Canadian Business Law Developments
In September, 2011, Tony Clement, Canada's Minister of Industry,
and James Moore, Minister of Canadian Heritage and Official
Languages, announced the re-introduction of legislation to
modernize Canada's Copyright Act. A previous
attempt in June, 2010, remained on the order paper once the
general election had been called. The Copyright Modernization
Act was expected to pass its second reading soon
after the start of the winter session on January 30, 2012.
bill attempts to update Canada's intellectual property laws
to take account of new technologies such digital music and
MP3 players, brings Canadian copyright legislation into line
with international standards by implementing the World Intellectual
Property Organization Internet Treaties, and provides new
tools to enable copyright holders to pursue infringers, such
as peer-to-peer file sharing websites.
the bill, individuals will be permitted to 'format shift,'
in other words copy legally acquired music onto devices that
they own provided it is for personal use. This includes copying
music from CDs onto MP3 players. In addition, individuals
will be allowed to 'time shift,' or record internet, radio
or television broadcast for viewing or listening at a later
to a summary of the bill, copyright owners would have "stronger
legal tools to go after online pirate sites that facilitate
copyright infringement" and the legislation clarifies
that those who "knowingly facilitate infringement"
are liable in Canada. Creators will also have new "making-available
rights" to allow them to control how their works are
made available online.
bill introduces a new civil remedy for copyright owners against
those who knowingly enable infringement of copyright. This
new remedy supplements existing criminal powers to deal with
pirate sites with new stronger tools for copyright owners
that make liability for enabling of infringement clear. However,
the government says that search engines and internet service
providers (ISPs) will be unaffected by this provision, "to
the extent that they act as true, neutral intermediaries."
an attempt to tackle online piracy, the bill introduces a
'notice and notice' approach, whereby ISPs will be obliged
to pass on a copyright infringement notice issued by a copyright
owner to the customer in question. ISPs will be required to
keep details of customers accused of copyright infringement
on record for use in a possible court action, but will not
be compelled to terminate accounts, as has been the approach
in other countries.
the bill also ensures that Canadians will not face disproportionate
penalties for minor infringements of copyright by distinguishing
between commercial and non-commercial infringement. Under
current law, for commercial and non-commercial infringements,
copyright owners can sue for statutory damages ranging from
CAD500 (USD480) to CAD20,000 for each work that is infringed.
For example, a case involving 50 works would translate into
a minimum payment of CAD25,000, and a maximum of CAD1m. The
new bill will dramatically reduce an individual's exposure
in cases of non-commercial infringement. In such cases, statutory
damages will be reduced to a one-time payment of between CAD100
and CAD5000 for all infringements that took place prior to
the lawsuit. For commercial infringement, there will be no
change from the current law.
January, 2009, the Canadian Intellectual Property Office (CIPO)
launched a consultation on the second package of proposed
amendments to the country's Patent Rules. CIPO
has been holding official consultation periods to collect
public feedback on several proposed amendments to the Patent
consultation period will end on February 28, 2009.
amendments proposed in the second package seek to
safeguard applicants’ rights in situations where their
rights would have lapsed due to a failure to meet
certain procedural requirements. The package also improves
some operational procedures, by providing more flexibility
as to who can pay a fee and reinstate an abandoned application.
Finally, the package waives some of the fees related to sequence
listings filed electronically, and reduces the required delay
to request examination.
Office also recently announced that its Patent Maintenance
Fees Electronic Payment system is now available online. The
new electronic system is designed to make paying patent maintenance
fees more efficient and accurate for both clients and CIPO
mid-2008, CIPO unveiled its 2008-09 Business Plan, documenting
plans and key activities for 2008-09, guided by the Strategic
Plan 2007-2012, entitled 'Moving Forward to Canada’s
strategic plan outlined five strategic directions adopted
by the organization, namely: client services and outreach,
the IP administrative framework, international activities,
business plan was organized around these five strategic directions.
