McCarthy T�trault

News :: Edward Kerwin Wins "Author of the Year -- Capital Markets Canada" in Lexology Legal Writing Awards 2010

Toronto, March 17, 2010 — McCarthy Tétrault congratulates Edward Kerwin, who has been honoured as the 2010 "Author of the Year — Capital Markets Canada" in the Lexology Legal Writing Awards. The award recognizes authors whose articles have proven to be consistently popular with corporate counsel readers based on the content and quality of the pieces submitted.

Article :: New Criminal Cartel and Civil Competitor Agreement Provisions under the Competition Act Come into Force1

When significant changes to the Competition Act were adopted in March 2009 as part of Bill C-10, the Budget Implementation Act, 2009,² a one-year transitional period was provided before the coming into force of the amendments to the conspiracy provisions. This transitional period ended on March 12, 2010. The new per se criminal conspiracy offence and associated increased penalties, as well as the new civil provision for agreements between competitors, are now in force.

Article :: Limits on Contractual Limits on Liability -- Part 2

In my last column I discussed the recent SCC guidance on the important exceptions that may come into play to reduce the effectiveness of contractual limitation of liability ("LOL") clauses. The SCC guidance focuses on different aspects of the LOL clause itself, or the behavior of the wrongdoer under the Agreement. These exceptions are important in the context of LOL clauses in technology-related supply agreements; but they are also relevant to any other type of commercial contract that contains an LOL clause.

Article :: Limits on Contractual Limits on Liability -- Part 1

While the term "LOL" in an Internet chat environment may denote a jocular sentiment (i.e. – "laugh out loud"), in the context of legal contracts an "LOL" clause is no laughing matter. Instead, the "Limitation of Liability" ("LOL") clause is of central importance in any agreement for the acquisition of tech-related products or services. LOL language, however, can also be found in a range of other commercial agreements as well. Therefore, several recent cases that address LOL contract matters discussed below (and next month) will be of keen interest to lawyers and their clients.

Article :: Access to Information: Public Registers and MDDEP Documents now available On-Line

Since November 29, 2009, all public registers expressly required by law for which the Ministry of Sustainable Development, Environment and Parks (MSDEP) is responsible have been available online at http://www.registres.mddep.gouv.qc.ca.

Article :: Canadian Government Launches Consultations on Encryption Controls

Yesterday, Foreign Affairs and International Trade Canada’s Export Controls Division (ECD) launched its "Consultation on the International Interpretations of the Wassenaar Arrangement Cryptography Note by Wassenaar Arrangement Participating States." These consultations will be of particular significance for companies engaged in the export or transfer from Canada of encryption goods, software or technology or items that have been designed or modified to use or work with encryption.

Encryption controls have been a challenge for many Canadian software and hardware vendors. Category 5 — Part 2 of Canada’s Export Control List identifies information security items that require a permit in order to be exported from Canada to destinations other than the United States. Because the threshold for control is very low — key lengths in excess of 64 bits (in the case of symmetric algorithms) — many vendors have been surprised to learn that the export or transfer of their encryption goods and technology requires a permit before shipment to their foreign customers. Often, they first discover this when the Canada Border Services Agency detains these goods just prior to export. Failure to obtain a permit prior to exporting or transferring controlled goods or technology can attract significant penalties.

Article :: 2010 Federal Budget Commentary

Finance Minister Flaherty tabled the Conservative government's fifth budget yesterday. The 2010 Federal budget contains a number of significant tax proposals, including changes to the taxation of employee stock options, the reporting and taxation of gains realized by non-residents on the disposition of certain Canadian properties, and the treatment of non-resident trusts and foreign investment entities. It also contains a number of measures targeted at areas in which the government perceived tax abuses, including income fund conversion transactions involving unrelated corporate loss pools and structures that generate foreign tax credits. Mandatory information reporting of certain avoidance transactions is also proposed. These and other measures are discussed in detail in our budget commentary.

Presentation :: Webinar: 2010 Federal Budget -- Get the Full Picture

On March 4, 2010, McCarthy Tétrault, and Thomson Reuters, hosted a live Webinar on the 2010 Federal Budget. Our leading Tax lawyers presented an in-depth analysis of the Budget's tax measures and their impact on business. Special guest Jeffrey Hodgson, Editor-in-Charge, Markets, Reuters News, provided a brief overview of the Budget's potential impact on economic and policy developments.

News :: McCarthy Tétrault Leads Canadian Firms for Most Top Rankings in Chambers Global 2010

Toronto, March 4, 2010 — McCarthy Tétrault earned more top rankings in the 2010 edition of Chambers Global: The World’s Leading Lawyers than any other Canadian firm. The firm garnered the most Band 1 rankings in practice categories, a testament to its full-service offering. McCarthy Tétrault also leads with 47 lawyers ranked in the highest three bands, more than any other firm. Altogether, 80 McCarthy Tétrault lawyers are recognized 92 times for their exceptional abilities and performance.

