Temporary Suspension of In-Person Shareholder Meeting Deadlines under the ABCA

April 15, 2020

Pursuant to a ministerial order under the Public Health Act (Alberta) (the Ministerial Order), the Government of Alberta under the Minister of Service Alberta has temporarily suspended the obligations of Alberta corporations to hold in-person shareholder meetings under the provisions of the Business Corporations Act (Alberta).

Shareholder Meetings

The Business Corporations Act (Alberta) (ABCA) requires the directors of an ABCA-incorporated corporation to call an annual meeting of shareholders not later than 18 months after incorporation and subsequently not later than 15 months after the corporation’s last annual meeting. In light of the state of public health emergency declared in Alberta, the deadline to hold an in-person annual meeting of shareholders has temporarily been suspended. This may allow ABCA corporations to delay their annual shareholder meetings beyond the usual deadlines under the ABCA.

Although the Ministerial Order does not preclude ABCA corporations from conducting a meeting through remote (virtual) means (including teleconference or videoconference methods), such order also does not provide relief from the provisions of the ABCA governing meeting methods. As such, ABCA corporations may still only hold virtual meetings if the corporation’s by-laws expressly provide that the corporation is entitled to use such a meeting method.  Despite the Ministerial Order, it appears that ABCA corporations that are otherwise contemplating holding a purely virtual shareholder meeting (rather than an in-person or hybrid meeting) would still need to hold their meetings within the usual time periods (of 18 months after incorporation and not later than 15 months after the last annual meeting).

As previously discussed, annual meeting deadlines were extended by each of the TSX and the TSX-V for issuers listed on those exchanges. In addition, the Canadian Securities Administrators have expressed support for the use of virtual meetings in the 2020 proxy season, the Director under the Canada Business Corporations Act has provided guidance on virtual meetings for CBCA corporations, and the Government of Ontario has provided an extension of the annual meeting deadlines (and an ability of corporations to conduct virtual meetings notwithstanding the provisions of a corporation’s articles or by-laws) for corporations existing under the Business Corporations Act (Ontario).

While not prohibiting virtual meetings, the Ministerial Order in Alberta is not as broad as the order in Ontario.  In addition, the Alberta Ministerial Order leaves some uncertainty for Alberta corporations in several other areas:

  • The Ministerial Order does not address exemptions that may be needed from requirements that a new notice to shareholders be sent (and potentially a new record date set) should an in-person meeting that has already been called subsequently be changed to a virtual meeting on a later date.
  • The Ministerial Order does not provide relief from certain requirements for ABCA corporations to produce and have incremental (audited) interim financial statements put before shareholders at the shareholder meeting should such an annual meeting be delayed beyond six months from the corporation’s year-end.

It is not clear whether additional relief may be addressed in a subsequent ministerial order.

General

The Ministerial Order will continue until the earliest of 60 days after the Alberta public health emergency order is terminated and the date the Ministerial Order is terminated by either the Minister of Service Alberta or the Lieutenant Governor in Council in Alberta.  The length of the deadline suspensions during the Ministerial Order will lead to an extension of such deadlines after the order is terminated (but only for deadlines that would have expired during the effectiveness of such Ministerial Order).  As a result, ABCA corporations looking to take advantage of the suspension of the 18 month and 15 month deadlines to hold annual shareholder meetings will need to closely watch the lapse date of the Ministerial Order vis-à-vis their 18 month or 15 month deadlines.

The temporary suspension of the shareholder meeting deadlines under the ABCA can be found in Ministerial Order No. SA: 009/2020 (Service Alberta) dated April 9, 2020 (and posted April 10, 2020).  The Ministerial Order provides for similar deadline suspensions under the Companies Act (Alberta) and the Societies Act (Alberta), as well as providing for suspensions of certain obligations of ABCA corporations under the ABCA to provide in-person access to (i) the corporation’s registered office and records office and (ii) certain corporate records of such corporations. As noted above, it is not yet clear whether additional Ministerial Orders will be subsequently issued to address some of the points of uncertainty raised in this post.

For further information about virtual shareholder meetings, please see our prior posts:

DISCLAIMER: This publication is intended to convey general information about legal issues and developments as of the indicated date. It does not constitute legal advice and must not be treated or relied on as such. Please read our full disclaimer at www.stikeman.com/legal-notice.

Stay in Touch with Knowledge Hub