It also included three key enablers deemed "critical
to our success," according to CIPO. These were: management
and accountability; internal and external communications;
and information and technology.
June 2007, the Canadian Anti-Counterfeiting Network (CACN)
applauded a report published by Parliament's Industry,
Science and Technology Committee, entitled "Counterfeiting
and Piracy are Theft".
on to urge the federal government to act quickly on the Committee's
recommendations for strong measures against counterfeiting
report boldly and unambiguously reinforces the need for the
government to take proactive steps against criminal activities
that cause billions of dollars in economic losses, feed money
to organized crime, and pose a significant threat to the personal
health and safety of Canadians," announced Doug Geralde,
Chair of CACN.
made 19 recommendations, including:
criminal provisions, including legislation making it an
offence to manufacture, reproduce, import, distribute and
sell counterfeit goods.
civil remedies for counterfeiting and piracy infringements.
monetary penalties for importing and exporting counterfeit
and pirated goods.
imposing liability on individuals who distribute pirated
digital works and who manufacture and/or distribute circumvention
devices for commercial gain.
Border Services Agency and law enforcement authorization
to target, detain, seize, and destroy counterfeit and pirated
goods on their own initiative.
provision of adequate resources to the RCMP and Department
of Justice to effectively address counterfeiting and piracy.
of the World Intellectual Property Organization (WIPO) Copyright
Treaty and the WIPO Performances and Phonograms Treaty.
establishment of an Intellectual Property Crime Task Force
composed of police officers, customs officers and federal
prosecutors to work with intellectual property business
recommendations chimed with those made earlier that month
in a separate report on counterfeiting and piracy issued by
Parliament's Standing Committee on Public Safety and National
also the fourth time in recent years that a Parliamentary
committee had unanimously called upon the Government to ratify
the WIPO treaties, including previous calls by the Heritage
in June 2007, Amendments to Canada's Patent Rules,
the Trade-marks Regulations (1996), the Industrial Design
Regulations, the Integrated Circuit Topography Regulations,
and the Copyright Regulations, published in the Canada Gazette
in mid-May, partially came into force.
regulations were put in place on Saturday June 2, with the
exception of sections 4, 5, 6, 8 and 9 of the Regulations
amending the Trade-marks Regulations (1996), which came into
force on October 1, 2007.
to the Canadian Intellectual Property Office (CIPO), the amendments
were designed to encourage small entities (i.e. entities employing
50 or fewer employees or a university) to use the patent system,
while providing a relief mechanism for those who mistakenly
pay fees at the small entity level.
amendments to the Patent Rules, the Trade-marks Regulations
(1996), the Industrial Design Regulations, the Integrated
Circuit Topography Regulations, and the Copyright Regulations
were made to improve the intellectual property regime by simplifying
procedures, and reducing processing times and costs.
October, 2006, the
Government of Canada published Industry Canada's Regulations
Amending the Patented Medicines (Notice of Compliance) Regulations
and Health Canada's Regulations Amending the Food and Drug
Regulations in Part II of the Canada Gazette.
regulations, which came into force on October 5, 2006, strengthen
the economy in the long term by restoring certainty, predictability
and balance to Canada's intellectual property framework for
pharmaceuticals and bio-pharmaceuticals.
Health Canada's Regulations Amending the Food and Drug Regulations,
new and innovative drugs will receive a guaranteed
minimum period of market exclusivity of eight years
- up from the current five years.
is deemed especially important to Canada's burgeoning biotechnology
industry, since biologic drugs often have little patent protection
left by the time they are approved for sale due to lengthy
development and regulatory review times.
regulations will also provide a further six months of market
exclusivity to innovative drugs that are the subject of pediatric
studies, in order to encourage companies to provide more information
about the effects these products have on children.
turn, Industry Canada's Regulations Amending the PM(NOC) Regulations
will restore their original policy intent by enabling generic
versions of innovative drugs to enter the market immediately
following the expiry of relevant patents, while also allowing
substantive improvements to innovative drugs to be duly protected.
