Filtered-Insights

Click carefully: Canadian Securities Administrators Staff Notice on cybersecurity practices

Fri, 31 Jul 2026 00:00:00 Z

The Canadian Securities Administrators (CSA) published Staff Notice 33-322 – Review of Registered Firms’ Cybersecurity Practices and Additional Guidance (the Staff Notice) on July 15, 2026, following a focused review of 73 registered firms’ cybersecurity practices. The message is not especially surprising: cybersecurity is a core business risk, and registered firms are expected to have practical, documented and regularly refreshed controls that fit their size, complexity and operations.

Practical takeaways

Right-size your cyber security program. Smaller and mid-sized firms may not need bank-sized machinery, but they do need to cover the key risks and be able to show their work.
Make cybersecurity part of the compliance calendar: policy review, training, risk assessment, vendor review, incident response testing and backup testing should all be on the list.
Keep evidence. The CSA repeatedly focuses on documentation, including reviews, training records, risk assessments, vendor due diligence, testing and follow-up.
Treat third-party incidents as your problem too. If a provider holds either firm or client data, its breach may quickly become your own regulatory, contractual and client-communications issue.
Do not wait for a breach to find out who is supposed to do what. Test the incident response plan while everyone is calm and the phones are not ringing.

As set out in the Staff Notice, cybersecurity incidents are both a business risk to firms and a risk to the confidential client data held by firms. In other words, “we thought IT had it covered” is unlikely to be an acceptable response.

Five expected cybersecurity practices

1. Policies that match reality. Firms should have written cybersecurity policies and procedures that cover the obvious trouble spots: electronic communications, firm and personal devices, remote access, data security and encryption, software updates, vendor oversight, employee training, accountability and incident reporting. As with many other policies, the CSA expects those pertaining to cybersecurity to be reviewed at least annually and to align with the firm’s actual procedures. In our experience, policies, controls, governance and reporting must be assessed against real-world expectations, and work with the firm’s crisis communication, business continuity, disaster recovery and escalation procedures. In addition, incident playbooks need to have practical decision trees, notification triggers, evidence preservation and documentation protocols. About those passwords…

2. Training that sticks. Tailored cybersecurity training should happen at the time of onboarding a new employee, and at least annually after that, with more frequent refreshers where the firm’s risk profile calls for it. Training should cover phishing and social engineering, confidential information, passwords, device security, and when and how to escalate. Firms should keep records of who attended and when, and what was covered. Documented phishing simulations are all but expected, with repeat clickers subject to targeted follow-up.

3. Risk assessments with actual controls. Firms should conduct and document cybersecurity risk assessments at least annually. The assessment should identify critical assets and confidential data, vulnerabilities (both internal and external), likely threats, potential consequences and whether the firm’s controls are sufficient. CSA staff expect that these risk assessments are not only documented, but that they evidence that a firm has considered all of the specified areas. Firms should not forget about risks and controls related to access rights: role-based access controls, the principle of least privilege, timely removal of access and periodic reviews are squarely on the CSA’s radar. Firms that use third-parties to conduct these risk assessments are expected to address any missing elements set out in the assessment and how any concerns will be addressed. Baseline controls to consider for areas of risk include multi-factor authorization, VPNs, encryption, scheduled systems backups, email filtering, software patching and updating, suspicious cyber activity logs and secure data disposal. Staff note that cybersecurity audits and penetration testing, while not mandatory, are effective practices.

4. Vendor oversight that is more than “they’re big, so are probably fine.” Every firm that was part of the review used third-party service providers with access to systems or data. The CSA expects meaningful due diligence before onboarding all third-party service providers, and periodically afterward, with documentation supporting those efforts. Firms should understand how providers protect data, where data is stored, how access is controlled, how incidents are reported, and how responsibilities are divided in cloud environments. We often advise firms to strengthen contractual requirements and update items such as cybersecurity controls, breach notification, audit rights, sub-contracting and data handling. System and Organization Controls (SOC) 2 or similar reports are useful, where available, but they still need to be reviewed.

5. An incident plan that has been tested before the incident. Firms should have a written incident response plan with a clear definition of a cybersecurity incident, a description of the different types of cyber attacks a firm might face, procedures for attacks on third-party service providers holding firm data, and specifics on roles and responsibilities for notifications, escalations and so on. Firms are expected to regularly test this plan, whether through tabletop exercises or simulations. Well thought-out tabletop exercises entail designing a realistic ransomware or cyber incident scenario that unfolds across technical, executive and board-level decision points. Backup recovery testing should also be documented. While cyber insurance is not required, the CSA notes it can be helpful, both financially and by providing operational assistance when faced with a security breach.

How we can help

AI in Canadian health care: From pilots to real-world implementation

Thu, 30 Jul 2026 00:00:00 Z

Artificial intelligence has entered a new phase in Canadian health care. BLG recently hosted health care leaders, hospital representatives, technology companies, and industry stakeholders at its Artificial Intelligence in Canadian Health Care Symposium in Toronto.

Discussions throughout the symposium revealed a clear shift in how health care organizations are thinking about AI. A year ago, many conversations focused on experimentation and use cases. As of 2026, attention is increasingly turning to implementation, governance, procurement, accountability and scale. A common theme emerged throughout the day: AI has entered a new phase in the sector.

Artificial intelligence is moving from experimentation to implementation

The conversation is no longer whether AI can be used. AI is already being tested, evaluated, and deployed across clinical, operational, and administrative settings. The more pressing question is how health care organizations can deploy, govern, and scale these tools in a way that is safe, trusted, operationally sustainable, and legally defensible.

For hospitals, health authorities, health care companies, insurers, and health technology vendors, the next 12 to 24 months are likely to be defined less by technological capability and more by governance, accountability, procurement, privacy, and implementation discipline.

AI adoption is accelerating, but scale is lagging

Health care organizations across Canada are increasingly exploring AI tools for documentation, workflow efficiency, patient flow, triage, diagnostic support, imaging review, and operational decision-making. AI is no longer confined to research environments or isolated pilots.

However, the widespread deployment of AI across health care systems remains relatively limited.

Many organizations have successfully identified promising use cases and conducted pilot projects. Far fewer have successfully integrated AI into day-to-day operations in a manner that is scalable, repeatable, and trusted by clinicians, patients, and organizational leadership.

This implementation gap is becoming one of the most significant challenges facing health care organizations. The barriers are rarely technical alone. More often, organizations struggle with governance structures, procurement models, privacy obligations, accountability frameworks, implementation planning, and organizational readiness.

The result is that health care organizations increasingly find themselves asking not whether AI works, but whether they can confidently operationalize it within the realities of the Canadian health care system.

Why this matters now

The timing of this conversation is important.

Across Canada, health care organizations continue to face significant workforce pressures, administrative burden, clinician burnout and access-to-care challenges. As a result, many organizations are evaluating AI not as a technology initiative, but as a potential operational tool to help address real constraints within the health care system. This urgency is one reason why discussions around implementation, governance and accountability have become so important.

Against that backdrop, AI is increasingly being viewed as a potential tool to reduce documentation burdens, support clinical workflows, improve operational efficiency, and assist decision-making.

Yet health care is not simply another industry adopting a new technology.

AI deployment in health care may affect patient care, clinical judgment, privacy rights, institutional accountability, and public trust. Decisions about implementation therefore carry different implications than they might in other sectors.

This is one reason why governance has become such a central theme in discussions about health care AI.

Governance is becoming a precondition to scale

A recurring theme throughout the symposium was that governance is no longer an optional consideration addressed after deployment.

Increasingly, governance is becoming the bridge between successful pilots and sustainable implementation.

Health care organizations are being required to answer a series of fundamental questions:

Who approves the deployment of an AI system?
What evidence is required before implementation?
Who is accountable when issues arise?
How should systems be monitored over time?
When should a system be paused, retrained, modified, or discontinued?
How should incidents, near misses, and unexpected outcomes be documented and managed?

Governance is therefore becoming less about policy development and more about establishing operational structures that support the responsible use of AI across an organization's lifecycle.

Organizations that fail to address these questions may find it difficult to move beyond isolated use cases, regardless of the underlying technology's capabilities.

Privacy and data governance remain foundational

No discussion of health care AI can occur without addressing privacy and data governance, something ever more timely now as Canada recently introduced Bill C-36, An Act to enact the Protecting Privacy and Consumer Data Act (PPCDA), which would replace the Personal Information Protection and Electronic Documents Act (PIPEDA) as our federal private-sector privacy regime; BLG published in-depth guidance on the proposed changes.

AI implementation frequently engages questions involving personal health information, de-identification, consent, vendor access, cybersecurity, secondary use of data, and re-identification risk.

As health care organizations pursue more sophisticated AI initiatives, they are increasingly being asked to balance innovation objectives against statutory obligations and public expectations.

Importantly, governance considerations extend beyond compliance. Public trust remains a critical factor in successful AI adoption. Health care organizations must be able to explain how data is being used, what safeguards are in place, and how accountability is maintained throughout deployment.

Trust is not simply a communications issue, it is increasingly becoming an operational requirement.

The standard-of-care conversation is beginning

One of the more interesting discussions throughout the symposium involved the evolving relationship between AI and the standard of care.

Historically, concerns have focused on the risks associated with overreliance on AI-generated outputs. Clinicians remain responsible for exercising professional judgment, and AI does not transfer accountability for clinical decisions.

However, health care organizations should also be mindful of a different question that may emerge as AI adoption matures.

As certain tools become more accurate, more reliable, and more widely accepted within clinical practice, questions may eventually arise regarding whether failure to consider certain widely accepted AI-supported tools creates a different category of risk.

While Canadian law has not yet provided definitive answers, organizations should anticipate increased attention to how AI intersects with professional obligations, clinical decision-making, and institutional risk management.

This issue is likely to become increasingly important as AI moves from experimentation to broader adoption.

AI procurement and contracting are becoming strategic issues

Another key takeaway from the symposium was that many AI risks are ultimately managed or created through contractual arrangements.

Health care organizations often focus on the functionality of a proposed tool. Equally important, however, are the terms governing how that tool will be deployed, maintained, updated, monitored, and supported over time.

Organizations should carefully consider:

allocation of liability;
privacy and security obligations;
data ownership and permitted uses;
implementation responsibilities;
performance expectations;
audit and reporting rights;
model updates, functionality and retraining obligations;
service interruptions and incident response; and
governance and monitoring requirements.

As AI systems continuously evolve, procurement arrangements increasingly need to address lifecycle management rather than simply software acquisition.

This makes contracting a strategic component of AI governance, not merely an administrative exercise.

Five practical questions for health care organizations

As health care organizations evaluate AI initiatives, leadership teams should consider:

What problem are we trying to solve?
What governance structure will oversee implementation and ongoing use?
How will privacy, data governance, and cybersecurity risks be addressed?
What contractual protections are required to manage risk appropriately?
How will the organization evaluate performance, monitor outcomes, and respond to issues after deployment?

Organizations that can answer these questions effectively will be positioned to move from experimentation toward sustainable implementation.

Why health care AI requires a multidisciplinary approach

The issues associated with health care AI do not fit neatly within a single legal or operational discipline.

Few health care AI initiatives involve a single issue or practice area. Questions involving AI frequently engage health law, privacy, cybersecurity, technology procurement, regulatory compliance, governance, insurance, litigation risk and enterprise risk management simultaneously.

As a result, organizations increasingly require advice that integrates multiple perspectives rather than addressing individual issues in isolation.

At BLG, our Health Care, Cybersecurity & Privacy, Technology, Corporate Commercial, Regulatory, and Litigation teams work together to help health care organizations assess AI initiatives from multiple angles, whether evaluating governance frameworks, negotiating procurement arrangements, assessing privacy obligations, developing implementation policies, or managing operational and clinical risk.

Looking ahead

If there was one overarching takeaway from BLG's Artificial Intelligence in Canadian Health care Symposium, it was this: AI has moved from innovation to implementation.

The organizations that succeed over the next 12 to 24 months will not necessarily be those that adopt AI first. They will be the organizations that can govern it, contract for it, explain it, monitor it, and stand behind it once it becomes part of day-to-day operations.

As health care organizations move from experimentation to operational deployment, the ability to govern, monitor and manage AI will increasingly distinguish successful initiatives from unsuccessful ones. BLG will continue working with hospitals, health care organizations, technology companies and other sector participants as they navigate the legal, regulatory, governance and operational challenges that accompany this next phase of AI adoption.

Reach out to any of the authors or key contacts below to discuss how AI governance, procurement, privacy or clinical risk considerations may affect your organization.

Please also sign up for BLG’s AI x Health Care newsletter that aims to provide periodic updates on the latest AI in health care news.

McCarthy v. Bison Transport: Ontario court upholds just cause dismissal

Thu, 30 Jul 2026 00:00:00 Z

In McCarthy v. Bison Transport Inc., 2026 ONSC 3729, the Ontario Superior Court of Justice upheld a termination for just cause arising from an employee’s second failed drug test. The decision highlights the importance of clear workplace policies, consistent enforcement, and the limits of the duty to accommodate in the absence of an actual or perceived substance-dependency disability.

Key takeaways for employers on just cause dismissal

McCarthy v. Bison Transport Inc. confirms that employers in safety sensitive industries may rely on breaches of drug and alcohol policies as grounds for just cause termination, provided those policies are clearly communicated to employees, consistently enforced and impose consequences proportionate to the breach.

Employers may rely on a positive drug test to support termination where an employee knowingly violates a valid workplace policy.
The duty to accommodate does not apply where there is no actual or perceived substance-dependency disability.
Where an employee has, or is perceived to have, a substance-dependency disability, employers must accommodate to the point of undue hardship.
Clear documentation, signed acknowledgements and prior warnings can help employers show employees understood the policy and the consequences of breaching it.
Good faith, transparent termination processes can help reduce the risk of aggravated and punitive damages.

Background: failed drug tests and workplace policy enforcement

Mr. McCarthy worked for Bison Transport, a federally regulated employer, for four years as a long-haul driver. When he was hired, Mr. McCarthy attended mandatory training and signed an acknowledgement confirming his understanding that violations of Bison Transport’s Drug and Alcohol Policy (the Policy) could result in disciplinary action, including termination.

In November 2014, Mr. McCarthy failed a random drug test administered in accordance with Bison Transport’s Drug and Alcohol Testing Procedures. Bison Transport placed Mr. McCarthy on an unpaid leave of absence and required him to complete a return-to-work program, including educational programming and testing requirements. Later that month, Mr. McCarthy returned to work, undergoing further random drug testing, which he passed. Following his return to work, Mr. McCarthy signed a written warning expressly advising that any future failed drug or alcohol tests could result in his immediate termination.

In October 2017, Mr. McCarthy failed a second drug test. During a subsequent meeting, he again acknowledged the Policy and his understanding that a second violation could lead to his termination. Bison Transport terminated his employment for cause with immediate effect.

Mr. McCarthy commenced a wrongful dismissal action. The Ontario Superior Court of Justice dismissed his claim, holding that his termination was justified under the Policy, which was found to be a reasonable one for employees in safety sensitive positions.

The Ontario Superior Court of Justice’s reasoning: policy clarity, good faith and evidentiary proof

A clear and consistently enforced workplace policy can support termination for just cause

Bison Transport argued that it had just cause to terminate Mr. McCarthy’s employment after he violated its Policy by failing a second drug test while employed in a safety sensitive position.

The Court agreed. In its decision, the Court reaffirmed that an employer relying on a breach of a corporate policy as grounds for termination must prove that the policy was well-known to the employee, that it was consistently enforced, and that it imposed consequences proportionate to the implications of the breach.

The evidence showed that the Policy had been clearly communicated to and understood by Mr. McCarthy and that it was consistently enforced by Bison Transport. The Court also noted that Mr. McCarthy had acknowledged, following his first failed drug test in 2014, that a second failed test could result in his immediate termination. Further, the Court found that the Policy itself was reasonable given the safety sensitive nature of Mr. McCarthy’s position.

Finally, the Court found no evidence that Mr. McCarthy had, or was perceived to have, a substance addiction or dependency issue that would have triggered Bison Transport’s duty to accommodate. The Court concluded that, given the “uncontradicted evidence” that Mr. McCarthy neither suffered from nor was perceived to suffer from a drug-related disability, Bison Transport had no obligation to accommodate him and was justified in terminating his employment for cause following his second failed drug test.

Honest and transparent termination processes can limit an employer’s damages exposure

Mr. McCarthy sought damages for breach of contract and breach of the Canadian Human Rights Act, as well as aggravated and punitive damages.

Having found that Mr. McCarthy was not wrongfully dismissed, the Court briefly considered the damages that would have been awarded had his claim succeeded. In doing so, it rejected his claim for damages under the Canadian Human Rights Act, emphasizing that there was no evidence that he suffered from a disability or was perceived to have one.

The Court also dismissed Mr. McCarthy’s claims for aggravated and punitive damages, finding no evidence to support the allegation that Bison Transport engaged in unfair, bad-faith or otherwise deliberate unlawful behaviour during his termination. In contrast, Bison Transport was found to have acted honestly and transparently throughout the process, motivated by legitimate public safety concerns. The Court concluded that, even if Mr. McCarthy had been wrongfully dismissed, Bison Transport's conduct during the termination process did not warrant an award of aggravated or punitive damages.

What McCarthy v. Bison Transport Inc. means for Ontario employers

Employers in safety sensitive industries may rely on workplace policies, including drug and alcohol policies, to justify termination for just cause. To do so, however, employers must ensure their policies are clear, well-communicated to employees, consistently enforced, and proportionate to the breach.
Employers should maintain complete and accurate records of policy documents, employee training, signed acknowledgements, warnings, testing results, and other documentation showing that employees understand applicable policies, procedures and consequences.
Random drug and alcohol testing may be permissible in safety sensitive workplace environments, particularly where the testing is connected to legitimate safety concerns and implemented through a reasonable workplace policy.
If human rights issues are engaged (for example, in the drug and alcohol context if the employee has or is perceived to have a drug or alcohol dependency), employers must remain mindful of the duty to accommodate to the point of undue hardship. On the other hand, recreational drug use alone, without a dependency, does not trigger an employer’s duty to accommodate.
Employers can reduce the risk of aggravated and punitive damages by handling disciplinary and termination decisions honestly, transparently and in good faith.

BLG’s Labour and Employment group can help

If you have questions about just cause dismissal or any other labour and employment matter, BLG's Labour & Employment Group provides strategic advice to employers across Canada. Reach out to the authors or key contacts for guidance tailored to your organization.

SCC confirms: You have a constitutional right to judicial review on all issues

Thu, 30 Jul 2026 00:00:00 Z

In Democracy Watch v. Canada (Attorney General), the Supreme Court of Canada confirmed that the Constitution guarantees the availability of a legality review for all aspects of an administrative decision. Privative clauses purporting to oust the courts from this supervisory role are unconstitutional.

The Supreme Court held that general political oversight of the Conflict of Interest and Ethics Commissioner (the Commissioner) by Parliament does not provide an adequate alternative remedy for judicial review of the Commissioner’s decisions. The Supreme Court declared a partial privative clause purporting to preclude judicial review of the Commissioner’s decisions on questions of fact and law to be unconstitutional.

Key takeaways

Judicial review is available for all aspects of an administrative decision: Legality review of both questions of fact and law is part of the superior courts’ core supervisory jurisdiction protected by sections 96 to 101 of the Constitution Act, 1867. The Court declined to endorse the view that reasonableness review under Vavilov is the constitutionally guaranteed minimum.
Partial privative clauses are unconstitutional: Legislatures cannot constitutionally oust the courts’ core supervisory jurisdiction through privative clauses, even partial ones. Privative clauses that cannot be read as constitutionally compliant should be struck down.
An adequate alternative remedy must provide for a legality review and a commensurate remedy: While a court has discretion to decline to consider the merits of a judicial review application based on an “adequate alternative remedy”, the alternative forum must provide for a legality review of the impugned decision and offer a remedy commensurate with that which would have been available on judicial review.
General political oversight is not an adequate alternative to judicial review: Though Parliament has a general oversight role over the Commissioner, this political oversight did not provide the remedy available on judicial review to Democracy Watch, namely, consideration of the legality of the Commissioner’s report.

Background

The Commissioner issued a report on May 14, 2021, finding that then-Prime Minister Justin Trudeau had not contravened the Conflict of Interest Act, S.C. 2006, c. 9 (the COIA), in relation to two WE Charity funding decisions. Democracy Watch applied to the Federal Court of Appeal for judicial review of the Commissioner’s report, alleging errors of fact and law. The Attorney General of Canada brought a motion to strike Democracy Watch’s application, in part on the basis that the privative clause in s. 66 of the COIA prohibits judicial review of the Commissioner’s decision on questions of fact and law, limiting review to questions of jurisdiction alone.

A full panel of the Federal Court of Appeal allowed the Attorney General’s motion on the basis that Democracy Watch had adequate alternative remedies available to it, namely, political oversight by the Standing Committee on Access to Information, Privacy and Ethics, which receives annual reports from the Commissioner on the administration of the COIA. Relying on Canada (Auditor General) v. Canada (Minister of Energy, Mines and Resources), in which the Supreme Court held that the Auditor General had an adequate remedy to address grievances with the Governor in Council’s decisions under the Auditor General Act through a Parliamentary reporting mechanism, the Federal Court of Appeal determined that Parliament’s political oversight of the Commissioner under the COIA provided an alternative remedy in this case. In a minority opinion, Chief Justice de Montigny also would have found that the privative clause in s. 66 barred judicial review, though the majority did not agree that the privative clause was enforceable.

Supreme Court of Canada decision

The Supreme Court allowed Democracy Watch’s appeal. In a unanimous decision written by Chief Justice Wagner, the Supreme Court held that there was no adequate alternative remedy available to Democracy Watch, and that the Constitution requires legality review of all aspects of administrative decisions, including on questions of fact and law. Section 66 of the COIA, which purported to oust review on certain issues, was therefore unconstitutional and declared to be of no force and effect to the extent it bars judicial review on questions of fact and law.

A political process to enforce the COIA is not an adequate alternative remedy

The Supreme Court held that the Federal Court of Appeal erred by treating political oversight by Parliament through the Commissioner’s annual reporting obligation as an adequate alternative remedy. While the courts have discretion to decline to hear the merits of an application for judicial review where there is an adequate alternative remedy, an alternative forum is only adequate if it provides for a legality review of the administrative decision, and if a commensurate remedy can be ordered.

The Supreme Court distinguished Auditor General, in which the Auditor General himself sought judicial review but had access to an alternative political remedy, from the situation of Democracy Watch, which brought an application for judicial review based on public interest standing and has no other recourse under the COIA. Parliament’s political oversight does not provide Democracy Watch with any right to a legality review of the Commissioner’s report. Additionally, s. 47 of the COIA provides that the Commissioner’s conclusions in the challenged report are final and may not be altered by anyone. As such, the Supreme Court of Canada observed it was “hard to see” what political remedy Parliament could offer Democracy Watch. The only way for Democracy Watch to obtain legality review of the Commissioner’s report was through the courts.

The Constitution guarantees legality review on questions of fact and law

The Supreme Court also affirmed that the Constitution guarantees legality review of all aspects of an administrative decision, including questions of fact and law. Pursuant to the judicature provisions in ss. 96–101 of the Constitution Act, 1867, the courts play a constitutional supervisory role over the administrative state, through judicial review of exercises of public power. This role is fundamental to the rule of law, which requires that all legal powers be exercised in accordance with their limits. The Supreme Court’s emphasis on the importance of judicial review to the rule of law follows its prior decisions which reiterated the constitutional nature of the right to seek judicial review, including Yatar v. TD Insurance Meloche Monnex.

Though in Crevier v. Attorney General of Quebec, the Supreme Court had observed that a privative clause cannot shield an administrative decision from judicial review on questions of jurisdiction, the Supreme Court found that this does not mean that judicial review on questions of fact and law can be so shielded. Rather, the Court concluded that Crevier must be understood in its proper historical context—including the courts’ evolving understanding of what constitutes a “jurisdictional question”, and the changes in the applicable standard of review. Crevier never intended to permit privative clauses to shield unreasonable findings of fact or law from judicial review.

However, the Court declined to endorse the view from certain parties and interveners that the reasonableness review as defined in Vavilov is the constitutionally guaranteed minimum seeing as the common law standards of review can be and have been modified over time, leaving that issue for another day.

Accordingly, legislation that purports to oust the courts’ supervisory role is unconstitutional. The Supreme Court held that s. 66 of the COIA, which purports to oust judicial review on questions of fact and law, could not be read in a constitutionally compliant manner, and therefore declared it to be of no force and effect.

The Court’s decision in Democracy Watch will be relevant in the upcoming appeal in Canadian National Railway Company v. Alberta Pacific Forest Industries Inc. (42092), set to be argued in November, addressing the constitutionality of s. 18.5 of the Federal Courts Act, which ousts the Federal Courts’ jurisdiction to hear a judicial review application where the matter may be appealed to the Governor in Council. BLG is counsel for CN in the appeal.

What CIRO is doing: Enforcement report for 2025-2026

Tue, 28 Jul 2026 00:00:00 Z

On July 22, 2026, the Canadian Investment Regulatory Organization (CIRO) released its enforcement report for the 2026 fiscal year, from April 1, 2025, to March 31, 2026 (the Report), which can be found here. The Report covers enforcement activities and priorities for both investment and mutual fund dealers over the past year and notes that most integration priorities have now been completed. CIRO “continues to modernize its regulatory approach by integrating systems, policies and processes to strengthen regulatory effectiveness.”

