Law Times

Law Times • augusT 8, 2016 Page 11 www.lawtimesnews.com FOCUS Governments looking to modernize business statutes BY JIM MIDDLEMISS For Law Times O ntario business law- yers should brace themselves for a pos- sible f lood of provin- cial, and maybe federal, legisla- tive change to the laws that fall within their ambit. In June, the provincial gov- ernment kicked things off by introducing Bill 218, the Bur- den Reduction Act, 2016, which, among other things, will repeal the Bulk Sales Act. Ontario is the last province to have a Bulk Sales Act on its books, noted Alethea Au, a busi- ness lawyer at Stikeman Elliott LLP. "It's been repealed in all other provinces," she says, but Ontario has been a "holdout." The act provides unpaid trade creditors with certain pro- tections in the case of a sale of all of a company's business assets. While it provided insolvency lawyers with some comfort, it created headaches for mergers and acquisitions lawyers, who had to dance around the legisla- tion in business deals. "For M&A lawyers, it will make things a lot more efficient once the Bulk Sales Act is re- pealed," Au says. Its repeal recommendations stem from efforts by the On- tario government to modernize its business laws and arose from recommendations in a June 2015 report from a blue-chip panel of business law experts to the Ministry of Government and Consumer Services. It made a number of recommendations, including that the provincial government "establish a regular formal process to promote the continuous review and updat- ing of corporate and commercial statutes." In March of this year, Ontario responded by appoint- ing a Business Law Advisory Council to help with the mod- ernization efforts. But Ontario is not the only government looking at its busi- ness laws. The federal government is still undergoing its "five-year review" of the Canada Business Corporations Act, which closed for comment in May 2014, un- der the previous Conservative government. It heard from 82 organizations calling for up- dates and changes to the legisla- tion, covering everything from shareholder rights and voting to executive compensation. While reforms are underway to similar initiatives at various other levels of government and regulatory bodies, not much has moved on the federal front, despite a requirement in the law that it undergo a statutory re- view every five years. However, the last time the legislation was amended was 2001, long before much of the innovation of the Internet, and the legislation is woefully inadequate in dealing with things such as electronic meetings and voting. A spokesperson for Inno- vation, Science and Economic Development Canada (formerly Industry Canada, which is re- sponsible for the legislation) said "the Government of Canada continues its review of the Can- ada Business Corporations Act, taking into account the submis- sions received from stakeholders during the consultation. "Those consultations were wide-ranging, and provided considerable perspectives for the Government to consider to position the CBCA to meet its important policy objectives." While the efforts by govern- ments to move on moderniza- tion of commercial statutes is welcome, it's not enough, says Anita Anand, a professor at the University of Toronto Faculty of Law. Her biggest beef is that the reform initiatives lack integra- tion, especially when it comes to the various business corpora- tions acts that exist. "The disheartening aspect of the process today is that it ap- pears to be run in silos. The fed- eral government runs its review of the federal statute and the On- tario government runs its review of the Ontario statute," she says. "When you stand back as an aca- demic, you ask, 'Why are these processes occurring in silos?' Shouldn't it be the case that peo- ple around the table are talking to other review panels so that the reforms that occur to statutes is at least somewhat consistent?" Another critique is that the reform process lacks deadlines. "There are no time limits for reforms," says Anand. LT Anita Anand says while the efforts by governments to move on modernization of commercial statutes is welcome it's not enough. AVAILABLE RISK-FREE FOR 30 DAYS Order online at www.carswell.com Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 New Edition Brand Management in Canadian Law, 4th Edition John S. 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