will provide greater certainty and predictability for the
industry overall, thereby strengthening investment and innovation
improvements to the intellectual property environment are
the product of extensive consultations with the pharmaceutical
and biotechnology industry, and respond to the major concerns
expressed by each sector of that industry," explained Maxime
Bernier, Minister of Industry, continuing:
improvements will encourage research into new and innovative
drugs, and help to deliver on our government's commitment
to provide the right environment for business-driven research
amendments published today will benefit Canadians by making
it easier for lower-cost, generic versions of these drugs
to enter the market in a timely fashion," Tony Clement, Minister
of Health, added.
emerged in December, 2006, that Hong Kong and Canada had renewed
a memorandum of understanding to bolster co-operation in information
and communications technology.
agreement focused on software applications, products and policy,
and information and communications infrastructure and related
Kong's Permanent Secretary for Commerce, Industry & Technology
(Communications & Technology) Francis Ho and Canada's Department
of Industry Communications Research Centre President, Veena
Rawat signed the renewed memorandum at the ITU Telecom World
2006 Hong Kong pavilion this week.
Hong Kong's first information and communications technology
MOU partner, signed the original memorandum in 1998. Both
places have extended it twice since then.
the renewed MoU, the two places will seek co-operation in
the areas of:
applications, products and policy, including multimedia
and digital entertainment; Internet, e-Government, information
technology security and e-Health; and,
and communications infrastructure and related policy, including
electronic commerce, current and future issues in telecoms
policy, broadband networks and applications, and wireless
technologies and services.
released by the International Federation of the Phonographic
Industry in January, 2012, music revenues rose by 8% in 2011,
a decline of 3% year-on-year but much improved on the reduction
of 8% seen in 2010. The Federation announced that there were
signs that the industry was beginning to get on top of the
online priracy blamed for the decline in sales which began
in the late 1990s.
to a statement released by the International Federation of
the Phonographic Industry in March, 2006, the "downward spiral"
of music sales in Canada resumed in 2005 as illegal
file swapping exacted a high toll on the country's
artists and music industry.
new figures came with a warning from the head of the recording
industry's international trade body that Canada is being left
behind in the fast-growing digital music business that last
year topped US$1 billion worldwide.
music sales in Canada declined by $23 million, or 4 percent,
to $608.7 million in 2005, the Canadian Recording Industry
Association (CRIA) reported, going on to reveal that the decline
resumes an almost decade-long spiral paralleling the rise
of music file swapping on the Internet, and follows a brief
respite in 2004, when sales briefly stabilized.
astonishing that a sophisticated nation like Canada has dragged
its feet for so long while the rest of the world has adapted
its copyright laws to the digital age," observed John Kennedy,
IFPI chairman and CEO, continuing: "The digital music world
is moving on - Canada must move with it, or its whole music
culture will suffer."
contrast with Canada's situation, worldwide music sales via
the Internet and mobile phones tripled year-over-year to US$1.1
billion in 2005 and are expected to continue climbing rapidly,
according to a recently released report from IFPI. Digital
revenues have leapt from zero to 6 percent of record company
revenues globally in the last two years - far greater than
in Canada, where digital revenue comprises less than 1 percent
of total sales.
Digital Music Report 2006 shows that Canada is losing out
by not updating its copyright laws to protect intellectual
property in the digital environment, as have its major trading
partners. The report reveals that in the United Kingdom and
Germany, which have implemented digital copyright reform,
legal buyers using sites like iTunes and MSN now exceed illegal
contrast, illegitimate downloads outnumber legal sales by
hundreds of times in Canada, which is cited by the OECD as
having the largest online piracy rate per capita in the world.
The IFPI report further finds that half the people who have
cut down on file-swapping in Europe, where most countries
have enacted digital copyright laws, have done so out of concern
for the legal consequences.
legal downloading surges ahead in other parts of the world,
Canada is marooned on the sidelines," warned CRIA President
Graham Henderson, adding that: "The goal of a vibrant digital
marketplace in Canada will remain beyond reach until our legal
environment encourages people to buy music instead of passively
accepting theft on the Web."