Key CIRO enforcement trends for investment and mutual fund dealers

We have excerpted some important findings from the Report and believe these trends will continue in the year ahead:

CIRO focuses on dealer supervision, gatekeeping and compliance systems:
1. CIRO continues to focus on cases involving system issues, dealer supervision and gatekeeping. While there are still individual misconduct cases, there is a noticeable shift toward scrutinizing firms’ compliance systems with a focus on preventing misconduct, not simply responding to it.
CIRO pursues fewer enforcement proceedings with higher fines:
1. Year over year, proceedings commenced and concluded have decreased, but sanctions and disgorgement have significantly increased. This means CIRO is prosecuting fewer cases but pursuing higher-value proceedings.
CIRO harmonizes MFDA and IIROC enforcement systems:
1. The Report emphasizes that the MFDA and IIROC systems have merged and are operating as one system.

CIRO enforcement activity in 2026 focuses on investor protection and market integrity

The Report highlights that in 2026, CIRO hearing panels imposed more than $15 million in sanctions. The Report also notes that suspensions and permanent bars were imposed, predominantly against individuals, and that CIRO continued to pursue disgorgement orders. The cases advanced focused on the effectiveness of supervision and internal controls, as well as the obligation of regulated entities and individuals to act as gatekeepers to the capital markets.

CIRO also continued to refer cases to the Canadian Securities Administrators (CSA). In the 2026 fiscal year, 86 market-related cases were referred, including 32 manipulation cases, nine insider trading cases and 45 other Securities Act violations.

This year, the Report focuses on cases involving the protection of investors from unfair, improper or fraudulent practices, improving industry standards and promoting market integrity:

Against firms, the Report noted several decisions related to breaches of supervisory obligations and a lack of due diligence in the opening and operation of accounts.
Against individual regulated persons, the Report drew attention to decisions relating to discretionary trading, misappropriation of client funds and unauthorized transfers.

CIRO enforcement statistics show higher sanctions and changing complaint trends

The Report includes a detailed summary of statistics on sanctions imposed in 2026, the fine collection rate and the number of complaints, investigations and enforcement proceedings.

In 2026, there were a total of nine decisions against firms, compared with seven decisions in 2025 and 10 decisions in 2024. The quantum of monetary sanctions against firms more than doubled in 2026, reversing the decline seen between 2024 and 2025. Dealers were collectively ordered to pay a total of $4,097,500 in fines in 2026, up from $2,400,000 in 2025. Dealers were also ordered to disgorge a total of $4,305,790, a nearly sevenfold increase from $623,925 in 2025.

As for individuals, total fines ordered increased from $4,992,523 in 2025, in connection with 50 decisions, to $6,266,999 in 2026, in connection with 39 decisions. The quantum of disgorgement decreased from $1,718,059 in 2025 to $958,684 in 2026, though this amount remains higher than the $427,997 in disgorgement in 2024. There was also a decrease in the number of suspensions, conditions and permanent bars compared with 2025.

The number of Complaints and Settlement Reporting System (ComSet) complaints increased substantially, from 3,833 in 2025 to 6,426 in 2026. However, CIRO attributed the increase to several large mutual fund dealer members filing service-related and other events in ComSet that were not previously reported in the Member Event Tracking System (METS) and noted that the additional events did not raise regulatory concerns or increase the number of enforcement cases opened.

Notably, 2026 saw a year-over-year decrease in enforcement proceedings, both commenced and concluded, continuing the trend from 2024 to 2025. The majority of concluded proceedings were settlement hearings, with the firms or registered individuals involved agreeing to the imposed sanctions.

Increased scrutiny for regulated firms

CIRO’s 2025-26 enforcement report signals a continued focus on stronger supervision, effective compliance systems and meaningful consequences for misconduct. Regulated firms should review their internal controls, supervision practices and gatekeeping obligations to ensure they are prepared for increased scrutiny in the year ahead.

The clean economy ITC labour requirements: How they work, new CRA guidance and some residual issues

Mon, 27 Jul 2026 00:00:00 Z

NOTE: For a print-friendly version of this document that includes visuals and tables, please download and print the .pdf file.

Canada’s clean economy investment tax credits (ITCs) constitute a major tax policy expenditure supporting Canada’s efforts to achieve a net-carbon-zero economy by 2050. These ITCs, which are explained and summarized here, are often a critical element in the financial viability of many carbon capture, energy generation, battery storage and other clean economy projects.

While the details of the different clean economy ITCs vary somewhat, they generally follow a more or less common format:

eligible taxpayers, generally taxable Canadian corporations, incur expenditures that qualify for a particular clean economy ITC (“qualifying expenditures”), generally being the cost of specific tangible property designated as ITC-eligible, such as a wind turbine;
qualifying expenditures generally include the full cost of acquiring and installing ITC-eligible property and putting it into active service, but generally exclude “preliminary work activity” such as front-end design or engineering work; and
for each taxation year, the eligible taxpayer claims an amount of the particular clean economy ITC equal to total qualifying expenditures for that year, reduced by any “government assistance” received or receivable by the taxpayer, multiplied by the ITC rate for that particular clean economy ITC. This is done by completing and filing the prescribed form applicable to that particular clean economy ITC by the deadline permitted for so doing. Prescribed forms and other information can be found on the Canada Revenue Agency’s clean economy ITC webpage. The amount of ITC the taxpayer is entitled to is credited to the taxpayer’s CRA account and either reduces its taxes owing or is paid to the taxpayer.

Taxpayer’s $ ITC entitlement = ITC rate × $ taxpayer’s qualifying expenditures

When it comes to the ITC rate, the taxpayer has a choice to make when claiming the ITC and completing the required prescribed form (except for the Clean Technology Manufacturing ITC, to which the labour requirements do not apply). If a taxpayer elects to meet the “labour requirements” set out in s. 127.46 ITA, it may claim the particular clean economy ITC at the “regular tax credit rate.” This means the full ITC rate specified in the legislation, such as 30 per cent for the Clean Technology ITC, 15 per cent for the Clean Electricity ITC and so on. Otherwise, the taxpayer may claim only the “reduced tax credit rate,” being 10 percentage points lower than the “regular tax credit rate,” viz., 20 per cent for the Clean Technology ITC, five per cent for the Clean Electricity ITC and so on. It is not uncommon on major clean economy projects for the difference between the regular and reduced ITC rate to amount to tens of millions of dollars, or more on the largest projects.

If a taxpayer elects to meet the labour requirements (which consist of a “prevailing wage requirement” and an “apprenticeship requirement”) but does not in fact meet them, there are two possible outcomes as regards the ITC rate:

if the CRA determines that the taxpayer failed to meet those requirements “knowingly or in circumstances amounting to gross negligence” (the K/GN Standard), the taxpayer effectively suffers a 15 per cent ITC rate reduction, i.e., what would normally be a 30 per cent rate for the Clean Technology ITC essentially becomes 15 per cent instead, a catastrophic result for many clean economy projects; or
otherwise, the taxpayer gets the regular tax credit rate but must pay a per diem tax in ss. 127.46(6) or (7) to the CRA and top-up payments to any underpaid employees.

Hence, the K/GN Standard constitutes a fork in the road for establishing the consequences of labour requirements non-compliance.

The discussion that follows describes some of the interpretive and practical issues associated with the labour requirements, and reviews the conclusions reached by the CRA’s Income Tax Rulings Directorate (Rulings) in CRA document 2025-1081341E5, dated April 28, 2026 (the New CRA Guidance). In the New CRA Guidance, Rulings answers questions about a situation where the taxpayer has engaged a contractor whose employees (1) are not covered by an eligible collective agreement and (2) are paid less than what the labour requirements prescribe to be the compensation necessary to comply with the “prevailing wage” element of the labour requirements.

The New CRA Guidance makes the following interpretive determinations:

in a situation where no eligible collective agreement applies to covered workers who have been paid less than the prevailing wage, the taxpayer can correct this deficiency, i.e., pay these workers the shortfall to bring them up to the prevailing wage, any time before the taxpayer prepares and files their ITC claim for the relevant taxation year and be in full compliance with this element of the prevailing wage requirement. As a result of being in compliance, the per diem tax in s. 127.46(6) will not be applicable, and the late payment of these workers will not prevent the taxpayer from attesting to having met the labour requirements or risk transgressing the K/GN Standard if the taxpayer elects to meet the labour requirements and claim the regular tax credit rate;
in cases where the per diem tax in s. 127.46(6) does apply, it is computed with reference to the number of days of work for which the relevant worker was not paid the prevailing wage, viz., “each day” means “each day of work for which the worker was short-paid,” not “each day such shortfall remains unpaid” or any other interpretation;
a taxpayer who has actual knowledge of a prevailing wage requirement deficiency cannot remedy it so as to come into compliance by paying the top-up penalty described in s. 127.46(13) to the CRA;
a taxpayer who has actual knowledge of a prevailing wage requirement deficiency for a particular taxation year, elects to meet the labour requirements and claims the regular tax credit rate for that year risks transgressing the K/GN Standard and the very adverse consequences that entails, and should instead claim only the reduced tax credit rate for that year;
a taxpayer may claim the reduced tax credit rate in one taxation year without thereby disentitling itself from claiming the regular tax credit rate in other years, viz., the reference to “each installation taxation year” in s. 127.46(2) should not be interpreted as requiring a taxpayer to elect to meet the labour requirements for every installation taxation year in respect of any particular clean economy ITC; and
where a taxpayer does transgress the K/GN Standard in respect of a particular taxation year, the adverse implications of that are limited to that particular taxation year, viz., the reference in s. 127.46(9)(a) to being “not entitled to the regular tax credit rate” is limited to that taxation year (referred to in s. 127.46(9) as the “claim year”).

This article goes on to address an apparent legislative gap in the rules relating to the K/GN Standard that is problematic where an ITC claimant knows, or strongly suspects, some element of the prevailing wage requirement has not been met for one or more covered workers, and is practically unable to remedy the situation in a way that meets the definition of “compliance” within the meaning of the statute. For example, where a covered worker is an employee of a contractor or subcontractor retained by the taxpayer to work on the project, i.e., the taxpayer has no direct relationship with the relevant employee, the taxpayer may have no practical ability to ensure that any shortfall is paid to the employee if the contractor becomes unco-operative, goes out of business or loses contact with the employee.

Read literally, the rules as drafted would appear to prevent such a taxpayer from claiming the regular tax credit rate for fear of being found to have “knowingly or in circumstances amounting to gross negligence failed to meet those requirements” if they claim the regular tax credit rate. Such a taxpayer would thus be forced into claiming only the reduced tax credit rate because the compliance deficiency, no matter how small, they are aware of is one they do not have the ability to fix. The imposition of a 10 per cent ITC rate reduction for the entire amount of the taxpayer’s clean economy ITC claim for the year seems profoundly disproportionate and unfair in such circumstances.

Fundamentally, some mechanism is needed for allowing a taxpayer who is aware of a compliance deficiency and is willing to address it to do so in a way that is considered to constitute “compliance” with the labour requirements, allowing the taxpayer to claim the regular tax credit rate without fear of transgressing the K/GN Standard. For example, deeming self-reported compliance deficiencies not to meet the K/GN Standard would encourage taxpayers trying to meet the policy objectives of the labour requirements to do so rather than opt out of them and claim the reduced tax credit rate, a lose-lose outcome.

I. The labour requirements: Overview

The labour requirements are intended to “incentivize companies to create good jobs”. They are modelled on similar requirements that exist under comparable U.S. tax credit legislation, although they are used in the U.S. for other purposes and American taxpayers have decades of experience in dealing with them. The labour requirements have two distinct elements:

the “prevailing wage requirements”, which require “covered workers” to be adequately compensated for the “preparation or installation” of ITC-eligible property at the taxpayer’s work site (herein, P&I Work); and
the “apprenticeship requirements”, which require the taxpayer to make reasonable efforts to ensure that apprentices registered in Red Seal trades (or equivalent provincially registered trade) work at least 10 per cent of the hours worked during the year by “covered workers” who are Red Seal workers performing P&I Work at the taxpayer’s project site. For this purpose, a safe harbour rule deems the taxpayer to have met this requirement where it takes the prescribed actions.

“Covered workers”

A key concept of both labour requirements is “covered workers”, defined as an individual:

who is an employee (whether of the taxpayer or someone else, such as a contractor retained by the taxpayer or sub-contractor of such contractor) engaged in P&I Work;
whose duties at the taxpayer’s work site are primarily manual or physical; and
who is neither an administrative, clerical or executive employee nor a “business visitor to Canada” as described in section 187 of the Immigration and Refugee Protection Regulations.

The “covered worker” definition raises various interpretive questions. For example, the scope of what constitutes P&I Work is a matter of some judgment. As a general rule, it seems logical to presume that the scope of P&I Work would not include activities that are excluded from ITC eligibility. For example, one would think that activities excluded from eligibility for the CCUS ITC as “preliminary CCUS work activity” generally should not be considered to be “preparation or installation” of CCUS ITC-eligible property, by virtue of being “preliminary to the acquisition, construction, fabrication or installation of” such property.

To some degree, this is supported by a careful reading of the ITC legislation and, in particular, the “covered worker” definition, which refers to the preparation or installation “of” ITC-eligible property. Some looser connection between the preparation/installation work and the ITC-eligible property could have been used, such as preparation or installation activities “relating to” or “in respect of” ITC-eligible property. The choice was made to limit activities that are in-scope of the labour requirements as P&I Work to those with a closer, more direct link between ITC-eligible property and the in-scope activities created by the use of the preposition “of.”

In this regard, CRA document 2025-1081921E5, dated February 25, 2026, is interesting. It considered the case of a very large property described in Class 57(a) to be used in a carbon capture project. This property required a large hole to be excavated, and pilings installed in the hole in order to create a concrete foundation to permanently support the ITC-eligible property. The foundation constituted a Class 57(f) property¹ so as to be itself be ITC-eligible, leading Rulings to conclude as follows:

As a result, Canco would be subject to the labour requirements for the preparation or installation of the Foundation (a specified property), provided that Canco elects to meet the labour requirements under subsection 127.46(2). In our view, this would include the excavation of the hole into which the Foundation will be placed, the installation of the pilings and the pouring of the concrete to construct the Foundation. All of these activities are part of the installation of the Foundation and therefore would constitute the “preparation or installation of specified property” for purposes of the labour requirements in section 127.46.

Similarly, it will not always be clear whether a particular worker’s P&I Work duties are “primarily manual or physical in nature.” For example, a foreman directly supervising the activities of those who are engaged in manual P&I Work may not meet this test in many cases, depending on their actual duties, while a lead hand who is herself operating machinery while advising less-experienced workers often will. Presumably, the key distinction is how frequently a worker’s duties involve hands-on activity versus supervising those engaged in such work. This would be consistent with CRA document 2025-1070641E5, dated Oct. 2, 2025, where Rulings states: “It is our view that the phrase ‘manual or physical in nature’ as it appears in the definition of ‘covered worker’ within the Labour Requirements refers to those duties that involve physical exertion (including using tools or machines to perform the physical labour) as opposed to mental exertion.”

There is also CRA guidance as to what constitutes the taxpayer’s work site, being the geographic location where activities are potentially in-scope of the labour requirements. In CRA document 2025-1070641E5, Rulings stated as follows:

In our view, a work site will only be a designated work site of an incentive claimant if the work site is at the disposal of the incentive claimant, based on a textual, contextual and purposive analysis of section 127.46. This could include a work site that the incentive claimant owns, rents or to which the incentive claimant otherwise has legal access, provided that it has control over the work site and can access it at its own discretion.

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The prevailing wage requirements

The prevailing wage requirements consist of three distinct components: a compensation element (s. 127.46(3)(b)(i)), an attestation element (s. 127.46(3)(b)(ii)) and a notice element (s. 127.46(3)(b)(iii)). First, the compensation element mandates that all covered workers be compensated for their P&I Work either (1) in accordance with any eligible collective agreement applicable to that worker or (2) if no such eligible collective agreement applies, in an amount no less than the non-overtime wages and benefits specified in the eligible collective agreement that most closely aligns with the covered worker’s experience level, tasks and location. It is unclear whether the text is to be read literally as creating a substantively broader requirement when an eligible collective agreement applies, i.e., the taxpayer becomes non-compliant if any term of that eligible collective agreement isn’t fully met. To date, the CRA has not provided any guidance on this point, although from a tax policy perspective it seems counterintuitive to hold employers governed by an eligible collective agreement to a more stringent standard for ITC purposes than other employers.

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In addition, the notice element requires the taxpayer to meet a job site notice requirement, while the attestation element requires the taxpayer to attest that it has (1) in fact met the compensation element of the prevailing wage requirement for its own employees and (2) taken reasonable steps to ensure the employers of any other covered workers, i.e., contractors, subcontractors and others, have done likewise. The CRA has provided guidance online as to what “reasonable steps” means. The New CRA Guidance includes further commentary on how a taxpayer can demonstrate that “reasonable steps” have been taken.

The attestation element is not an attestation to having actually met the prevailing wage requirements. Instead, it requires the taxpayer to attest to having in fact met the prevailing wage requirements as regards its own employees, but only to having “taken reasonable steps to ensure that any covered workers employed by any other person” have been compensated in accordance with the required standard.

It is also important to understand that while the apprenticeship requirements can be definitively met by making “reasonable efforts” to achieve a specified result,² the same is not true of the prevailing wage requirements. To comply with the prevailing wage requirements, one must in fact achieve the prescribed results: reasonable efforts do not suffice.

There is thus a gap between what a taxpayer must attest to as part of meeting the prevailing wage requirements and what the taxpayer must actually achieve in order to meet them and thereby comply with the prevailing wage requirements. Specifically, while meeting the attestation element of the prevailing wage requirements requires only “reasonable steps” of the taxpayer as regards the employees of contractors and subcontractors, meeting the compensation element demands that all covered workers have in fact been compensated as required. In many cases, this is not always entirely within the taxpayer’s control.

There are two principal implications from the fact that making “reasonable efforts” to comply with the compensation element of the prevailing wage requirements is insufficient to have complied with the prevailing wage requirements:

if the “normal” compliance deficiency rules apply (i.e., the taxpayer’s actions do not meet the K/GN Standard), the applicable penalty/remediation provisions effectively hold the taxpayer strictly liable for any deficiency in paying the prevailing wage to all covered workers, not just the taxpayer’s own employees. Simply making “reasonable efforts” towards complying with the prevailing wage requirements is not enough to avoid the consequences of failing to actually meet them; and
a taxpayer who has taken reasonable steps to prevent a compliance deficiency as to the compensation element of a contractor’s covered employees but who is aware a deficiency exists (1) can truthfully make the necessary attestation, but (2) risks the consequences of s. 127.46(9) if it claims at the regular tax credit rate while having knowledge of the contractor’s compliance deficiency. Put another way, making reasonable efforts to ensure that contractors meet the compensation element of the prevailing wage requirements may not be good enough to claim the regular tax credit rate without transgressing the K/GN Standard if the taxpayer knows of, or perhaps strongly suspects, that a compliance deficiency exists.

II. Labour requirements compliance

As noted, taxpayers claiming clean economy ITCs have a choice. A taxpayer can choose not to elect to meet the labour requirements and simply claim the relevant ITC at the reduced tax credit rate. Alternatively, if a taxpayer elects to meet the labour requirements and is determined not to have fully complied with them, the consequences depend on whether the taxpayer’s actions are considered to have met the K/GN Standard or not.

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Non-compliance: Normal circumstances

In “normal” circumstances where the K/GN Standard is not met, the consequences of non-compliance are much less severe. The taxpayer’s entitlement to the regular tax credit rate remains undisturbed. However, a taxpayer who has not complied with the apprenticeship requirements is liable to pay, as additional Part I tax, an additional $50³ for each hour of work that was required to be performed by apprentices registered in Red Seal trades on P&I Work for the year in order to meet the statutory target but was not, under s. 127.46(7). A taxpayer that has not complied with the prevailing wage requirements faces two sanctions:

s. 127.46(6), which obligates the taxpayer to pay, as additional Part I tax, “an amount equal to $20⁴ for each day in the installation taxation year on which the covered worker was not paid the prevailing wage” (the s. 127.46(6) per diem tax); and
ss. 127.46(11)-(14), which applies where the CRA has notified the taxpayer of a compliance deficiency and which obligates the taxpayer to either make up any deficiency in the compensation element of the prevailing wage requirements (plus interest) to the short-paid employee (a top-up amount) or pay 120 per cent of that amount to the CRA as a penalty.

Amounts paid as additional tax or penalty are non-deductible, while penalties are potentially eligible for CRA relief under s. 220(3.1) in appropriate circumstances. Top-up amounts are treated as salary and wages and so are deductible to the payer when paid, but are excluded from being eligible for the relevant clean economy ITC under s. 127.46(14).

The wording of the per diem tax in s. 127.46(6) reads as follows:

(6) Unless subsection (9) applies, if an incentive claimant claims a specified tax credit at a regular tax credit rate in a taxation year but does not meet the prevailing wage requirements in respect of a covered worker for one or more days in an installation taxation year in respect of that specified tax credit, there shall be added to the tax payable under this Part for the installation taxation year by the incentive claimant an amount equal to $20 for each day in the installation taxation year on which the covered worker was not paid the prevailing wage.

There is some degree of interpretive uncertainty as to the scope of “each day in the installation taxation year on which the covered worker was not paid the prevailing wage.” Specifically, this phrase could be read as describing each day of work for which a particular worker received less than the prevailing wage, or potentially as each day during the year where the shortfall for any such underpaid work date remained outstanding and unpaid. The New CRA Guidance resolves this question, indicating that the former is the correct interpretation in the answer to Question 2.

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Non-compliance: Knowingly or in circumstances amounting to gross negligence

Alternatively, if the taxpayer is determined to have failed to comply knowingly or in circumstances amounting to gross negligence, ostensibly on any element of the labour requirements and in any amount, it effectively suffers a 15 per cent ITC rate reduction, i.e., what would normally be 30 per cent for the Clean Technology ITC effectively becomes 15 per cent. The maximum ITC claim allowed is the reduced tax credit rate, and a penalty amount equal to another five per cent ITC rate reduction applies, thus making the consequences of claiming the full rate where the K/GN Standard has been met much worse than simply claiming the reduced tax credit rate.

The framing of one-third of the adverse consequence as a penalty rather than a further reduction in the applicable tax credit rate in theory allows the CRA to waive it under s. 220(3.1), although presumably the scope for such relief will be limited given the “knowingly or grossly negligent” threshold for when this penalty applies. Logical cases for penalty relief would include ones where the amount of K/GN non-compliance was fairly minimal, or where the taxpayer self-reports after having made good-faith remediation efforts. The CRA’s policies on discretionary penalty relief are set out in IC07-1R1.

The phrase “knowingly or in circumstances amounting to gross negligence” as used in s. 127.46(9) is almost identical to the standard prescribed in s. 163(2) for penalties for false statements or omissions. As such, prima facie, one would expect the jurisprudence developed under that latter provision to be equally applicable to interpreting the K/GN Standard established in s. 127.46(9).

In Canada v. Paletta Estate (2022 FCA 86),⁵ the Federal Court of Appeal had occasion to review what the K/GN Standard entails and what differentiates it from “normal” negligence:

[65] Neglect under subparagraph 152(4)(a)(i) refers to a lack of reasonable care. The duty of reasonable care is met if the taxpayer has “thoughtfully, deliberately and carefully assesse[d] the situation and file[d] on what he believe[d] bona fide to be the proper method”; in other words, “in a manner that the taxpayer truly believe[d] to be correct” (Regina Shoppers Mall Ltd. v. Canada, [1990] 2 C.T.C. 183, 90 D.T.C. 6427 (F.C.T.D.), aff’d (1991), 126 N.R. 141, 91 D.T.C. 5101 (F.C.A.); see also Canada v. Johnson, 2012 FCA 253, 435 N.R. 361, [2013] 1 F.C.R. D-2). This test is not disputed by the parties. The Court may also draw inferences of negligence from an omission to verify the validity of a taxpayer’s belief (Robertson v. Canada, 2016 FCA 303, 2016 D.T.C. 5131, at paragraphs 5 and 6).

[66] In contrast, subsection 163(2) requires that the false statement be made knowingly or in circumstances amounting to gross negligence. This burden can be met either directly or constructively, through a demonstration of wilful blindness (Wynter v. Canada, 2017 FCA 195, 2017 D.T.C. 5114 (Wynter), at paragraph 16):

In sum, the law will impute knowledge to a taxpayer who, in circumstances that suggest inquiry should be made, chooses not to do so. The knowledge requirement is satisfied through the choice of the taxpayer not to inquire, not through a positive finding of an intention to cheat.

[67] Wynter teaches that although wilful blindness and gross negligence often converge, they are conceptually different. Rennie J.A., writing for this Court, explains this difference as follows (Wynter, at paragraphs 18 and 19):

Gross negligence is distinct from wilful blindness. It arises where the taxpayer’s conduct is found to fall markedly below what would be expected of a reasonable taxpayer. Simply put, if the wilfully blind taxpayer knew better, the grossly negligent taxpayer ought to have known better.

