigation, the Commissioner, along with the federal, Alberta and Québec privacy commissioners, issued a report that found that Clearview had contravened Canadian privacy laws and recommended that Clearview cease offering its facial recognition services to clients in Canada, cease collecting, using, and disclosing personal information of individuals in Canada, and delete personal information of individuals in Canada (the Report)⁵. Notably, the Canadian privacy commissioners concluded in the Report that the “publicly available” exemption to the requirement to obtain an individual’s consent for the collection of their personal information did not apply to Clearview’s activities.

When Clearview refused to comply with the Report’s recommendations, the Commissioner issued an order (the Order) to enforce the recommendations as they apply to individuals in British Columbia.

Clearview applied for judicial review of the OIPCBC Decision and similar orders made by the Alberta and Québec privacy commissioners.⁶ Please see BLG bulletins The extraterritorial reach of B.C.’s privacy laws: Court upholds privacy commissioner’s order against foreign AI company and Alberta judgment opens the door to the legitimization of data scraping and AI model training for more details on the judicial review decisions of the Supreme Court of British Columbia and the Court of King’s Bench of Alberta.

The Appeal Court’s decision

Clearview argued that PIPA could not apply to Clearview as a matter of constitutional law, and that it did not need to obtain the consent of individuals whose facial images it collected from online sources. Clearview also argued that the Order was unnecessary, unenforceable and/or overbroad.

The Court concluded that PIPA is constitutionally applicable to Clearview as there is a real and substantial connection between Clearview and BC Even though Clearview had ceased its marketing activities in B.C. in July 2020, it continued to acquire facial images of individuals in BC after that time.

The Court emphasized that when assessing whether a real and substantial connection exists, factors such as physical location of content providers, servers and end users, which were important in historical cases, are less important today due to the evolution of the internet. Rather, the Court conducted a contextual analysis of the relationship between B.C., the subject matter of PIPA, and Clearview and determined that “BC’s relationship to Clearview is substantial, not incidental.”⁷ The key factual basis for this finding was that Clearview’s services depended on its ability to collect facial images from individuals around the world to build its database, and that because it was unable to exclude BC from its scraping activities, that meant that “Clearview’s access to BC (and every other jurisdiction) is essential to its operation.”⁸ The Court also commented on the quasi-constitutional nature of the right to personal privacy:

“Clearview conflates the right to personal privacy with PIPA when it submits that “[t]he importance of provincial legislation is not a basis to expand that legislation’s reach beyond provincial borders”. The right to personal privacy is not coextensive with PIPA; PIPA is simply one of many legislative and common law mechanisms through which protection of personal privacy is achieved. The importance of the public interest in protecting that fundamental right is highly relevant in the sufficient connection analysis.”⁹

And further that:

“Clearview’s position that PIPA is constitutionally inapplicable to it means that it, and any other company that acquires personal information on the internet using a global search engine, would be immune from domestic privacy laws. This would significantly compromise the ability of jurisdictions such as BC to protect personal information on the internet. In light of this, I consider Clearview’s relationship to the subject matter of PIPA also militates in favour of a sufficient connection.”¹⁰

Further, the Court held that the Commissioner did not unreasonably interpret and apply PIPA in concluding that: (i) the “publicly available” exemption to consent did not apply to Clearview’s activities, and (ii) Clearview did not have a reasonable purpose for its collection, use, and disclosure of personal information. The Court acknowledged that while the OIPCBC Decision did not address Clearview’s argument that PIPA infringed its freedom of expression under the Canadian Charter of Rights and Freedoms (this argument was key in the judicial review decision of the Court of King’s Bench of Alberta¹¹), this did not make the Commissioner’s decision unreasonable.

Finally, the Court held that the Commissioner’s remedial Order was reasonable and enforceable. Clearview’s appeal was dismissed.

Conclusion

The British Columbia Court of Appeal’s decision in this case provides a clear and forceful affirmation of the broad territorial and substantive reach of BC’s PIPA. Organizations operating in digital and data-driven environments should take careful note: the absence of a physical presence in British Columbia will not insulate a business from the application of provincial privacy laws where there is a real and substantial connection to the province.

In particular, companies whose business models rely on the large-scale collection of personal information from online sources—especially through automated scraping or AI-enabled data aggregation—face heightened regulatory scrutiny. The Court’s reasons underscore that (i) consent exceptions will be interpreted narrowly, (ii) the “publicly available” exemption does not create a parallel right to collect personal information at scale, and (iii) the overarching “reasonable purposes” requirement functions as a meaningful legal boundary, prohibiting data practices that fall into regulatory “no-go zones,” even where technical arguments regarding consent may be advanced.

The decision also reinforces the quasi-constitutional status of privacy rights in Canada and signals judicial deference to privacy regulators’ contextual and purposive interpretations of their home statutes. For multinational organizations, this ruling confirms that global data strategies must be assessed against local privacy frameworks, and that reliance on the borderless nature of the internet will not defeat domestic enforcement efforts.

In light of this evolving jurisprudence, organizations should proactively review their data sourcing practices, AI training methodologies, consent frameworks, and cross-border compliance strategies to ensure alignment with Canadian privacy laws. The Clearview decisions collectively represent a strong statement from Canadian courts: innovative technologies and global business models must operate within clearly defined legal limits designed to protect individuals’ fundamental privacy rights.

For more information on how our team can assist, please contact the individuals below.

Extreme circumstances call for extreme measures: NL’s pandemic travel restrictions upheld by SCC

Fri, 27 Feb 2026 00:00:00 Z

In a decision released Feb. 13, 2026, the Supreme Court upheld a province’s ability to impose inter-provincial travel restrictions in times of crisis (Taylor v Newfoundland and Labrador, 2026 SCC 5).

In May 2020, at the start of the COVID-19 pandemic, Nova Scotia resident Kimberley Taylor was denied entry to Newfoundland and Labrador (NL), where the rest of her family grieved the sudden death of her mother. Shortly before NL’s Chief Medical Officer of Health had ordered that non-residents were prohibited from entering the province, with only limited exceptions. Although Ms. Taylor was granted an exemption authorizing her entry 10 days later, she along with the Canadian Civil Liberties Association (CCLA) sought a declaration that the travel restrictions unjustifiably infringed her rights under s. 6(1) and 6(2) of the Charter of Rights and Freedoms, which provide for mobility rights. It was the first time the courts were asked to consider whether s. 6 guarantees a right of movement simpliciter—the right to travel freely within Canada for any purpose.

Key takeaways

Sections 6(1) and 6(2) guarantee Canadian citizens and permanent residents the right to travel freely throughout Canada, including across provincial borders. This means that restrictions that are more than trivial—laws that prevent free movement, or which make movement contingent on government approval (such as the exemptions at issue), will infringe s. 6.
Travel bans and other significant restrictions on mobility will generally not be justifiable in a free and democratic society. However, where travel restrictions are part of a comprehensive government response to a crisis, including restrictions designed to save lives and protect the health of a vulnerable population, they may be able to pass scrutiny under the Oakes test.
The purposive approach remains central to Charter interpretation, which is a unique exercise from ordinary statutory interpretation. The analysis starts with a consideration of the underlying interests the provision is designed to protect before considering the text of the provision and other context. Courts must interpret a Charter provision in a manner that best protects those underlying interests. Where the provision is capable of more than one such interpretation, the Court should favour the broadest, most liberal interpretation.
The well-established 3-step methodology applicable to bilingual interpretation of legislation—where the narrower shared meaning between the English and French versions is preferred—does not apply in the Charter context. Instead, the interpretive approach must follow the same purposive approach as all Charter interpretation. A purposive approach to bilingual Charter interpretation requires courts to select whichever reading better protects the right, which will generally be the broader of the two readings.
The precautionary principle adopted in the environmental context—whereby the lack of full scientific certainty should not be used to justify inaction in the face of a threat of serious or irreversible harm—is not a freestanding principle of the s. 1 analysis. However, the concerns underlying the precautionary principle already underpin the s. 1 Oakes test. That test is flexible and considers the context of the state action, according the government significant deference on complex policy issues, including where the evidence is inconclusive.

The decisions below

The application judge at the Supreme Court of Newfoundland and Labrador canvassed the jurisprudence regarding s. 6 of the Charter and determined that the question before him—whether s. 6 guarantees a right to travel across provincial borders—was one of first instance. He concluded that s. 6(1) but not s. 6(2) guaranteed Canadian citizens a right to travel across provincial borders. He held that the travel restrictions infringed Ms. Taylor’s right to mobility under s. 6(1), but that the infringement was justified under s. 1, concluding: “In the circumstances of this case Ms. Taylor’s right to mobility must give way to the common good.”

Ms. Taylor and the CCLA appealed. Before the appeal was heard, the travel restrictions were repealed. Although both the appellants and the province urged the Court of Appeal to proceed, the Court declined to decide the appeal on the basis that it was moot.

The Supreme Court interprets section 6 purposively and broadly

The majority confirms a purposive approach to bilingual Charter interpretation

Justices Karakatsanis and Martin, writing for the majority (with Côté, O’Bonsawin and Moreau JJ) set out the purposive approach to Charter interpretation—an approach that is distinct from ordinary statutory interpretation. This approach starts by examining the interests protected by the Charter provision at issue. The Court then must consider the broader context, including the character and objects of the Charter more broadly; the text of the Charter provision, including any headings; the history of the Charter right; analogous international and comparative law; interpretation of any related Charter rights and freedoms; the drafting history of the Charter provision; and any other relevant context. Then, taking all of these sources of information into account, the Court must interpret the provision to provide the most generous protection to the underlying interests. This approach differs from the usual approach to statutory interpretation, where the analysis starts with the plain meaning of the text before considering context.