May, 2010, the Canadian government released details of the
proposed Canadian Securities Act, which would establish a
Canadian securities regulator. The Act was forwarded to the
Supreme Court of Canada (SCC) to establish whether it is within
the legislative authority of the Parliament of Canada. The
SCC usually offers its opinion within one to two years.
noted that, despite the Canadian financial regulatory regime
demonstrating its superiority during the financial crisis,
Canada remains the only major industrialized country without
a national securities regulator. The regulator would oversee
the country’s capital markets, the government explained.
proposed regime will provide:
and more consistent protection for investors across Canada;
Improved regulatory and criminal enforcement to better fight
New tools to better support the stability of the Canadian
Faster policy responses to emerging market trends;
Simpler processes for businesses, resulting in lower costs
for investors; and
More effective international representation and influence
The proposed Canadian Securities Act is built on provincial
securities regulation and harmonizes existing legislation
in the form of a single statute. It is the fruit of the work
of the Expert Panel on Securities Regulation (the Hockin Panel)
and other reform efforts, and reflects domestic and international
best practices. The government explained that the Act in particular
will introduce significant regulatory improvements in terms
of governance, adjudication, financial stability, and regulatory
and criminal enforcement, and provides a wide scope of authority
to regulate financial instruments and participants in capital
a speech to the Canadian Chamber of Commerce in Mexico in
August, 2008, Canada's Minister of International Trade Michael
M. Fortier spoke of the growing significance of the
North American Free Trade Agreement (NAFTA) for bilateral
trade between Canada and Mexico.
Mexico is Canada’s fifth-largest export market - and
a growing one, too. In addition, Canada is a key market for
Mexico, second only to the US in terms of market share,"
Fortier observed in his speech.
noted that more than 2,800 Canadian companies are currently
active in Mexico, with over 3,000 others currently working
on their first sale, many of which are small and medium-sized
went on to added that: "We’ve used NAFTA as a launching
pad for a mature and growing bilateral partnership. But it’s
up to us to write the next chapter - especially today, when
we see the US economy experiencing difficulties.
leaders have set the goal of increasing bilateral trade by
50%, and bilateral investment by 100% between 2005 and 2010.
To help reach this goal, our countries are working together
through the Canada-Mexico Partnership (CMP).
NAFTA remains more important than ever. Global competition
hasn’t gone away. If anything, it has grown fiercer.
It’s up to us to make more out of the NAFTA partnership,
and to strengthen our competitiveness as a continent and in
our economies at home.
joining the North American free trade partnership, Mexico’s
economy has grown dramatically. It has become a close and
valued partner of the US and Canada on economic and security
matters. And it benefits from an extensive network of free
trade agreements with more than 40 countries."
concluded that "Indeed, our relationship with Mexico
provides a great opportunity to demonstrate to the world the
advantages of open, transparent and competitive economic cooperation
- and the benefits of reaching out to the world to create
opportunities for our citizens."
June 2007, Jim Flaherty, Minister of Finance, announced the
publication of final regulations strengthening Canada's
safeguards against organized money laundering and
New Government will be relentless in its efforts to prevent
money laundering and terrorist crimes,” Flaherty stated.
He added: “We are taking an international leadership
role to combat money laundering and terrorist financing by
devoting substantial new funding to bolster our analytic,
investigative and prosecution resources.”
regulations bring Canada’s anti-money-laundering and
anti-terrorist-financing regime in line with new Financial
Action Task Force standards. They also follow recommendations
made in the 2004 Auditor General’s Report, and in a
2004 Treasury Board–mandated evaluation of the regime.
customer due diligence measures, such as new requirements
to identify the beneficial owners of corporations and other
due diligence measures including identification and monitoring
of correspondent banking relationships and politically exposed
- A requirement
to report attempted suspicious transactions.
information sharing among the Financial Transactions and
Reports Analysis Centre of Canada (FINTRAC), law enforcement
and other domestic and international agencies.
establishment of a registration regime for money service
amendments implement new provisions of the Proceeds of Crime
(Money Laundering) and Terrorist Financing Act, which received
Royal Assent in December 2006.
financial institutions and intermediaries with sufficient
time to change their systems and train their employees, these
regulations were to come into effect on two separate dates.