Gross negligence requires a higher degree of neglect than a mere failure to take reasonable care. It is a marked or significant departure from what would be expected. It is more than carelessness or misstatements. The point is captured in the decision of this Court in Zsoldos v. Canada (Attorney General), 2004 FCA 338 at para. 21, 2004 D.T.C. 6672:

In assessing the penalties for gross negligence, the Minister must prove a high degree of negligence, one that is tantamount to intentional acting or an indifference as to whether the law is complied with or not. (See Venne v. R. (1984), 84 D.T.C. 6247 (Fed. T.D.), at 6256.)

[68] It can be seen from this that subsection 163(2) imposes a higher threshold with the result that conduct warranting the reopening of statute-barred years pursuant to subparagraph 152(4)(a)(i) will not necessarily justify the imposition of a penalty under the former (see for example Van der Steen v. The Queen (1984), 2019 TCC 23, 2019 D.T.C. 1024; see also Venne v. The Queen, 84 D.T.C. 6247, [1984] C.T.C. 223 (F.C.T.D.)). The opposite is however true; conduct that justifies the imposition of a penalty under subsection 163(2) will necessarily meet the threshold contemplated by subparagraph 152(4)(a)(i).

The CRA’s interpretation of these concepts can be found in the relevant portion of the CRA’s Income Tax Audit Manual (Chapter 28), which discusses the terms “knowingly” and “gross negligence”:

28.4.2 Knowingly or under circumstances amounting to gross negligence

It is vital to understand the meaning of the term “knowingly or under circumstances amounting to gross negligence” to apply a gross negligence penalty.

Knowingly, as used in subsection 163(2) of the ITA, implies that a taxpayer knew or ought to have known that the amount of tax paid was less than should otherwise have been paid for the purposes of the ITA or that the amount of refund or rebate claimed was greater than the amount that the person was eligible to receive for the purposes of the ITA. Knew implies that a taxpayer deliberately or intentionally acted in such a manner, while ought to have known does not mean actual knowledge, but means that the taxpayer had in effect the means of knowledge.

Gross negligence, as used in subsection 163(2), covers a set of facts which clearly indicates either that the taxpayer knew or ought to have known that an offence was committed under this subsection or that the taxpayer acted so carelessly or so negligently that the way in which the taxpayer handled their affairs amounted to gross negligence (that is, negligence of conspicuous magnitude). The set of facts typically fall in the categories of “(a) the magnitude of the omission in relation to the income declared, (b) the opportunity the taxpayer had to detect the error, (c) the taxpayer's education and apparent intelligence, (d) genuine effort to comply.” [Lauzon v The Queen, 2016 TCC 71, para 29, and 2016 FCA 298] “Gross negligence may be established where a taxpayer is wilfully blind to the relevant facts in circumstances where the taxpayer becomes aware of the need for some inquiry but declines to make the inquiry because the taxpayer does not want to know the truth” [Strachan v The Queen, 2015 FCA 60, para 4] and “consequently, the law will impute knowledge to a taxpayer who, in circumstances that dictate or strongly suggest that an inquiry should be made with respect to his or her tax situation, refuses or fails to commence such an inquiry without proper justification.” [Panini et al v The Queen, 2006 FCA 224, paragraph 43].

Go to 28.4.18, Other gross negligence penalties, for a list of court cases that discuss “knowingly” and “gross negligence.”

The factors cited by the CRA as relevant to determining whether the K/GN Standard has been met include the following:

28.4.4 Specific factors to consider when imposing gross negligence penalties

To determine if gross negligence penalties should be applied, consider (not an exhaustive list):

materiality of the false statement or omission
taxpayer’s history of contact with the CRA
taxpayer’s knowledge of tax matters
nature of the false statement or omission
taxpayer’s involvement in preparing the return
misinterpretation of the legislation
books and records
number of sources of taxable income
disclosure of other sources of taxable income
taxpayer’s history of compliance
signature on the return

The burden the CRA must discharge in order to support a K/GN finding has been described by the courts as a “heavy”⁶ one, and “the imposition of gross negligence penalties is to be applied in the clearest cases with the [CRA] being required to prove intent or reckless misconduct, otherwise taxpayers should be given the benefit of the doubt.”⁷ However, because the sanctions contained in s. 127.46(9) for being found to have breached the K/GN Standard are so severe, and will likely also create serious adverse non-tax implications, e.g., under relevant financing agreements, taxpayers can be forgiven for having a very low willingness to risk the CRA applying s. 127.46(9).

One of the questions posed in the New CRA Guidance was whether a taxpayer who was aware of a compliance deficiency beyond its ability to remedy at the time its ITC claim was filed could claim the regular tax credit rate, on the basis that it was ready and willing to correct the deficiency but simply could not do so. Not surprisingly, Rulings’ response (in the answer to Questions 1 and 2) was that the taxpayer could not claim the regular tax credit rate without risking the application of the K/GN consequences of s. 127.46(9):

If Canco knows that it did not meet one or more of the Labour Requirements at the time that it claims its CCUS tax credit for its 2025 taxation year, then it should not elect under subsection 127.46(2) in respect of that claim. If it does, Canco could be subject to the gross negligence penalty in subsection 127.46(9), if the Minister determines that it elected to meet the Labour Requirements and knowingly failed to meet those Labour Requirements.

This conclusion was further reiterated in the answer to Question 3:

The hypothetical facts state that, at the time of making its CCUS tax credit claim for Canco's 2025 taxation year, the three covered workers were not compensated in accordance with subparagraph 127.46(3)(b)(i). Therefore, at that time, Canco is aware that it has not complied with all of the Labour Requirements and should not elect under subsection 127.46(2) in respect of that specified tax credit or it could be subject to the gross negligence penalty in subsection 127.46(9).

Canco may decide to wait to make its claim for the CCUS tax credit for the 2025 taxation year until the prevailing wage requirements are met.

In fairness, there is not really much other answer Rulings could have provided, given the text of the statute and the K/GN jurisprudence. The response referenced the CRA’s further comments on s. 127.46(9) made at the 2025 Canadian Tax Foundation Round Table, memorialized as CRA document 2025-108081, which described a K/GN determination as “a question of fact that can only be determined after an examination of all the relevant facts and circumstances.” In this previous statement, the CRA indicated that while an “inability to substantiate that covered workers employed by others were compensated in accordance with subparagraph 127.46(3)(b)(i) should not, in and of itself” support a finding that the K/GN Standard had been met, the failure to take reasonable steps to ensure such compliance could support such a finding, and that in such circumstances “the gross negligence penalty under subsection 127.46(9) should generally apply.”

The further question was asked whether such a taxpayer could pre-emptively pay the CRA the shortfall penalty described in s. 127.46(13) in order to come into compliance and legitimately claim the regular tax credit rate. The answer to this suggestion was also “No”:

The “top-up penalty” in subsection 127.46(13) that you referred to in your question is only applicable if Canco receives a notification from the Minister specifying that it did not meet the prevailing wage requirements for a designated work site for a taxation year, pursuant to subsection 127.46(11). This is referred to as a Corrective Measure, and it is initiated by the CRA. There is no mechanism available to Canco to voluntarily pay the top-up penalty without having received this notification from the Minister.

This would also seem to be an accurate interpretation of the statute, as strictly speaking the procedure described in s. 127.46(13) is a sanction for non-compliance, and its text does not characterize payment as constituting compliance with the labour requirements. This then leaves a taxpayer with knowledge of a compliance deficiency that it cannot remedy in the unsatisfactory position of either claiming the reduced tax credit rate, which is bad, or claiming the regular tax credit rate and risking the consequences of s. 127.46(9), which is worse.

Non-compliance: Common problems

In practice most issues associated with labour requirements compliance arise from the compensation element of the prevailing wage requirement. Common problem areas include the following:

failing to correctly determine that a worker’s duties are primarily manual or physical, such that someone who was thought not to be a “covered worker” in fact is;
determining the scope of P&I Work too narrowly for one or more workers, such that more work and/or workers are in-scope of the labour requirements than originally thought; and
for a covered worker to whom no eligible collective agreement applies, incorrectly determining the regular wages and benefits applicable under the closest comparable eligible collective agreement.

This could occur for either the taxpayer’s own employees or, more typically, employees of a contractor or subcontractor, in respect of whom the taxpayer has less information and control and where the employer, i.e., not the taxpayer, generally has less incentive to achieve labour requirements compliance since it does not bear the cost of failure, subject to contractual allocation of consequences. For example, where a covered worker is an employee of a contractor or subcontractor retained by the taxpayer to work on the project, i.e., the taxpayer has no direct relationship with or information about the relevant employee, the taxpayer may have no practical ability to ensure that any shortfall is paid to the employee.

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On large ITC-eligible projects with hundreds or thousands of covered workers and dozens of contractors, subcontractors and sub-subcontractors, the reality is that there will very often be situations where the taxpayer knows or has very good reason to think someone has been paid less than the prevailing wage. Taxpayers can try to remedy this, but there will not always be a solution offering reasonable certainty that compliance can be achieved. For example, contractors or subcontractors go out of business or become non-co-operative over contractual disputes, or their covered workers move away, sometimes without leaving contact information. This is often simply the on-the-ground reality. In such circumstances, the taxpayer’s ability to claim the regular ITC rate by electing into the labour requirements and in fact meeting the prevailing wage requirement is effectively frustrated by the inability to actually meet that requirement for literally each and every in-scope worker the taxpayer knows has, or believes may have, been underpaid.

One such potential compliance concern relates to when covered workers are paid the prevailing wage. Particularly on larger projects with numerous contractors and subcontractors, prevailing wage shortfalls arising from any of the foregoing reasons (or others) are virtually inevitable. If a taxpayer discovers a particular covered worker has been paid less than she should have been, can this be corrected in such a manner as to be considered compliant with the compensation element of the prevailing wage requirements?

There is no time specified in s. 127.46 by which the required compensation must be paid to the covered worker. Hence, at least in cases where no eligible collective agreement applies to the covered worker, so long as the required amount of compensation has been paid to the covered worker by the time the taxpayer files its ITC claim, it can truthfully attest to having met (past tense) the compensation element of the prevailing wage requirement. This was confirmed in the New CRA Guidance, where Rulings states in its Response to Questions 1 and 2:

Canco can elect to meet and attest that it met the Labour Requirements at the time that it makes its claim for the CCUS tax credit for its 2025 taxation year, provided that, at the time of making the claim, the three short-paid covered workers were compensated in accordance with the applicable Compensation Requirement above, based on the hypothetical facts.

This determination is both consistent with the text of the statute and the tax policy underlying the labour requirements: incentivizing employers to create good jobs that pay the prescribed level of wages. Given the severe potential consequences for non-compliance with the labour requirements, there is no apparent policy reason to find employers non-compliant if they pay the required wages but do so past an arbitrary deadline. The same tax policy would seem to be applicable in cases where an eligible collective agreement does apply, although the CRA has not expressed a view on this.

Non-compliance: Electing the reduced rate vs. s. 127.46(9) consequences

A taxpayer with actual knowledge or strong suspicion of a labour requirements deficiency has the unenviable choice of either claiming the reduced tax credit rate or claiming the regular tax credit rate and taking their chances that the CRA considers their circumstances to have met the K/GN Standard such that the punitive consequences of s. 127.46(9) apply. Both alternatives raise interpretive questions which the New CRA Guidance addresses.

Can one elect the reduced tax credit rate in one year and the regular rate in another?

A taxpayer considering whether to choose not to meet the labour requirements in a particular year and simply claim the reduced tax credit rate will want to understand the consequences of doing so. Specifically, if the choice to opt out of labour requirements compliance for one year has consequences in other years, this would greatly diminish the viability of doing so.

The operative labour requirements rule in s. 127.46(2) reads as follows:

(2) Despite sections 127.44, 127.45, 127.48 and 127.491, the applicable rate for each specified tax credit of an incentive claimant is the reduced tax credit rate unless the incentive claimant elects in prescribed form and manner to meet the prevailing wage requirements under subsection (3) and the apprenticeship requirements under subsection (5) for each installation taxation year in respect of the specified tax credit.

Paraphrasing, this provision establishes the reduced tax credit rate as the taxpayer’s applicable ITC rate unless the taxpayer elects to meet the labour requirements “for each installation taxation year”. A literal reading of this provision raises some concern that unless a taxpayer elects to meet the labour requirements for every installation taxation year in respect of any particular clean economy ITC, the applicable ITC rate for that particular ITC will be the reduced tax credit rate for every such year. Put another way, the legislative text does not make explicit that electing into the labour requirements in respect of a particular year only impacts that year, and that not electing for one year does not affect other years.

Fortunately, the New CRA Guidance provides a definitive interpretation that this is indeed the case, a common-sense result that is very helpful to have clarified. This is provided in the last sentence of the response to Question 4:

Response to Question 4

Since the subsection 127.46(2) election is made with a claim for a specified tax credit, and the hypothetical facts strongly suggest that Canco will not meet the Labour Requirements in 2025 (specifically the Compensation Requirement), Canco should not elect, and should claim the CCUS tax credit for the 2025 taxation year at the reduced tax credit rate. However, the hypothetical facts state that Canco will meet the Labour Requirements in 2026 and in 2027, therefore Canco can elect under 127.46(2) when it makes its claims for the CCUS tax credits for its 2026 and 2027 taxation years.

This response effectively reads the legislation as inferring the words “for any particular installation taxation year” after the words “the applicable rate”, and the reference to “each” installation taxation year as “that” installation taxation year. Interpreting the provision in a textual, contextual and purposive manner, it is eminently logical to conclude that electing to meet the labour requirements (or not) and claim the regular (or reduced) tax credit rate is a year-by-year exercise. In this manner, a taxpayer who cannot (or chooses not to) meet the labour requirements in one year is not disincentivized from trying to meet them (and thereby claim the regular tax credit rate) in other years.

Does a “knowingly/gross negligence” finding in one year affect other years?

As noted, the consequences of being found to have been non-compliant in a manner that reaches the K/GN Standard are severe. The text of s. 127.46(9) reads as follows:

(9) If an incentive claimant has claimed a specified tax credit at the regular tax credit rate in a taxation year (referred to in this subsection as the “claim year”) but has failed to meet the prevailing wage requirements or the apprenticeship requirements for an installation taxation year in respect of that specified tax credit and the Minister determines that the incentive claimant knowingly or in circumstances amounting to gross negligence failed to meet those requirements, then

(a) the incentive claimant is not entitled to the regular tax credit rate, and is entitled to not more than the reduced tax credit rate, for the specified tax credit; and

(b) the incentive claimant is liable to a penalty for the claim year equal to the amount determined by the formula

50 per cent × (A − B)

where

A is the amount of the specified tax credit claimed by the incentive claimant at the regular tax credit rate for the claim year, and
B is the amount that the incentive claimant would have been entitled to claim as a specified tax credit at the reduced tax credit rate for the claim year.

Unlike in paragraph (b) where the penalty is explicitly stated to be “for the claim year”, the disentitlement to the regular tax credit rate in paragraph (a) makes no reference to any particular year. This raises the question of whether denial of the regular tax credit rate applies to more than the particular year in which the K/GN Standard was found to have been met.

Once again, the New CRA Guidance interprets the legislation in a textual, contextual and purposive manner to clarify that the disentitlement to the regular tax credit rate should be read as referring only to “the claim year.” This is contained in the response to Question 5:

Response to Question 5

Assuming that the conditions of subsection 127.46(9) only apply to Canco for its claim for the CCUS tax credit for its 2025 taxation year (not the other claim years), the implications imposed under subsection 127.46(9) will only apply to its 2025 claim year (not the other claim years).

This is demonstrably the right answer, and the certainty it provides is helpful.

III. The labour requirements: Problems and suggestions

A taxpayer claiming clean economy ITCs to which the labour requirements apply has basically two choices:

forego meeting the labour requirements, and claim at the reduced tax credit rate (i.e., for the Clean Technology ITC, at the 20 per cent rate instead of the regular 30 per cent rate); or
decide to meet the labour requirements, invest the time and effort required to pursue compliance with them, and then formally elect to meet them for the year and claim the regular tax credit rate, on the basis that while compliance may not be perfect there are no compliance deficiencies that meet the K/GN Standard, so that the worst-case scenario is entitlement to the regular tax credit rate but possible per diem taxes and/or top-up payments.

As the law presently stands, a taxpayer who knows or has good reason to believe non-compliance exists with some element of the labour requirements and who nonetheless elects to meet them risks a result worse than claiming at the reduced tax credit rate.

Do the existing rules create the optimal incentives?

Some of the most common compliance problems highlight an important policy issue. It is very much in the interests of both taxpayers seeking clean economy ITCs and governments encouraging labour requirements compliance that any deficiencies that taxpayers become aware of be “curable,” in the sense of taxpayers having some avenue for taking corrective steps that both meet the relevant tax policy objectives and are deemed to constitute “compliance” with the labour requirements generally and the compensation element of the prevailing wage requirements specifically. If taxpayers are left in the position of finding compliance deficiencies that they are ready and willing to fix but that either:

they are practically unable to fix, for reasons outside their control; or
if fixed in a substantive sense, do not technically constitute full “compliance” with the labour requirements,

whatever time and effort they have spent trying to comply with the labour requirements is potentially for naught:

if such a taxpayer elects to meet the labour requirements and claims the regular tax credit rate, the danger is that the CRA applies s. 127.46(9) on the basis that the taxpayer did so “knowing” that it did not pay 100 per cent of the full amount required to be the “prevailing wage”, or paid it but in some way not within the legislative definition of “compliance”; and
alternatively, such a taxpayer must absorb the cost of claiming the reduced tax credit rate on the taxpayer’s entire qualifying expenditure for the year.

The problem is that the application of s. 127.46(9) is binary: it either applies to the taxpayer’s entire claim for a particular clean economy ITC in a given year, or it doesn’t apply at all. As a result, a taxpayer who knows, or perhaps merely suspects, that any amount of non-compliance with the labour requirements has occurred and remains unremedied at the time the ITC claims form is completed takes the risk that s. 127.46(9) will apply to their entire clean economy ITC claim for the year. Put simply,

the cost of suffering either a 10 per cent or 15 per cent reduction in the taxpayer’s ITC claim for the year bears no relationship (and may be completely disproportionate) to the degree of labour requirements non-compliance; and
no legislative safety valve exists for a taxpayer who wants to correct a known or suspected compliance deficiency but cannot, for whatever reason.

There is no explicit discretion within the legislation for the CRA to waive or ignore situations where, despite making good-faith efforts to achieve 100 per cent compliance, at the time the taxpayer makes its ITC claim it knows or has very good reason to believe compliance has been less than perfect, e.g., some number of covered workers have been paid something less than the prevailing wage for some number of work days. While a particular CRA auditor ultimately reviewing the claim might exercise such discretion, the consequences of that not happening are so severe as to make it completely impractical to claim the regular tax credit rate and risk s. 127.46(9) applying in the hope of that discretion. Moreover, most clean economy ITC-eligible projects of any size are going to be audited by an accounting firm that will force a taxpayer in such circumstances who claims the regular tax credit rate to report an uncertain tax position or a reserve in their financial statements, which will be completely unacceptable to lenders and other stakeholders. As such, many taxpayers in this position who cannot know with confidence that all labour requirements non-compliance they know of, or they believe is likely to exist, can somehow be remedied will simply forego trying to remediate any non-compliance and just claim at the reduced tax credit rate.

This is a lose-lose outcome for taxpayers and government alike if the result is that no matter how much time and effort the taxpayer has put in towards achieving full compliance, a fairly de minimis amount of known non-compliance can effectively disentitle a taxpayer from millions or tens of millions of dollars of clean economy ITCs, by forcing claims at the reduced tax credit rate. On a larger project, such situations can easily occur, which can in turn incentivize a taxpayer at the outset of a project to not bother incurring the cost and effort of trying to achieve labour requirements compliance at all, and just accept the reduced tax credit rate, a result that benefits no one and does not achieve the policy objectives of the labour requirements.

Suggested legislative improvements

Taxpayers who know or suspect they have a compliance issue and want to fix it deserve to be treated differently from those who don’t care or who make minimal compliance efforts and claim the regular tax credit rate anyway. Viewed within the overall tax policy context of wanting to provide fiscal support to green economy projects while generating well-paying jobs in Canada, it seems unfair, and counterproductive, to deny the regular tax credit rate to taxpayers who become aware of a compliance deficiency before they file their ITC claims and are willing to remedy it, but cannot do so in a way that constitutes compliance within the meaning of s. 127.46.

There are at least two ways in which the labour requirements could usefully be amended to better achieve the government’s underlying tax policy objective of encouraging taxpayers to pursue labour requirements compliance on clean economy projects while providing taxpayers with greater certainty and fairness:

provide a mechanism to remedy known or suspected compliance deficiencies before the time the taxpayer makes its ITC claim for the year that is deemed to bring the taxpayer into labour requirements “compliance”, so as to allow the taxpayer to claim the regular tax credit rate without fear of s. 127.46(9) applying; and
eliminate the all-or-nothing consequences facing taxpayers legitimately trying to address compliance deficiencies, and make the consequences of non-compliance meeting the K/GN Standard proportionate to degree of non-compliance.

As to the first point, effectively what is required is some mechanism whereby a taxpayer who has made reasonable efforts to achieve full compliance and finds itself at a dead end can take action that is deemed to constitute compliance with the prevailing wage requirements. For example, the U.S. version of the prevailing wage requirement in 26 CFR § 1.45-7 includes such relief in some cases. Specifically, the following rule in § 1.45-7(c)(1)(v) applies:

Special rule for laborers and mechanics who cannot be located. A taxpayer will be deemed to have paid a correction payment, under this paragraph (c)(1), to a laborer or mechanic who cannot be located if the taxpayer can establish that correction payments have been made. A taxpayer may establish that correction payments have been made by demonstrating compliance with the applicable State unclaimed property law and all Federal and State withholding and information reporting requirements with respect to the payments.

In its simplest form, such a mechanism could be an addition or appendix to the ITC claims form whereby the taxpayer self-reports any known compliance concerns with the compensation element of the prevailing wage requirements, much like a disclosure schedule for representations and warranties in a share purchase agreement operates. If considered necessary or desired, such mechanism could include paying estimated amounts to the CRA or a trusted third party, although this may not really be needed given the existing consequences for “normal” non-compliance. In either case, self-reported compliance concerns would be deemed to be outside the scope of s. 127.46(9), and the “normal” sanctions for non-compliance (i.e., the s. 127.46(6) per diem tax and s. 127.46(11) obligation to pay top-up amounts) could be made applicable. This seems like a simple and costless way in which the government can incentivize taxpayers to do the right thing and pursue labour requirements compliance without penalizing those who have taken reasonable steps towards compliance (the attestation element of the prevailing wage requirement already establishes this baseline) but are aware of potential deficiencies.

Such action would go a long way towards relieving the risk of disproportionately adverse consequences from conduct that is found to reach the K/GN Standard. However, the binary, all-or-nothing nature of s. 127.46(9) remains potentially draconian, and this seems needlessly punitive. Gross negligence penalties in s. 163(2) based on the same K/GN Standard apply on an issue-by-issue basis, rather than to the taxpayer’s entire tax owing for the year. Some consideration could usefully be given to limiting the scope of s. 127.46(9) to something more proportionate to the scope of the taxpayer’s knowing or grossly negligent conduct, either by expressly amending the consequences of that provision to that effect or at least creating a statutory authority within its text to give the CRA discretion to reduce its impact in appropriate circumstances. Not all conduct meeting the K/GN Standard is equal and ensuring that the crime fits the punishment is a reasonable and appropriate result that does not dilute the deterrence effect on those who are truly bad actors seeking to take advantage of a relatively generous tax expenditure program.

Smoot-Hawley revived: a never-before-used Depression-era law is invoked against Canadian trade

Mon, 27 Jul 2026 00:00:00 Z

“Anyone, anyone?”

Mr. Lorensax, the Economics Teacher

On July 20, 2026, the president of the United States signed three proclamations covering motor vehicles, alcoholic beverages and dairy, imposing additional 50 per cent tariffs on Canadian goods said to account for roughly US$20 billion in annual imports. Although there is some question about exactly how many of the listed products Canada exports into the United States, and how much, if we take that figure at face value, it would be just over five per cent of the US$380 billion in goods U.S. private interests and public procurement authorities buy from Canadian exporters each year.

The accompanying fact sheet characterizes the measures as a response to Canadian “discrimination” against U.S. exports. The annexed lists deal with products ranging from wine and cement to furniture, textiles, machinery and hockey sticks, and thus extend well beyond the three named sectors. The duties purport to apply to goods entered for consumption on or after 12:01 a.m. ET on Aug. 19, 2026.

Like the section 232 tariffs, the new measures apply regardless of CUSMA origin. This means that the “rule of origin” shield that has protected the majority of Canadian exports from IEEPA and section 122 tariffs since March 2025 does not apply.

And, of course, like the IEEPA or the section 122 tariffs, the legal authority invoked, Section 338 of the Tariff Act of 1930, has never before been used to impose tariffs in its near century on the statute books.

This explainer situates the new measures within the full arc of the dispute, which we have tracked since before the first tariff proclamation was signed, canvasses Canada’s responses, and assesses what Section 338 is, why it was chosen, and where this goes next.