The majority also confirmed that this same purposive approach applies to bilingual interpretation of Charter rights. The Court rejects the well-established 3-step Daoust methodology for bilingual interpretation of legislation as inapplicable in the Charter context. Under the Daoust methodology, the Court gives priority to the narrowest area of overlap between the English and French versions of the statutory text on the basis that this will be best reflective of legislative intent. In contrast, Charter interpretation must start with a broad, liberal, and purposive reading of the text. Both the English and French versions are authoritative and must be read together to give colour and content to the interests protected and the purpose of the right. Where the two versions cannot be read harmoniously, the Court must select the reading that better protects the right, which will generally be the broader of the two.

The majority grounds a right of mobility simpliciter in both sections 6(1) and 6(2)

The majority applies this purposive approach to interpreting the scope of protection of mobility rights in s. 6 of the Charter. The majority identifies twin purposes of s. 6 working in harmony—section 6 “is designed to protect a broad interest in human mobility” both “to facilitate individual autonomy and dignity”, and to “promote national unity and a common Canadian identity”.

One of the key issues before the Court was whether a right to travel simpliciter, if it exists, is found in s. 6(1) or 6(2) or both. With respect to s. 6(1), the debate centered on whether the language guaranteeing the right “to enter, remain in and leave Canada” includes a right to travel across provincial borders or is limited to a right against exile and banishment. With respect to s. 6(2), the debate centered on whether the provision protects only a right to move and take up residence in another province, or includes a right to travel between provinces for other purposes. The plain reading of the French text appears to encompass both, whereas the English version is more ambiguous.

The majority adopts the broader interpretations of both provisions, concluding that both s. 6(1) and 6(2) guarantee the right to travel freely throughout Canada, including between provinces. This is important because each of s. 6(1) and 6(2) is limited in different ways. Section 6(2) is subject to certain economic limits set out in s. 6(3) and 6(4) that do not apply to s. 6(1). And s. 6(2) applies to both citizens and permanent residents, whereas s. 6(1)—the only section relied on by the application judge—only applies to citizens. By grounding the right of mobility simpliciter in both s. 6(1) and 6(2), the right applies to a broader subset of the Canadian population.

The majority therefore concludes that government actions that limit in a non-trivial way the ability of Canadian citizens and permanent residents to travel freely within Canada, or that require government approval for such travel, infringe s. 6(1) and 6(2) of the Charter.

The Court finds the travel restrictions to be reasonable and justified in the context of a crisis

The Supreme Court is unanimous in finding that the travel restrictions were justified under s. 1 of the Charter. They are found to be a “reasonable component of a comprehensive government response to the extraordinary crisis of the pandemic”.

The respondents and numerous interveners made a novel argument that the “precautionary principle” should apply as part of the Oakes test under s. 1. The precautionary principle was developed in the context of international and domestic environmental law, and calls for governments to take a preventative mindset and not allow lack of scientific certainty to justify inaction in the face of a threat of serious or irreversible environmental damage. The argument was that the principle should be similarly applied in the constitutional context to support greater deference to legislative choices made in the face of threats of serious harm and scientific uncertainty.

The majority rejects this novel argument, holding that there is no need to formally recognize the precautionary principle as part of the s. 1 test. Instead, the majority holds that the Oakes test is sufficiently flexible and nuanced to allow consideration of the same factors that underly the precautionary principle, and notes that considerable deference is already accorded to governments under that test on issues of public policy, including where the scientific evidence is uncertain

Here, the majority concludes that the objective of preventing illness and death caused by travellers’ importation and spread of the virus was rooted in public health, a goal of collective importance. The limit on Canadians’ s. 6 rights is found to be “carefully tailored”, particularly in light of the vulnerability of the province’s population and healthcare system. Importantly, the Court repeats at several junctures that an analysis of lawmakers’ responses in times of crisis cannot operate with the benefit of hindsight. In this case, the Court upholds the province’s decision while acknowledging it was made without the benefit of concrete scientific or medical evidence, but rather the limited amount that was understood about COVID-19 at the early stages of the pandemic.

The Supreme Court splits on the proper interpretation of section 6

Justices Kasirer and Jamal JJ (Wagner CJ concurring) and Justice Rowe separately dissented in part. They all agree with the majority that a right to interprovincial travel is protected by s. 6 of the Charter; that Newfoundland and Labrador’s travel restrictions violated that right; and that the violation was justified under s. 1. However, Justices Kasirer and Jamal are of the view that the scope of protection in s. 6(1) is limited to international mobility and only s. 6(2) protects interprovincial mobility. Justice Rowe takes the opposite view—he writes that interprovincial travel simpliciter is protected only by s. 6(1) (and is therefore guaranteed only to citizens), whereas s. 6(2) protects the right to move and take up residence in another province, not simply to travel.

An ongoing dialogue regarding restriction of rights in a crisis

In addition to the merits, the majority addresses its exercise of power under s. 40(1) of the Supreme Court Act to hear a moot appeal, finding that the Court of Appeal erred in the circumstances by refusing to exercise its discretion to do so. The majority describes how the issues at play are “of manifest public importance” and that there is a “clear social cost” in leaving the question of state limitations on mobility unconsidered.

Indeed, as the once widespread pandemic restrictions remain only in memory, Canadian courts are tasked with determining how far government restrictions can go in times of crisis without unreasonably impinging upon Canadians’ rights. Principles of national unity and self-determination, which are top of mind for many Canadians, appear throughout the Court’s analysis.

This case forms part of a broader legal dialogue involving the adoption of emergency measures that interfere with individual choice and freedom, including the Federal Court of Appeal’s recent decision in Canada (Attorney General) v. Canadian Civil Liberties Association. For an analysis of the FCA’s decision finding that Cabinet lacked reasonable grounds to believe a national emergency existed when it invoked the Emergencies Act to counter the “Freedom Convoy” demonstrations, see BLG’s article. With this more recent decision, the Supreme Court sends a clear message that restrictions on fundamental Charter rights will be subject to intense scrutiny, but that extreme circumstances can justify equally (or proportionally) extreme measures.

Final CSA rules on related party reporting and disclosure in financial statements: What investment fund managers need to know

Fri, 27 Feb 2026 00:00:00 Z

On January 22, 2026, the Canadian Securities Administrators (CSA) published final amendments (the Final Amendments) to National Instrument 81‑101 Mutual Fund Prospectus Disclosure (NI 81‑101), National Instrument 81‑102 Investment Funds (NI 81‑102), National Instrument 81‑106 Investment Fund Continuous Disclosure (NI 81‑106) and National Instrument 81‑107 Independent Review Committee for Investment Funds (NI 81‑107). The Final Amendments are part of the CSA’s broader project to modernize the investment fund continuous disclosure regime, which is being implemented in three workstreams, as set out below. The Final Amendments – which come into force on April 22, 2026 – implement Workstream Two (related party transaction reporting), Workstream Three (financial statement disclosure) as well as editorial updates to simplified prospectus disclosure.

Investigating performance bond claims: Lessons learned from Graphic Packaging v. 2477621 Ontario Inc.

Thu, 26 Feb 2026 00:00:00 Z

The recent case of Graphic Packaging International Canada, ULC v. 2477621 Ontario Inc. et al.¹ (Graphic Packaging) was described by the Ontario Superior Court as “fundamentally a straightforward construction case”. However, the case, which involved the interpretation of a bespoke form of performance bond not typically used in Canada, resulted in a less than a straightforward decision. Respectfully, the Court made generalized statements regarding certain principles of surety law with only limited analysis of the underlying facts and issues, and without reference to the applicable jurisprudence. Therefore, while it is important to consider the fundamental issues of surety law discussed in the case, the outcome of the case was largely driven by its unique facts, such that its application should be limited accordingly.

Background

Graphic Packaging International Canada ULC (Graphic) sold a contaminated former paper mill in Jonquière, Quebec, to 2477621 Ontario Inc. (247) under an Agreement of Purchase and Sale (the APS). Although title to the property transferred to 247, Quebec environmental legislation required Graphic, as the last operator of the mill, to complete a full site rehabilitation. The APS recognized this ongoing statutory obligation while assigning responsibility for demolition of the mill to 247. Although not provided for in the APS, it was 247’s intention to extract and sell certain high-value metals from the mill structures and equipment onsite.

Under the APS, 247 was required to deliver a scope of work for the demolition within 30 days and complete the specified demolition work within 24 months. The APS also required 247 to obtain a performance bond to secure its obligations, naming Graphic as obligee. 247 obtained the required bond from Talisman Casualty Insurance Company LLC (Talisman), acting as surety. The form of performance bond issued by Talisman (the Bond) differed substantially from the forms commonly used on Canadian construction projects. Instead of using the standard CCDC form of performance bond, the Bond was based on the AIA A312–2010 form used in the United States. It also included a number of modifications to the American form that were negotiated by 247. For example, the Bond removed the requirement that Graphic terminate the APS as a condition for triggering the surety’s obligations. The Bond also imposed notice requirements upon 247 that are not required by the bond forms commonly used in Canada, and it included a condition precedent requiring Graphic to agree to pay the “Balance of the Contract Price”, which was defined as “those monies due and payable to the Purchaser per the terms of the [APS]”.

Having procured the Bond, 247 began its planned salvage operations; however, it did not deliver the required scope of work within 30 days. In fact, it did not deliver the required scope of work within 24 months, nor did it even hire a demolition contractor to start the work before the expiry of the 24-month period. In April 2017, Graphic wrote to 247 to express serious concerns with 247’s commitment to honouring the demolition obligations and document 247’s failure to provide the scope of work proposal within 30 days, as required. While 247 pointed to harsh winter conditions, thefts of salvaged metals, and a months long work stoppage following a fatal workplace incident as reasons for the delays, it did not dispute that it had not provided the scope of work proposal and had not demolished the mill within the specified timeframes.

