Peterson McVicar Blog

January 2023 Edition

Majority Voting Requirements for CBCA Companies

On August 31, 2022, amendments to the CBCA came into effect which impose majority voting requirements on distributing corporations governed thereby (the “Amendments”). Corporations listed on the TSX have been subject to the similar majority voting requirements of that exchange since 2014. As such, these amendments will have the greatest effect on federally incorporated issuers which are listed on the TSX Venture Exchange, the NEO Exchange, or the Canadian Securities Exchange.

Prior to the Amendments, directors under the CBCA could be elected as part of a slate and for a term of up to three years. In uncontested elections, shareholders could vote ‘for’ directors or choose to withhold their vote. The result was that a single vote in favour of an unopposed candidate would suffice to elect them.

As of August 31, 2022, the following rules apply to distributing corporations under the CBCA:

  • Each elected director shall hold office for a term ending not later than the close of the next annual meeting (s 106(3.1))
  • Each candidate must be voted upon and elected individually (s 106(3.3))
  • Where a director candidate is running unopposed, the number of votes cast in their favour must represent a majority of the votes cast for or against them, else they will not be elected (s 106(3.4))