The U.S. measures: Threats and tariffs since the “fentanyl” announcement

The current dispute dates to Nov. 25, 2024, when the then president-elect announced that among his first executive acts would be a 25 per cent tariff on all Canadian and Mexican goods, tied to fentanyl and the border. Our analysis at the time drew on the 2018 steel and aluminum experience to anticipate what followed: unilateral measures, retaliation, remission frameworks and negotiation under duress. What we did not anticipate was quite how many statutory vehicles the exercise would consume.

a. The IEEPA phase (February 2025 – February 2026)

On Feb. 1, 2025, the president signed Executive Order 14193: “Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border” imposing a 25 per cent tariff on nearly all Canadian goods (10 per cent on a defined set of energy resources), invoking the International Emergency Economic Powers Act. Following a negotiated 30-day suspension (Executive Order 14197), the tariffs took effect March 4, 2025. A critical feature emerged days later: goods qualifying for preferential treatment as CUSMA-originating were exempted. That carve-out transformed origin compliance from a duty-savings exercise into the difference between zero and 25 per cent and, because a substantial share of Canadian exports had historically entered under MFN rates without claiming preference (where MFN was already zero, certification cost outweighed benefit), it sent companies scrambling to qualify goods, assemble certifications and document regional value content for the first time.

b. The Section 232 sectoral architecture (2025–2026)

In parallel, the administration built out sectoral tariffs under Section 232 of the Trade Expansion Act of 1962, the national-security authority, on steel and aluminum (March 2025), automobiles and parts (Proclamation 10908, effective April 3, 2025, for vehicles and by May 3, 2025, for parts, with a temporary exemption for CUSMA-eligible parts pending a content-based assessment system), copper, and later medium- and heavy-duty vehicles (October 2025), timber and lumber, and pharmaceuticals. Crucially, none of the foregoing comes with a standing exemption for CUSMA-compliant goods.

The auto measures came with their own relief valve: an “import adjustment offset” of 3.75 per cent of the MSRP of U.S.-assembled vehicles in year one, stepping down thereafter, which is a regime that has since expanded to the medium- and heavy-duty sector. In September 2025, the U.S. Department of Commerce added a petition process allowing U.S. producers to seek expansion of the Section 232 autoparts scope, an accretion mechanism that continues to pull new tariff lines into coverage.

c. Learning Resources and the post-IEEPA scramble

On Feb. 20, 2026, the U.S. Supreme Court held in Learning Resources, Inc. v. Trump that IEEPA does not authorize broad-based import tariffs, invalidating the centrepiece of the 2025 architecture. As we wrote at the time, the decision left the availability, timing and mechanics of refunds uncertain. Businesses that paid IEEPA-based tariffs were advised to assess steps to preserve refund rights, particularly where entries had not yet liquidated. That advice has aged well, and it applies with equal force to what follows.

The administration’s response was a statutory scramble: temporary 10 per cent across-the-board tariffs under Section 122 of the Trade Act of 1974, capped at 150 days absent congressional extension and largely exempting CUSMA-compliant goods. Those tariffs expire this week. The administration also accelerated its Section 301 investigations. We flagged in March that Section 301, with its USTR investigations, consultations, and findings, would become the workhorse for targeted action; it has since produced 25 per cent tariffs on Brazil and forced-labour-related measures targeting Canada. But Section 301 takes time and process. Section 338, as we discuss below, requires neither.

One further development frames everything: earlier this month, at the first joint review, the United States declined to renew CUSMA in its current form. The agreement remains in force, but the non-renewal opens rolling annual reviews that could run to the agreement’s 2036 sunset and converts every U.S. tariff measure into negotiating leverage for that process.

Canadian responses

d. Measures imposed, and removed

Canada responded swiftly:

March 4, 2025. Twenty-five per cent counter-tariffs on C$30 billion in U.S.-origin goods, including food products, wine, spirits, beer, appliances, apparel, cosmetics, pulp and paper, with a second phase to expand coverage to C$155 billion. The tariffs applied only to goods originating in the U.S. under the CUSMA marking rules, a mirror image of the origin logic on the U.S. side.
March 12, 2025. C$29.8 billion in counter-tariffs responding to the U.S. steel and aluminum measures.
April 9, 2025. Twenty-five per cent surtaxes on non-CUSMA-compliant U.S. fully assembled vehicles and certain parts, the auto countermeasures and associated quota administration that the U.S. motor-vehicles proclamation now cites as “discrimination”.
Relief in parallel. From the outset, Ottawa paired retaliation with a remission framework under which importers could seek relief where inputs could not be sourced domestically or from non-U.S. suppliers, or in other exceptional circumstances with severe economic impacts, the same two-ground structure we saw in 2018. The United States Surtax Remission Order (2025) granted six-month remissions for manufacturing, food and beverage packaging, and public health and safety inputs (later extended); a performance-based remission framework supported automakers maintaining Canadian production; and the Large Enterprise Tariff Loan Facility provided liquidity.
Sept. 1, 2025. The pivot: Canada removed retaliatory tariffs on CUSMA-covered U.S. goods, roughly 90 per cent of U.S. imports by coverage, to match the U.S. exemptions and restart negotiations, while maintaining countermeasures on steel, aluminum and autos pending resolution of the corresponding Section 232 tariffs.
Dec. 26, 2025. Canada tightened steel tariff-rate quotas against global imports, reducing quota levels for non-FTA countries to 20 per cent of 2024 volumes, protecting domestic producers from supply diverted by U.S. measures, while honouring the CUSMA carve-out.
Provincial measures. Nearly every provincial and territorial liquor authority delisted U.S. alcohol from public shelves, the measure the alcoholic-beverages Proclamation now targets, and to which we return below.

e. The dispute settlement track

Canada also litigated. In March 2025, Canada requested WTO consultations on the IEEPA and steel/aluminum tariffs; on April 3, 2025, it initiated WTO dispute proceedings challenging the Section 232 auto tariffs as inconsistent with the GATT 1994, including the U.S.’s bound tariff commitments under Article II and MFN obligations under Article I. The U.S. response was telling: it invoked Article XXI, asserting that national-security measures are self-judging and beyond the reach of WTO dispute settlement, a position panels have repeatedly rejected, but which the U.S. can maintain indefinitely because the Appellate Body’s paralysis lets it appeal any adverse panel report “into the void.” The consultations remain, formally, pending. The merits are strong; the remedy is the problem.

f. The search for diversified trade

The track for Canadian trade diversification has been quieter but real: more than 20 new economic and security partnerships since early 2025; the September 2025 strategic-industries measures; public consultations on CUSMA (September 20 to November 3, 2025) feeding Canada’s positions for the joint review; and sustained outreach to the EU, the U.K., and the Indo-Pacific under existing agreements. The results are measurable if modest: the U.S. share of Canadian goods exports fell from nearly 76 per cent in 2024 to just under 72 per cent in 2025. Diversification is a decade-long project, but the effects should prove noticeable quarter to quarter.

The new measures

a. Scope

Each of the three July 20, 2026, proclamations imposes an additional 50 per cent ad valorem duty on a distinct annex of HTSUS tariff lines applicable to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. ET on Aug. 19, 2026, the 30-day minimum lead time the statute itself requires. Key parameters:

No CUSMA carve-out. The duties apply whether or not goods qualify as originating. This severs, for the first time, the link between origin compliance and tariff protection that has structured the entire dispute since March 2025. A valid certification of origin is simply irrelevant to a covered line.
Coverage well beyond the named sectors. Although the three proclamations are framed around autos, alcohol and dairy, the annexes reach foodstuffs, wood products, paper, textiles, machinery, furniture and consumer goods. The measures are calibrated to Canadian export exposure, not to the sectors in which discrimination is alleged. They comprise retaliation across the tariff schedule, not a mirror-image response.
Exclusions. Energy, potash, critical minerals, fish, and goods already subject to Section 232 duties are excluded. Note the phrasing: autos, steel, aluminum, lumber, and pharmaceuticals escape the Section 338 duties only because they already face Section 232 tariffs. This is an anti-stacking rule, not an exemption. The exclusions spare Canada’s largest export categories, which is why the measures reach “only” US$20 billion.
No sunset, and an escalation mechanism. Unlike Section 122’s 150-day cap, the proclamations advance an interpretation that the Tariff Act allows Section 338 tariffs to continue indefinitely unless the president reduces, modifies or terminates them. Section 338 also contains a further step no other modern tariff authority replicates: if the president finds the discrimination is maintained or increased after duties are imposed, the statute authorizes him to exclude the country’s products from importation altogether. The ceiling on escalation, in other words, is not a higher rate, it is an embargo.

b. What is Section 338?

Section 338 (19 U.S.C. § 1338) is a surviving fragment of the Smoot-Hawley Tariff Act, descended from Section 317 of the Tariff Act of 1922. This section authorizes the president to impose duties of up to 50 per cent on imports from a country he “find[s] as a fact” discriminates against U.S. commerce, directly or indirectly, by law, administrative regulation or practice, in a manner that disadvantages U.S. commerce relative to that of third countries, with the duties calibrated to offset the resulting burden. There is no public record of tariffs actually imposed under the provision since at least 1949. The provision was conceived for a world of bilateral tariff bargaining, before the GATT, before MFN as a multilateral norm, before trade agreements with built-in dispute settlement, and its anachronisms are now glaring:

“Discrimination” is undefined. In a world of MFN obligations, preferential agreements that discriminate by design (every FTA treats parties better than non-parties, that is the point), and treaty-sanctioned countermeasures, the term is doing enormous unexamined work. The measures Washington complains of are themselves responses to prior U.S. tariffs, many imposed in violation of CUSMA. Whether lawful countermeasures can constitute “discrimination” under a 1930 statute is, to put it gently, open.
The dairy grievance has already been litigated, under CUSMA. The United States twice challenged Canada’s dairy TRQ allocation practices under CUSMA Chapter 31. The first panel (2021) found Canada’s process of reserving TRQ pools inconsistent with the agreement. Canada revised its practices, and the second panel (2023) largely rejected the renewed U.S. claims. The dairy Proclamation thus recasts, as unilateral “discrimination,” a grievance the U.S. pursued through the agreed mechanism and substantially lost. The comparison to EU access under CETA misses the mark: differential treatment across trade agreements is what trade agreements do.
The provincial dimension. The alcoholic-beverages Proclamation attributes to “Canada” the demarketing decisions of provincial liquor monopolies. State attribution of sub-federal measures is familiar terrain in trade law. GATT Article XXIV:12 and CUSMA both address it through undertakings to engage in consultations in such circumstances. A presidential “finding of fact” that sweeps in the purchasing decisions of provincial Crown retailers, without any collaborative discussion or investigative process, compounds the statute’s core due-process problem.
The ITC’s role has never been tested. Section 338 sits in the part of the Tariff Act concerning the International Trade Commission (ITC) and assigns the Commission a duty to keep itself informed of discrimination and bring matters to the President’s attention with recommendations. Whether that is a procedural prerequisite or merely an advisory channel is unresolved. The Proclamations proceed on presidential findings alone, with no apparent ITC process.
The offset mismatch. The statute directs duties calibrated to offset the burden on U.S. commerce. The White House’s own figures put the alleged injury at roughly US$5.6 billion in lost auto exports and US$582 million in alcohol. A uniform 50 per cent rate, the statutory maximum, applied to US$20 billion in products largely unrelated to the affected sectors sits uneasily with a remedial, offset-based design.
Implicit supersession. There is a respectable argument that Section 338 was superseded by the modern, process-laden authorities Congress enacted decades later, Section 301 in particular, which occupies precisely the same field (foreign practices that burden or discriminate against U.S. commerce) but conditions action on USTR investigation, consultation, and findings. On this view, reading Section 338 as a process-free bypass renders Congress’s later procedural architecture optional.

Prospects

U.S. courts. Litigation is certain, and Learning Resources frames it: a broad, undefined, never-used delegation invoked for sweeping economic measures is the fact pattern that attracts major-questions scrutiny. The government’s position is not without foundation. Section 338, unlike IEEPA, expressly speaks of duties, expressly caps them at 50 per cent, and expressly places the power in the hands of the President. But the missing ITC process, the elasticity of “discrimination,” the offset mismatch, and the supersession argument all offer footholds.

For affected entities, the practical lesson of the IEEPA litigation is that real remedies may not emerge quickly from the court system. The Supreme Court vindicated the challengers in Learning Resources, and yet the refund mechanics remain unresolved months later.

Trade law. Fifty per cent duties on originating goods are flatly inconsistent with U.S. tariff commitments under CUSMA and exceed U.S. bound rates under GATT Article II; applied to Canada alone, they raise Article I MFN questions. Expect Canada to supplement its pending WTO consultations and to consider CUSMA Chapter 31 proceedings, where, unlike at the WTO, panel reports cannot be appealed into the void, and where Canada’s success in the dairy TRQ disputes shows the mechanism can work. The constraint is time: panels take the better part of a year at best. The remedy is prospective, and CUSMA itself is under renegotiation, a negotiation in which these tariffs are, transparently, leverage.

The negotiating table. The USTR statement is explicit that Canada’s sin is retaliation: only Canada and China responded to the 2025 tariffs with countermeasures rather than negotiated deals. The Section 338 action is thus designed, at least in part, to price retaliation itself, and its embargo endgame is the threat that gives the pricing teeth. Ontario Premier Doug Ford has urged a dollar-for-dollar response; the prime minister’s statement calls the measures a direct violation of CUSMA while signalling readiness to engage intensively. Ottawa’s dilemma is acute: the domestic politics of the past 18 months reward firmness, but Section 338’s escalation mechanism means counter-retaliation invites a finding that discrimination has “increased.” Expect Canada to pursue all three tracks at once: a calibrated response, dispute settlement and an intensified push at the CUSMA table, with the Sept. 1 precedent (concede the symbolic but hold the sectoral tariffs) as the likely template.

What businesses should do before August 19

The 30-day window is short, and duties attach based on the date of entry for consumption, not order, shipment or border-crossing dates for goods in transit. Canadian exporters and U.S. importers of Canadian goods should:

Map exposure against the annexes at the HTSUS line level. Coverage does not always track sector intuition. Classification determinations may now determine whether a good faces a tariff of 0 or 50 per cent. See our overview on goods classification and CUSMA rules of origin.
Do not rely on CUSMA origin, but do not abandon it. Origin provides no shelter from Section 338 duties but remains important for the Section 122 regime’s CUSMA exemption while it lasts, Canada’s countermeasures and any negotiated resolution.
Confirm the interaction with Section 232. Goods subject to Section 232 duties are excluded from Section 338, an anti-stacking rule that makes scope determinations under the 232 programs, including the expanding auto-parts petitions and the offset regimes, newly consequential.
Accelerate entries where commercially feasible. Goods entered before 12:01 a.m. ET on Aug. 19 escape the duties. Warehouse withdrawals count as entries. Inventory sitting in bonded warehouses should be evaluated now.
Review contracts and pricing. Tariff-allocation clauses, price-adjustment mechanisms, hardship and force majeure provisions, and Incoterms determine who bears a 50 per cent duty. Revisit both existing agreements and templates and, as we have advised since the first round, build express tariff language into new contracts rather than litigating silence later.
Preserve refund rights from the first entry. Document duty payments, monitor liquidation, and consider protests.
Monitor Ottawa. Canadian counter-measures, remission frameworks (with their two-ground test and documentary template), and support programs have followed every previous round of U.S. action. Businesses that assembled remission files in 2025 should keep them current; those that did not should start.
Engage. CUSMA consultations, remission processes, and any U.S. comment opportunities are channels through which affected businesses shaped outcomes in earlier rounds, including the September 1 removals and the exclusion architecture itself.

BLG’s International Trade and Investment group is monitoring the annexes, the litigation, and any Canadian response, and has advised clients through every phase of this dispute, including on origin qualification, remission requests, classification and scope determinations, contractual risk allocation, and refund preservation. For assistance, contact any member of our team, and follow developments on our Tariffs and Trade Resource Centre and The Tariff Home Companion podcast.

Cross-examining receivers, monitors and trustees in Alberta insolvency proceedings: An exceptional remedy

Fri, 24 Jul 2026 00:00:00 Z

Court-appointed receivers, monitors and trustees play a central role in Canadian insolvency proceedings. As officers of the court, they are expected to act independently and impartially, and in accordance with their statutory and court-ordered duties. Given this role, a recurring question in Alberta insolvency practice is whether parties may cross-examine a court officer on the contents of a report.

There is a clear general principle in Alberta: receivers, monitors and trustees are not ordinarily subject to cross-examination on their reports, and any such examination is exceptional rather than routine. Courts retain discretion to permit questioning where circumstances warrant, but applicants must demonstrate a legitimate and compelling basis for doing so.

The general rule: Cross-examination is exceptional

Alberta courts have consistently recognized that receivers and monitors are officers of the court whose neutrality should be protected. As a result, they are not generally subject to questioning absent unusual or exceptional circumstances. In Coast Automotive Group Inc (Re), the Alberta Court of Appeal reaffirmed that parties seeking to examine a monitor must establish exceptional circumstances before further questioning will be permitted. The Court emphasized that officers of the court are entitled to protection from irrelevant or improper questioning and that their neutrality should not be compromised through unnecessary involvement in adversarial disputes.

This principle reflects the broader policy objective of ensuring that court officers can perform their duties without becoming embroiled in litigation between stakeholders or being subjected to fishing expeditions designed to support collateral claims.

Cross-examination of receivers

The leading Alberta authorities concerning receivers stress that examination rights are limited and must be tied to specific concerns about the receiver’s conduct or reports.

In Re Big Sky Living Inc. (Bankrupt), the Court held that a party seeking to examine a receiver must provide cogent or compelling reasons and identify the particular conduct at issue. Mere dissatisfaction with a receiver’s actions or generalized allegations will not suffice. The Court adopted the criteria in Re Ravelston Corp., recognizing that a court officer may be examined in unusual circumstances, particularly where the officer refuses to co-operate in clarifying a report or declines to provide reasonable explanations regarding matters contained in it.

Importantly, the Court observed that formal cross-examination is often unnecessary because clarification can frequently be achieved through less intrusive means, such as written questions, correspondence or informal discussions.

A similar approach was taken in Edmonton Region Community Board v Aboriginal Partners & Youth Society. There, the Court held that only legitimate questions directed at clarifying statements in a receiver’s reports or explaining the receiver’s conduct should be permitted. The Court expressly cautioned against allowing examinations to become fishing expeditions or mechanisms for disgruntled stakeholders to build claims against the receiver. However, it acknowledged that questions genuinely aimed at obtaining information related to statements made in a receiver’s reports may be appropriate.

Accordingly, while examination of a receiver is possible, Alberta courts require a focused and demonstrably legitimate purpose before permitting it.

Trustees in bankruptcy: A slightly different framework

Trustees in bankruptcy stand in a somewhat different position because the Bankruptcy and Insolvency Act (BIA) expressly provides that a trustee’s report constitutes evidence on an application for a bankrupt’s discharge. Because trustee reports may significantly influence the outcome of a discharge hearing, courts have recognized circumstances in which examination may be appropriate.

In Klapstein, Re, the Court held that a bankrupt may seek to examine a trustee pursuant to s. 163(2) of the BIA where a serious dispute exists regarding the contents of the trustee’s report. The Court acknowledged that such examinations may be justified when concerns have been raised in a timely and substantive manner. Nevertheless, the Court emphasized that examination remains a matter of judicial discretion and is not an automatic right.

Thus, although trustees may be more susceptible to examination than receivers or monitors due to the evidentiary status of their reports, the applicant must still establish a legitimate reason for the examination and persuade the court that it is necessary in the circumstances.

Conclusion

The Alberta authorities establish a consistent theme across receiverships and bankruptcies: court-appointed insolvency professionals are not ordinarily subject to cross-examination on their reports. Receivers, monitors and trustees are officers of the court whose neutrality and independence warrant protection. Consequently, parties seeking to examine them must demonstrate more than disagreement with a report or a desire for broad discovery.

Cross-examination may be permitted where there are specific and exceptional circumstances, such as a genuine need to clarify material contained in a report or to address a serious dispute supported by particularized concerns. However, fishing expeditions, collateral attacks and attempts to draw court officers into adversarial disputes will generally be rejected. The governing principle remains that examination is the exception, not the rule.

One step closer to harmonization: CIRO's proposed Incorporated Approved Person Compensation model

Thu, 23 Jul 2026 00:00:00 Z

The Canadian Investment Regulatory Organization (CIRO) has published rule amendments to harmonize advisor compensation (the Amendments). Following CIRO’s 2024 position paper that consulted on three potential regulatory approaches to allow payment of advisor compensation to advisor-owned corporations for all CIRO-regulated dealer members (Dealers), the Amendments propose to adopt the Incorporated Approved Person compensation option.

In a material shift from the 2024 proposals, under the proposed Amendments, both ancillary activities and regulated Canadian financial services sector activities can be conducted by the advisor’s corporation (Incorporated Approved Person) on behalf of the sponsoring Dealer, subject to certain constraints. CIRO views the proposed Amendments as addressing the lack of flexibility, consistency and tax certainty under the current directed commission model, which will be phased out.

We encourage firms and advisors to review the potential impact of the proposed Amendments on their business model and provide feedback to CIRO by the November 6 comment deadline.

We invite you to REGISTER for our webinar on September 22, 2026, from noon to 1 p.m. EST, during which we will share additional insights on the proposed Amendments.

What the proposed Amendments do

The proposed Amendments are designed to harmonize CIRO’s advisor compensation rules by:

Repealing the directed commission arrangement option for mutual fund dealers’ client-facing Approved Persons. This option is currently available to client-facing advisors with mutual fund dealer firms or firms dually registered as both mutual fund dealers and investment fund dealers;
Retaining the current option for advisors to be either employees or agents of their Dealer; and
Introducing the option that all client-facing advisors may adopt an Incorporated Approved Person arrangement with their sponsoring Dealer, which would allow permitted regulated Canadian financial services sector activities, and ancillary activities, to be carried out by the Incorporated Approved Person.

While Dealers are not required to make the Incorporated Approved Person option available to their advisors, CIRO notes that there may be competitive advantages in terms of attracting and retaining talent for those Dealers who do make it available, versus Dealers that do not provide this option.

What does the Incorporated Approved Person model entail?

The Amendments propose the following requirements in connection with the Incorporated Approved Person model:

Who can have an Incorporated Approved Person and for what purposes?

The individual associated with the Incorporated Approved Person must be a client-facing Approved Person of the sponsoring Dealer.
The Incorporated Approved Person must be registered in the required category (or exempt from registration) in the applicable Canadian jurisdictions in which it operates.
An individual using an Incorporated Approved Person must be approved by CIRO (to ensure there is a chain of accountability between CIRO, the Dealer and the Approved Person).
The Incorporated Approved Person may only carry out activities that have been approved in advance by the Dealer, are not contrary to securities laws and do not bring the industry into disrepute. The activities are limited to being:
- Ancillary to the activities performed by the Incorporated Approved Person on the Dealer’s behalf; or
- Regulated Canadian financial services sector activities, provided the Approved Person is a qualified individual financial services advisor in the Canadian jurisdiction where the activities are being performed, who is not prohibited from engaging in such activities.

CIRO is requesting stakeholder feedback on the appropriate scope and prohibitions of the activities that can be performed, whether more than one client-facing Approved Person sponsored by the Dealer should be able to be employed by the Incorporated Approved Person, and any associated conflicts of interest that should be considered and managed.

Relationship between Approved Person, Incorporated Approved Person and Dealer

The proposed Amendments prescribe the key terms of the written agreement that will be required between the Incorporated Approved Person, the Dealer and the individual Approved Person. However, we anticipate that tax considerations will drive the structure of these tripartite agreements and advice should be sought at the outset to ensure that the desired tax benefits are able to be realized.

CIRO prescribes the following contents for the agreement:

Compliance with all applicable laws, securities laws and CIRO requirements (indeed, CIRO retains the discretion to require a Dealer to obtain a legal opinion in support of this compliance);
The Approved Person must conduct all securities and derivatives-related business for the Dealer through the Incorporated Approved Person;
The Dealer must be responsible for supervision of the Approved Person and the activities of the Approved Person conducted for the Dealer through the Incorporated Approved Person;
The Approved Person must provide disclosure to impacted clients of the nature of the incorporated advisor relationship; and
The Incorporated Approved Person must obtain prior approval from the Dealer before engaging in activities other than those being conducted on behalf of the Dealer.

Dealers are required to supervise each Incorporated Approved Person as they would an employee, are responsible for ensuring that the Approved Person and the Incorporated Approved Person comply with applicable laws and CIRO requirements, and are liable to clients and other third parties for the Approved Person and Incorporated Approved Person’s conduct for activities performed on behalf of the Dealer.

We anticipate the adoption of an Incorporated Approved Person model will increase Dealers’ supervisory burden, as CIRO will expect adequate systems to approve, monitor and supervise Incorporated Approved Person activities and prevent unpermitted outside activities, a risk which may be greater under these new structures.

We may also see an uptick in client complaints of misrepresentations related to confusion about the legal relationship among the Dealer, the Approved Person and the Incorporated Approved Person. To mitigate this risk, Dealers will want to ensure clear and consistent client disclosure.

