Faculty Blog

University of Toronto philosophy professor Joseph Heath argues for a reinstatement of rationality in social and political discourse in his new book, Enlightenment 2.0.[1]   This book provides modern examples of statements by politicians that are not based on proper factual or logical foundations.

We could use some rational logic  in the world of administrative monetary penalties. The new Canadian Anti Spam Law, (CASL)[2] is enforced by a  maximum administrative  penalty (AMP) of $1,000,000 in the case of an individual, and $10,000,000 in the case of any other person.  AMPs defy logic in two significant ways. 

First, CASL states explicitly under the heading of "Administrative Monetary Penalties",  "Violations" and the "purpose of penalty" that  "the purpose of a penalty is to promote compliance with this Act and not to punish."[3]   .   The proposition that penalties do not punish not only defies logic  but also violates basic rule of the English language.  Penalty is defined as "A punishment imposed for breaking a law, rule, or contract."[4]  

Reports abound of an apparent innovation crisis in the pharmaceutical sector, with some sources citing escalating drug development costs, declining new drug approvals, and an increasingly stringent regulatory environment. Concurrently, commentators refer to the death, or at least the decline, of the blockbuster model of drug development—where large, brand-name pharmaceutical companies rely on a portfolio of drugs that gross more than U.S. $1 billion per year—which has dominated the pharmaceutical sector for decades.

Financial Post

This week, the Canadian Securities Administrators (CSA) published draft rules under which a takeover bid would have an irrevocable 50 percent minimum tender condition. Once met, the rules would require an additional 10-day right to tender for undecided shareholders.

The bid, however, would also remain open for a minimum of 120 days. The 50 percent condition is laudable, because it offers effective decision-making capacity on the part of shareholders. The 120-day requirement, however, would cause uncertainty in the market, to the detriment of target shareholders, and of bidders.

The CSA proposal seeks to strike a balance that might lessen the prominence of litigation relating to shareholder rights plans or “poison pills.” The bidder must obtain a “majority of minority” approval before it can take up shares; securities of the bidder and its joint actors would not be counted in the 50 percent. The advantage is that a minority of shareholders cannot force the majority to sell control.

The proposal would therefore likely sound the death knell for some pills such as the “just say no” pill, whereby the bidder can remove the pill only via a proxy contest. But it would prevent bidders from being able to corner target shareholders into the undesirable choice of selling into an underpriced offer or being stuck with illiquid shares.