The principles from the seminal case on directors fiduciary duties, BCE Inc. v. 1976 Debentureholders, 2008 SCC 69 (“BCE”), has finally been codified. In this case, the Supreme Court of Canada confirmed that directors must consider the best interests of the company, but also consider the impact on shareholders and certain stakeholder groups.On June 21, 2019, the Canada Business Corporations Act, R.S.C. 1985, c. C-44 (the “CBCA”) was amended to include the director fiduciary principles in BCE.

Section 122 of the CBCA provides for the duty of care of directors and officers. It was amended by adding
subsection (1.1) which reads:

Best interests of the corporation

(1.1) When acting with a view to the best interests of the corporation under paragraph (1)(a), the directors and officers of the corporation may consider, but are not limited to, the following factors:

1. the interests of
   1. shareholders,
   2. employees,
   3. retirees and pensioners,
   4. creditors,
   5. consumers, and
   6. governments;
2. the environment; and
3. the long-term interests of the corporation.

Notably, this section includes “retirees and pensioners” in the list of stakeholders — which were not specifically mentioned by the Supreme Court of Canada in BCE — as well as the environment and the long-term interests of the corporation. While this list of stakeholders to consider is not mandatory, directors of CBCA companies should be aware and conscientious of the effect their decisions may have on this expanded group of stakeholders.

If you would like further details about these new amendments or their impact on your corporation, please contact the writer or any other member of Clark Wilson’s Private Company Mergers & Acquisitions Group.