In the event that CIRO or a securities regulatory authority commences an investigation related to misconduct by the Approved Person or Incorporated Approved Person, or in the event the Dealer has reasonable grounds to believe that the Approved Person or Incorporated Approved Person has breached CIRO requirements or securities laws, the Dealer is permitted to immediately, without notice, assume direct responsibility for the impacted clients, to the exclusion of the Approved Person and Incorporated Approved Person. The Dealer is permitted to designate another qualified person to provide services to the impacted clients, and that person may receive remuneration that would otherwise have been paid to the Approved Person and the Incorporated Approved Person.

Legal structure of the Incorporated Approved Person

A single Approved Person is the only permitted voting shareholder of an Incorporated Approved Person. This Approved Person must also be the sole director. The voting shareholder, as well as family members who qualify as a “related person” to the voting shareholder under the Income Tax Act (Canada), can be non-voting shareholders.

Approved Persons sponsored by other Dealers, and anybody subject to sanctions, are prohibited from being a voting or non-voting shareholder of an Incorporated Approved Person.

CIRO poses several questions about the appropriateness of these shareholder/owner limitations, including whether non-client-facing Approved Persons who meet certain criteria should be permitted to conduct business through, and own voting or non-voting shares in, the Incorporated Approved Person.

Critical tax considerations

Tax considerations will be central to the viability and structure of any Incorporated Approved Person arrangement. In particular, the written agreements among the Dealer, the Approved Person and the Incorporated Approved Person will need to be carefully structured so that the services being compensated are properly provided through the Incorporated Approved Person and so the arrangement can withstand the security of the Canada Revenue Agency (CRA) and Revenu Québec and avoid negative tax consequences.

If the arrangement is off-side applicable tax rules, the consequences may not be limited to the Incorporated Approved Person: the individual Approved Person owner may be assessed personally, including where amounts paid to the Incorporated Approved Person are treated as having been directed, transferred or assigned by the individual Approved Person. The potential tax implications for the Incorporated Approved Person can be significant, including loss of deductibility of certain expenses, loss of access to favourable corporate tax rates, punitive tax treatment applicable to personal services businesses (PSB) and potential double taxation. When structured in accordance with applicable tax laws and the proposed Amendments, an Incorporated Approved Person can provide individual Approved Persons with considerable tax benefits including (i) deductions for certain expenses not available to an employee; and (ii) potential tax deferral on the income. For example, in Ontario, services income earned by an individual is subject to a tax rate of 53.53 per cent, whereas a corporation earning such income may be subject to a corporate tax rate of 12.2 (for income that qualifies for the small business deduction) or 26.5 per cent (for all other active business income). This income will be subject to further tax (at 47.74 per cent and 39.34 per cent, respectively) when paid to individual shareholders as dividends, resulting generally in tax integration when the income is ultimately distributed to the individual.

Dealers and Approved Persons should seek tax advice at the outset, prior to structuring the new relationship, as the tax analysis will drive key terms of the agreements, including the persons entering each agreement, the terms of each agreement, the allocation of services, the legal and factual relationship among the parties, and the documentation needed to support the intended tax treatment.

While the tax considerations in Québec generally mirror the federal rules, Québec-specific issues should also be considered, including the risk of PSB treatment, which must be analyzed in light of the Québec Taxation Act and the Civil Code of Québec. Moreover, Revenu Québec has repeatedly indicated that its concern is not the commission-sharing arrangement itself, but rather determining who is legally entitled to the remuneration based on the parties’ contractual arrangements. On that basis, Revenu Québec has audited a number of mutual fund advisors who allocated commission income to their corporations (using the ‘directed commission’ model), taking the view that the income remained personally attributable to the advisor for tax purposes. Whether this position will be revisited following CIRO’s proposed Amendments remains uncertain. Several reassessments issued by Revenu Québec are currently under objection and are being held for review by a Revenu Québec officer pending the outcome of a similar case before the Québec court.

Practical implications of the proposed Amendments

New corporations

When evaluating whether and how to make Incorporated Approved Person arrangements available, Dealers and advisors will want to assess:

Whether the tripartite agreement between the Dealer, the Approved Person and the Incorporated Approved Person will permit each party to have the desired level of control or flexibility.
The cost, resources, and other practicalities of structuring the arrangement in a way that is compliant with both securities regulatory expectations and tax requirements.
While the proposed Amendments are intended to provide greater flexibility for Approved Persons, the parties will need to carefully manage the allocation of risk and responsibility among the Dealer, the Approved Person and the Incorporated Approved Person. In particular, Dealers may face increased regulatory and litigation exposure as a result of being required to supervise the activities of an Incorporated Approved Person. Disputes could also arise over whether conduct was Dealer-related or whether it was outside of the Dealer-approved scope of activities for the Incorporated Approved Person.

Existing mutual fund dealer directed commission structures

Existing directed commission structures for representatives of mutual fund dealers will need to be assessed to determine:

Whether existing share ownership and director structures align with the requirements in the proposed Amendments.
How to restructure the existing corporation to comply with the proposed Amendments in a manner that is tax efficient.
Whether CIRO is proposing a sufficient transition period and transition guidance (given the remaining ambiguities) for existing directed commission corporations to become compliant Incorporated Approved Person arrangements.

CSA registrants: Portfolio managers and EMDs too?

While the Amendments are not proposed to apply to CSA-registered portfolio managers or exempt market dealers, such registrants should consider whether to advocate for the inclusion of a non-individual registration category being equally available to them.

The path ahead

We see a lengthy path ahead before the proposed Amendments can be enacted.

The extent of the Canada Securities Administrators’ (CSA) support for the proposed Amendments is as-yet unknown. Changes to securities law will be required, including to the securities legislation of various Canadian jurisdictions (Acts) and to National Instrument 31-103 – Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) to allow for advisor-owned Incorporated Approved Persons to carry out registrable activities and impose the corresponding regulatory obligations. Changes to the Acts will require provincial and/or territorial legislative changes by the relevant government, while changes to NI 31-103 will require public consultation, evaluation of the feedback, publication of finalized amendments and ministerial approvals. Currently, it is unclear whether changes to the Acts and NI 31-103 will (i) create an exemption from registration for Incorporated Approved Persons that carry out securities-related activities or, (ii) establish a new, less burdensome, non-individual registration category for Incorporated Approved Persons.

CIRO poses transition period questions in the proposed Amendments. Stakeholders will want to consider the extent of the efforts required to restructure, draft and negotiate these arrangements, as well as repaper policies and procedures to address the new requirements, and other considerations, to assess the sufficiency of the transition time proposed.

We urge Dealers and advisors to carefully consider how these proposed Amendments will apply to them and to provide suggestions and comments to CIRO by the November 6 comment deadline.

The Supreme Court clarifies Canada’s methods of medical treatment doctrine

Fri, 17 Jul 2026 00:00:00 Z

On July 17, 2026, the Supreme Court of Canada released its long-awaited decision in Pharmascience Inc. v. Janssen Inc., 2026 SCC 26, providing the most significant guidance in decades on the patentability of methods of medical treatment in Canada. While the Court ultimately upheld Janssen's patent, which the Court characterized as being for dosing regimens for formulations used to treat schizophrenia, the broader significance of the decision lies in its clarification of how subject matter should be assessed to determine if it defines non-patentable methods of medical treatment.

Background

The evolution of the method of medical treatment doctrine

Unlike many exclusions from patentability, the prohibition of patenting methods of medical treatment (MMT) does not appear anywhere in the Patent Act. Instead, it emerged through the common law, most notably from the Supreme Court's decision in Tennessee Eastman.

In Tennessee Eastman, the Court held that a surgical method did not constitute patentable subject matter because it related to the exercise of professional skill rather than an “art” within the meaning of the Patent Act.

Over the decades that followed, that reasoning expanded beyond surgical procedures, and Courts were increasingly asked whether therapeutic methods involving pharmaceuticals likewise crossed the line into unpatentable subject matter. While a new drug could constitute patentable subject matter, greater difficulty arose where patents claimed how a drug should be administered, particularly where treatment depended on dosage adjustments, treatment schedules, or patient-specific considerations.

In attempting to distinguish patentable pharmaceutical inventions from unpatentable methods of medical treatment, the Canadian Courts considered a variety of recurring factors when attempting to assess if a claim required the exercise of professional skill and judgement, including:

whether the claim recited a fixed dosage regimen or a range requiring adjustment;
whether treatment required ongoing individualized clinical decision-making; and
whether the claimed invention more closely resembled a vendible product than the exercise of a professional medical skill.

The difficulty was that professional skill and judgement is not referred to in the Patent Act itself and no single factor led to a comprehensive legal framework.

The dispute before the Supreme Court

The present dispute arose with respect to Janssen’s Canadian Patent No. 2,655,335, whose claims recite specific dosage regimens for paliperidone used in the treatment of schizophrenia. The patent teaches a dosing schedule involving the administration of particular loading and maintenance doses.

The Federal Court in Janssen Inc. v. Pharmascience Inc., 2022 FC 1218 recognized that the existing jurisprudence related to methods of medical treatment had largely developed around a distinction between fixed and variable dosing regimens. Under that line of inquiry, claims directed to specific dosage amounts and fixed administration schedules were generally considered patentable subject matter, whereas claims requiring a physician to select a dose or treatment schedule from within a range were more likely to be characterized as unpatentable methods of medical treatment. Although the Federal Court questioned the theoretical foundation of this dichotomy, it acknowledged that this remained the prevailing state of the law.¹

The Federal Court of Appeal (FCA) in Pharmascience Inc. v Janssen Inc., 2024 FCA 23 held, and what ultimately became the guiding rule until now, was that the fixed versus variable dosage distinction was not the correct test. Rather, the proper inquiry was whether use of the invention (not whether to use it) required the exercise of skill and judgement. Importantly, the Court of Appeal acknowledged that this assessment inherently turned on the particular claims and evidence in each case.²

At the heart of Pharmascience's appeals was the contention that Janssen's patented dosing regimen crossed the line from a patentable pharmaceutical innovation into an unpatentable method of medical treatment that attempted to monopolize a physician’s judgement on “how” and “when” to administer the drugs.

The Supreme Court’s analysis

Before turning to Janssen's patent itself, the Supreme Court addressed the broader question: Are methods of medical treatment non-patentable subject matter under Canadian law?

The Court's answer was unequivocal.

From the opening paragraphs of the decision, the Court repeatedly characterized the doctrine as settled Canadian law. For more than fifty years, Canadian courts have consistently treated methods of medical treatment as unpatentable subject matter, and the Court emphasized that no Canadian court has held otherwise. In language rarely seen on a question of patent doctrine, the Court noted that it was being asked to "disrupt this settled law" and declined to do so.³

Importantly, the Court rejected Janssen's submission that the MMT doctrine disappeared with the repeal of former section 41(1) of the Patent Act. The Court concluded that the doctrine has been reaffirmed repeatedly by subsequent jurisprudence, is rooted in the broader principle that professional skills are not patentable and has become an established part of Canadian patent law independent of the former statutory provision.

In doing so, the Court effectively closed the door on arguments that the prohibition on methods of medical treatment ceased to exist as a distinct exclusion following the repeal of former section 41(1) of the Patent Act.

Adopting the Federal Court of Appeal's framework for methods of medical treatment

Neither Pharmascience nor Janssen succeeded with their competing positions. Instead, the Court expressly endorsed the framework previously articulated by the Federal Court of Appeal, describing it as a "balanced approach" grounded in the purpose of the doctrine itself.

Under that approach, the ultimate question remains whether the claimed subject matter amounts to professional medical skill and judgment. Put differently, the inquiry is whether the claim seeks to "fence in" an area of medical practice.⁴

The Court emphasized that this assessment begins with purposive claim construction and focuses on the “real subject matter of the claim.”⁵ Citing the Federal Court of Appeal, the Supreme Court emphasized that what matters in this part of the analysis is substance, not form.⁶

Professional skill and judgement

Perhaps the most significant aspect of the decision appears in the Court's discussion of professional skill and judgment.⁷

The Court drew a distinction between whether a claimed invention amounts to professional medical skill and judgement, or whether professional medical skill and judgement would be used in selecting the invention for a particular use.

By way of example, the Court stated that a medical professional prescribing a drug to a patient exercised clinical judgement in deciding whether it was appropriate, but that does not itself make the drug unpatentable. Rather, it is the prescribing decision that is the unpatentable subject matter. Further, once selected, a medical professional may still need to monitor a patient and decide whether to continue, stop or alter treatment. The Court affirmed that the mere existence of those decisions does not render the treatment unpatentable subject matter.⁸

The test for methods of medical treatment⁹

The most significant contribution of the decision may be the Supreme Court's clarification of how the methods of medical treatment doctrine is to be applied. Although the Court declined to draw a bright line between patentable medical innovations and unpatentable methods of medical treatment, it endorsed the Federal Court of Appeal's approach and identified three key considerations to guide the analysis.

First, the need for professional skill and judgement in determining whether a treatment is appropriate for a patient will generally not affect its patentability. The decision to prescribe a treatment is distinct from the invention itself.

Second, the more a claimed invention requires tailoring to the circumstances of individual patients, the more likely it is to amount to a method of medical treatment. Conversely, inventions capable of broad application without individualized adjustment are less likely to constitute methods of medical treatment.¹⁰

Third, the analysis must remain connected to the rationale underlying the doctrine. The more a medical professional would naturally develop, refine, or improve the subject matter through ordinary professional practice, the more likely it is that the subject matter is a non-patentable method of medical treatment.¹¹

Importantly, the Court emphasized that these are not bright-line rules. Rather, they are guideposts in what the Court repeatedly described as a "factually suffused" inquiry.

Moving beyond the fixed-versus-variable dosage debate

Endorsing the Federal Court of Appeal's approach, the Court held that the fixed-versus-variable dosage distinction "skirts the ultimate issue" and is, at best, an evidentiary proxy for the real inquiry of whether the claimed invention amounts to professional medical skill and judgment.¹² A variable dosage regime is therefore not inherently unpatentable, nor is a fixed dosage regimen automatically patentable, subject matter.

Application to Janssen’s Patent

Applying these principles, the Court concluded that the subject matter of Janssen's claimed invention did not amount to professional medical skill and judgment. The claimed subject matter did not require the kind of individualized clinical decision-making that characterizes an unpatentable method of medical treatment. The claims therefore remained patentable subject matter, and the appeal was dismissed.

Implications

The Supreme Court’s decision confirms that methods of medical treatment remain excluded from patentable subject matter in Canada. At the same time, the Court held that a claim is not unpatentable merely because it concerns variable dosages or timing. The analysis remains fact-specific and turns on the substance of the claim, including whether implementing the claimed subject matter requires a physician or other health professional to exercise individualized skill and judgment. Claim form may be relevant to that assessment, but the decision does not suggest that form alone is determinative.

Bill C-31 proposes major Defence Production Act changes affecting Canadian defence procurement

Wed, 15 Jul 2026 00:00:00 Z

On June 3, 2026, the House of Commons completed second reading of Bill C-31, Budget 2025 Implementation Act, No. 2 (Bill C-31) which will now proceed to study in the Standing Senate Committee on National Finance. Alongside numerous policy changes to Canada’s defence procurement strategy, Bill C-31 includes amendments to the Defence Production Act, RSC 1985, c D-1 (the DPA).¹

The tabled amendments to the DPA reflect Canada’s prioritization of defence and security, including changes to the strategy for defence procurement.

I. Definition & Scope Changes – Associated Governments and Defence Services

Notably, Bill C-31 proposes the following amendments to the DPA, altering key definitions that affect the scope of application of the DPA. Generally, these amendments serve to recognize defence and security functions where Canada participates in cooperative defence initiatives with “associated” allied governments, now expressly including the European Union and its Member States. These amendments also significantly expand the meaning of “defence services” to include anything required or used for national defence or security and anything that is used for the production or supply of these services.

For example, Bill C-31 proposes to amend the following key definitions:

Modifying the definition of “associated government” to include governments or international organizations in good standing with NATO, and to include the European Union and its Member States;²
Expanding the definition of “defence projects” to include works in relation to residential communities on federal real property, and works “required for the purposes of national security” more broadly;³
Expanding the definition of “defence contract” to include contracts with the government of Canada, or Associated Governments, that relate to defence services “in any way”;⁴ and
Adding a definition of “defence services”, which includes “anything” that is required or used for the purposes of national defence or national security, or for cooperative defence/security efforts carried on between Canada and an Associated Government, vessels, and “anything” used for the production of the same.⁵

II. Ministerial Powers

The DPA defined the “Minister” who is authorized to act in respect of the DPA as the Minister of Public Works and Government Services.⁶ Conversely, Bill C-31 alters the definition so that the Minister of Public Works remains the “Minister” for the purposes of Part 2 of the Act (addressing the regulation of access to controlled goods), but the definition of “Minister” in Part 1 of the Act (addressing procurement of defence supplies) means the Minister designated under section 3 of the Defence Investment Agency Act, another enactment currently proposed under Bill C-31.⁷ The referenced Minister is not identified, but would be designated by an order of Cabinet.⁸

Bill C-31 also clarifies that the powers, duties and functions pursuant to this legislation prevail over the Department of Public Works and Government Services Act.⁹

In addition to clarifications of Ministerial duties in section 312 of the bill, the Minister is empowered, if authorized by Cabinet, to do anything the Minister is authorized to do under this legislation, on behalf of an Associated Government.¹⁰ This provision likely envisages future defence partnerships, such as the Agreement between the European Union and Canada Concerning Participation under the SAFE Instrument.

Notably, the Minister is also authorized to pay out of the Consolidated Revenue Fund up to $1 billion in aggregate, broadly for the purposes of (1) stockpiling, (2) financial assistance, and (3) defence services, defence supplies, and defence project procurement.¹¹

III. Information Requests & Stockpiling

The Minister is entitled to request information about defence supplies and defence services that a person provides or contemplates providing, including about the source of supply for these supplies or services, and the facilities that a person has available for the provision of defence supplies, defence services, or the construction of defence products.¹² Notably, this type of information request can be made of anyone who provides defence services or who carries on a business that is suitable for providing defence services.¹³ Previously, this type of request was limited to persons providing defence supplies or defence projects¹⁴ – now the scope has been expanded to include persons providing defence services as well, which has been very broadly defined.

The Minister is also empowered to engage in stockpiling of designated materials in a broader range of circumstances. Previously, stockpiling was limited to materials designated by Cabinet as essential to the needs of the community to safeguard against possible shortages. Bill C-31 expands this stockpiling power to include anything “essential to the needs of Canada” as well as for a “community in or outside of Canada” and for “an associated government” for the purposes of national defence, national security, and economic security.¹⁵

IV. Defence Procurement

There are several added provisions and amendments that are likely to impact prospective suppliers in a defence procurement process.

a. Financial Assistance

Bill C-31 contemplates expanded ministerial powers to offer financial assistance for a purpose related to national defence production, procurement, and investment, as well as relating to defence supplies, defence services, and defence projects, and for stockpiling. Financial assistance can include providing loans or advanced payments, grants and contributions, and to enter into other financial arrangements, with the authorization of Cabinet.¹⁶

b. Business Information

Notably, Bill C-31 confirms that no information about an individual business that was obtained pursuant to this legislation will be disclosed without consent, except to a government department for the purposes of discharging its functions, for the prosecution of an offence under this legislation, or for the purposes of another legal proceeding (with the consent of the Minister).¹⁷

c. National Security Exemption

Bill C-31 confirms that the national security exemption may be invoked in relation to any domestic or international trade agreement that Canada is a party to.¹⁸ Relevant trade agreements include the Canadian Free Trade Agreement, for domestic trade, the Canada-EU Comprehensive Economic and Trade Agreement, and the World Trade Organization Agreement on Government Procurement.

Generally, the national security exemption operates to allow Canada to derogate from standard procedures within a given procurement process to safeguard national security interests. Invocation of a national security exemption can allow for non-competitive procurement structures, limit the procedural protections afforded to prospective suppliers and limit legal routes of recourse.

d. Competitive Defence Procurement

Despite confirming that the national security exemption may be invoked, Bill C-31 also contains a general requirement that the Minister must conduct a competitive procurement process for a contract before entering into it, subject to some exceptions.¹⁹

The exceptions where a competitive procurement is not required include:

Contracts for addressing urgent operational requirements;
Where necessary for conducting military operations, critical defence projects, or safeguarding national security;
To support a sector of the Canadian economy that is important to national defence, national security, or economic security;
Contracts for defence supplies or services that are interoperable or interchangeable with defence supplies, services, or projects of Canada or an Associated Government;
Contracts in relation to sensitive technology;
Contracts where only one person is capable of performance;
Contracts to fulfil an interim requirement, for operational reasons;
Contracts to fulfil interim requirements;
Contracts for research, development, or innovation in relation to defence supplies or services;
Contracts for defence supplies or services that were the subject of funding from Canada for research, development, or innovation;
Contracts that are to be entered into with a government entity, under an agreement/arrangement with a government entity, or under a procedure of an international organization, of which Canada is a member;
Where exceptions arising from regulations to the Financial Administration Act apply; or
Where prescribed by regulation.

Even where an exception does not apply, the Minister is still entitled to exclude any person from participating in a competitive procurement process, if there are reasonable grounds to believe that this person or anything proposed to be used poses a risk to national defence, national security, or public safety. The Minister is not obliged to provide reasons to a person who is excluded from participation on this basis.

V. Future Regulations & Reviews

Cabinet is entitled to make regulations, including to address the Minister’s stockpiling powers, as well as to fix terms that are deemed to be expressly set out in contracts for defence procurement, the provision of information relating to the costing of procurement contracts, and the procedure for competitive procurement processes. Regulations may also set out additional details and definitions for certain exceptions to competitive procurement processes, including what is an “urgent operational requirement”, “sensitive technology”, and a contract with a “government entity.”²⁰

The Minister would be required to undertake a review of this legislation within three years after coming into force and prepare a report to Parliament.²¹

VI. Implications of Bill C-31’s Proposed Amendments to the DPA

The proposed amendments in Bill C-31 have not been enacted yet. As of the date of writing, the bill has completed second reading in the House of Commons and is currently before the Standing Senate Committee on National Finance.

However, the proposals in Bill C-31 signal some key takeaways for established defence sector and dual-use industries, if enacted in the same or substantially similar form.

a. Broader Market Access & Associated Government Procurements

Expanding the definition of “associated governments” to include states and international organizations in good standing with NATO, the European Union (“EU”), and EU member states signals a clear intent to deepen cross-Atlantic industrial and defence cooperation among allies. This proposed legislative change builds on Canada’s recent agreement with the EU, granting Canadian companies preferential access to defence procurement funded through the EU’s Security Action for Europe (SAFE) instrument.

As a result, defence sector participants may see new opportunities emerge for Canadian companies, particularly in accessing and contributing to multinational procurement programs and integrated supply chains under models similar to SAFE.

However, participation in allied or EU-led procurements will engage a complex overlay of regulatory considerations. In addition to Canadian national security, investment review, and procurement requirements, companies should expect heightened expectations around compliance, interoperability, and security clearances. Depending on the structure of the procurement process, compliance with the Associated Governments’ own procurement requirements and security regimes may be required in some cases. Successfully navigating these frameworks will be critical to realizing the benefits of expanded market access.

b. Expanded Scope: Defence Services

By broadening the DPA to cover “defence services” in addition to “defence supplies” and “defence projects” and by encompassing a wider range of defence-related projects, more entities, including service providers, technology companies, and dual-use businesses, may be engaged in procurement processes and contract arrangements that now fall within the scope of the DPA. Due to an increased emphasis on community protection and economic security, businesses that engage in key infrastructure building and operate within critical economic sectors may also see contracting opportunities and requests for information arising out of the DPA regime.

If and when these changes come into force, a wider range of government contracts may now be termed as defence contracts to which the DPA applies. As a result, traditionally non-defence or dual-use companies may be subject to information requests about their possible supply chains and ability to provide supplies.

Companies that provide services into the defence ecosystem, as well as those looking to enter the sector or compete in defence procurements, should proactively assess whether their activities are now captured. Early evaluation and preparation will be critical to managing heightened regulatory scrutiny and adapting to a more complex compliance environment.

c. Centralization of Procurement Authority

Granting greater authority over defence and national security procurement to a single procurement entity is a welcome and long anticipated reform. Arguably, the most impactful change stemming from Bill C-31 the amendment indicating that the DPA prevails over the Department of Public Works and Government Services Act – this change could represent a shift away from the role for defence procurement in the Minister of Public Works and PSPC. Centralizing decision-making has the potential to accelerate timelines, particularly for urgent or strategically sensitive projects, while improving coordination and consistency across major procurements.

At the same time, this shift will likely introduce new approval pathways and require stakeholders to navigate a more centralized procurement framework that may be less predictable in the near term as new processes and institutional practices evolve.

d. Clarifying Competitive Procurements vs. Non-Competitive Procurements

Although the proposed amendments do clarify that the default rule is for competitive defence procurement processes, the long list of exceptions, some of which are broadly worded, likely means that many defence procurement processes will not be wholly competitive.

However, the proposed new structure of the DPA may offer some greater clarity on when a competitive procurement process is required or not. Currently, the national security exemption is typically invoked in a defence procurement, which allows for derogation from the typical procedural requirements to enable competition between prospective suppliers. By setting a standard rule in favour of competitive requirements, a non-competitive procurement process must fall within one of the outlined exceptions. By assessing the likelihood of an exception applying to a given procurement, this allows suppliers to better anticipate how the process will be run.