Most of the provisions will come into force on June 23, 2008,
while the remainder were effective on June 30, 2007.
in June 2007, Mr Flaherty announced that the government
is moving forward with proposals to make the country's capital
markets more competitive.
conclusion of his meeting with provincial and territorial
ministers responsible for securities regulation, Flaherty
issued the following statement:
had a productive meeting, a good exchange of views, and I
stressed the importance of creating a Canadian advantage in
global capital markets. The objectives are to give enterprises
of all sizes better access to capital at more competitive
costs, provide investors with increased investment choices
and create more jobs for Canadians."
particular, I highlighted the advances Canada’s New
Government has made since releasing our capital markets plan
earlier this year."
explained that these initiatives included:
a senior expert advisor, Nick Le Pan, to the RCMP to bolster
the fight against white-collar crime;
amendments to Canada's bankruptcy and insolvency laws to
improve protection of financial contracts, including derivatives;
with provincial securities commissions on draft regulations
for principal-protected notes issued by banks;
a paper, to be issued this week, to align federal statutes
with provincial and territorial securities transfer laws;
discussions with the US Treasury Secretary, other finance
ministers from the G7 and key partner countries on free
trade in securities.
government has also reviewed progress made by provinces and
territories and the Canadian Securities Administrators to
harmonize and streamline securities regulation. Flaherty revealed
that all ministers agreed that these steps are constructive
and will lead to lower regulatory barriers and reduced costs
for issuers and investors.
advantage requires a shared commitment to enhance the effectiveness,
content and structure of capital markets regulation, in particular
by improving enforcement and by favouring proportionate, more
principles-based regulation," Flaherty noted.
February 2007, the Canadian Securities Administrators announced
that they were seeking comments on a proposed rule to
force all hedge funds to register under a set of national,
Rule would harmonize registration requirements that exist
in various acts, rules, regulations, notices and practices
across the CSA jurisdictions into a single national instrument.
It would also significantly reduce the number of registration
categories for firms and individuals.
period was open until June 20, 2007.
plans were a delayed response to the spectacular collapse
of Portus Alternative Asset Management two years previous.
the new CSA plan, hedge fund managers and sales staff would
also undergo checks. Canadian hedge fund assets are estimated
to top CS$30bn.
December, 2006, receiver for failed Canadian hedge fund, Portus
Alternative Asset Management said it was ready to
begin distributions to investors, according to a filing in
the Ontario Superior Court.
Last June, KPMG, the receiver, said it estimated that about
85% of funds would be returned, but gave no timescale. KPMG
also asked the Court to allow those investors who invested
in registered plans (about half of Portus's 26,000 clients)
to receive payouts and put the money into a further registered
plan with triggering a taxable event.
said in the summer that about $662.15 million (Canadian) and
about $37.2 million (US) of Portus assets have been found
and secured in 130 bank and investment accounts in Canada,
the Turks and Caicos and the Cayman Islands, out of more than
$800m that was collected by Portus. The majority of Portus
assets remain tied up in notes issued by France's Société
Générale which were purchased for $529m, and mature between
2008 and 2011.
of Portus Boaz Manor - who fled to Israel after Portus collapsed
- and co-founder Michael Mendelson have been charged by the
Ontario Securities Commission with failing to act in good
faith with clients. Mendelson was also charged with unregistered
trading and issuing securities without filing a prospectus.
The maximum penalties are C$5 million and five years in jail.
October, 2006, the Investment Dealers Association of Canada
(IDA) welcomed the release of the final report of the Task
Force to Modernize Securities Legislation in Canada,
entitled 'Canada Steps Up'.
