A Bailout won't Fix Bombardier's Biggest Problems - The National Post February 29, 2016

Many alternatives regarding the way forward for troubled Bombardier Inc. have been proposed. The Quebec government has already committed $1.3 billion in aid and now some type of moral argument is being levelled at Ottawa to throw money into Bombardier’s cap also. This is a very bad idea from a governance perspective, as well as a taxpayer perspective.

Let’s be clear about Bombardier’s governance reality: The Bombardier/Beaudoin families hold almost 60 per cent of voting power in the corporation, despite holding an economic interest of just one-quarter of that figure. This is a dual-class-share firm that just isn’t flying.

A federal bailout would place a billion or more taxpayer dollars in the hands of family that is insulated from governance accountability because of the corporate structure that it has chosen. This insulation and lack of accountability have not been good for the company. Over the past five years, Bombardier’s stock price has declined more than 75 per cent. Why should Canadian taxpayers be on the hook for Bombardier’s poor corporate governance?

The Success Stories of Dual Class Shares Miss an Incontrovertible Truth - The Globe and Mail Feb 22, 2016

Dual class share structures are fundamentally unfair: they leave the subordinate shareholders unprotected and cry out for a response from securities regulators. Proponents of such structures call up the success stories – like Fairfax or Onex – but rarely do they focus on the incontrovertible truth that dual class share structures undermine corporate governance standards because the subordinate shareholders carry a lopsided share of the economic risk in the firm relative to their ability to influence the affairs of the corporation through their vote.

In particular, these shareholders cannot elect directors, approve financial statements, appoint auditors or ensure change through their vote. Their rights are meaningless in the face of the proportionately greater economic risk that they bear. Dual class structures thus undermine existing accountability mechanisms in the corporate statute. Because the jurisdiction of securities regulators is founded on investor protection and the public interest, dual class share structures should be further regulated, if not prohibited, in capital markets.

Prof. Anita Anand writes, "A bailout won’t fix Bombardier’s biggest problems" in Financial Post

Tuesday, March 1, 2016

In a commentary in the Financial Post, Prof. Anita Anand argues that a federal government bailout of Bombardier Inc. won't address the company's fundamental problems, family control and dual-class shares ("A bailout won’t fix Bombardier’s biggest problems: family control and dual-class shares," February 29, 2016).

Read the full commentary on the Financial Post website, or below.

Prof. Anita Anand writes "The success stories of dual-class shares miss an incontrovertible truth"

Tuesday, February 23, 2016

In a commentary in the Globe and Mail, Prof. Anita Anand, the new J.R. Kimber Chair in Investor Protection and Corporate Governance, argues for stricter regulation, if not an outright ban, on dual-class shares ("The success stories of dual-class shares miss an incontrovertible truth," February 22, 2016).

Read the full commentary on the Globe and Mail website, or below.

Prof. Tony Duggan delivers the Commercial Law Centre Lecture at the University of Oxford

Friday, October 30, 2015

Prof. Tony Duggan delivered the 4th Commercial Law Centre Lecture at the University of Oxford on Oct. 14, 2015. Prof. Duggan spoke on the subject of "Form and Substance in the Determination of Property Rights: Set-off, Flawed Assets and Security Interests in Cash Deposits." 

Professor Duggan's lecture concerned an issue which frequently vexes courts: whether a contract creates property rights, or merely personal rights.  The lecture focused on the decision of the Canadian Supreme Court in Caisse Populaire Desjardins de l'Est de Drummond v Canada [2009] SCC 29.

Prof. Anita Anand authors report on the use of "poison pills" in takeover bids

Thursday, October 29, 2015
Prof. Anita Anand

Proposed takeover rules will produce winners and losers and need rethinking, according to a new report by Prof. Anita Anand for the C.D. Howe Institute. In “The Future of Poison Pills in Canada: Are Takeover Bid Reforms Needed?,” Prof. Anand assesses the rules proposed by the Canadian Securities Administrators (CSA), and recommends a key change: do not implement the proposed 120-day bid period and retain the current 35 day period.

Time to prohibit dual class share structures?

Wednesday, October 28, 2015

Centre for the Legal Profession roundtable discussed the advantages and disadvantages of DCS

By Sheldon Gordon

Do dual class share (DCS) structures need to be more strictly regulated in the interests of shareholder democracy—or even banned outright—by Canada's securities commissions?

The Constitutionality of Administrative Monetary Penalties: Defining the punitive paradigm

The Supreme Court of Canada released its anticipated decision in Guindon v. Canada[i]on July 31, 2015, which held that administrative monetary penalties ("AMPs") under section 163.2 of the Income Tax Act (the "ITA")[ii] are not offences that trigger constitutional protections such as the right to be presumed innocent.

Other AMPs schemes and the punitive paradigm

The door is still open for constitutional challenges to the myriad of other AMPs if they fall within the 'punitive paradigm'.  In Guindon, the Supreme Court observed that "[a] monetary penalty may or may not be a true penal consequence" and "[i]t will be so when it is, in purpose or effect, punitive."[iii]  Where a penalty's purpose or effect is punitive, this will trigger Charter[iv]rights.  The Court articulated a balancing test to determine whether an outcome is punitive:

Prof. Audrey Macklin co-authors "We need to better regulate Canadian companies abroad"

Monday, July 27, 2015

In a commentary in the Globe and Mail, Prof. Audrey Macklin and Prof. Penelope Simons of the University of Ottawa Faculty of Law argue that Canada can and should more closely regulate the conduct of Canadian oil, gas and mining companies operating overseas ("We need to better regulate Canadian companies abroad," July 25, 2015). The commentary responds in part to the report by the UN Human Rights Committee on Canada published a few days prior.