Certain exceptions may also afford greater opportunities. One exception is directly linked to supporting a sector of the Canadian economy linked to defence, which would likely allow for a procurement process that favours Canadian suppliers, or excludes non-Canadian suppliers. Another exception is linked to procurement of defence supplies/services relating to research and development, which may incentivize participation in Canadian R&D programs and grants. Lastly, the exception relating to contracts entered into with a government entity or under a procedure of an international organization may allow for tailored procurement processes that fall within the scope of international agreements and envisage participation by suppliers with content from Canada and other countries to participate, such as under the Agreement between the European Union and Canada Concerning Participation under the SAFE Instrument.

Lastly, Bill C-31 appears to contemplate that further clarity on the scope of some exceptions will be provided by regulation, and also envisages the possibility of regulations to set out fixed terms that are deemed to be included in defence contracts, which may offer more clarity for prospective suppliers, in understanding the contractual allocation of risk for particular classes of defence contract early in the procurement process.

e. Increased use of Industrial Policy Tools

The broadening of financial assistance powers (e.g. loans, grants, advance payments) reflects a shift toward more active government participation in defence industrial development, particularly at the direct investment level. Companies should monitor funding opportunities, but also anticipate conditions tied to national security priorities.

While loans, grants, and advance payments will go a long way toward democratizing market participation in defence-sector projects, there are a number of risk-allocation reforms that need to occur in order to generate meaningful industry buy-in. From a contracting perspective, Canada’s traditional reluctance to accept limitation of liability or contractor-friendly indemnification provisions has long been a defining feature of its procurement posture. When combined with the high dollar value and complexity of major defence projects, this approach can create a level of contractual risk that discourages participation, particularly among small and mid-sized enterprises.

Although the federal government has signalled an intention to modernize its approach to risk allocation in defence procurement, it is unlikely that core positions on contractual flow-down obligations, limitation of liability, or indemnities will be addressed through legislative amendments. Instead, any meaningful evolution in these areas is more likely to emerge through policy guidance and procurement practices developed by the Defence Investment Agency.

f. Greater Flexibility in Stockpiling

Removing limits on what may be stockpiled is a clear signal that Canada intends to take a more proactive and strategic approach to supply chain resilience, including economic security considerations. This change is likely to drive increased demand for domestic production capacity and support longer-term, more predictable supply arrangements across the defence industrial base.

More fundamentally, the proposal reflects a shift in Canada’s traditional procurement philosophy. Rather than treating industry primarily as a means of delivering discrete projects, the government appears to be repositioning industry as a strategic partner in building and sustaining sovereign defence capabilities.

This evolution aligns Canada more closely with key allies and reflects a growing recognition that maintaining readiness and technological edge requires deeper industrial integration. In doing so, Canada is also signalling an intention to better position itself in an environment defined by growing competition with peer and near-peer adversaries, where industrial capacity and supply chain security are increasingly central to national defence.

VII. Conclusion

Taken together, the proposed amendments represent a material evolution in Canada’s defence procurement and industrial policy framework. While not yet in force, they signal a clear shift toward a more centralized, multi-faceted, and security-driven approach that aligns more closely with key allies. For industry participants, this creates meaningful opportunities, particularly in allied markets and domestic capability development, but it also introduces increased regulatory complexity and compliance expectations.

Organizations should begin assessing how these changes may affect their operations, contracts, and growth strategies. Early engagement, regulatory preparedness, and alignment with government priorities will be critical to successfully navigating this transition and capitalizing on the opportunities it presents.

Canada’s foreign buyer ban: What the 2027 expiry signals for investors

Fri, 10 Jul 2026 00:00:00 Z

Nearly four years after enacting the Prohibition on the Purchase of Residential Property by Non-Canadians Act (the Act), banning foreign buyers in Canada’s housing market, the federal government is now weighing options to relax restrictions as the Act’s expiry looms. While the Carney government has maintained the previous administration’s decision to extend the prohibition through 2026, it has also signalled a desire to re-open the market to foreign investment in certain circumstances.

Key takeaways

Canada's foreign buyer ban expires in 2027, and the Carney government is actively considering a new approach rather than a straight extension of the current prohibition.
The ban had limited measurable impact: foreign buyers represented just 1.1 per cent of home sales in British Columbia in 2021, and average Canadian housing prices still rose more than 20 per cent during the ban period.
Australia's tiered exemption model, permitting foreign investment in new builds, large-scale redevelopment projects, and vacant land, is one of the frameworks being considered for Canada's post-2027 approach.
Canada already has standing exemptions under the Act for vacant land, certain redevelopment purchases, and publicly traded non-Canadian-controlled entities incorporated in Canada.
Investors and developers should monitor legislative developments closely as the 2027 expiry approaches, particularly around supply-side exemptions that could reopen targeted segments of the residential market to foreign capital.

Canada’s housing crisis: Did the foreign buyer ban address it?

The federal ban, which generally prohibits foreign nationals and commercial enterprises from purchasing residential property in Canada, was enacted as part of an effort to address the country’s significant housing shortfall.

The Canada Mortgage and Housing Corporation projects that new housing construction must roughly double – to approximately 380,000 to 430,000 units annually until 2035 – to meet projected demand. The government sought to limit foreign buyers on the view that their participation was pricing domestic purchasers out of the market. However, experts have long questioned whether a foreign buyer ban would meaningfully increase housing supply or improve affordability.

In 2021, the year before the ban was announced, foreign buyers were involved in only 1.1 per cent of home sales in British Columbia, down from 3 per cent in 2017. Over the nearly four years the ban has been in effect, average Canadian housing prices have nevertheless continued to rise, increasing by more than 20 per cent between 2021 and 2026.

Soon after its enactment, Canada eased restrictions to permit foreign purchases of vacant land and residential properties intended for redevelopment, acknowledging the role foreign-controlled corporations play in expanding housing supply and improving affordability.

The federal government’s new pragmatic approach

Since coming into office, Prime Minister Mark Carney’s administration has taken a pragmatic approach to foreign investment. Minister of Housing Gregor Robertson has indicated that the government sees offshore capital as playing a role in addressing gaps in Canada’s housing market,¹ while the federal government has also indicated that it is weighing tax code reform to attract large foreign investors.²

The disparity between the ban’s stated objective and its real-world effects helps explain the government’s shift. The legislation is largely aimed at speculative single-family housing rather than large multi-family or commercial corporate developments. Because foreign purchasers represented only a small proportion of such transactions, removing them has done little to correct the market’s more significant issues. Price trajectories during the ban instead tracked broader macroeconomic conditions rather than changes in foreign buying. As a result, targeted supply-side exemptions designed to channel offshore capital into new builds, large-sale redevelopment and vacant-land projects are increasingly viewed as an alternative to blanket prohibition.

How Australia's foreign buyer restrictions compare to Canada's framework

Australia faces a similar housing shortage to Canada, targeting 1.2 million new homes between 2025 and 2029. Purchases of established dwellings in Australia by foreign persons comprised 32.9 per cent of total sales in 2023.

Australia enacted its own ban on April 1, 2025, restricting foreign purchases of established dwellings. The Australian framework allows certain exceptions, including:

investments that increase housing stock by more than 20 units;
purchases for redevelopment that support the availability of housing on a commercial scale (such as retirement villages, assisted living facilities and student accommodation);
purchases of new builds; and
purchases of vacant land.

Most exceptions available to foreign persons in Australia are subject to review board approval and strict eligibility conditions.

While originally set to expire on March 31, 2027, the Australian government recently extended the ban to June 30, 2029, a signal that the Australian government views the restrictions as a durable response to housing concerns even as it continues to carve out new-build and redevelopment-stage investment.

Minister Robertson has indicated that Australia’s framework is a model of interest for Canada following the Act’s expiry in 2027, specifically pointing to exemptions for higher-end new homes or rental housing as a possible avenue for foreign investment. Regardless of the final structure, Canada appears to be shifting toward a nuanced approach to foreign investment rather than continuing with a large-scale prohibition.

Existing exemptions in Canada

In contrast to the Australian exemption regime, which generally requires review board approval before completion, the exemptions under the Act in Canada allow certain purchases to proceed by category without case-by-case approval.

The Act applies only to immovable real property located within census metropolitan areas or census agglomerations, excluding certain rural properties and movable property on leased land. Its definition of residential property also generally excludes large non-stratified apartment buildings and development projects.

In response to industry feedback, the federal government introduced amendments to the Act in 2023 to fully exempt vacant land and create a standing exemption for certain redevelopment purchases. The amendments also created an exception for non-Canadian-controlled entities that are incorporated under Canadian federal or provincial law and publicly traded in Canada. Together, these changes were intended to facilitate non-Canadian capital investment in redevelopment that advances the government’s housing-supply objectives.

The key remaining distinction between the current Canadian and Australian frameworks is that Australia expressly permits certain purchases of new dwellings, while Canada’s exemptions remain focused on vacant land, redevelopment, and specified purchaser categories.

What we’re watching as Canada's foreign buyer ban approaches its 2027 expiry

The government has yet to announce a decision on the Act’s future. Given the exceptions already carved into the current regime and the direction of the government’s comments, investors should expect potential changes to the framework post-2027, with an eye to property type and development intent, not blanket eligibility. We will continue to monitor these developments and update this article as they arise.

This publication is of a general nature only and does not constitute legal advice.

BLG can assist

BLG’s Commercial Real Estate Group provides expert advice to builders, buyers, contractors, consultants, governments and others to ensure they can navigate complex legal issues related to housing development. If you have any questions regarding this article or an upcoming project you are involved in, please contact the authors or key contacts below.

FSRA’s new Operational Risk and Resilience Guidance for Ontario insurers

Thu, 09 Jul 2026 00:00:00 Z

On June 8, 2026, the Financial Services Regulatory Authority of Ontario (FSRA) issued its Operational Risk and Resilience Guidance (PC0050APP) for Ontario-incorporated insurance companies and reciprocal insurance exchanges (collectively, Ontario insurers).

The guidance, which sits under FSRA’s Risk-Based Supervisory Framework (RBSF-I), marks an escalation in supervisory focus on cyber threats, data vulnerabilities, third-party dependencies, and climate exposure.

While adoption of the guidance’s principles is not mandatory, FSRA has indicated that an insurer’s adoption of those principles when determining its supervisory approach may be weighed. Ontario insurers should thus treat this guidance as a strong signal of regulatory expectations and an early prompt to assess gaps.

What Ontario insurers should do now

Ontario insurers should consider a structured gap assessment against PC0050APP’s four principles, prioritizing:

Reviewing Board and Senior Management governance structures, including risk appetite documentation and ORMF approval records;
Auditing IT and cybersecurity controls against GR0016INT and confirming incident notification procedures align with FSRA’s materiality thresholds;
Reviewing third-party vendor contracts for notification obligations, audit rights, and BCP/DRP integration;
Testing BCP and DRP adequacy, including scenario-specific stress testing; and
Beginning to incorporate ESG and climate risk considerations into corporate strategy ahead of anticipated further FSRA guidance.

Background

FSRA supervises both Ontario-incorporated insurers and reciprocal exchanges licensed under the Insurance Act (Ontario); PC0050APP supplements the existing Corporate Governance Guidance (PC0051INT) and FSRA’s IT Risk Management Guidance (GR0016INT). However, while GR0016INT applies to all FSRA-regulated entities, including federally incorporated insurers licensed in Ontario, PC0050APP applies to Ontario-incorporated insurers only.

Insurers subject to federal oversight should also note that FSRA’s guidance broadly aligns, but remains separate as provincial guidance, with expectations in force for federally regulated financial institutions under OSFI’s Guideline B-13 – Technology and Cyber Risk Management, reinforcing that operational and cyber resilience is now a pan-Canadian regulatory priority. Ultimately, both FSRA and OSFI have increased their supervisory focus on operational and cyber resilience, resulting in enhanced oversight expectations for insurers operating in Ontario.

PC0050APP’s four principles

PC0050APP is organized around four principles that outline FSRA's intended supervisory outcomes:

(1) Governance

Ultimate accountability for operational risk oversight rests with the Board and Senior Management. FSRA expects Ontario insurers to maintain an Operational Risk Management Framework (ORMF), adopt a three-lines-of-defence structure, and clearly define risk appetite, tolerance, and limits. The Board must periodically review and approve Business Continuity Plans (BCPs) and Disaster Recovery Plans (DRPs).

(2) Risk identification and assessment

Ontario insurers must regularly scan their operating environment, including products, people, processes, systems, and the external environment, to identify and assess inherent operational risks. Information technology is specifically flagged as a significant activity subject to this scan.

(3) Risk management

An effective ORMF should reduce both the frequency and impact of operational risk events. Frameworks and supporting policies must be commensurate with the Ontario insurer’s size, complexity, and risk profile, and integrated with enterprise-wide risk management.

(4) Resilience

Ontario insurers must plan for adverse scenarios and demonstrate crisis readiness. BCPs and DRPs must be tested against severe but plausible scenarios, kept current, and produced for FSRA on request during supervision. The guidance also emphasizes learning from past failures as a driver of continuous improvement.

Four sub-risk categories under the lens

FSRA identifies four sub-risks within its definition of operational risk, each with specific supervisory implications:

(1) Third-party risk

As insurers increasingly rely on cloud service providers and other outsourced vendors, FSRA emphasizes that accountability and ownership of all risks remain with the insurer, regardless of the outsourcing arrangements. Ontario insurers should establish a third-party risk management framework, conduct ongoing due diligence, and ensure contracts contain appropriate notification, audits, and performance provisions. Concentration risk (that is, over-reliance on a single dominant provider) warrants specific attention.

(2) Cyber risk

FSRA will assess IT controls across access management, network security, asset classification and disposal, incident monitoring, and cybersecurity awareness training. Insurers must provide FSRA with timely notification of material IT incidents as required under GR0016INT, which sets a 72-hour notification window for Ontario-incorporated insurers and reciprocals. BCPs and DRPs should specifically address technology service disruptions.

(3) Data risk

Inadequate data governance is a distinct operational risk, spanning integrity, availability, and the safeguarding of confidential consumer information. FSRA will evaluate whether clear accountability and governance frameworks are in place, and whether data capabilities hold up under stress.

(4) Climate risk (physical and transition)

Physical climate events can disrupt critical operations and amplify underwriting losses through increased property damage claims. FSRA currently assesses ESG and climate initiatives as part of the Resilience Rating under RBSF-I, and has signalled that further climate-specific guidance may follow.

The broader regulatory and legal landscape

FSRA’s PC0050APP emerges amid a broader wave of cybersecurity and operational resilience regulation at both federal and provincial levels.

At the federal level, Bill C-8 received Royal Assent on June 15, 2026, thereby completing the legislative process for the Critical Cyber Systems Protection Act (CCSPA) and establishing Canada's first mandatory cybersecurity regime for designated operators in sectors, including telecommunications, banking, and clearing systems. Its provisions will come into force gradually, on a day or days to be fixed by order of the Governor-in-Council; read BLG’s in-depth Insight on the topic, Critical Cyber Systems Protection Act: Bill C-8 is adopted.

While in its current form the CCSPA does not capture federally regulated insurers, insurers that rely on vendors that are designated operators, such as large bank-affiliated cloud providers, may face downstream contractual cybersecurity requirements as those vendors implement their own CCSPA obligations.

Provincially, Ontario's Enhancing Digital Security and Trust Act, 2024 (EDSTA) and its accompanying regulations, O. Reg. 51/26 (Cyber Security) and O. Reg. 52/26 (Digital Technology Affecting Individuals Under Age 18), both in force as of July 1, 2026, impose mandatory cybersecurity programs, biennial cyber maturity assessments, and 72-hour critical incident reporting on prescribed broader public sector entities.

Ontario's Plan to Protect Ontario Act (Budget Measures), 2026 (Bill 97) further modernizes the province's access-to-information and privacy framework by extending privacy impact assessment, breach reporting, and cybersecurity safeguard requirements to municipalities.

Although private insurers are not captured by EDSTA, its regulations, or Bill 97, insurers serving public-sector clients may encounter more rigorous cybersecurity expectations as those organizations strengthen vendor oversight obligations.

Takeaways for Ontario insurers

Together with OSFI Guideline B-13 (Technology and Cyber Risk Management), OSFI Guideline B-10 (Third-Party Risk Management), and FSRA's GR0016INT (IT Risk Management Guidance), PC0050APP reinforces a consistent regulatory expectation: boards are accountable for operational risk, risk management frameworks must be documented and proportionate, third-party accountability cannot be outsourced, and resilience must be demonstrated through tested plans rather than asserted. For Ontario-incorporated insurers, PC0050APP provides the framework through which FSRA will assess operational risk and resilience during supervisory reviews.

Key takeaways include:

(1) Governance accountability cannot be delegated.

The Board bears ultimate responsibility.
Risk appetite statements, ORMF approval, and BCP/DRP oversight must be demonstrably Board-level activities.
Ontario insurers should assess their governance structures against Principle 1 and document any gaps.

(2) Cyber and IT controls will face direct scrutiny from FSRA.

FSRA will assess the full lifecycle of IT risk management from access controls and network security through to incident reporting and staff training.
Insurers should benchmark their programs against GR0016INT. The 72-hour material incident notification window for Ontario insurers under GR0016INT is a compliance tripwire worth confirming in internal procedures.

(3) Outsourcing does not outsource the risk.

Accountability for third-party risks stays with the insurer.
Vendor contracts, particularly with cloud service providers, should be reviewed for incident notification obligations, audit rights, concentration risk provisions, and BCP/DRP integration.

(4) BCPs and DRPs must be tested and producible on demand.

FSRA may require insurers to present BCPs, DRPS, and scenario testing results during supervisory monitoring.
Plans must be current, scenario-tested, and capable of being produced promptly.

(5) Climate is a growing supervisory priority, and should be acted upon before the next guidance is anticipated to come out (2031).

FSRA has signalled that additional climate and ESG guidance is coming, and already factors ESG initiatives into the Resilience Rating.
Ontario insurers that have not yet begun embedding climate risk into corporate strategy should start now.

Just over the horizon: 2025 annual report of the OSC’s Investor Advisory Panel

Wed, 08 Jul 2026 00:00:00 Z

The Ontario Securities Commission’s Investor Advisory Panel released its 2025 Annual Report (IAP Report) in May, suggesting that investor protection should continue to shape the regulatory agenda, including through regulatory initiatives aimed at innovation, capital formation and competitiveness. The IAP Report emphasizes that retail investors are operating in an increasingly complex environment marked by more product choice, technological change, social media influence and increased fraud risk, and it repeatedly frames investor protection as essential to each branch of the OSC’s mandate.

For registrants, one important theme is the focus on retail facing digital practices. The IAP highlights concerns about do-it-yourself (DIY) investing, the growing use of AI and social media in investment decision making and digital engagement practices such as push notifications, contests, rewards programs and trending asset lists. It supports additional safeguards, cautions against harmful digital engagement practices and encourages regulators to consider whether further measures are needed in relation to finfluencers.

The IAP Report also notes the expansion of Exchange-Traded Funds (ETFs), with 2025 marking the first time ETF launches outpaced mutual fund launches, including more complex and digital asset related products, and stresses that disclosure regarding such products must be clear, accessible and useful to investors. The IAP Report also raises concerns more generally about inconsistent compliance with the Client Focused Reforms (CFRs), including deficiencies in risk profiling, “Know Your Product (KYP)” processes, suitability assessments and training.

Finally, the IAP Report underscores two broader developments relevant to firms’ risk management frameworks: modernized enforcement actions and renewed attention to investor redress. The IAP calls for expanded enforcement tools and strategies in response to increasingly sophisticated fraud, including AI-enabled scams, and reiterates its long-standing support for binding decision-making authority for the Ombudsman for Banking Services and Investments (OBSI), along with clearer and more effective redress mechanisms for harmed investors.

The authors would like to thank Ray Zhao, student-at-law, for his contributions to this insight.

Le modèle d’accès aux documents d’information continue des Autorités canadiennes en valeurs mobilières est prêt

Wed, 08 Jul 2026 00:00:00 Z

Les Autorités canadiennes en valeurs mobilières (ACVM) ont mis la touche finale à leur nouveau modèle d’accès visant certains documents d’information continue des émetteurs assujettis qui ne sont pas des fonds d’investissement (le « modèle d’accès ») en modifiant le Règlement 51-102 sur les obligations d’information continue et le Règlement 54-101 sur la communication avec les propriétaires véritables des titres d’un émetteur assujetti.

Si toutes les approbations nécessaires sont obtenues, les modifications entreront en vigueur le 22 septembre 2026 et confirmeront la tendance vers les communications numériques sur les marchés financiers canadiens.

Points à retenir

Un nouveau modèle d’accès électronique pour la transmission par des émetteurs assujettis n’étant pas des fonds d’investissement des états financiers annuels, des rapports financiers intermédiaires et des rapports de gestion correspondants (collectivement, les « documents d’information continue ») entrera en vigueur le 22 septembre 2026.
Le modèle d’accès est facultatif et peut être utilisé pour transmettre certains documents d’information continue même si les obligations de transmission existantes continuent de s’appliquer pour d’autres – il offre donc de la flexibilité aux émetteurs.
Les émetteurs assujettis qui adoptent le modèle d’accès doivent suivre un cadre de notification, qui comprend l’obligation de transmettre un avis avant de commencer à l’utiliser, de publier un communiqué et de faire une annonce en ligne, et respecter les obligations d’information continue pour s’assurer que les investisseurs sachent en tout temps comment consulter les documents d’information continue électroniquement.
Les investisseurs pourront toujours demander et obtenir des exemplaires sans frais. Les instructions permanentes visant la réception de documents sous forme électronique ou papier continueront d’être appliquées.
Le modèle d’accès fonctionne en parallèle des procédures de notification et d’accès; il ne les remplace pas.

Contexte : les origines du modèle d’accès

Selon la législation actuelle en valeurs mobilières au Canada, les émetteurs assujettis doivent chaque année donner aux investisseurs l’occasion de demander certains documents d’information continue en format électronique ou papier.

En 2022, les ACVM ont proposé un modèle fondé sur l’accès pour les prospectus et les documents d’information continue. Il est entré en vigueur pour les prospectus en 2024, mais les ACVM ont retardé sa mise en œuvre pour les documents d’information continue à la lumière de commentaires réclamant plus de protections pour les investisseurs.

Des modifications concernant la sensibilisation des investisseurs et l’accessibilité ont été publiées pour commentaires en 2024. Pendant la deuxième période de consultation, les commentaires donnaient unanimement un appui général aux modifications proposées et se réjouissaient de l’équilibre entre l’allégement du fardeau réglementaire et l’accès continu des investisseurs à l’information.

Fonctionnement du modèle d’accès : obligations de dépôt, de notification et de communication

Selon le modèle d’accès, un accès électronique est réputé avoir été donné lorsque l’émetteur satisfait aux exigences suivantes :

Il a déposé le document d’information continue sur SEDAR+.
Au plus tard un jour civil après ce dépôt, il a publié un communiqué pour annoncer qu’il est accessible en ligne. Le communiqué doit indiquer comment accéder au document sur SEDAR+ et comment les investisseurs peuvent en demander un exemplaire, et confirmer que toute instruction permanente de transmission électronique ou papier continuera d’être appliquée. Il doit aussi informer les investisseurs de la fonctionnalité de notification de SEDAR+, laquelle leur permet de s’abonner pour recevoir des notifications par courriel lorsque l’émetteur dépose des documents d’information continue visés sur SEDAR+. Les mentions exigées peuvent être présentées dans un communiqué contenant d’autres informations.
Il a publié le document d’information continue sur son site Web ou a fourni un hyperlien y menant directement sur SEDAR+ au plus tard deux jours civils après son dépôt. L’émetteur doit aussi inclure une déclaration prescrite sur l’accès électronique sur son site Web. Des instructions générales précisent que les documents publiés doivent rester accessibles au moins jusqu’à la publication des documents du prochain exercice, et que la déclaration devant obligatoirement figurer sur le site Web doit être sur la même page, près des documents ou du lien vers SEDAR+.

L’émetteur assujetti qui utilise le modèle d’accès pour la première fois doit publier un communiqué au moins 25 jours civils avant de faire un dépôt et de publier un communiqué expliquant qu’il s’est servi du modèle d’accès.

En plus de réaliser les étapes liées au dépôt, les émetteurs qui se prévalent du modèle d’accès doivent donner de l’information continue aux investisseurs sur le modèle et son fonctionnement. Ils doivent notamment fournir un « rappel annuel » dans les documents reliés aux procurations, un jeu de documents relatif aux procédures de notification et d’accès ou un document d’accompagnement distinct expliquant que les documents d’information continue seront rendus accessibles électroniquement, comment s’abonner aux notifications SEDAR+ et comment demander des exemplaires.

Aucun avis n’est requis de la part de l’émetteur qui cesse d’utiliser le modèle d’accès. Le rappel annuel peut figurer dans les documents de notification et d’accès, mais les modifications ne changent par ailleurs rien à ce régime.

Considérations pratiques pour les émetteurs

Le modèle d’accès est un pas important vers un régime de communication principalement numérique, mais, comme il est facultatif, les émetteurs doivent analyser si son adoption leur convient.