On July 12, 2017, Graphic formally notified Talisman of the missed 30-day deadline and expressed its concern that 247 would default on the demolition work because of the looming 24-month deadline. Graphic requested a conference with Talisman and 247 to discuss 247’s performance, as provided for in the Bond. Talisman did not respond. The Court found that the July 2017 letter clearly expressed Graphic’s intention to declare 247’s default, as required by the Bond. Talisman’s failure to respond to the request for a conference was found to be, at the very least, a waiver of an opportunity to cure Graphic’s default, realized or anticipated.

On September 21, 2017, Graphic sent a further letter to Talisman. Although the specific content of this letter is not set out in the decision, the Court noted that the Bond required Graphic to “declare the contract default and notify Talisman of same” and it held that Graphic “issued such a default, referring to the July 12, 2017 notice”.

On October 6, 2017, Talisman wrote to Graphic to request various documents to verify Graphic’s claim. Although Talisman later argued that Graphic failed to identify the nature of 247’s default as part of its defence in the litigation, the Court noted that Talisman’s request for information contained no indication that Graphic had failed to identify the default. The Court therefore described Talisman’s position that Graphic failed to identify the nature of 247’s default as “utterly disingenuous”. The Court also described Talisman’s document request as “boilerplate” and noted that Graphic was given ten days to produce “a long and broadly worded” list of documentation and information that the Court described as “largely irrelevant” and “telegraphed the surety’s intention to renege on its performance bond”.

The Court went on to note that the Bond contained no provision entitling Talisman to make the document request, drawing a distinction from the standard requirements upon an insured in reporting a loss to an insurer.

Graphic responded on October 24, 2017, and stated that it required more than ten days to provide all of the information and documentation requested. On March 9, 2018, Graphic provided some of the requested documents and confirmed that 247 had indeed failed to complete the demolition by the December 2017 deadline, which had since passed. As a result, Graphic made a formal declaration of 247’s default under the Bond (presumably in connection with the missed 24-month deadline) and, because time was of the essence, Graphic informed Talisman and 247 that it had started the process of soliciting bids from replacement contractors. The Court noted that the solicitation of bids from other contractors was one of the Surety’s remedial options under the Bond, and that it would have been hard to fault Graphic for taking the initiative because Talisman had not taken any remedial action itself.

The Court found that the correspondence between Graphic and Talisman left no doubt that Graphic had complied with the requirements of the Bond in declaring 247 in default, both with respect to the 30-day scope of work requirement and the 24-month demolition requirement. Having found that Graphic declared and notified Talisman of these defaults, the Court turned to Talisman’s argument that the surety obligation remained untriggered because Graphic had yet to inform Talisman that it agreed to pay the Balance of the Contract Price to the Surety or to a contractor selected to perform the work. Talisman had raised this issue in correspondence sent to Graphic in March of 2018; however, Graphic did not confirm its agreement to make the Balance of the Contract Pirce available until August of 2018. That was apparently because, in the meantime, events occurred that raised hope that 247 would finally comply with its demolition obligations.

As Graphic communicated to Talisman in May 2018, 247 had finally prepared a draft demolition plan. The plan was not immediately approved by the Québec Environment Ministry (the Ministry), but a meeting was scheduled to address the Ministry’s requirements. Ultimately, a demolition plan submitted by Graphic, as adapted from 247’s plan, was approved by the Ministry in June 2018, and a demolition permit was issued. However, 247 did not start the work, even after Graphic obtained an extension of the time for doing so from the Ministry. In early August, 2018, under mounting pressure from the Ministry, Graphic wrote to 247 and Talisman and advised that, if 247 did not start work before August 6, 2018, Graphic would proceed with a replacement contractor it had hired. In response, 247 asserted that the presence of stakeholder representatives on site “sufficed as the start of demolition activities”. On August 21, 2018, Graphic informed 247 and Talisman that the Ministry was dissatisfied with 247’s lack of progress on the demolition and advised that Graphic’s replacement contractor would begin to perform the demolition work on August 27, 2018. Graphic noted in its correspondence that Talisman had not indicated that it would obtain its own bids and that Graphic assumed that Talisman was in agreement with Graphic’s proposed course of action. Graphic at that point addressed an issue previously raised by Talisman regarding payment of the Balance of the Contract Price, which Graphic asserted was “nil” in accordance with the terms of the APS.

Rather surprisingly, Talisman wrote back and asserted that 247 was in fact taking “significant action” to demolish the mill and had “diligently moved forward”. However, since 247 had failed to satisfactorily progress the work, Graphic obtained an interlocutory injunction in September 2018 authorizing it to retake possession of the site and perform the demolition work itself. In November 2018, Graphic excluded 247 from the site.

On March 15, 2019, Talisman provisionally denied liability under the Bond unless Graphic provided the outstanding information listed in its October 2017 request within ten days. This information was ultimately provided by Graphic to Talisman on April 30, 2019, on the condition that Talisman not share the information with 247. While Talisman acknowledged the sufficiency of the information, it took issue with the condition imposed by Graphic with respect to sharing the information with 247. On July 24, 2019, Talisman formally denied liability under the Bond, alleging that Graphic was in default of the APS and that, in any event, Graphic had failed to satisfy the Bond’s conditions precedent to liability, namely by failing to declare 247 in default in a proper or sufficient manner and failing to comply with the requirement to agree to pay the Balance of the Contract Price. In the alternative, the letter outlined several reasons to excuse Talisman from liability on the basis of alleged prejudice, including alleged prejudice arising from “grace periods” provided by Graphic to 247.

In the face of Talisman’s denial of liability, Graphic moved for summary judgment to enforce its claim against 247 for the expenses it incurred to complete the demolition work, and its claim against Talisman for breach of the Bond. Talisman responded by seeking an order dismissing Graphic’s motion by way of “boomerang” summary judgment, on the ground that Graphic’s failure to provide 247 a remediation plan and failure to agree to pay the Balance of the Contract Price for the demolition separately each prevented the triggering of Talisman’s obligations.

The Court’s decision

A significant portion of the Court’s decision is devoted to analyzing the sequence of Graphic and 247’s respective obligations under the APS. The Court ultimately concluded that, as of December 24, 2017, the deadline for completing the demolition work, the only party in breach of the APS was 247.

The Court then turned to a consideration of Talisman’s duties under the Bond and ultimately rejected each of Talisman’s defences. While the Court’s conclusions are largely tied to the unique (and arguably extreme) circumstances of the case, the Court’s analysis of the applicable principles of surety law warrants closer scrutiny.

1. The surety’s right under a performance bond to request documents as part of its investigation of a claim

Although the Court makes broad statements regarding a Surety’s right to investigate claims under a bond, these comments must be interpreted in light of the “snowblower approach” the Court found Talisman to have adopted in its document request. The Court stated that the Bond “contained no provision entitling Talisman to make the document request”, suggesting that a surety has no right (or at least a limited right) to request documents relating to the principal’s alleged default in the absence of express bond language to that effect. However, it has long been recognized at common law that the very nature of performance bonds gives rise to the surety’s right to perform such an investigation and make such document requests. Viewed in this light, the Court’s comments should be understood as simply reflecting its conclusion that Talisman intended to “bury Graphic in a documents and data request resembling a documentary discovery request in litigation” and not that a surety cannot make reasonable requests for information and documents as part of its investigation.

Any broad conclusion regarding limitations on a surety’s right to request information from an obligee is inconsistent with longstanding Canadian (and American) authority recognizing that a surety’s right to investigate under a performance bond arises from the nature of the bond itself – not the presence or absence of express language providing the surety with such a right. As the British Columbia Supreme Court recognized in Fraser Gate Apartment Ltd. v. Western Surety Co.:

Generally the surety will be entitled to […] properly investigate the contractual and factual circumstances of the claim, with particular regard to the question of whether the principal is in default under the contract, and whether the obligee has performed its obligations under the contract. That such an investigation, and reasonable time within which to do it, is required must be evident from the very nature of the bond.

The Court’s reasoning in Graphic Packaging may have been coloured by an apparent conflation of performance bonds with letters of credit, which of course is a distinct credit instrument. Indeed, elsewhere in the decision, the Court characterizes performance bonds as “the construction equivalent of a bank letter of credit.” With respect, that analogy is inappropriate. The defining feature of letters of credit is that they are demand instruments. Letters of credit are intended to ensure prompt payment and an issuer’s obligation is consequently triggered by the presentation of stipulated documents and deliberately insulated from any disputes concerning the underlying contract. As a result, investigation of contractual performance is unnecessary and, indeed, antithetical to the commercial purpose of the instrument. In contrast, the surety’s liability under a performance bond is conditional and dependent upon, among other things, an actual default under the bonded contract and the obligee’s proper declaration of the same. The triggers can therefore be complex and will require multiple determinations. It is for this reason that the surety has a right to investigate, which has long been recognized at common law.

In the circumstances of the case, the Court’s comments regarding Talisman’s right to request documents relating to Graphic’s claim should not be treated as supporting any deterioration of this right. Rather, they are tied to the specific document request made by Talisman, which, as noted above, the Court found to be overly broad and largely irrelevant to the issue of whether 247 or Graphic was in default of their obligations under the APS, or indeed any other issues relating to Talisman’s liability under the Bond. The Court also noted that Talisman did not request any information regarding the nature of the alleged default or raise the absence of this information as an issue at the outset. Therefore, the appropriate conclusion to be drawn from the Court’s decision is simply that a surety is not entitled to make overly broad and irrelevant document requests as part of its investigation. However, a surety is clearly entitled at law to investigate any claims under a bond with appropriate document requests to investigate whether the conditions for liability under the bond have been met.

2. The distinction between notice of default and declaration of default

It is clear from the existing jurisprudence that a surety’s obligation to respond promptly under a performance bond does not arise until a formal demand has been made of the surety. Such a demand must be clear, direct, and unequivocal. Prior to a proper claim being made, the surety does not have a duty to investigate – or even a right to unilaterally intervene in a dispute between the principal and obligee. The application of this principle is critical. It ensures that the obligee, not the surety, bears responsibility for deciding whether the principal’s conduct warrants escalation. As Canadian courts have consistently held, until a formal declaration is made to the surety, the “clock does not start ticking” on the surety’s obligations (Fraser Gate).

