CANADA Law and Practice Contributed by: Claudia Feldkamp and Chris Pigott, Fasken
Penalties and enforcement The Minister of Public Safety is responsible for the enforcement of the Supply Chains Act. In November 2024, the Department of Public Safe - ty and Emergency Preparedness published its most recent iteration of guidance on its inter - pretation of the Supply Chains Act and what is expected of entities and government institutions in preparing reports. The guidance imposes an additional requirement on reporting entities to complete and submit a questionnaire. Pursuant to the Supply Chains Act, failure to comply with the reporting obligation or the accessibility requirement is an offence and will lead to a fine of not more than CAD250,000. Any person or entity that provides false or misleading statements will be guilty of an offence and liable for a fine of not more than CAD250,000. Director liability Directors are subject to personal liability if the entities they serve do not comply with the Sup - ply Chains Act’s reporting obligations. Such lia - bility includes a fine of up to CAD250,000 for an individual director. Any director, officer, agent or mandatary that directed, authorised, assented to, acquiesced in, or participated in an offence is a party to and guilty of an offence under the Sup - ply Chains Act and is liable on conviction to the punishment, regardless of whether the person or entity that committed the offence has been prosecuted or convicted. Ongoing consultations and enforcement approach Throughout 2024, the Department of Public Safety and Emergency Preparedness conduct - ed ongoing informal consultation with Canadian lawyers who are advising companies on their compliance obligations under the new reporting framework created by the Supply Chains Act.
A variety of questions and concerns have been raised by companies and their lawyers concern - ing ambiguities in the Supply Chains Act and the guidance provided by the Department of of Public Safety and Emergency Preparedness. In the face of these legal questions and concerns, public safety officials have stressed the early focus of government efforts on education and awareness-raising, rather than on enforcement of the Supply Chains Act in the early stages of its coming into force. Disclosure Under Canadian Securities Laws Mandatory disclosures Under Canadian securities laws, public com - panies must disclose all information, including information about environmental and social issues that are material to an investor (ie, infor - mation that – if omitted or misstated – would likely influence a reasonable investor’s decision to buy, sell or hold a security). The Toronto Stock Exchange (TSX) and TSX Venture Exchange fur - ther require that material information is immedi - ately disclosed in accordance with their timely disclosure policies. Other than environmental and social matters determined to be material, a reporting issuer is not required to disclose envi - ronmental and social issues in its public disclo - sures record under securities regulation. Voluntary disclosures and potential consequences Companies (including public companies) often choose to report ESG information on a voluntary basis beyond what is required by securities laws, to meet the evolving expectations of stakehold - ers or to meet the requirements of an industry association or other multi-stakeholder initiative. Where public companies make such voluntary disclosures in relation to social issues, such dis - closures are subject to applicable securities laws concerning misrepresentations under the statu -
40
CHAMBERS.COM
Powered by FlippingBook