Pour nombre d’entre eux, le modèle d’accès pourrait permettre de réduire les coûts et le fardeau administratif associés aux exigences traditionnelles de transmission, comme l’impression et l’envoi postal des documents d’information continue. Si les dépenses liées à la transmission peuvent diminuer, les émetteurs pourraient devoir assumer de nouveaux coûts de conformité associés à la mise en œuvre et au maintien du modèle d’accès. L’adoption du modèle vient aussi avec de nouvelles exigences opérationnelles, comme le dépôt en temps utile des documents et communiqués connexes sur SEDAR+, la publication dans les délais prescrits des déclarations sur le site Web et d’autres tâches liées aux obligations d’information continue.

Le modèle d’accès reflète l’appétit des investisseurs pour les communications électroniques, mais les émetteurs doivent tout de même réfléchir à la façon dont ils réagiront à un changement dans les pratiques de transmission. Les investisseurs particuliers qui comptent sur les méthodes de transmissions traditionnelles ou qui n’utilisent pas vraiment SEDAR+ pourraient avoir besoin d’un accompagnement plus soutenu. Il pourrait être utile de bonifier les communications obligatoires aux investisseurs (par exemple en facilitant la navigation du site Web, en donnant des liens directs ou en envoyant des rappels par courriel) pour contrecarrer toute réduction dans la visibilité des documents.

Le modèle d’accès peut être adopté pour les états financiers annuels et les rapports de gestion connexes ou pour les rapports financiers intermédiaires et les rapports de gestion connexes, ou pour les deux. Les émetteurs peuvent aussi choisir d’utiliser le modèle pour certaines périodes intermédiaires et continuer de se plier aux exigences traditionnelles pour d’autres. Pour l’heure, le modèle ne s’applique pas aux documents liés aux procurations ni aux circulaires d’offre publique d’achat ou de rachat, et les émetteurs étrangers visés ou inscrits auprès de la SEC ne peuvent pas s’en prévaloir.

Enfin, les émetteurs doivent se garder de penser que le modèle d’accès remplace toutes les obligations de transmission. Les instructions permanentes données en vertu du Règlement 54-101 continuent de s’appliquer; le recours au modèle ne les remplace pas. Les investisseurs peuvent encore demander et recevoir des exemplaires sans frais, et toute instruction permanente visant la réception de documents sous forme électronique ou papier doit continuer d’être appliquée. De plus, les émetteurs pourraient continuer d’être soumis à des exigences de transmission distinctes prévues par la législation sur les sociétés par actions ou d’autres régimes applicables.

Prochaines étapes

Ces modifications témoignent de la volonté des ACVM de moderniser la transmission d’information sur les marchés financiers canadiens sans compromettre l’accès à cette information pour les investisseurs.

Les émetteurs qui songent à adopter le modèle d’accès doivent analyser les nouvelles exigences en matière d’échéances, de publication Web et de communication aux investisseurs, et vérifier si leur site et leurs contrôles actuels permettent de respecter les échéances et si d’autres lois sur les sociétés par actions ou obligations de transmission continuent de s’appliquer.

Pour en savoir plus, consultez l’Avis de publication des ACVM, Modifications visant la mise en œuvre d’un modèle d’accès à certains documents d’information continue des émetteurs assujettis qui ne sont pas des fonds d’investissement.

Les auteurs aimeraient remercier Sarah Spector, étudiante d’été, pour sa contribution à la rédaction de cet article.

A view from the scenic route: The 2025 OTC derivatives report

Wed, 08 Jul 2026 00:00:00 Z

The Ontario Securities Commission (OSC) released the Canadian OTC Derivatives 2025 Annual Report in May (the Report). The OSC obtains its data from public sources and directly from trade repositories. The Report offers findings of interest regarding Canada’s OTC markets for investment managers and advisers. Interest rate derivatives remained the dominant asset class in Canada’s OTC market, accounting for 88.2 per cent of total gross notional outstanding (GNO) in Q4 2025, with growth driven by swaps and continued adoption of the Canadian Overnight Repo Rate Average (CORRA-CAD) and Secured Overnight interest Rate (SOFR-USD) based products. Canada had 9.2 per cent of the global OTC derivatives market (measured by GNO) in June 2025.

The report also underscores the OSC’s increasing focus on data quality. Amendments to the trade reporting rule that took effect on July 25, 2025, together with compliance related remediation, materially affected reported statistics by improving product classification and removing stale or expired trades.

Looking ahead, the most notable regulatory development is the expansion of mandatory central clearing under NI 94-101 – Mandatory Central Counterparty Clearing of Derivatives and Related Companion Policy, effective March 25, 2026, to cover certain index credit default swap products in addition to updated interest rate derivatives tied to benchmark transition. More broadly, the report suggests the OSC is taking a more granular, risk-sensitive approach to monitoring derivatives markets, including through the use of risk metrics like DV01, which measures the dollar change in a position’s value resulting from a one-basis-point movement in interest rates.

The authors would like to thank Ray Zhao, student-at-law, for his contributions to this insight.

La réglementation des centres de données en Alberta

Wed, 08 Jul 2026 00:00:00 Z

Alberta est l’une des administrations canadiennes les plus proactives en ce qui a trait à la construction de centres de données à grande échelle, en particulier s’ils facilitent le traitement par l’intelligence artificielle (IA). En conjuguant lois ciblées, coordination intergouvernementale et orientations stratégiques à l’intention des autorités de réglementation de l’énergie, la province adopte une approche réglementaire qui s’écarte à plusieurs égards importants du traitement classique de la demande d’électricité des grands consommateurs industriels.

Points à retenir pour les promoteurs

L’Alberta modernise son cadre réglementaire pour accélérer l’approbation de projets de centres de données et fixe des conditions qui favorisent les centres produisant leur propre électricité.
L’Alberta propose une souplesse réglementaire presque inégalée au pays, en particulier pour l’autogénération ou les modèles de production d’électricité hybrides.
Les centres de données pourraient être assujettis à des exigences de raccordement non standard, en vertu de règlements permis par le projet de loi 8, plutôt qu’au traitement uniforme traditionnellement appliqué aux grands consommateurs industriels.
La prise en compte de la production, de la gestion de la charge et de la réglementation dès le début des projets réduira les risques entourant l’approbation.
L’alignement fédéral-provincial améliore la prévisibilité pour les investissements en infrastructures d’IA à grande échelle.

Réglementation et approche des centres de données : le modèle distinctif de l’Alberta

L’approche de l’Alberta a ceci de distinctif qu’elle traite les centres de données comme des infrastructures d’importance stratégique plutôt que comme des consommateurs d’électricité ordinaires de la clientèle commerciale. Dans sa stratégie Alberta’s AI Data Centre Strategy, la province a défini les centres de données comme des outils essentiels pour la diversification économique, l’innovation et l’objectif du Canada d’acquérir une « capacité de calcul souveraine ». Ce cadre a sous-tendu des mesures législatives et réglementaires subséquentes destinées à accélérer la construction de centres de données, tout en veillant à ce que les Albertains en tirent des retombées économiques à long terme. Pour les promoteurs, cela veut dire que les projets de centres de données sont de plus en plus évalués selon un critère d’intérêt public élargi qui va au-delà des considérations classiques des services publics, telles que la demande de puissance ou le moment du raccordement.

L’approche « Apportez votre électricité »

L’aspect le plus distinctif du cadre de l’Alberta est peut-être sa préférence affirmée pour les centres qui produisent leur propre électricité ou qui augmentent autrement la production nouvelle nette. Dans son approche provisoire pour la phase 1, l’Alberta Electric System Operator’s (AESO) réserve 1 200 mégawatts (MW) à des demandes de raccordement de centres de données. La province reconnaît cependant que la demande des centres projetés dépasse largement la capacité que le réseau peut fournir sans que la fiabilité ou l’abordabilité n’en souffrent.

En conséquence, le gouvernement a indiqué qu’il priorisera les projets qui pourront compter principalement sur leur propre production d’électricité ou sur des arrangements structurés ne sollicitant pas le réseau public. Cette approche s’écarte fortement du modèle classique de raccordement au réseau. Les promoteurs, plutôt que d’être strictement invités à participer au processus concurrentiel standard de l’AESO, sont encouragés à intégrer dès le départ à leur projet la planification de la production, de la gestion de la charge et du raccordement.

De multiples projets de centres de données sont actuellement à l’étude à l’AESO, qui a publié une carte des demandes de raccordement sur son site Web. Pour en savoir plus sur le mandat confié au ministre responsable en ce qui concerne l’IA et les centres de données, consultez ce bulletin de BLG d’octobre 2025.

Coordination avec la politique fédérale dans le cadre du protocole d’accord Canada-Alberta

L’approche de l’Alberta se distingue également par sa coordination avec la politique fédérale aux termes du protocole d’accord Canada-Alberta (le Protocole) conclu récemment. Le document officialise l’engagement des deux gouvernements à augmenter la capacité du réseau électrique pour soutenir les infrastructures d’IA et de centres de données, et il aligne les initiatives albertaines avec la Stratégie canadienne sur la capacité de calcul souveraine pour l’IA.

Fait à noter, le Protocole suspend l’application du Règlement sur l’électricité propre en Alberta, ce qui réduira le risque que des projets de centres de données y soient freinés par des contraintes fédérales relatives aux émissions.

Souplesse réglementaire additionnelle (mais encore incertaine)

Des modifications apportées récemment aux lois de l’Alberta par la Utilities Statutes Amendment Act, 2025 (anciennement le projet de loi 8) confèrent au ministre de l’Abordabilité et des Services publics et à l’AESO le pouvoir d’édicter des règles et des règlements à l’égard des centres de données. On peut présumer que ces outils serviront à instaurer un cadre adapté aux particularités des centres de données qui pourrait aussi faciliter leur raccordement; aucun cadre de cet ordre n’a cependant été annoncé pour le moment. Le ministre peut maintenant, entre autres choses :

définir différentes catégories de centres de données;
réglementer l’accès au réseau électrique;
imposer des exigences de gestion de la charge ou de délestage;
exempter les centres de données d’exigences prévues par l’Electric Utilities Act.

L’AESO a aussi le pouvoir, désormais, d’édicter des règles relatives aux centres de données. Contrairement aux autres règles de l’AESO, ces règles ne pourront pas être contestées au motif qu’elles n’assurent pas « un fonctionnement équitable, efficace et ouvertement concurrentiel du marché de l’électricité de l’Alberta ».

Les pouvoirs conférés par ces modifications traduisent l’intention claire de confier au pouvoir exécutif le raccordement et l’intégration de centres de données au réseau électrique albertain. Ils pourraient même tracer une nouvelle voie les exemptant des règles et des principes qui ont jusqu’ici régi ce réseau. Cette approche extraordinaire donne en effet au gouvernement le pouvoir de réagir rapidement et résolument au rythme potentiellement perturbateur de développement des centres de données dans la province, mais le gouvernement lui-même n’a pas encore indiqué clairement comment il pourrait y réagir. Ses annonces jusqu’ici donnent à penser que l’approbation réglementaire accélérée des projets s’accompagnerait d’obligations, pour les promoteurs, de financer la mise à niveau des lignes de transmission les raccordant au réseau, mais aucune approche détaillée n’a encore été annoncée.

Pour les promoteurs, le projet de loi 8 est porteur à la fois de possibilités et d’incertitude. Il pourrait ouvrir la voie a des structures innovantes de raccordement et d’alimentation électrique, mais signifie aussi que les projets de centres de données pourraient être assujettis à des conditions réglementaires sur mesure, différentes de celles qui s’appliquent aux autres grands consommateurs industriels. Pour en savoir plus sur le Protocole et le projet de loi 8, consultez ce bulletin de BLG de décembre 2025.

Redevance sur le matériel informatique pour les centres de données

La Financial Statutes Amendment Act, 2025 (No. 2) a instauré une redevance de 2 % sur le matériel informatique applicable aux centres de données raccordés au réseau qui nécessitent au moins 75 MW de puissance. Cette redevance entrera en vigueur le 31 décembre 2026 et sera pleinement déductible de l’impôt albertain sur le revenu des sociétés. Elle n’aura aucun effet net sur le fardeau fiscal d’un centre de données si celui-ci est rentable et paie de l’impôt sur les bénéfices. La province a laissé entendre qu’elle pourrait mettre en place d’autres programmes de paiement tenant lieu d’impôt et des mécanismes de report pour alléger les pressions financières pesant sur les entreprises en démarrage, dans le but de trouver un équilibre entre la collecte de recettes publiques et le maintien de l’attrait de l’Alberta comme terre d’accueil de centres de données.

D’autres mesures sont prévues pour inciter les promoteurs de centres de données à « apporter leur électricité » : la redevance est réduite à 1 % pour les centres qui sont raccordés au réseau, mais qui génèrent leur propre électricité, et les centres complètement autonomes n’en paient aucune. Pour en savoir plus sur la redevance pour les centres de données de l’Alberta, consultez ce bulletin de BLG de septembre 2025 (en anglais seulement).

Comment ces particularités s’intègrent dans le processus standard de raccordement au réseau

Pour réduire les frictions réglementaires, l’Alberta a créé un service d’accompagnement spécialisé ayant pour rôle de coordonner les approbations avec les ministères provinciaux, les organismes de réglementation, les municipalités et les communautés autochtones. Ce service ne remplace pas les approbations formelles relatives aux services publics ou à l’aménagement du territoire, mais est conçu pour réduire les problèmes d’ordonnancement et éviter les retards là où des raccordements, des autorisations de production et la délivrance de permis de construction sont interreliés.

AESO : exigences de raccordement propres aux centres de données

L’AESO a publié des exigences de raccordement propres aux centres de données qui invitent les demandeurs à indiquer les caractéristiques techniques et opérationnelles proposées, dont la composition de la charge, les sources de production d’appoint et le comportement d’exploitation attendu. La communication de ces renseignements n’est pas obligatoire pour le moment, mais elle s’inscrit dans l’élaboration d’un cadre que l’AESO compte étoffer avec le temps.

Programme d’intégration des grandes charges de l’AESO – Phases I et II

La phase I du programme d’intégration des grandes charges de l’AESO s’est conclu à la fin de 2025 par l’attribution de la totalité de la capacité provisoire de raccordement de 1 200 MW à deux projets. Pour cette première phase, l’AESO a prévu une certaine souplesse en réponse aux commentaires des promoteurs, notamment en ouvrant une période de négociation qui permettait l’échange des mégawatts assignés avant l’attribution finale.

Les demandes de grande charge restantes seront évaluées dans la phase II du programme. Cette phase servira aussi à orienter l’élaboration d’un cadre à long terme applicable à tous les projets d’intégration de grandes charges, dont des projets centres de données. Elle sera particulièrement centrée sur le modèle « apportez votre électricité » et le processus réglementaire de raccordement. Ses considérations relatives à l’intégration couvriront tous les aspects du mandat de l’AESO, à savoir les processus de raccordement, la planification du réseau, les opérations, les marchés, la conception des tarifs et la fiabilité.

Maintien de la fiabilité du réseau et de l’abordabilité pour les contribuables

Les questions de la préservation de la fiabilité du réseau et du maintien de l’abordabilité de l’électricité pour les clients existants sont de toutes les déclarations du gouvernement albertain et de l’AESO. La province est catégorique : les promoteurs des centres de données doivent assumer les coûts associés à leurs impacts sur le réseau; ces coûts ne doivent pas être transférés aux contribuables. D’où la volonté de l’Alberta d’imposer des exigences de raccordement ou des mécanismes financiers propres aux centres de données raccordés au réseau, un principe qui renforce les appuis politiques et réglementaires à un développement accéléré, tout en visant à maintenir la confiance du public dans le réseau électrique.

Les suites de la refonte du marché de l’énergie de l’Alberta

La mise en œuvre du Restructured Energy Market (REM), une refonte complète du marché albertain de l’électricité qui vise à stabiliser les prix et à améliorer la fiabilité, doit commencer en 2027. Le travail de planification et de conception est terminé, mais il reste des étapes à franchir pour opérationnaliser la nouvelle structure et établir des catégories de tarifs. Ces changements auront des conséquences directes sur la rentabilité des centres de données raccordés au réseau et pourraient redéfinir la manière dont ces installations et d’autres grands consommateurs industriels achèteront, produiront ou vendront de l’électricité.

Data centre regulation in British Columbia – Competing for a limited supply

Wed, 08 Jul 2026 00:00:00 Z

British Columbia recently introduced legislative amendments that will restrict the electrical capacity available for new data centre projects within the Province. As of Feb. 1, 2026, the allocation of new electrical capacity for data centre purposes in British Columbia is subject to system-wide aggregate limits that are allocated under a competitive process administered by the British Columbia Hydro and Power Authority (BC Hydro).

As outlined below, these limits are both quantitative and structural in nature. For the two-year period starting Feb. 1, 2026, BC Hydro is restricted to making available a total of 100 MW of new electricity capacity for conventional data centre purposes and 300 MW of new electricity capacity (plus any unused capacity from the conventional data centre limit) for AI data centre purposes. Further, no single project can be allocated more than 145 MW of capacity.

Taken together, these modest limits, coupled with the need to compete with other projects for a finite supply, will have major implications for proponents looking to develop or expand data centre facilities in British Columbia.

Regulatory framework

These changes are rooted in recent amendments to British Columbia’s electricity regulatory regime. The Utilities Commission Act, administered by the British Columbia Utilities Commission, is the principal legislation governing the supply of electricity to data centres in British Columbia.

On November 27, 2025, Bill 31, Energy Statutes Amendment Act, 2025 received Royal Assent and came into force. In broad terms, the Act made key amendments to the Utilities Commission Act to empower the provincial government to depart from the existing “first-come, first-served” electricity service model to prioritize certain industries over others for the stated purpose of ensuring electricity access brings the greatest benefit to British Columbia. More specifically, the amendments permitted the creation of limits on the electrical capacity available to cryptocurrency, data centre, and hydrogen-for-export facilities, which the Province identified as being energy intensive while generally providing fewer jobs and less revenue than natural resource projects.

Limits on available electricity capacity

These legislative changes were operationalized through regulation in early 2026. On Feb. 1, 2026, the Data Centre and Hydrogen Production Facility Power Supply Regulation (the Supply Regulation) came into force. The Supply Regulation introduces limits on the allocation of new electrical capacity for data centres and hydrogen-for-export facilities.

For data centres, the Supply Regulation distinguishes between two categories of facilities. Specifically, it applies to:

conventional data centres (data centres, other than an AI data centres, the primary purposes of which is storage or processing of electronic data); and
AI data centres (defined to mean data centres, other than a cryptocurrency mining project, in which 10 percent or more of the electricity supplied to the facility is or will be used for: (i) computational tasks related to artificial intelligence; (ii) processing and storing data related to the computational tasks in (i); or (iii) powering equipment and infrastructure used for the purposes referred to in (i) or (ii)).

Within these categories, the Supply Regulation establishes aggregate limits on the total amount of new electrical capacity that BC Hydro may make available for data centre purposes. Specifically, for the two-year period commencing on February 1, 2026, BC Hydro cannot make available more than:

a total of 100 MW of new electricity capacity for conventional data centre purposes; and
the aggregated total of: (i) 300 MW of new electricity capacity; and (ii) any electricity capacity not made available under the limit for conventional data centre purposes, for AI data centre purposes.

These limits are further tightened over time. For the one-year period between Feb. 1, 2028 and Feb. 1, 2029, these limits will be cut in half: 50 MW (for conventional data centre purposes) and 150 MW plus any capacity not used for conventional data centre purposes (for AI data centre purposes). The Supply Regulations also provide that a single request for service cannot exceed 145 MW of capacity.

Competitive allocation process

Capacity limits are only one part of the new regime. The Supply Regulation further requires BC Hydro to establish and conduct a competitive process for the allocation of new electricity capacity for data centre purposes.

In response to this requirement, on Jan. 30, 2026, BC Hydro and the Government of British Columbia formally announced a 2026 Call for Demand for Emerging Industries (the Call for Demand) to fulfill the competitive process requirement for data centres for the two-year period starting Feb. 1, 2026. The Call for Demand establishes the following eligibility requirements:

Size of request: The request must be for electrical service of 10 MW or greater, but not more than 145 MW of capacity.
Location: The project must be located within BC Hydro’s service area.
Type of Request: The project must be a new facility not yet interconnected to the BC Hydro grid or must be for (i) incremental capacity; or (ii) a change in end use of electricity supply at an existing facility.
Facility Type: Conventional data centre or AI data centre.
Interconnection: The project is or will be directly or indirectly interconnected to the BC Hydro grid, either via the distribution system or transmission system.
Interconnection Queue: As of Feb. 1, 2026, the project is: (a) in BC Hydro’s transmission or distribution interconnection queue but has not yet signed a facilities study agreement (transmission) or paid a design deposit (distribution); or (b) not yet in BC Hydro’s interconnection queue.

Applicants must also meet certain minimum criteria, including financial capacity and readiness to support the proposed project, as well as a willingness and ability to curtail electricity demand on 24 hours’ notice.

From a timing perspective, the deadline for initial applications and bid security ($25,000 per MW requested) was March 9, 2026. Eligible applications will be assessed based on criteria established by BC Hydro, including the cost-effectiveness for BC Hydro, economic development and community benefits, data sovereignty, First Nations benefits, and environmental benefits.

Looking ahead, it is expected that a further competitive process will be established for the period commencing Feb. 1, 2028 to Feb. 1, 2029.

Other data-centre-specific regulation has been limited to date

Beyond electricity supply, data centre‑specific legislation in British Columbia has been slow to develop. Apart from recent amendments to the Utilities Commission Act, there has been limited targeted regulation directed specifically at data centre development.

Conclusion

In practical terms, the modest 300 MW and 100 MW total allocation for AI and conventional data centres (and 145 MW single-project limit) will likely constrain the growth of the industry in British Columbia. This is particularly notable when compared with other jurisdictions, where individual projects often require significantly higher loads.

By way of comparison, in June 2025, the Alberta Electric System Operator (AESO) introduced an interim connection limit of 1,200 MW for large load projects until 2028. The AESO recently announced it has allocated all 1,200 MW to two projects, one requiring 970 MW and the other 230 MW, with other proposed projects contemplating load requirements of up to 1,800 MW.

As a result, proponents in British Columbia need to be aware of potential barriers to obtaining the electricity service required to power their projects. Where grid‑supplied electricity is unavailable, power may need to be generated “behind the fence,” through renewable or conventional means (such as natural gas), which can give rise to secondary risks, including potential impacts under the Clean Electricity Regulations (CER) introduced in 2025, see our prior bulletin for more on the CER: Canada's new Clean Electricity Regulations | BLG.

Finally, the limits do not only apply solely to new projects. Requests for incremental capacity or changes in end use are also subject to the limits and competitive allocation process. Accordingly, proponents considering expansion or acquisition of existing facilities will need to carefully assess the risk of being unable to secure additional grid‑supplied electricity.

La réglementation des centres de données en Ontario

Wed, 08 Jul 2026 00:00:00 Z

En Ontario, la province canadienne la plus populeuse, la construction et le raccordement des centres de données sont régis par les règles et les institutions provinciales en matière d’électricité. Les obligations d’accès et de raccordement au réseau sont principalement prévues par la Loi de 1998 sur l’électricité¹, par le Code des réseaux de transport (TSC, pour Transmission System Code)² et le Code des réseaux de distribution (DSC, pour Distribution System Code)³ de la Commission de l’énergie de l’Ontario (CEO) et par les exigences de la Société indépendante d’exploitation du réseau d’électricité (SIERE) sur l’approbation des raccordements et la participation aux marchés.

Des initiatives récentes, comme le projet de loi 40, signalent un resserrement du contrôle pour les grandes « installations de charge précisées » et potentiellement un alourdissement du fardeau pour les promoteurs qui demandent un raccordement.

Les promoteurs qui lorgnent un projet de centre de données en Ontario auraient avantage à d’abord se poser la question suivante⁴ : l’installation sera-t-elle raccordée au réseau de transport (généralement > 50 kV) ou de distribution (< 50 kV)?

La réponse à cette question permet de déterminer le processus applicable. Voici les points les plus importants auxquels doivent s’attarder les promoteurs de centres de données en Ontario :

À faire pour un centre de données raccordé au réseau de transport (réseau dirigé par la SIERE)

Choisir une zone proposée de raccordement et communiquer rapidement avec le transporteur et la SIERE pour confirmer les processus d’évaluation et d’approbation applicables, la portée attendue de l’étude et les dates réalistes de la mise en service.
Lancer et réaliser les études de raccordement qui forment habituellement le chemin critique pour les grandes charges : une évaluation de l’impact sur le système (SIA, pour System Impact Assesment) de la SIERE et une évaluation de l’impact du raccordement (CIA, pour Connection Impact Assessment) menée par le transporteur. Ces études permettent de relever les mises à niveau potentielles et les exigences techniques.
Prévoir le partage des coûts et les ententes en matière de garantie/finances pour les mises à niveau et les actifs de raccordement, comme les risques associés aux délais et les demandes d’autorisation de construire auprès de la CEO si des renforcements en amont sont nécessaires.
Négocier et signer la documentation sur le raccordement, y compris les ententes de raccordement et les contrats de construction et d’exploitation connexes, conformément au TSC et aux exigences de la SIERE.
Accomplir les démarches d’inscription et d’autorisation pour les marchés/programmes de la SIERE qui peuvent s’appliquer aux entités qui se raccordent au réseau dirigé par la SIERE, y compris l’inscription, l’autorisation et l’attribution des rôles requis de l’organisation, même quand l’installation en est principalement une de charge.
Vérifier si une politique provinciale évolutive pourrait imposer d’autres critères aux « installations de charge précisées », comme l’imposition aux centres de données de critères énoncés dans des règlements pris en vertu de textes comme le projet de loi 40 (voir plus loin dans l’article).