While the language of the Bond regarding notice and declaration of default differs from that in the standard forms used across Canada, the crucial distinction between declaring the principal in default, and then making a claim under the bond, appears to be preserved. § 3.1 of the Bond required Graphic to “provide notice to [247] and [Talisman] that [Graphic] is considering declaring a Contractor Default.” §3.2 of the Bond required Graphic to “[declare] a Contractor Default and [notify Talisman]” as a condition precedent to Talisman’s liability. However, the distinction between “notice” and “declaration” of default is not reflected in the Court’s analysis. It is also not clear from the decision when Graphic first declared 247 to be in default and called upon Talisman to perform under the Bond. On the one hand, the Court held that Graphic’s September 21, 2017 communication satisfied the § 3.2 requirement that Graphic “declare the Contractor default,” but the Court later held that Graphic made its “formal declaration of 247’s contractor default” when Graphic delivered some of the requested documents on March 9, 2018, which is obviously inconsistent.

The Court faults Talisman for alleged inaction long before March 2018. As the decision does not describe the contents of the September 21, 2017 letter, it is not clear whether the contents of the letter satisfied the requirements of the Bond. However, if a proper declaration of default was not made before March 2018, or if Talisman didn’t make a claim under the Bond before March 2018, such a criticism would be unwarranted. The subtle but critical distinction between notice and declaration of default is important, as Canadian law does not impose an obligation on a surety to respond under a performance bond until default has been declared and a claim has been made to the surety.

3. Material variation and prejudice to the surety in cases of extension of time for performance

The Court also rejected Talisman’s argument that, by providing 247 with grace periods, Graphic extended the time for performance of the underlying contract and thereby materially varied the contract, prejudicing Talisman and discharging it from liability. The Court correctly recognized the principle that a change that imposes additional risk on the surety without its consent will discharge the surety from its obligations under a performance bond.

However, respectfully, the Court erred in commenting that granting the contractor “more time to perform the work, even past the deadline for completion, cannot prejudice the surety.” This simple proposition misstates the law of material variation. While extensions of time may be benign, or even benefit the surety in some circumstances, it is not the case that such changes to the time for completing the underlying contract “cannot” prejudice the surety. As the British Columbia Supreme Court noted in MGN Constructors Inc. v. AXA Pacific Insurance Company, extensions of time can carry real consequences for the surety’s risk, such as increased overhead or prolonged exposure to adverse weather. As a result, and as the Supreme Court of Canada acknowledged in Ferrara v. National Surety Co., where a bonded contract provides a fixed time for performance, and this period is extended by the obligee and principal without the consent of the surety, the surety will have grounds to be discharged on the basis of material variation of contract if it suffers prejudice as a result.

The Court may well have been correct that, in this particular case, given 247’s pervasive non-performance, no prejudice was actually suffered. However, the broader holding to the effect that extensions of time “cannot” prejudice a surety is inconsistent with longstanding surety law principles.

Conclusion

Although the result in Graphic Packaging may be justifiable based on the specific facts of the case, particularly the extraordinary delays and the extent of non-performance by 247, as well as the unique form of the Bond that was issued by Talisman, the decision diverges from well-established Canadian surety principles in terms of:

The conclusion that the Bond provided the surety with “no right” to make a document request;
The apparent blurring of the distinction between notice and a declaration of default; and
The assertion that extensions of time “cannot prejudice” a surety.

These conclusions must be considered in light of the unique factual circumstances of the case, and not as broadly applicable principles of surety law. For these reasons, the precedential value of the decision in Graphic Packaging should be considered with caution.

Both Talisman and 247 have filed notices of appeal of the motion decision. We will update this commentary after the release of the Court of Appeal decision. For more information, please reach out to any of the key contacts below.

Preventing confidentiality incidents: BLG’s translation of recent guidance from the Commission d’accès à l’information

Thu, 26 Feb 2026 00:00:00 Z

The Commission d’accès à l’information (CAI) will not be publishing an English version of guidance that it provided in January 2026 on the prevention of confidentiality incidents by private organizations. On the occasion, the CAI published both a guide and a checklist.

Considering the interest of organizations and individuals throughout Canada for Québec’s privacy legislation, BLG has made available this unofficial translation of both tools in an effort to facilitate incident prevention. Readers should refer to these documents with care and review the original French versions published by the CAI. In the event of a discrepancy between the original French versions and their unofficial translation to English, the French versions shall take precedence.

What’s guaranteed – and what isn’t: The Supreme Court of Canada draws the line on GRC coverage in Emond v. Trillium Mutual Insurance

Wed, 25 Feb 2026 00:00:00 Z

Overview

In its recent decision in Emond v. Trillium Mutual Insurance, the Supreme Court of Canada held that a homeowner’s policy did not cover added costs to comply with conservation authority requirements in rebuilding a home following a loss, notwithstanding that the policy included a Guaranteed Rebuilding Cost endorsement.

The decision offers clarification on the scope and limitations of Guaranteed Rebuilding Cost (GRC) coverage specifically, while also providing further direction on how the Court approaches policy interpretation generally. The 7–1-1 decision reinforces the structured approach to insurance contract interpretation outlined in Ledcor, with the Court clarifying that endorsements are interpreted within the policy as a whole, identifying when language in an insurance contract is ambiguous, and explaining when the nullification of coverage doctrine would justify a departure from language that is unambiguous. The two dissents highlight tensions between principles of policy interpretation, with a focus on the reasonable expectations of insureds.

Background and procedural history

The litigation arose after the insureds’ home suffered a total loss due to flooding.

Their homeowner policy had an exclusion for the increased costs of repair or replacement due to any law regulating the zoning, demolition, repair, or construction of buildings, except as provided for under the Additional Coverages. One of the Additional Coverage exceptions stated that the insurer would pay up to $10,000 for increased costs to comply with zoning and construction-related laws.

The policy also included a GRC endorsement, extending the amount payable under the policy beyond the limit stated on the declaration page in circumstances where the insureds repair or replace the damaged or destroyed home at the same location with materials of similar quality using current building techniques.

When the local conservation authority required upgrades during reconstruction, the insurer declined to cover the compliance costs, citing the exclusion for increased costs arising from compliance with by-laws or building codes. The insureds argued that the GRC endorsement expanded coverage sufficiently to override the exclusion.

The application judge found in favour of the insureds, but the Court of Appeal allowed the insurer’s appeal. The matter proceeded to the Supreme Court of Canada, which upheld the Court of Appeal’s decision.

The majority’s decision

Justice Rowe, writing for the majority, reaffirmed the Ledcor three‑stage framework for policy interpretation:

The insured bears the onus of establishing that the loss falls within the coverage grant. Aspects of the endorsement that affect coverage are considered as part of the coverage conferred by the insurance contract.
The insurer bears the onus of establishing that an exclusion or limitation applies.
The insured bears the onus of establishing an exception to the exclusion.

Building on Progressive Homes and Sabean, the decision also reiterates that the assessment of ambiguity is a threshold issue. Where the language of the insurance contract is unambiguous, effect should be given to that clear language, reading the contract as a whole. Interpretive tools should only be resorted to where the language is ambiguous. Ambiguity arises where there are multiple reasonable but different interpretations of the policy. In the face of ambiguity, the court cannot rely on the language alone and instead must move to the second stage – employing rules of contract interpretation to resolve the ambiguity, including:

the interpretation should be consistent with the reasonable expectations of the parties;
it should not give rise to results that are unrealistic or that the parties would not have contemplated in the commercial atmosphere in which the insurance contract was formed; and
it should be consistent with the interpretations of similar insurance policies.

If ambiguity still remains after the two first stages, the court must employ the contra proferentem rule, construing the provision against the drafter (insurer) and in favour of the insured.

Applying this approach, the majority held that the homeowners’ property policy did not cover the insureds’ increased costs of rebuilding their home in compliance with conservation authority requirements beyond the $10,000 in Additional Coverage. While the loss fell within the grant of coverage, the increased costs were ousted by the exclusion for by-law compliance costs, which was clear and unambiguous. Unlike the dissenting reasons, the majority did not find that the language of the compliance cost exclusion injected a temporal dimension into the provision. Further, the GRC endorsement did not override the exclusion. The GRC endorsement simply amended the basis of claim payment by increasing the amount payable under the policy beyond the stated limit. The exclusions in the policy continued to apply, which was confirmed by language in the GRC endorsement, stating that in all other respects the policy provisions and limits of liability remained unchanged.

In addition to the oft-cited principles of policy interpretation, the Court also addressed the principle of nullification of coverage. The homeowners argued that applying the compliance cost exclusion would virtually nullify the coverage provided by the GRC endorsement. Courts in Ontario have accepted that a policy provision should not be applied to the extent it would completely defeat the very objective of having purchased the relevant coverage and render it nugatory.

The insurer disagreed, arguing that the noncompliance cost exclusion may limit what can be recovered under the GRC endorsement, but the endorsement still conferred a benefit such that it was not rendered nugatory. The Majority agreed with the insurer. The high bar to show nullification was not met and the compliance cost exclusion applied, despite the GRC endorsement.

Dissenting reasons

Karakatsanis J. agreed with the majority regarding the framework of the analysis but disagreed on its application to the facts. She found ambiguity in the interaction between the GRC endorsement and the compliance cost exclusion, noting that the insureds reasonably understood that the guaranteed rebuilding endorsement covered all compliance costs except increased costs to comply with laws that arose after they paid their premium and the insurer issued their policy. Both the insured and insurer interpretations were reasonable on the face of the contract, and the principles of policy interpretation were necessary to resolve the ambiguity. The principles of “reasonable expectations” and interpretation in light of “commercial realities” favoured the insureds. If ambiguity persisted beyond that stage of the analysis, the coverage provisions ought to be construed broadly and the exclusion clauses narrowing, meaning that the compliance cost exclusion only operated to exclude increased costs arising from laws enacted after the issuance of the policy.