Article :: Franchise Law -- Significant Recent Legal Developments

A review of recent judicial developments of significance to the franchise bar was presented at the Franchise Association Legal Day on March 2, 2010.

Serial Publication :: McCarthy Tétrault Co-Counsel: Business Law Quarterly (Volume 5, Issue 1)

Welcome to Volume 5, Issue 1 of McCarthy Tétrault Co-Counsel: Business Law Quarterly. This publication has been created to give our clients a picture of what is going on in business law and, most importantly, what it means to them.

Article :: OSC Staff Review Finds IFRS Transition Disclosure Lacking

The Ontario Securities Commission (OSC) recently released the results of its review of the quality of International Financial Reporting Standards (IFRS) transition disclosure provided by certain randomly selected issuers in their 2008 annual and 2009 interim management discussion and analysis (MD&A).

Article :: HST: BC and Ontario Moving to Implementation

In 2009, Ontario and British Columbia announced that their provincial sales tax systems would be harmonized with the federal GST effective July 1, 2010. The harmonized sales tax (HST) will consist of a five per cent federal component and a provincial component of seven per cent in British Columbia and eight per cent in Ontario (for a combined HST rate of 12 per cent and 13 per cent, respectively).

Article :: Mining Law Update: Bill C-300

Bill C-300, a private member’s bill put forth by Ontario Liberal MP John McKay, purports to promote corporate social responsibility (CSR) in the Canadian mining industry’s site country operations. However, the perverse result of Bill C-300 could be that mining companies move to countries with less of a commitment to CSR, ultimately making matters worse for site countries.

Article :: Investment Canada Act Threshold Announced for 2010

Industry Canada has announced that the Investment Canada Act threshold for 2010 that applies to most direct acquisitions of Canadian businesses by non-Canadian investors from World Trade Organization member countries is $299 million (a decrease from last year’s $312 million-threshold). The threshold applies to the gross book value of the target’s assets. Note that under the Act, a non-Canadian includes a Canadian-incorporated entity that is ultimately controlled outside of Canada.

Article :: Québec Superior Court Authorizes National Bank of Canada to Exclude Shareholder Proposals Submitted Abusively

On December 8, 2009, the Superior Court of Québec per the Honourable Justice Joel A. Silcoff granted a motion by the National Bank of Canada (Bank), authorizing it to omit some 38 proposals submitted by a shareholder for inclusion in the Management Proxy Circular to be distributed in advance of its 2010 Annual General Meeting of Shareholders. In its reasons, the court stated clearly, for the first time, that proposals that are "neutral" or otherwise permissible on their face can nevertheless legitimately be excluded if the context in which they are submitted indicates abuse by the shareholder.

Article :: Changes to Credit Card Practices and Federal Cost of Borrowing Disclosure

Final versions of the Credit Business Practices Regulations (CBP Regs) and the Cost of Borrowing Regulations (COB Regs) that apply to federally regulated financial institutions were published in September 2009. Drafts of both sets of regulations had previously been submitted for public comment in May 2009, and after submissions by industry groups remained largely intact. Some of the changes came into force on January 1, 2010. Other changes that require substantial system changes will be delayed until September 1, 2010.

Article :: Caisse Drummond Supreme Court of Canada Decision

In June of 2009, the Supreme Court of Canada dismissed an appeal from the Federal Court of Appeal in the Caisse populaire Desjardins de l’Est de Drummond v. Canada case.

Article :: Québec's Bill 60: New Rules for Payment Cards, Extended Warranties and Long-Term Service Contracts

Bill 60, An Act to amend the Consumer Protection Act and other legislative provisions, was adopted by Québec’s National Assembly on December 5, 2009 and will come into effect on the date or dates set by the government, but no later than June 30, 2010.

Article :: Responding to the "Halloween Surprise": Using Plans of Arrangement to Convert Income Trusts to Corporations

On the evening of October 31, 2006, the federal government’s "Halloween surprise" ended the favourable tax treatment formerly afforded to income trusts. The new tax rules come into effect in 2011. As a result, many income trusts are now in the process of converting into corporations ahead of the deadline.

Transaction/Case :: Caisse de dépôt et placement du Québec and F.T.Q. acquired subscription receipts of GLV

Transaction/Case :: Vasogen Inc. completes loss utilization and reverse take-over transactions

Transaction/Case :: HSBC leases new LEED office building from bcIMC

Transaction/Case :: Temple Energy Inc. acquires Livingston Energy Ltd

Transaction/Case :: Twin Butte Energy Ltd. acquires Buffalo Resources Corp.