Publicly listed corporations governed by the Canada Business Corporations Act (CBCA) must provide certain diversity disclosure to shareholders in advance of their annual meetings. Canada’s federal corporate regulator, Corporations Canada, has clarified that this information must also be filed with Corporations Canada.
Diversity disclosure requirements
Since January 1, 2020, all CBCA corporations that are reporting issuers (including issuers listed on the Toronto Stock Exchange (TSX), TSX Venture Exchange or Canadian Securities Exchange) are required to provide annual disclosure regarding board and senior management diversity. Under the “comply or explain” system, CBCA issuers are required to disclose certain details on their diversity policies or, if they do not have policies, explain why not. In addition, whether or not they have diversity policies, CBCA issuers are required to disclose certain diversity statistics annually. The requirement under securities regulations applicable to TSX-listed issuers is limited to disclosure on gender diversity. The CBCA, however, has an expanded concept of diversity that includes not only gender but also Aboriginal peoples, persons with disabilities and members of visible minorities. Click here to access our earlier legal update on this topic.
Clarified filing requirements
The diversity disclosure required by the CBCA must be sent to shareholders as part of the annual meeting information package, and is typically included in the proxy circular. Under CBCA requirements, proxy materials must be filed with Corporations Canada at the same time they are sent to shareholders.
Although there is an exemption from this requirement that has historically resulted in most publicly listed corporations not having to make a separate filing with Corporations Canada (on the basis that the proxy materials are already filed on SEDAR), Corporations Canada has clarified that the exemption does not apply to proxy materials that include the required diversity disclosure. This is because the diversity requirements in the CBCA are broader in scope than what is required to be disclosed under provincial securities legislation. Accordingly, even if a CBCA corporation has filed its proxy materials on SEDAR, it must also file the CBCA-required diversity disclosure (whether forming part of its proxy circular or as a separate document) with Corporations Canada.
The required diversity disclosure can be filed with Corporations Canada through its Online Filing Centre. As the required diversity information is typically included in the proxy circular, Corporations Canada advises that the simplest approach is to submit the complete proxy circular. Note that there is no fee to make the online filing.
For additional information on the diversity disclosure requirements in Canadian securities and corporate legislation as well as other diversity-related initiatives, click here.