Côté J. authored a second dissent, agreeing with the framework set out by the majority, but departing from the majority’s finding that the compliance cost exclusion applied to limit the GRC endorsement. Her Honour noted that such endorsements are intended to provide peace of mind and reasonably led the insureds to expect full coverage for all necessary rebuilding expenses after a total loss. In this case, the GRC endorsement was textually unclear and the compliance cost exclusion was structurally unclear. In the face of these ambiguities, Côté J. concluded, “the reasonable expectations of the insureds were that they were purchasing precisely what the GRC endorsement was labelled as: a guarantee that [the insurer] would pay for the cost of rebuilding their home.” Côté J. would allow the appeal in part, set aside the judgment of the Court of Appeal, and restore the application judge’s declaration – with the alteration that the coverage did not include increased costs resulting from the operation of any rule, regulation, by‑law, or ordinance, not in effect at the time that the insurance policy was last renewed.

Conclusion

The Supreme Court’s decision reinforces the structured approach to policy interpretation – with the majority and two dissents converging on the approach and diverging on its application. The majority’s decision sharpens the boundaries of Guaranteed Rebuilding Cost coverage and highlights that endorsements must not be read in isolation, while the two strong dissents make clear that tensions may nevertheless arise between insurer and insured interpretations, with clarity being found through consideration of the parties reasonable expectations and the commercial realities but only after a threshold determination that ambiguity exists.

Québec’s Private Sector Act: Compliance guide for organizations

Tue, 24 Feb 2026 00:00:00 Z

BLG’s comprehensive guide addresses Québec’s Private Sector Act, as modernized by Law 25, as the cornerstone of an effective privacy program. It also addresses key requirements relating to biometrics, the frameworks governing cross‑border data transfers, and the principal obligations arising from related federal legislation, offering a comprehensive and cohesive approach to privacy compliance.

In our Act respecting the protection of personal information in the private sector: Compliance guide for organizations, we position the Private Sector Act as the central reference framework, while seamlessly integrating supporting legislation, such as:

The requirements of the Act to establish a legal framework for information technology (IT Act) applicable to biometric systems and identity verification
Provisions of the Civil Code of Québec relating to the protection of the right to privacy and the awarding of punitive damages
Canada’s anti-spam legislation governing commercial electronic messages
Reporting obligations applicable to the financial sector under the regulations of the Autorité des marchés financiers (AMF)

Canada’s Defence Industrial Strategy: New implications for Canadian defence procurement

Fri, 20 Feb 2026 00:00:00 Z

On Feb. 17, 2026, the Government of Canada released the latest iteration of Canada’s national defence strategy, Security, Sovereignty and Prosperity: Canada’s Defence Industrial Strategy (the Strategy), which follows a commitment in Budget 2025 to invest $81.8 billion into the Canadian Armed Forces by 2030, and institutional efforts to facilitate a Canada-focused approach to defence procurement.

The Strategy is centered upon a “Build-Partner-Buy” framework that prioritizes domestic procurement in areas of existing Canadian strength and capacity, as well as for areas of key sovereign concern. While the Strategy also seeks to continue defence procurement through partnerships with allies, and off-the-shelf investments, Canada’s concerted goal is to select investments that can flow back into the Canadian economy while generating sufficient sovereign control over Canada’s defence industry.

The Strategy rests on five pillars, including: industry engagement, the build-partner-buy framework, innovation, securing supply chains, and collaboration with domestic partners, including in the Arctic.

Notably, the Strategy identifies several ambitious goals over the next ten years, including a goal to increase the share of defence procurements awarded to Canadian firms to 70 per cent, increasing Canada’s investment in defence-related research and development by 85 per cent, and increasing total defence industry revenues by over 240 per cent.

Accordingly, the Strategy serves to further refocus Canada’s defence industrial base towards domestic acquisition alongside further concrete steps, investment, and objectives to grow Canada’s defence capabilities, innovation, and industrial partnerships. Successfully navigating these changes remains crucial for both Canada’s domestic industry as well as for suppliers from allied states.

Pillar I: Renewing our relationship with industry

The Strategy identifies that a longstanding challenge of Canada’s defence industry has been signaling and committing to long-term demand, allowing domestic industry to accurately forecast and invest accordingly.

The Strategy seeks to provide a clearer long-term commitment towards defence sector demand, engage more closely with industry, including by pursuing co-development of solutions, and providing regular touchpoints for industry partners to engage as part of defence procurement processes. There will be an effort to improve and streamline industry participation in defence procurement, including by better facilitating security clearances and accreditation of secure facilities, as well as providing more assistance to small and mid-sized Canadian businesses in this sector.

Among other commitments, the Strategy identifies the following key actions to renew relationships with domestic industry:

Canada’s new Defence Investment Agency will establish a permanent Defence Advisory Forum to provide a consistent venue to engage with industry. This Forum will be chaired by the Ministers for National Defence, and Industry, and the Secretary of State (Defence Procurement);
Investments will be made to accelerate the security clearance and security accreditation process for defence sector personnel and secure facilities;
Canada will create regularly scheduled “industry days” with the Department of National Defence, the Canadian Armed Forces, the Defence Investment Agency, and Innovation, Science and Economic Development;
Canada will publish a regularly updated inventory of anticipated procurements to allow for earlier visibility of these forthcoming opportunities; and
Canada will institute a dedicated “concierge” service for companies working on defence and dual-use technologies to facilitate better navigation of government processes.

Pillar II: Procuring strategically: The defence investment agency & “build-partner-buy”

In addition to facilitating more streamlined relationships with industry, the Strategy also seeks to engage with and grow domestic industry partnerships as well as Canadian industrial capability. The Strategy specifically seeks to build leading domestic “champions” that meet Canada’s strategic and defence needs and continue to advance innovation and development.

To achieve this goal, the Strategy commits to the publication of a framework for the onboarding of Canadian defence firms as strategic partners by the summer of 2026.

The Defence Investment Agency is anticipated to play a key role in attaining this objective, in facilitating a more integrated and streamlined approach to defence procurement. Notably, the Strategy confirms that the government’s intention is for the Defence Investment Agency to operate outside of Public Services and Procurement Canada, as a stand-alone entity, which appears to be intended to better coordinate inputs across the government, including National Defence, Innovation, Science and Economic Development, Public Services and Procurement Canada, and the Canadian Armed Forces.

The Strategy focuses on fostering domestic industry involvement first and foremost in fulfilling key sovereign capabilities:

Aerospace: Aerospace Platforms, Avionics, Aircraft Communications;
Ammunition: Common Ammunition, Battle-Decisive Munitions, Small Arms, Missiles and Bombs;
Digital Systems: Secure Cloud, Artificial Intelligence, Quantum Computing and Communications, Integrated Command, Control and Communications, High-Assurance Communications Equipment;
In-Service Support: Naval, Air, Land;
Personnel Protection: Medical Counter Measures;
Sensors: Marine Sensors, Quantum Sensors, Electronic Warfare:
Space: Space-based Intelligence, Surveillance and Reconnaissance, Space Domain Awareness, Satellite Communications, Space Launch;
Specialized Manufacturing: Land Vehicles, Surface Ships, including Icebreakers, and Marine Systems;
Training and Simulation: Naval, Land, Air; and
Uncrewed and Autonomous Systems: Uncrewed and Autonomous Land, Aerial, Underwater and Surface Systems (including Uncrewed Collaborative Platforms).

In addition to focusing on domestic acquisitions and capability-building in these key strategic areas, the Strategy also confirms that Canada will continue to partner in defence procurement with trusted allies, including in areas where Canada cannot fully build or fulfill a capability alone.

These partnerships include a continuation of the close defence relationship with the United States, as well as strengthening partnerships with the European Union and the United Kingdom, Australia, New Zealand, Japan, and the Republic of Korea.

Lastly, in addition to domestic capabilities, and partnerships with allies, Canada will continue to consider direct acquisitions from foreign suppliers. However, the Strategy does seek to reduce the reliance on integrated defence platforms which necessitate ongoing reliance on ongoing software updates, IP, or schematics.

Additionally, while Canada will continue to work with multinational suppliers, including under its Industrial and Technological Benefits (ITB) Policy, going forward, Canada will require multinational suppliers to do a greater percentage of their work in Canada and with Canadian-controlled firms. The ITB Policy applies to certain major defence procurements, and broadly requires that suppliers awarded defence contracts undertake business activity in Canada equal to the value of the contract, in addition to assessing suppliers on economic benefit factors during the bid phrase. It appears that the Strategy envisions future restrictions that will limit the ability of multinational suppliers to meet their ITB Policy obligations investing into indirect work with their Canadian subsidiaries, rather than doing direct work in Canada with Canadian-controlled firms.

The Strategy identifies the following key actions to renew relationships to fulfill the “Build-Partner-Buy” framework for defence procurement:

Direct new defence procurements in areas of home-grown strength or key sovereign capabilities to Canadian firms, including through use of the national security exception in the applicable trade agreements governing procurement processes;
Diversity Canada’s partnership opportunities with trusted allies, including particularly partnerships in Europe and the Indo-Pacific, to include joint work and the sharing of key technologies and IP;
Buy equipment from allies, with strong conditions that foster reinvestment into the Canadian defence industrial base and ensure Canadian sovereign control over the newly acquired assets;
Reform the ITB Policy to align with the Canada-focused procurement objectives for key sovereign capabilities, introduce mechanisms that incentivize investments that expand industrial output and development, including the creation of a Strategic Investment Transaction to credit certain investments, supporting Canadian industry in claiming exports and supply chain activities as credits; re-calibrating incentives for skills-development, and simplifying the operation of the Policy.