À faire pour un centre de données raccordé au réseau de distribution (raccordement à une SLD en vertu du DSC)

Identifier la société locale de distribution (SLD) autorisée à distribuer de l’électricité à l’emplacement proposé et confirmer la capacité disponible, la tension souhaitée et les limites locales à l’expansion.
Soumettre la demande de raccordement de la SLD et suivre le processus de raccordement prescrit par le DSC, y compris l’examen technique de la SLD, les plans d’expansion exigés et l’entente de raccordement.
Prévoir le partage des coûts pour les expansions et les actifs de raccordement conformément au DSC, y compris la répartition des coûts entre le client et le distributeur. Ces éléments doivent se refléter dans les prévisions économiques et les calendriers du projet.
Lorsqu’un raccordement au réseau de distribution a des implications pour l’ensemble du système, confirmer si des études de la SIERE/du transporteur (SIA/CIA) doivent aussi être réalisées.
Prévoir les considérations liées à la mesure, au règlement et à la catégorie de tarif, y compris la possibilité de proposer une catégorie nouvelle ou modifiée pour les grands centres de données et les conditions de service applicables du distributeur.
Comme pour les raccordements au réseau de transport, rester à l’affût des exigences provinciales applicables aux grands centres de données (par exemple les prérequis pour les « installations de charge précisées ») qui pourraient influer sur les délais de raccordement et d’approbation.

Il est fortement recommandé de tenir strictement confidentiels les nouveaux investissements, de vérifier les autres projets en attente de raccordement avant de s’engager à acquérir un site et à l’aménager, et d’exercer une diligence et une surveillance continues pour atténuer le risque que des tiers soumettent des demandes (même sans l’autorisation ou le consentement du propriétaire du site) pour s’approprier une place plus avantageuse que celle du promoteur dans la file d’attente et extraire des concessions en retour de l’abandon de cette demande.

Projet de loi 40

Le 11 décembre 2025, des modifications apportées à la Loi de 1998 sur l’électricité⁶ sont entrées en vigueur pour donner la priorité aux demandes de raccordement visant des projets de centres de données que l’on estime servir les intérêts économiques de la province et faciliter leur approbation.

Des précisions devraient être données dans des règlements, dont la définition de « centre de données » à appliquer dans ce contexte. Les documents publiés au Registre environnemental suggèrent que les facteurs à considérer pour l’établissement des priorités quant aux demandes de raccordement de centres de données sont notamment les suivants : importance du raccordement électrique, évaluation des avantages économiques pour la communauté, considérations liées à la souveraineté des données, échéanciers d’approbation, poids sur le réseau, fardeau pour les usagers et les contribuables et possibilité de créer une nouvelle catégorie de tarif.

Pour l’heure, on ne sait pas comment la volonté de prioriser ces centres de données s’articulera en pratique : Les délais seront-ils raccourcis? Les centres de données recevront-ils un traitement différent dans la planification du réseau? Comment les sites privilégiés seront-ils déterminés? La priorité s’appliquera-t-elle aussi à la mise à niveau du réseau?

Planification du réseau par la SIERE

La SIERE est chargée de planifier et de préparer les réseaux d’électricité pour combler les besoins futurs, y compris de prévoir la demande en électricité en Ontario⁷. Dans un document publié en 2025 intitulé « IESO Demand & Conservation Planning Technical Paper: Large Step Loads »⁸, la SIERE qualifie les centres de données de « fortes charges soudaines » (large step loads), soit des charges excédant 20 MW raccordées en grands blocs en peu de temps.

La SIERE répartit aussi les centres de données en trois catégories :

Centres de données d’entreprise – ceux des grands fournisseurs de services infonuagiques (Amazon, Google et Microsoft).
Centres de données en colocation – quand le propriétaire loue de l’espace de serveur à plus d’une entreprise.
Centres de données à très grande échelle – ceux qui comptent au moins 5 000 baies de serveur et ont une superficie d’au moins 10 000 mètres carrés.

Comme les délais de construction se comptent généralement en mois plutôt qu’en années, et que la capacité des serveurs peut être augmentée rapidement à mesure que la demande se matérialise, les réseaux électriques peuvent subir un choc. Les cadres ontariens de planification s’adaptent pour tenir compte de l’ampleur et de la rapidité des changements.

La CEO semble anticiper ces impacts, vu la création de la Carte centralisée de renseignements sur la capacité⁹, qui fournit des données sur la capacité du réseau électrique de la province pour les raccordements de charge et de ressources énergétiques décentralisées. Les promoteurs de centres de données peuvent s’en servir pour évaluer et choisir des emplacements potentiels.

Évaluations d’impact

Pour les installations de production et de charge nouvelles ou modifiées ayant une capacité supérieure à 10 MW raccordées au réseau dirigé par la SIERE, les promoteurs doivent réaliser à la fois une SIA de la SIERE¹⁰ et une CIA menée par le transporteur¹¹.

Ces deux évaluations peuvent prendre jusqu’à 12 mois et sont soumises à des frais. On ne sait pas si le processus peut être accéléré pour les centres de données. Si on choisit de donner la priorité à ces projets, les délais s’allongeront pour les autres.

Renouvellement du marché

Le 1^er mai 2025, la tarification au coût marginal en fonction du lieu (CML) a remplacé le prix horaire de l’énergie en Ontario (PHEO)¹². Les CML représentent la valeur de l’électricité à des endroits précis du réseau électrique ontarien, alors que le PHEO était un tarif uniforme. Le renouvellement du marché vise à encourager la répartition efficace des ressources et l’investissement dans les endroits qui ont le plus besoin d’électricité.

La tarification en fonction du lieu signifie que l’introduction de la charge d’un grand centre de données à un endroit donné pourrait affecter négativement le prix facturé aux autres clients approvisionnés par la même partie du réseau. Le renouvellement du marché pourrait aussi causer des ennuis aux promoteurs de centres de données qui tentent d’anticiper les prix de l’électricité – souvent l’intrant le plus coûteux – dans les prévisions économiques de leur projet.

Exigences techniques de la SIERE

Le 14 mai 2026, la SIERE a publié son projet d’exigences techniques pour les grandes charges computationnelles raccordées au réseau ontarien, catégorie à laquelle appartiennent les centres de données (les exigences techniques)¹³. Ce projet consolide les exigences techniques existantes pour les installations de charge générales et en introduit de nouvelles concernant les potentiels effets nuisibles des grandes charges computationnelles sur la fiabilité du réseau¹⁴.

La SIERE précise que ceux qui demandent un raccordement pour des projets de grande charge computationnelle doivent suivre son processus établi pour l’évaluation et l’approbation des raccordements¹⁵¹⁶. Les projets doivent respecter tous les critères applicables des règles du marché de la SIERE, du TSC, du DSC et des autres normes de fiabilité mentionnées dans les exigences techniques¹⁷.

Les demandeurs doivent fournir d’autres renseignements sur leur projet, comme le plan de développement, les données sur l’équipement principal, la composition de la charge et la fourchette opérationnelle de tension et de fréquence¹⁸. Le projet de normes introduit aussi des exigences techniques d’interconnexion adaptées au comportement particulier des grandes charges computationnelles, afin de maintenir la fiabilité du réseau électrique intégré¹⁹.

Collectivement, les nouvelles exigences techniques alourdissent le fardeau des promoteurs de « grandes charges computationnelles » en matière de conformité et de déclaration. La SIERE a indiqué que ces exigences pourraient évoluer à mesure qu’elle en saura plus sur ces charges.

La SIERE tiendra un webinaire sur la consultation publique le 23 juillet 2026 pour présenter les nouvelles exigences techniques et faire le survol des commentaires recueillis auprès des parties prenantes tout au long du processus de rédaction.

Comité des projets de la SIERE

En prévision de la hausse attendue de la demande énergétique dans tout l’Ontario, et dans le cadre du Plan énergétique intégré de la province²⁰, la SIERE a mis en place un processus de comité d’identification des grands projets (MPIC, pour Major Projects Identification Committee) pour repérer rapidement les grands projets et mieux planifier le réseau.

On prévoit que les centres de données seront responsables de 13 % de la nouvelle demande en électricité en Ontario d’ici 2035²¹, et les MPIC se veulent un système d’alerte pour repérer les projets qui pourraient générer une forte demande.

Le processus va comme suit :

Les initiateurs de grands projets soumettent les renseignements sur leur projet à la SIERE.
La SIERE étudie les dossiers.
Les initiateurs et la SIERE collaborent pour confirmer les détails du projet.
Les entités qui ont de l’information pertinente sur les projets, comme les ministères et agences provinciales, les SLD et les municipalités (individuellement ou collectivement, les valideurs de grands projets), étudient les dossiers, et transmettent des renseignements et mises à jour utiles.
Une liste des grands projets est produite annuellement et intégrée aux plans et prévisions du réseau électrique²².

Conclusion

En Ontario, raccorder un centre de données au réseau électrique n’est pas un simple processus d’approvisionnement commercial. Les promoteurs doivent se plier à un processus de raccordement réglementé qui fait intervenir différents contrôleurs et calendriers selon que le projet vise le réseau de transport ou de distribution. Dans les deux cas, l’évaluation préliminaire du site devrait être axée sur :

i. la capacité réaliste et la date de mise en service;

ii. la nécessité de réaliser des SIA/CIA, la durée de ces évaluations et la portée des mises à niveau connexes;

iii. le partage des coûts et la garantie financière pour les travaux de raccordement et de renforcement.

Les promoteurs ont avantage à établir un plan de raccordement propre à l’Ontario : identifier le bon cocontractant (transporteur ou SLD), confirmer les études et approbations à obtenir, prévoir la mise à niveau et les délais de réalisation, et vérifier si des exigences relatives aux « installations de charge précisées » s’appliquent lorsque des règlements sont adoptés.

Centres de données au Québec : d’une promesse séduisante à un contrôle rigoureux

Wed, 08 Jul 2026 00:00:00 Z

Depuis 2016, le Québec s’est activement positionné comme une destination de premier plan pour les centres de données, en tirant parti de son abondance d’énergie renouvelable, de ses tarifs d’électricité concurrentiels et de son ambition de renforcer la souveraineté numérique. Appuyée par une société d’État qui contrôle la production, le transport et la distribution d’électricité, la province offrait une proposition de valeur convaincante : une énergie à faible coût et un climat naturel froid qui réduit les coûts de refroidissement.

Cette stratégie a porté fruit : le nombre de centres de données a considérablement augmenté au cours des dernières années. Cependant, cette expansion rapide, conjuguée aux difficultés amenées par la transition énergétique et la rareté des ressources, exerce de plus en plus de pression sur les ressources énergétiques du Québec, ce qui a entraîné un changement de politique notable. Ce qui semblait au départ un environnement favorable et prévisible se transforme maintenant en un cadre réglementaire plus restrictif et étroitement contrôlé.

Une série de mesures législatives et réglementaires en témoignent. En effet, le Québec a instauré en 2023 une exigence d’autorisation ministérielle pour les projets de 5 mégawatts (MW) ou plus, ainsi que pour les activités de cryptomonnaie liées à une chaîne de blocs nécessitant un minimum de 50 kilowatts (kW)¹.
S’appuyant sur ces changements, le Québec a adopté, en juin 2025, la Loi assurant la gouvernance responsable des ressources énergétiques et modifiant diverses dispositions législatives² (également appelée projet de loi 69). Cette loi renforce et élargit la maîtrise du gouvernement sur l’attribution de l’électricité, consolidant le rôle du ministre de l’Économie, de l’Innovation et de l’Énergie (le Ministère) dans l’approbation des projets énergétiques de grande envergure et dans l’orientation de la gestion à long terme des ressources.

Une décennie après avoir ouvert ses portes aux grands consommateurs d’électricité, le Québec réajuste maintenant sa démarche. Les exploitants de centres de données contestent de plus en plus les mesures d’Hydro‑Québec, telles que d’importantes propositions de hausses tarifaires et de nouveaux frais de sous-utilisation de la capacité.

Acteurs institutionnels de premier plan

Pour comprendre le cadre énergétique du Québec, il faut bien connaître ses principaux acteurs.

Sur le plan des politiques, le Ministère joue un rôle central. Son mandat consiste à assurer une gestion responsable et intégrée des ressources énergétiques, tout en favorisant le développement économique et la transition énergétique³.

Hydro‑Québec, en tant que service public intégré verticalement de la province, assure la production, le transport et la distribution de l’électricité. Ses activités sont réglementées par la Régie de l’énergie du Québec, laquelle détient une compétence exclusive sur les tarifs d’électricité et les conditions de service. La Régie veille à ce que les tarifs demeurent équitables, et à ce que l’on gère les ressources énergétiques de façon responsable.

Principales dispositions du projet de loi 69 : resserrer le contrôle de l’attribution de l’énergie

Voici un aperçu des principales dispositions du projet de loi 69, qui vise à moderniser le secteur énergétique du Québec :

Surveillance accrue : renforcer le rôle de la Régie de l’énergie dans la supervision des grands projets et l’établissement des tarifs.
Plus grande transparence : exiger une reddition de comptes au public plus claire et une meilleure mobilisation des parties prenantes pour les décisions entourant l’énergie.
Attribution des ressources : mettre à jour les critères d’attribution de l’électricité aux grands consommateurs en mettant l’accent sur une utilisation responsable et des priorités stratégiques, tout en assurant une intégration équilibrée de diverses sources d’énergie afin de réduire la dépendance à l’hydroélectricité.
Intégration environnementale : intégrer des critères environnementaux et sociaux dans le développement et l’attribution des ressources énergétiques.

Pour les installations énergivores, comme les centres de données, le projet de loi 69 apporte plusieurs changements majeurs :

Accès à l’électricité : les nouvelles installations ou les projets d’expansion font l’objet d’une évaluation plus rigoureuse quant à leur concordance avec les priorités provinciales, notamment dans les sphères économique, sociale et environnementale.
Politiques d’attribution : les installations doivent démontrer une utilisation responsable de l’énergie et contribuer à des objectifs stratégiques, tels que la décarbonation ou le développement régional.
Exigences de conformité : des obligations de reddition de comptes et de surveillance accrues garantissent que les grands consommateurs respectent les conditions convenues et aident à atteindre les objectifs énergétiques de la province.
Retards possibles : des examens réglementaires supplémentaires peuvent prolonger les échéanciers des projets, surtout ceux qui entraînent des répercussions environnementales ou sociales importantes (voir ci-dessous).

Projets exigeant une approbation ministérielle

Depuis 2025, Hydro-Québec ou tout autre fournisseur d’électricité doit obtenir l’autorisation du Ministère pour fournir de l’électricité à un centre de données, par exemple, qui demanderait 5 MW d’électricité ou plus pour ses activités, ou encore à un consommateur d’électricité qui demande 50 kW ou plus pour un usage cryptographique appliqué aux chaînes de blocs à des fins de minage de cryptomonnaie⁴. Selon les autorités réglementaires, ce processus de raccordement au réseau vise à garantir que les ressources limitées en électricité sont attribuées aux projets générant les plus grands bénéfices généraux pour la province. Ainsi, le processus n’est plus uniquement technique — il est stratégique et concurrentiel.

1. Dépôt de la demande

Le processus de raccordement au réseau pour un centre de données (ou un projet de minage de cryptomonnaies impliquant des activités de chaîne de blocs) débute par le dépôt d’une demande officielle auprès du Ministère et du fournisseur d’électricité concerné (généralement Hydro‑Québec). Cette demande se veut une présentation officielle du projet; on y précise ses besoins énergétiques, ses caractéristiques techniques, ainsi que les retombées économiques, sociales et environnementales prévues.

2. Examen par le gouvernement et Hydro-Québec

Une fois déposée, la demande fait l’objet d’une évaluation rigoureuse et comparative avec d’autres projets proposés. Comme la capacité électrique est limitée, l’évaluation des projets ne se fait pas selon le principe du premier arrivé, premier servi. Le gouvernement et Hydro‑Québec examinent plutôt conjointement toutes les demandes pour déterminer celles qui utiliseraient l’électricité de la façon la plus efficace et la plus bénéfique.

Dans ce contexte, on accorde une attention particulière à plusieurs facteurs décisifs, comme l’apport économique du projet (la création d’emplois et les investissements, ses répercussions environnementales et sociales, etc.). Les autorités examinent également la demande du projet à la lumière de l’évaluation énergétique globale (pour assurer une gestion optimale de l’énergie), des mesures prévues d’efficacité énergétique, de l’utilisation d’équipement à haut rendement, de l’optimisation du bouquet énergétique (p. ex. l’utilisation d’autres sources d’énergie comme la biomasse, la bioénergie, le gaz naturel ou l’autoproduction), ainsi que de la récupération et de la valorisation des rejets thermiques, entre autres choses.

Fait important, l’évaluation vise à maximiser les avantages par mégawatt consommé, plutôt que de simplement privilégier les projets de plus grande envergure. Autrement dit, les projets démontrant un solide rendement global et une utilisation efficace de l’énergie sont plus susceptibles d’être choisis en premier.

3. Décision et issues possibles

Après l’évaluation, le Ministère prend une décision, qu’Hydro‑Québec fait suivre à l’auteur de la demande de projet. Il y a trois issues possibles :

Tout d’abord, le demandeur pourrait essuyer un refus. En pareil cas, il peut déposer une autre demande.
Deuxièmement, la demande peut être reportée. Cela signifie que le projet demeure en examen, mais qu’aucune décision n’est prise dans l’immédiat. L’auteur du projet peut discuter avec les autorités afin de relever les possibilités d’amélioration et de rehausser la proposition.
Enfin, le projet peut recevoir une approbation préliminaire. Il s’agit d’une acceptation conditionnelle; il y aura d’autres exigences avant l’octroi de l’autorisation finale (voir l’étape 4).

4. De l’approbation préliminaire à l’autorisation définitive

Lorsque l’approbation préliminaire est accordée, le projet doit franchir des étapes supplémentaires. D’abord, le gouvernement envoie une lettre de préautorisation précisant des conditions particulières à satisfaire dans un délai déterminé. Ces conditions peuvent notamment inclure des améliorations au chapitre de l’efficacité énergétique, des éclaircissements sur la démarche de raccordement ou des garanties financières.

Le demandeur est ensuite tenu de collaborer étroitement avec Hydro‑Québec et le gouvernement afin de préparer la documentation requise et de démontrer le respect de ces conditions. Une fois ces exigences satisfaites, le gouvernement rend une décision finale.

Cette autorisation définitive peut inclure des engagements contraignants, comme des échéances pour la conclusion d’une entente de raccordement, des exigences environnementales ou de retombées économiques, ainsi que des jalons importants dans le projet.

Autrement dit, les demandeurs issus des secteurs des centres de données et du minage de cryptomonnaies qui demandent un raccordement au réseau doivent désormais démontrer non seulement que le projet est faisable au point de vue technique, mais aussi qu’il tient compte des enjeux économiques, environnementaux et sociaux liés à sa consommation d’énergie.

Frais supplémentaires pour les performances moins élevées

Outre les contrôles d’accès resserrés, Hydro‑Québec a mis en place de nouveaux mécanismes de tarification pour les grands consommateurs d’énergie.

En 2025, Hydro-Québec a établi de nouveaux frais pour les clients avec contrats à tarif LG, qui visent les clients dont la demande s’élève à 5 MW ou plus (comme les centres de données), et qui n’ont pas utilisé toute l’électricité dont ils disposaient. Selon le tarif applicable, les clients doivent réserver un certain niveau de capacité électrique correspondant à leurs besoins opérationnels. Si cette capacité réservée dépasse nettement l’utilisation réelle, des frais s’appliquent.

Hydro-Québec calcule les frais en examinant la consommation du client au cours des 12 cycles de facturation précédents. Si la demande maximale de puissance du client pendant cette période est inférieure à 60 % de la capacité réservée, des frais sont appliqués. Ceux-ci sont calculés sur la portion inutilisée de la capacité réservée (c’est‑à‑dire l’écart entre la consommation de pointe réelle et le seuil de 60 %).

Ce mécanisme vise à assurer une utilisation efficace de la capacité électrique réservée, mais les parties prenantes perçoivent largement cette mesure comme une pénalité plutôt qu’un tarif traditionnel. Plusieurs exploitants de centres de données ont contesté la validité de ces frais devant la Cour supérieure du Québec, mais on attend toujours qu’elle se prononce sur la question.

Nouvelle proposition tarifaire pour les centres de données et l’exploitation de chaînes de blocs

En février 2026, Hydro‑Québec a annoncé qu’elle entendait proposer à la Régie de l’énergie de nouveaux tarifs pour les grands consommateurs (comme les centres de données), ainsi qu’un rajustement du tarif pour l’usage cryptographique appliqué aux chaînes de blocs⁵. Hydro-Québec déclare qu’elle veut que les centres de données assument une plus grande part des coûts liés à leur forte demande d’électricité, et souhaite aussi gérer de façon responsable la croissance des actifs et capter toute la valeur pour le Québec. Selon Hydro-Québec, les tarifs proposés refléteront le coût des nouveaux approvisionnements tout en demeurant compétitifs sur le marché nord-américain, tandis que l’électricité renouvelable sera mise à contribution.

En janvier 2026, le gouvernement du Québec a entériné l’approche d’Hydro-Québec en exposant à la Régie de l’énergie un ensemble d’enjeux économiques, sociaux et environnementaux, dans les décrets 89-2026 et 88-2026.

Centres de données (tarif CD)

Hydro-Québec a proposé un nouveau tarif CD pour les centres de données qui nécessitent 5 MW ou plus, à un coût moyen d’environ 13 ¢ le kWh — à peu près le double du tarif actuel pour les consommateurs de grande puissance.

Ce tarif s’appliquera automatiquement aux nouveaux projets, sous réserve de l’approbation de la Régie de l’énergie, avec des mesures transitoires pour les installations existantes afin d’assurer la prévisibilité de la consommation d’énergie. Il s’appliquera également à tout centre de données alimenté par Hydro-Québec et qui dispose d’un maximum autorisé de 5 MW ou plus, ce qui comprend les clients actuels qui paient les tarifs M et LG qui atteignent ce seuil.

Hydro-Québec demande à ce que le tarif CD entre en vigueur le 1er novembre 2026. Cependant, de nombreux exploitants et utilisateurs de centres de données ont déjà exprimé leur intention de contester le tarif CD devant la Régie de l’énergie. L’audience est prévue pour l’automne 2026; une décision pourrait être rendue d’ici la fin de l’année ou au début de 2027.

Chaînes de blocs et cryptomonnaie (tarif CB)

Hydro-Québec propose un tarif révisé de 19,5 ¢/kWh pour l’usage cryptographique appliqué aux chaînes de blocs, ce qui reflète la nature énergivore de ces activités et leur empreinte économique limitée. On propose une tarification transitoire sur trois ans aux clients actuels afin de faciliter l’adaptation. Ce tarif est également contesté devant la Régie de l’énergie, en parallèle avec le tarif CD pour les centres de données.

D’un point de vue comparé

Le resserrement par le Québec concorde avec les tendances en Colombie-Britannique et au Nouveau-Brunswick, qui mettent également l’accent sur une attribution prudente de l’électricité selon des critères économiques et environnementaux.

Par opposition, des administrations comme l’Alberta et certains États américains s’appuient davantage sur les combustibles fossiles ou sur une production décentralisée pour répondre à la demande des centres de données, ce qui offre une plus grande flexibilité, mais soulève différentes préoccupations environnementales.

Conclusion : un pivot stratégique avec des implications incertaines

La réglementation des centres de données au Québec a manifestement changé, passant d’une promotion dynamique à une croissance surveillée et sélective.

La province cherche désormais à s’assurer que ses ressources en électricité, quoique largement renouvelables, mais limitées, sont attribuées aux projets les plus bénéfiques d’un point de vue général. Ce changement est motivé par l’augmentation de la demande, la nécessité de gérer les contraintes d’infrastructure et des objectifs politiques plus larges liés à la transition énergétique et à la création de valeur économique.

Parallèlement, ce cadre en évolution laisse place à une plus grande incertitude pour les exploitants de centres de données. Des processus d’autorisation plus stricts, des tarifs plus élevés et de nouveaux frais pour la capacité inutilisée modifient les hypothèses économiques qui avaient attiré ces investissements au départ.

L’issue des contentieux réglementaires en cours devant la Régie de l’énergie et des contestations judiciaires en instance sera un tournant majeur. Elle déterminera si le Québec peut maintenir son attrait tout en exerçant une maîtrise accrue sur ses ressources énergétiques.

Dans les faits, le Québec ne se contente plus de rivaliser sur la base d’une électricité renouvelable à faible coût : il redéfinit les règles d’accès à cette électricité. La question cruciale consiste à savoir si ce modèle mènera à un équilibre durable entre l’intérêt public et l’investissement privé, ou s’il incitera certains acteurs à rediriger leurs projets vers des administrations plus conciliantes.