June 27, 2005 the IDA announced the establishment of this
independent task force of prominent business leaders, securities
lawyers, industry professionals and academics to recommend
changes to Canadian securities legislation to achieve a dynamic,
fair, efficient and competitive capital market.
Task Force was asked to undertake comprehensive and expert
research, in Canada and internationally, to generate data
and analysis to support informed and innovative reform of
regulatory content including issues related to investor protection,
access to capital, enforcement, governance and regulatory
burden. However, its mandate did not include issues of regulatory
Steps Up provides those charged with ensuring the integrity
and competitiveness of Canada’s capital markets with an unprecedented
body of original and leading edge research, data and analysis
by Canadian and international experts," IDA President and
CEO Joe Oliver announced.
continued: “Our objective in sponsoring the Task Force was
to promote informed debate and dialogue. We urge all participants
in Canada’s capital markets to participate in constructive
discussions about the Task Force recommendations and findings.
We also hope that stakeholders in other countries will find
the Report valuable.”
2006, saw developments in the Portus affair, which had begun
with the hedge fund's sudden collapse in February, 2005, when
the Ontario Securities Commission and the Mutual Fund Dealers
Association of Canada announced a plan that would require
some 55 investment and mutual fund dealers to repay
investors all fees received from failed hedge fund
Portus in connection with client referrals. The Investment
Dealers Association of Canada (IDA) supports the plan, which
applies to five of its members.
In total, excluding fees that have already been recovered,
about $12 million in fees was paid out of funds invested in
Portus to MFDA and IDA Ontario-registered dealers.
regulators say they have already received indications from
28 dealers, representing more than 80% of fees paid out of
funds invested in Portus to MFDA and IDA Ontario-registered
dealers, that they are willing to accept the plan. Dealers
have been asked to confirm by January 24, 2006 that they intend
to comply with the request and repay investors by May 31,
2006 under oversight by the MFDA and the IDA.
payment will be in addition to the money investors stand to
recover from the insolvency proceedings being conducted by
KPMG. The firm says that $662.15 million (Canadian) and about
$37.2 million (US) have been found and secured in 130 Portus
bank and investment accounts in Canada, the Turks and Caicos
and the Cayman Islands, out of more than $800m that was collected
by Portus. The majority of Portus assets remain tied up in
notes issued by France's Société Générale which were purchased
for $529m, and mature between 2008 and 2011.
the net is tightening around Portus founder Boaz Manor, who
fled to Israel last February. According to Israeli press reports,
Judge Shmuel Baruch of Tel Aviv District Court gave Manor
three days in December to deliver more than 100 diamonds worth
$11.6m, allegedly bought with Portus funds, to KPMG, or face
after pleas from Manor, who says he doesn't have the stones,
the judge held a closed hearing on 26th December at which
Manor was questioned by lawyers. Last week Judge Baruch issued
a further order, this time giving Manor seven days to produce
the diamonds or face gaol.
says that it has obtained a lien on up to $20.7 million over
Manor’s property in Israel, representing $3.1 million that
Manor allegedly transferred to his lawyer and $17.6 million
missing from Portus's funds. As to the diamonds, they may
be in Hong Kong, where Manor's sister-in-law is under court
pressure to reveal their whereabouts.
also faces charges brought in Canada by the Ontario Securities
Commission, which his Ontario lawyer says he will fight. Lawyer
Brian Greenspan said: "He intends, obviously, to defend and
respond to the charges and it's always been his intention
to appear as required in answer to any charges that are brought
OSC says it is proceeding expeditiously with the administrative
and court proceedings against Manor commenced in October last
year. The next appearance with respect to the administrative
proceeding commenced against Portus, Boaz Manor, Michael Mendelson,
Michael Labanowich and John Ogg is scheduled to take place
on January 17, 2006. With respect to the court proceeding
against Boaz Manor, the next attendance in provincial court
will take place on January 18, 2006.