Innovation, Science and Economic Development will publish the revisions to the ITB Policy in early 2026, with certain proposed changes anticipated to include:

Introduce a new “Strategic Investment Transaction” to encourage investments that increase Canadian defence industrial capacity, strengthen sovereign capabilities, support infrastructure, or transfer intellectual property;
Enhanced multipliers for high-impact contributions that advance defence priorities;
Provide recognition for infrastructure investments that support long-term capability building;
Introduce a Canadian Company Boost to increase credits for investments in Canadian firms with 70-100 per cent Canadian Content Value;
Add a multiplier for direct work with small and medium-sized businesses;
Update the Future Sales Transaction, including with credit for investments that drive future sales to Canadian companies;
Create more flexibility and tools for small and mid-sized businesses;
Introduce a new multiplier for investments in skills development and training in the defence sector;
Increase the multiplier for indigenous workforce development in defence industries;
Increase the minimum discretionary threshold for applying the ITB Policy from $20 million to $25 million; and
Replace the current list of Key Industrial Capabilities with a new list of 10 Sovereign Capabilities.

Updated ITB Terms and Conditions are also anticipated to be released in early 2026 with all of these Policy changes and their specific operationalization.

Pillar III: Investing purposefully to strengthen an innovative Canadian defence sector

The Strategy seeks to position Canada as a leader in defence research and development and innovation. To further this objective, the Strategy seeks to build upon investments in defence and dual-use technologies and innovation, by creating a new Science and Research Defence Advisory Council, which will include leaders from Canada’s post-secondary institutions with National Defence, Innovation, Science and Economic Development, and Canada federal research granting councils.

A particular area of development includes fostering innovation in the development of drones and drone technology, facilitated by a Drone Innovation Hub within the National Research Council. Other areas of focus include frontier technologies, such as AI, quantum, and cybersecurity, which will be coordinated through academia/government frameworks such as the Bureau of Research, Engineering and Advanced Leadership in Innovation and Science (BOREALIS).

The Strategy identifies the following key actions to foster defence innovation, research, and development:

Establish the new Science and Research Defence Advisory Council in 2026;
Invest $244 million in small and mid-sized businesses for advancing defence and dual-use technologies;
Create a Drone Innovation Hub at the National Research Council in 2026, with an investment of $105 million over three years;
Acquire a new research and development platform with an investment of $460 million over the next five years; and
Publish a roadmap for the standup of BOREALIS and select the first round of funded research projects by Q3 of 2026.

In addition to research and innovation objectives, the Strategy also seeks to increase development among small and mid-sized Canadian businesses. Budget 2025 already allocated a new $4 billion defence platform at the Business Development Bank of Canada. The Strategy also confirms and investment of $357.7 million to establish a Regional Defence Investment Initiative to support the growth of small and mid-sized businesses into both domestic and international defence supply chains.

Additionally, the Strategy seeks to strengthen Canada’s intellectual property ownership, protection, and access through:

Empowering Canadian small and mid-sized businesses to manage and leverage IP through ElevateIP and other programs; and
Prioritize Canadian IP ownership, protection, and access in defence procurement processes.

In order to further foster innovation, the Strategy commits to actively pursuing opportunities to grow Canada’s defence exports by improving whole-of-government coordination to prioritize supports for export opportunities and providing more supports for Canadian firms selling abroad, including through Trade Commissioners, Defence Attachés, and expanded Canadian presence at international defence and aerospace trade shows.

Lastly, the Strategy seeks to foster workforce development within Canada, by implementing a Canada Defence Skills Agenda, by investing in talent development, job opportunities, skills upgrading, labour mobility, and entering into partnership for skills development with the provinces, territories, and with First Nations, Inuit, and Métis rights holders.

Pillar IV: Securing supply chains for key inputs and goods

The Strategy also addresses priorities of safeguarding Canada’s supply chains, including through the new Canadian Defence Industry Resilience program, which will support domestic businesses in expanding their production capacity, including for key components and materials. Canada also seeks to secure sources and production of critical minerals, steel, and aluminum.

The Strategy identifies the following key actions to foster defence innovation, research, and development:

Launch the Canadian Defence Industry Resilience program to secure key supply chains, including for domestic nitrocellulose production;
Publish a new strategy for expanding production, processing, stockpiling, and procurement of critical minerals by Q2 of 2026; and
Prioritize funding efforts to support key sectors, including steel and aluminum production, and the expansion of biodefence and medical countermeasures capability.

Pillar V: Working with key domestic partners, including in Canada’s north and arctic

The Strategy emphasizes the importance of domestic collaboration with the provinces and territories and with First Nations, Inuit, and Métis rights holders, across a multitude of areas. The Arctic is a particular focus of these collaboration efforts, noting the importance of this region and its communities to Canada’s defence and sovereignty.

The Strategy includes significant investment into the Northern Operational Support Hubs program, to provide critical infrastructure and logistical support for military operations in Canada’s North, and collaboration with Indigenous partners and northern communities in the Arctic will be an emphasis. Canada currently projects a $2.67 billion investment into this program, including for both pure defence investment as well as dual-use infrastructure and capabilities.

Key takeaways

1. Shift towards domestic procurement continues

For suppliers, the Strategy continues a recent trend of Canada prioritizing domestic defence procurement and sovereign capability-building. The Strategy specifically references an increased willingness to invoke the national security exception in defence procurement processes to achieve this objective, in addition to multiple changes to Canada’s ITB Policy.

These changes will likely facilitate greater priority being given to Canadian suppliers in defence procurement and shifts in the ways that Canadian Content is credited under the ITB Policy. The Strategy specifically emphasizes that some of these shifts are targeted at multinational suppliers to incentivize substantial and long-lasting investment into domestic Canadian industry and reduce merely technical compliance and indirect investments with Canadian subsidiaries.

Given the Strategy’s identification of 10 key sovereign capabilities where domestic supply and acquisition will be prioritized, the emphasis on domestic suppliers and domestic industry-building, is likely to be far-reaching, given how broadly some of these sovereign capabilities are defined.

Finally, Canada’s prioritization of defence-sector projects has already begun to have ripple effects through applicable regulatory agencies. Wait times and processing lag at agencies responsible for vetting applicable security clearances, controlled goods access, and regulatory reviews for national security purposes have dramatically increased. For suppliers, especially those looking to enter the defence-sector, getting ahead regulatory compliance to minimize the risk of further regulatory delay must be a top priority. Developing applicable policies, conducting security audits, defining key roles and responsibilities for employees, and preparing security screening materials in advance are an effective way to mitigate delays associated with obtaining applicable clearances.

2. New administrative frameworks and government partners

The Defence Investment Agency has yet to begin its work, and the exact nature of how its coordinating role in facilitating defence procurement will function is unknown. To date, Canada’s defence procurement industry has encountered difficulties due to various bureaucratic and regulatory barriers associated with multiple governmental entities being directly involved in defence procurements.

The Strategy does confirm that the Defence Investment Agency will be operating independent of Public Services and Procurement Canada, but what this will mean for suppliers in practice is unclear. Having a clear understanding of the roles and authority of the stakeholders within a certain procurement process is vital to ensuring that participants understand the process, where they can clarify or confirm additional information, and what rights of recourse they have.

Simultaneously, the Strategy also identifies a number of other government programs, entities, and roles that will take larger roles in investing in industry, research, and even in fostering Canadian defence exports. There are additional opportunities identified for regular industry-government consultation, such as the Defence Advisory Forum. Remaining aware of policy guidance, consultation sessions, and new resources available will be helpful to existing suppliers, as well particularly for small and mid-sized Canadian businesses who are entering into or increasing their participation in the defence industry.

3. More details and policy updates to come

The Strategy confirms that there will be several new initiatives and policy changes made throughout 2026. In particular, the ITB Policy will be undergoing revisions, which are anticipated to be published in early 2026, and will include an update to the ITB Terms and Conditions.

Other policy developments to watch for in 2026 include:

The publication of a framework for the onboarding of Canadian defence firms as strategic partners;
The publication of a new strategy for expanding production, processing, stockpiling, and procurement of critical minerals;
Establishment and publication of new research funding incentives, including the Science and Research Defence Advisory Counsil, the NRC Drone Innovation Hub, and the BOREALIS roadmap; and
Establishment of new investments in small and mid-sized businesses in the defence sector.

Broadly, the Strategy represents a general framework that primarily serves to identify strategic priorities and guiding principles for Canada’s defence sector. While some policy changes and investments have been confirmed, either through Budget 2025 or this Strategy, many specific details on how the Strategy’s objectives will be attained remain forthcoming.

The specifics on the role and function of the Defence Investment Agency, the updates to the ITB Policy and the Terms and Conditions, and how multinational suppliers with Canadian subsidiaries will integrate within the Strategy’s procurement framework all will require further assessment as more details are confirmed.

4. Engage counsel

The Strategy implements a number of significant changes to the Canadian defence sector. To get ahead of these changes, engage legal counsel early to discuss how to best adapt and move forward to avoid regulatory uncertainty and administrative delays.

How we can help

Please contact our Defence and Security team to discuss the Strategy’s implications, assess potential impacts, and determine how your organization can best position itself moving forward.

Our team is prepared to provide informed guidance and support your next steps.

U.S. Supreme Court Decision on Emergency Tariffs: Legal and Commercial Implications

Fri, 20 Feb 2026 00:00:00 Z

On February 20, 2026, the U.S. Supreme Court issued its decision in Learning Resources, Inc. v. Trump, holding that the International Emergency Economic Powers Act (IEEPA) does not authorize the U.S. President to impose broad based import tariffs. The ruling provides authoritative guidance on the limits of executive power in the trade context and has direct implications for businesses subject to U.S. tariffs, including Canadian exporters and importers.

