By Thien Hoang
Happy Friday CBLB readers! Welcome back to another instalment of Friday Finds, a weekly series where we share recent highlights in Canadian business law. This week, we are covering Canada’s infrastructure growth plan, a recent SCC corporate bankruptcy case, and developments in Canada’s Responsible Business Conduct strategy.
Last week, the Government of Canada announced the Canada Infrastructure Bank’s (CIB) Growth Plan, a $10 billion plan to invest in new major infrastructure initiatives. The CIB was established under the Canada Infrastructure Bank Act to invest in revenue-generating infrastructure projects that “are in the public interest”. Specifically, the Growth Plan will invest in major initiatives relating to clean energy, broadband for underserved communities, large-scale building retrofits, agriculture irrigation, and the development of a low-carbon economy. To accelerate project delivery, $500 million is being allocated for project development and early construction work. The Government of Canada estimates that the Growth Plan, spanning over three years, will create approximately 60,000 jobs across the country. By identifying key areas of interest, the Government of Canada hopes to attract private and institutional capital, specifically in these priority sectors, to aid Canada’s economic recovery in light of the ongoing COVID-19 pandemic.
On October 2, 2020, in the case of Chandos Construction Ltd. v. Deloitte Restructuring Inc. (2020 SCC 25), the Supreme Court of Canada (SCC) ruled that in the context of insolvency (or bankruptcy) proceedings, certain provisions in a contractual agreement that remove value from the reach of the insolvent person’s creditors, which would otherwise have been available to them, are void and will not be given effect through the courts. Despite not being fully codified in the Bankruptcy and Insolvency Act (BIA), the SCC clarified the existence and application of the anti-deprivation rule, focusing on its purpose of preventing contractual provisions from frustrating the scheme of the BIA. The decision confirms that contracting parties (both individuals and corporations) will not be able to avail themselves by drafting contract clauses that remove monetary value from an estate in the case of insolvency. Instead, businesses should rely on alternative measures to protect themselves from the risk of counterparty insolvency.
Global Affairs Canada is continuing to solicit views from interested Canadians until October 16, 2020 with respect to a renewed Responsible Business Conduct (RBC) strategy. The RBC strategy is intended to guide Canadian companies towards advancing their responsible business practices internationally. This includes demonstrating a respect for human rights, applicable laws, and internationally recognized standards. Interested parties are encouraged to review the issue paper published by the Government of Canada and submit their views on its approach to RBC abroad. Specifically, the issue paper notes several “key global trends” which could inform and influence the development of the renewed RBC strategy and future policy initiatives. These global trends, which Canadian companies in all sectors should monitor in their activities abroad, include sustainable development goals, reconciliation with Indigenous peoples, climate change, industry standards and certification, due diligence, and supply chain legislation.
That wraps up this week’s Friday Finds! Thanks for reading and be sure to check back next week for more business law news stories.