RCMP is also investigating the affair and may stand a better
chance of attacking Manor under Federal laws - but they were
very slow to begin investigations and there has been no news
about their progress.
Law For Lawyers
Society of Upper Canada (LSUC) said in February, 2004, that
it is examining proposals which would allow Canadian law
firms to float on the stock market in order to raise capital.
has reportedly asked its regulation committee to look at models
which would allow law firms to utilise the capital market
to finance themselves.
development is said to have the support of many of the country's
large commercial firms, and the discussions will be closely
scrutinised by the US and UK legal communities, both of which
may see similar reforms in the future.
stem from a memo sent earlier this year by LSUC treasurer,
Frank Marrocco. Writing to senior members of the Society,
Mr Marrocco announced that: "I
want to look into whether our rules unduly or unreasonably
restrict law firms from financing themselves in ways that
are available in a modern capital market."
Chairmen of four Canadian securities regulators and the
Chairman of the US Securities and Exchange Commission (SEC)
in June, 2008, announced a schedule for the completion of
a process agreement that would open the way for discussions
of a potential US–Canada mutual recognition
arrangement. However, the global financial crisis
appears to have slowed this process and no progress report
has been issued since February, 2010.
has a system of securities regulation in which 13 separate
provincial and territorial securities regulators administer
and enforce highly harmonized laws and regulations.
order to facilitate discussions between Canada and the United
States, and more closely coordinate their systems of securities
regulation, the SEC and the Canadian Securities Administrators
(CSA) are working on an agreement setting forth the process
to be followed in discussing mutual recognition arrangements.
The process agreement, once concluded, would open the way
for substantive discussions between the CSA and the SEC
on the subject of mutual recognition.
recognition could provide Canadian securities exchanges
and certain other Canadian financial service providers with
greater freedom to operate in the United States under Canadian
regulatory oversight, while US securities markets and certain
other US financial service firms could gain greater freedom
to operate in Canada under SEC oversight.
this manner, dual regulation, redundancy, and regulatory
overlap could be eliminated.
work that we have accomplished with our Canadian regulatory
counterparts over many months has brought us to a significant
milestone in our ongoing discussions on the subject of mutual
recognition," commented SEC Chairman Christopher Cox,
going on to add that:
process agreement we hope to execute next month will provide
an efficient means to focus the US–Canada discussions.
That, in turn, could pave the way for an eventual arrangement
with our Canadian counterparts that would deepen cooperation
among securities regulators in North America and strengthen
the regulation of ongoing cross-border securities activity,
while reducing the barriers investors face in connection
with cross-border investment opportunities."
bonds we have strengthened during these months of discussions
have already led to closer enforcement and regulatory coordination
among US and Canadian securities regulators, and investors
are the clear winners," he concluded.
EU-Canada Summit held in June, 2005, welcomed the considerable
strengthening of dialogue between EU and Canadian
regulators since the entry into force of the Framework
for Regulatory Cooperation and Transparency between Canada
and the Commission in December 2004, highlighting progress
in a number of industrial sectors.
to the EC, regulatory cooperation under the Framework will
result in better regulations and help to avoid establishing
unnecessary barriers to trade. The Summit also noted the
development of a model Confidentiality Arrangement to facilitate
the exchange of information between regulators during preparation
of new legislation for goods, and a draft implementation
The voluntary Framework for Regulatory Cooperation and Transparency
of 2004 promotes a more systematic dialogue during the early
stages of the development of regulatory proposals for goods.
This facilitates work towards preventing and eliminating
unnecessary barriers to trade and investment, while ensuring
better quality and more effective regulations to achieve
public policy objectives.
Framework additionally outlines specific cooperative steps
that Canadian and European regulators are encouraged to
follow in bilateral dialogues, including early and regular
consultations, data and information exchanges, and sharing
of foreseen regulatory approaches.
has already started on several sectoral issues, including
consumer product safety, radiation emitting devices, toxins,
and food labelling. How to overcome different requirements
was discussed by regulators from both sites of the Atlantic
at the first meeting of the new Regulatory Cooperation Committee,
created under the Framework, on 18 May 2005.
to recently released figures, the EU is Canada’s second
largest trade partner after the US (12% of total Canadian
imports and 4.8% of total Canadian exports), while Canada
features among the top-ten of main EU trading partners.