Key holdings

In a 6–3 decision, the Court held that:

IEEPA does not confer authority to impose tariffs, notwithstanding language permitting the President to “regulate” importation during a declared national emergency.
Tariffs constitute a form of taxation, a power assigned by the Constitution to Congress, and therefore require clear and express legislative authorization.
Interpreting IEEPA to permit tariffs of unlimited scope, duration, and amount would impermissibly expand executive authority beyond what Congress delegated.

The majority emphasized that IEEPA has historically been used to impose sanctions and asset blocking measures, not to serve as a general tariff statute. The decision therefore affirms that IEEPA cannot be used as a general trade tool to impose sweeping import duties.

Tariffs invalidated by the decision

As a result of the ruling, tariffs imposed pursuant to IEEPA are invalidated, including:

Broad “reciprocal” country-specific tariffs applied across numerous trading partners, including Canada; and
Fentanyl related tariffs imposed on goods from Canada, Mexico, and China that relied on emergency declarations under IEEPA.

The Court made clear, however, that its decision is limited to tariffs imposed under IEEPA. It does not affect tariffs imposed under other statutory authorities, such as Section 232 of the Trade Expansion Act of 1962 (e.g., steel and aluminum tariffs). Those measures remain in effect because they were not before the Court and rest on distinct legislative frameworks.

Implications for Canadian businesses

From a business perspective, the decision materially reduces the risk of sudden, economy wide tariffs imposed under emergency powers. Canadian exporters and companies with integrated U.S. supply chains gain greater legal predictability regarding the limits of executive action under IEEPA.

However, the decision confirms that tariff risk has not been eliminated. Sector specific tariffs imposed under other trade statutes remain available to the U.S. government and continue to present compliance and cost considerations for cross border supply chains.

In practice, the commercial impact of the fentanyl related tariffs had been mitigated by existing trade arrangements. A substantial portion of goods originating in Canada and Mexico had remained exempt pursuant to the Canada–United States–Mexico Agreement (CUSMA). In addition, several trading partners had subsequently entered into bilateral arrangements with the United States under which the originally announced “reciprocal” tariffs were replaced with lower, negotiated duty rates.

Refunds of tariffs already paid

The Supreme Court did not address whether or how refunds will be issued for tariffs collected under the now invalidated IEEPA measures. The Court expressly left refund issues to subsequent proceedings, noting that questions relating to recovery of duties fall outside the scope of the Court’s decision.

As a result:

No automatic refund mechanism arises from the decision itself.
Recovery, if available, is expected to depend on U.S. customs law, including liquidation status, administrative protests, and potential litigation.

At this stage, the availability, timing, and mechanics of refunds remain uncertain. Businesses that paid IEEPA based tariffs should assess what steps are available to preserve refund rights, particularly where entries have not yet liquidated.

How we can help

BLG’s multidisciplinary team across Canada is well positioned to support clients as these developments unfold, including by supporting businesses with commercial risk management and strategic responses to cross border trade developments.

What health organizations need to know about the new AI scribe guidelines in Ontario, British Columbia, and Alberta

Fri, 13 Feb 2026 00:00:00 Z

Artificial intelligence–powered medical scribe tools (AI scribes) are increasingly used by Canadian health organizations to reduce documentation workload. In response, privacy regulators in Ontario, British Columbia, and Alberta have issued guidance on their lawful use under provincial health-privacy laws.

The scope of the new guidance varies by province. In Ontario and Alberta, it applies broadly to health information custodians as defined under PHIPA and the HIA, including hospitals, clinics, and physicians. In British Columbia, it applies only to private-sector healthcare providers regulated by PIPA, such as independent practitioners and most primary care clinics, and does not apply to public bodies like hospitals or health authorities.

This article summarizes the core compliance requirements in each province and highlights practical steps organizations should take before implementing AI scribe solutions.

Key takeaways for health organizations

As regulatory oversight of AI in healthcare increases, health organizations operating in Ontario, British Columbia, and Alberta should ensure that their use of AI scribes aligns with applicable legal requirements. In practical terms, this includes:

Documenting lawful authority and necessity, including the justification for using AI scribes despite their privacy impact.
Defining the scope of authorized use, including whether the scribe will also be used to support medical decision-making and clinical workflows.
Planning how to obtain consent (which is required in all jurisdictions).
Prohibiting secondary use (including vendor use of inputs and outputs for training) through contracts and system controls.
Limiting retention outside of the Electronic Medical Record (EMR) and relying on summary-only records.
Requiring human review of all AI-generated content before or soon after entry into the EMR.
Maintaining strong vendor oversight and governance, supported by a Privacy Impact Assessment (PIA) and, if a scribe will also be used to support medical decision-making, an Algorithmic Impact Assessment (AIA).

What is an AI scribe?

AI scribes are tools that use generative AI to capture clinical conversations, usually through real‑time audio, and turn them into structured notes and summaries. They can ease documentation pressures and help clinicians stay focused on patient interactions during care delivery. Because these tools record entire conversations involving patients, clinicians, and others, they typically process sensitive personal health information. Some AI scribes now go beyond simple transcription to provide features that support medical decision-making and clinical workflows. The deployment of scribes can raise documentation and other clinical risks and engages compliance obligations under provincial health-privacy laws.

AI scribe adoption must be “necessary” and “reasonable”

Across all three provinces, regulators emphasize that AI scribes cannot be adopted for convenience alone. Organizations must satisfy the applicable legal thresholds and justify the scope of recording full clinical encounters, most notably by showing that such collection is necessary for their operations and appropriate given the sensitivity of the information involved.

Ontario: PHIPA’s data-minimization rules require custodians to collect and use only the personal health information needed for the intended purpose. For AI scribes, this means limiting what is recorded, ensuring there is legal authority for the collection, and using less intrusive options where possible.
British Columbia: Under PIPA, organizations must meet the “reasonable person” test by demonstrating that a reasonable person would consider the collection of audio recordings, including sensitive voice data and incidental third-party information, appropriate in the circumstances, and that no less privacy-intrusive alternative would achieve the same objective.
Alberta: HIA applies the strictest standard. Custodians may collect personal health information only when expressly authorized by law, regardless of consent. Recording full clinical encounters must therefore be essential for care or another permitted purpose (e.g., determining eligibility or supporting internal management), not simply efficient.

Given the utility of AI scribes, we do not expect privacy regulators to challenge their use, but justification is nonetheless important to document, and custodians and trustees should carefully decide upon the scope of their use.

Consent must be jurisdiction-specific and legally grounded

Patient consent for the use of AI scribes has quickly become the norm. Consent is required in all three jurisdictions.

Ontario: Although health information custodians do not normally obtain consent to use technologies in processing personal health information, the IPC/Ontario has said that “consent of individuals would generally be required." According to the IPC, patients must understand that the encounter will be recorded using AI, what information is collected, the involvement of vendors, and the key risks and benefits of using AI scribes.
British Columbia: The OIPC has said that BC healthcare organizations must obtain consent before using an AI scribe in almost all clinical situations. Patients must be told what the AI scribe is, what it records, how their information (and any third‑party information) will be used, and the associated privacy risks, and must have a real choice to accept or decline.
Alberta: In Alberta, consent is required based on a provision of the HIA that requires custodians to obtain written consent to collect health information by a device that may not be visible to the individual. While custodians may comply by adopting processes to make the recording devices visible, they are best to obtain consent.

The legal standard for consent varies by jurisdiction. Practically, all custodians and trustees should adopt the disclosure called for by the Ontario and British Columbia commissioners. Those in Ontario and British Columbia who elect to obtain consent orally should require their clinicians to document the consent.

Secondary use and vendor training are effectively precluded

All three regulators take a restrictive approach to any secondary use of AI scribe inputs or outputs, particularly for vendor model training.

Ontario: PHIPA permits secondary use only with valid consent or if personal information is de‑identified to a “very low” re‑identification risk. IPC guidance indicates that audio recordings almost never meet this standard, effectively prohibiting vendor training.
British Columbia: Under PIPA, secondary use without consent is allowed only when it is reasonable and specifically authorized by law. OIPC guidance indicates that voice data usually remains personal information even when de-identified.
Alberta: Under HIA, vendors are treated as affiliates and may use personal health information only for purposes authorized by the custodian. Model training using personal health information is not permitted and cannot be justified by consent.

Custodians and trustees should carefully consider the secondary use issue. De-identification is a common means of enabling secondary use of personal health information, but there are strict requirements as to who de-identifies and how, and the very nature of the data produced by AI scribes renders lawful secondary use of very limited possibility.

Recordings and transcripts should be retained only in exceptional cases

Regulators are aligned in treating audio recordings and full transcripts as high-risk due to voice biometrics, incidental capture, and heightened breach exposure. As a result, the guidance converges on a principle of minimal retention.

Ontario: Retention outside the EMR should be exceptional. Best practice is to delete recordings and transcripts once a human‑validated summary is stored.
British Columbia: Limited retention is allowed only where needed for clinical decision‑making. Voice recordings should be deleted after transcription unless a clear purpose exists.
Alberta: Recordings and transcripts should be deleted after transcription and clinician validation, consistent with HIA’s essential‑information standard.

In practice, an EMR-only retention model (i.e., clinician-reviewed notes entered into the EMR, with underlying audio and transcripts deleted) has emerged as the prevailing compliance baseline.

Accuracy risks require human oversight

Across Ontario, British Columbia, and Alberta, regulators highlight similar accuracy risks, and all reject autonomous use of AI scribes. AI-generated notes must always be reviewed by a clinician, who remains legally responsible for the accuracy and completeness of the health record.

Ontario: Human review is required before any AI-generated content is relied on or entered into the EMR. Policies must be implemented and address hallucinations, multilingual errors, and automation bias.
British Columbia: PIPA requires organizations to take reasonable steps to ensure accuracy, including human-in-the-loop review, staff training, and periodic audits.
Alberta: Custodians must ensure accuracy under HIA. AI outputs must be reviewed to prevent errors such as session mixing or mis‑transcription.

