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Thursday, August 27, 2020

On August 20, 2020, the Canadian Securities Administrators (the “CSA”) published amendments to National Instrument 51-102 – Continuous Disclosure Obligations (“NI 51-102”) and its companion policies (the “Amendments”), following a comment period on the proposed amendments. The stated purpose of the Amendments is to reduce the regulatory burden imposed by the business acquisition report (“BAR”) requirements in certain instances, without compromising investor protection. See our prior update regarding the proposed amendments to NI 51-102 here.

Provided all necessary ministerial approvals are obtained, the Amendments will be effective as of November 18, 2020.

The Amendments

The Amendments modify the BAR requirements by introducing a two-trigger significance test and increasing the threshold of “significance” in respect of business acquisitions.

Two-Trigger Test

Presently, a reporting issuer that is not an investment fund or venture issuer is required to file a BAR after completing a “significant acquisition” of a business. A business acquisition is deemed to be a “significant acquisition” if any one of three tests is met, being (i) the asset test, (ii) the investment test, or (iii) the profit or loss test (the “Significance Tests”). Following the Amendments coming into force, a business acquisition will be considered a “significant acquisition” only when at least two of the three Significance Tests are triggered by the reporting issuer. This means that a non-venture reporting issuer will no longer need to file a BAR when it triggers only one of the Significance Tests.  

Threshold of the Significance Tests

Currently, the percentage threshold required under each Significance Test is 20%. However, under the Amendments, the percentage threshold will be raised to 30% for non-venture reporting issuers.

Venture Issuers

The Amendments will not apply to the BAR requirements as they relate to venture issuers. The CSA has already implemented reductions in regulatory burdens for venture issuers through a 2015 initiative that saw an increase in the Significance Tests thresholds from 40% to 100% for venture issuers, and the removal of the requirement that BARs filed by venture issuers contain pro forma financial statements.

If you have any questions with respect to the matters discussed above, please contact Rebecca Cochrane by email at or any other member of Wildeboer Dellelce LLP.

This update is intended as a summary only and should not be regarded or relied upon as advice to any specific client or regarding any specific situation. 

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