Canada ranks fourth among investors in the EU (after the
US, Switzerland and Japan), whereas the EU is the second
investor in Canada after the US.
Vice-President Günter Verheugen stated that: “Significant
progress in enhancing regulatory cooperation between the
EU and Canada has been made in a very short time. Better
dialogue results in better regulation, helping both partners
cut red tape and leading to more and more advantageous trade
between the EU and Canada.”
In December, 2004, the
European Union and six other World Trade Organisation members
(Brazil, Canada, India, Korea, Japan and Mexico) received
authorisation from the WTO to impose retaliatory measures
on the United States for failing to bring its legislation
into conformity with its international trade obligations.
This was a formal step, necessary before retaliatory measures
could be imposed.
the disputed Byrd amendment, introduced
in 2000, overseas firms which sell their products at below
cost price in the US can be fined by the government, with
the money going to the US firm or firms which initially
made the anti-dumping complaint.
EU and other aggrieved WTO members had argued for several
years that such a regime permits illegal subsidies for the
industries in question, and was therefore incompatible with
WTO rules. The Organisation itself came out in support of
this view in 2002, ruling the Byrd amendment illegal.
January 2007, Canadian Finance Minister, Jim Flaherty, announced
proposals to improve the taxation of financial institutions
by better aligning the current tax rules with new accounting
standards set out by the Accounting Standards Board that
came into effect as of October 1, 2006.
proposals I am putting forward will reduce the compliance
burden on financial institutions and improve the economic
efficiency of the tax system by improving the measurement
of income and capital for tax purposes," he explained.
proposals related to the mark-to-market properties (in particular,
specified debt obligations) held by all financial institutions,
policy reserves that are deductible by insurance corporations
in computing income for tax purposes, and the minimum tax
for life insurance corporations resident in Canada. These
proposals were designed to be broadly revenue-neutral.
August, 2006, the Cayman Islands Monetary Authority (CIMA)
and the Office of the Superintendent of Financial Institutions
Canada (OSFI) signed a memorandum of understanding
that will provide a framework for cross border cooperation
between the two countries.
MoU, signed 16 May 2006, establishes a protocol for the
sharing of information and protection of information shared,
cooperation regarding on-site inspections carried out by
one regulator on supervised financial institutions in the
other jurisdiction, and ongoing coordination.
is responsible for regulating and supervising all federally
chartered, licensed or registered banks and insurance, trust
and loan companies, as well as cooperative credit associations
and fraternal benefit societies in Canada.
General Counsel, Mr Langston Sibblies, noted that the agreement
was important since OSFI, as the federal regulator, has
jurisdiction in all of Canada's provinces.
MoU will allow us to develop cooperative relationships in
a structured and clear way and will further enhance supervision
of Canadian entities operating here, particularly in the
banking sector," he observed.
MoU is subject to the domestic laws of both jurisdictions,
as with other memoranda.
Sibblies continued: "One area of concern for OSFI in negotiating
the MoU was the preservation of confidentiality of information
that would be provided under the agreement and the assurance
that information received would be used for lawful supervisory
examination of our respective legislation we were both satisfied
that our laws governing information exchange and deterring
financial crime are equivalent. This facilitated the establishment
of the MoU."
Monetary Authority now has bilateral information exchange
agreements with eight overseas regulatory authorities, and
a multilateral MoU with eight authorities in the Caribbean.
Managing Director, Mrs. Cindy Scotland, said this latest
agreement underscored the importance Cayman, as a major
financial centre, placed on international cooperation.
MoU with OSFI again demonstrates our commitment to assist
overseas regulators in a manner consistent with Cayman's
laws as we pursue our mission of creating a competitive
and internationally recognised financial services industry,"