Accountability and vendor oversight cannot be delegated

In all three provinces, accountability remains with the custodian. Vendors may provide AI scribe technology or processing support, but health organizations remain fully responsible for compliance with health-privacy laws.

Ontario: The IPC expects strong governance, including PIAs/AIAs as appropriate, clear policies, and detailed vendor contracts covering use restrictions, security, breach reporting, and audit rights.
British Columbia: Organizations must maintain updated policies, ensure staff training, implement strong security safeguards, and manage access, correction, and complaint processes. Vendor contracts must prohibit unauthorized use and ensure secure handling.
Alberta: Vendor contracts must preserve custodial control over health information and require vendors to comply with all HIA obligations, including limits on use and secure destruction.

Insurance Legal Ledger: BLG’s business insurance newsletter (Winter 2026)

Thu, 12 Feb 2026 00:00:00 Z

BLG's insurance lawyers monitor key rulings on insurance claim, policy interpretation, and coverage disputes to provide clients with practical insights they can act on. Whether you're dealing with complex commercial policies or emerging risks, our newsletter helps you understand how significant court decisions and regulatory changes might affect your business insurance strategy.

Download our latest seasonal issue below or connect with our insurance law team to discuss how these developments impact your organization.

In this edition (Winter 2026)

AI liability in insurance brokerage (Canada)

Insurance brokers adopting AI face evolving liability questions requiring thorough vendor due diligence, human oversight policies, and ongoing education. While responsibility for biased AI outcomes remains legally unsettled, brokers remain accountable for AI outputs and must maintain professional standards, transparency with clients, and privacy compliance across jurisdictions.

Normandin v. La Source (Bell) Électronique inc. (Québec)

The Superior Court of Québec authorized a class action finding extended protection plans should be classified as insurance products subject to tax on insurance premiums, not GST/QST. Court dismissed other claims but confirmed misclassification carries regulatory and fiscal consequences, making proper product classification and tax compliance strategically critical for distributors and insurers.

Abiusi et al. v. Lawyers' Professional Indemnity Company (Manitoba)

Manitoba court dismissed a title insurer's attempt to simply remove non-compliant home improvements rather than repair them, despite clear policy language granting this discretion. Court prioritized reasonable commercial results and parties' expectations over literal contract terms, directing full repair costs up to policy limits instead.

Kennedy v. Crombie Developments Limited (Nova Scotia)

Nova Scotia court dismissed slip-and-fall action against property occupiers, confirming accessible parking spaces don't attract higher standard of care than regular spots. Under Occupier's Liability Act, reasonableness—not perfection—remains the standard for winter maintenance. Occupiers need only take reasonable steps to protect visitors from icy conditions.

Next phase, same timeline: Insurance Council of British Columbia’s consultation on Restricted Insurance Agent Regulation

Wed, 11 Feb 2026 00:00:00 Z

In December 2025, the Government of British Columbia introduced the Restricted Insurance Agent Licence Regulation (Regulation), creating a new framework for businesses that sell insurance alongside their primary products.

Taking effect on January 1, 2027, the regulation requires certain non-insurance businesses to obtain a Restricted Insurance Agency Licence (RIA) to offer eligible insurance. For further details, see BLG’s insight on the initial announcement.

The Insurance Council of British Columbia is responsible for overseeing the new RIA licence. As such, on February 10, 2026, it launched a consultation regarding rule amendments for the RIA licence.

This insight outlines the consultation’s main points.

Proposed amendments

The proposed amendments address five sections of the Regulation: (1) definitions, (2) licence and application requirements, (3) ongoing licensure and practice requirements, (4) RIA fees, and (5) transition rules.

The consultation webpage offers summaries of each proposed amendment. For example, the proposed definition section suggests:

Adding the definitions of “designated representative”, “restricted insurance agency”, and “restricted insurance agency representative”.
Amending the definition of “insurance agency” to include a restricted insurance agency.
Repealing the definition of “restricted travel insurance licence”.

As well, the Council has published informational webpages on the accreditation program for sales representatives as well as the RIA licence generally to help licensees and stakeholders provide informed feedback.

Providing feedback

The consultation period runs from February 10, 2026, until April 27, 2026.

Interested parties can submit feedback by completing an online form or emailing rules.consult@insurancecouncilofbc.com. Additionally, a webcast will be held on March 11, 2026 at 10 a.m. PT to review the licensing program and proposed amendments.

Looking ahead

After the consultation period ends, the Insurance Council will review all feedback. The proposed changes will then be submitted to the Minister of Finance for consideration and approval.

Contact us

The Regulation will come into force on January 1, 2027, with a three-month transition period ending March 31, 2027. This allows businesses time to apply for a licence and adapt to the new requirements.

Stakeholders should monitor the Council’s website and communication channels for updates.

For more information about the consultation or the RIA licence, please contact the authors or any team member listed below.

Healthcare supply chains: Managing modern slavery risks in hospital procurement

Tue, 10 Feb 2026 00:00:00 Z

Healthcare organizations should be aware of growing scrutiny over supply chain practices, including with respect to risks of forced and child labour and modern slavery. With Canada beginning to seize goods at the border and entering the third reporting cycle under the Fighting Against Forced Labour and Child Labour in Supply Chains Act (Supply Chains Act), and a majority of public hospitals across Canada approaching their March 31 year-end, there are immediate measures hospitals, purchasing groups, and other healthcare organizations can implement to strengthen compliance and mitigate mounting risks.

Key takeaways

Which healthcare products carry the highest modern slavery risks? PPE, surgical supplies, medical devices, and textiles represent the most documented forced and child labour vulnerabilities in hospital supply chains.
What reputational risks do hospitals face from supply chain issues? As regulatory scrutiny increases and transparency expectations rise, previously hidden labour‑rights issues may surface publicly, creating reputational and operational risks for front-line healthcare organizations.
How can supply chain issues disrupt hospital operations? Non-compliant goods destined for healthcare use may be seized at the border like any other goods, leading to months of delay and potential denial of entry, directly impacting delivery of patient care.
How has border enforcement changed for Canadian organizations? Canada Border Services Agency (CBSA) detention actions targeting imports jumped from a single seizure in 2024 to nearly 50 in 2025.¹
What compliance deadlines should healthcare organizations prioritize? The third reporting cycle under the Supply Chains Act is now underway. 2025 reports are due May 31, 2026, while market and regulator expectations continue shifting beyond year-one standards.

Where healthcare supply chains are most vulnerable

Canadian hospitals, purchasing groups, and other healthcare organizations rely on global supply chains to procure large volumes of medical devices, PPE, surgical instruments, pharmaceuticals, and textiles from abroad, which carry risks associated with modern slavery. Documented cases of forced and child labour have recently surfaced within healthcare supply chains connected to Canadian organizations.

Filtered Insights

Canada privacy laws: What U.S. businesses need to know

Overview – Canada’s privacy laws

Key elements of Canada’s privacy laws

1 – Consent

2 – Limitations

3 – Cross-border transfers

4 – Breaches

5 – Biometrics

6 – Data processing agreements

7 – Privacy-by-default

8 – Enforcement

Practical considerations and obligations for commercial transactions

1 – NDAs require specific customization

2 – Privacy due diligence is critical

3 – Post-closing notification obligations

4 – Ongoing privacy management post-transaction

BLG can help

Canada extends clean economy ITC filing deadlines

Permanent establishment and remote work: OECD's 2025 update and your organization

What you need to know

The new two-part test

What counts as a "commercial reason"?

Dependent agent PE

Takeaway: What this means in practice

BLG can assist

Hold the housewarming party: Three FHSA considerations before making a down payment

1. Combination with Home Buyers’ Plan (HBP)

2. Double deduction strategy

3. Timing of marriage or common-law partnership

Opening an FHSA

Contributing to an FHSA

Modern slavery compliance in Canada: Essential guidance for the 2026 reporting landscape

Key takeaways

Quick refresher: Understanding the basics of Canada's modern slavery regime

Federal Financial Institutions Legislative and Regulatory Reporter – January 2026

January 2026

BC Budget 2026: PST expansion increases costs for commercial real estate

Background

Analysis

What changed

Services newly subject to PST (Effective Oct. 1, 2026)

Legal framework

Practical commercial real estate impacts

Transaction costs

Operating costs

Development costs

What does not change

What is still unclear

What you can do now

Beyond BC: Court of Appeal upholds broad reach of provincial privacy laws

Background

The Appeal Court’s decision

Conclusion

Extreme circumstances call for extreme measures: NL’s pandemic travel restrictions upheld by SCC​

Key takeaways

The decisions below

The Supreme Court interprets section 6 purposively and broadly

The majority confirms a purposive approach to bilingual Charter interpretation

The majority grounds a right of mobility simpliciter in both sections 6(1) and 6(2)

The Court finds the travel restrictions to be reasonable and justified in the context of a crisis

The Supreme Court splits on the proper interpretation of section 6

An ongoing dialogue regarding restriction of rights in a crisis

Final CSA rules on related party reporting and disclosure in financial statements: What investment fund managers need to know

Investigating performance bond claims: Lessons learned from Graphic Packaging v. 2477621 Ontario Inc.

Background

The Court’s decision

1. The surety’s right under a performance bond to request documents as part of its investigation of a claim

2. The distinction between notice of default and declaration of default

3. Material variation and prejudice to the surety in cases of extension of time for performance

Conclusion

Preventing confidentiality incidents: BLG’s translation of recent guidance from the Commission d’accès à l’information

What’s guaranteed – and what isn’t: The Supreme Court of Canada draws the line on GRC coverage in Emond v. Trillium Mutual Insurance

Overview

Background and procedural history

The majority’s decision

Dissenting reasons

Conclusion

Québec’s Private Sector Act: Compliance guide for organizations

Canada’s Defence Industrial Strategy: New implications for Canadian defence procurement

Extreme circumstances call for extreme measures: NL’s pandemic travel restrictions upheld by SCC