Company and Finance News:

New Rules Increase Transparency and
Protections for Franchisees
The new Franchises Act and regulation taking effect [February 1, 2017] ensure prospective business owners in British Columbia will have more information available to help them to decide whether to open a franchised business. The act increases transparency for new franchisees by requiring franchisors to disclose important information about the company's legal, financial and bankruptcy history. The act also provides new legal protections for BC-based franchisees including:

• requiring that contracts include pre-sale information disclosure requirements;
• providing legal rights and protections to help parties to resolve disputes;
• requiring disputes be heard in BC;
• providing franchisees with the ability to sue for damages in court in cases where the franchise agreement is not honoured or the franchisee does not receive the required disclosure information; and
• allowing franchisees to cancel the franchise agreement and request their money back if the disclosure document was not provided to them as required.

The act outlines remedies in the event a potential franchisee is misled about potential profits through the disclosure documents by providing a time frame which a franchisee may rescind a franchise agreement, without penalty or obligation.

Read more. 

Regulations for CBCA's New Diversity, Majority Voting and
Notice-for-Access Provisions Released
The Government of Canada has released proposed regulations to accompany the proposed amendments to the Canada Business Corporations Act under Bill C-25 (discussed here). These proposed regulations add detail to Bill C-25's three major themes:

• Diversity disclosure;
• Majority voting in uncontested director elections; and
• Internet-based provision of meeting materials to shareholders (notice-and-access).

The proposed regulations were published on December 13, 2016 and will not come into effect until Bill C-25 itself takes force (it has passed second reading). As noted in our previous post, Bill C-25 is primarily an effort to bring the CBCA into alignment with recent developments in Canada's securities laws and stock exchange rules. Read the full article by Laura Levine and Alethea Au of Stikeman Elliot LLP.

Case Update: Insider Trading and Tipping in Canada and the US
It is now easier for regulators and Courts in Canada and the United States to prove liability in insider trading and tipping cases as a result of two recent decisions – the decision of the Ontario Superior Court of Justice (Divisional Court) in Finkelstein v. Ontario ("Finkelstein") and the decision of the Supreme Court of the United States in Salman v. United States ("Salman"). In Finkelstein, the Ontario Court supported the use of circumstantial evidence in establishing liability for tipping and insider trading and reiterated its deference to decisions of securities commissions. Also, the Court broadened its interpretation of the definition of "special relationship" in the Securities Act (Ontario) to include tippees who "ought reasonably to have known" that they received material non-public information from a person in a special relationship with the issuer. Accordingly, insiders should be careful not to share material non-public information, and individuals who receive material non-public information should not share that information or trade on it, as they can now more easily be found to have a "special relationship" with the issuer and accordingly be held liable for insider trading or tipping. Read the full article by Nafeesa Valli-Hashman of Clark Wilson. 

FICOM News
The Financial Institutions Commission of BC published the following announcements and bulletins in January:

• Letter to All CEOs/General Managers of British Columbia Credit Unions
  B.C. Liquidity Coverage Ratio Issued for Consultation
• Letter to Board Chairs/CEOs/General Managers, British Columbia Credit Unions
  Update on the Proposed CUDIC Risk Based Premium Assessment Methodology
• Letter to British Columbia (BC) Trust Companies and Non-Federally Regulated Extraprovincial Trust Companies
  Adoption of OSFI Guidelines
• Pensions Bulletin
  Transfer Options for Lump Sum Payment
• Credit Union Bulletin
  Application for Consent to Continue a Credit Union to the Federal Credit Union Regime
• Letter to All CEOs/GeneraI Managers of British Columbia Authorized Credit Unions
  Revised Residential Mortgage Loans Report Issued for Consultation
• Letter to Board Chairs and CEOs of BC credit unions
  Financial Institutions Commission's Regulation of Central 1 Credit Union
• News Release
  FICOM Welcomes Appointment of New Chair

Visit the FICOM website for more information.

BC Securities – Policies & Instruments
The following policies and instruments were published on the BCSC website in the month of January:

• 81-408 – CSA Consultation Paper 81-408 – Consultation on the Option of Discontinuing Embedded Commissions
  This paper identifies investor protection and market efficiency concerns regarding embedded commissions.
• 96-505 – Notice of adoption of BC Instrument 96-505
  BC Instrument 96-505 – Exemption from certain requirements to publicly disseminate data under MI 96-101 Trade Repositories and Derivatives Data Reporting
• 94-101 – Notice of Adoption – Multilateral Instrument 94-101 Mandatory Central Counterparty Clearing of Derivatives
  This notice provides notification of the adoption of Multilateral Instrument 94-101 Mandatory Central Counterparty Clearing of Derivatives and related documents.
• 94-102 – Notice of Adoption – Multilateral Instrument 94-102 Derivatives: Customer Clearing and Protection of Customer Collateral and Positions
  This notice provides notification of the adoption of Multilateral Instrument 94-102 Derivatives: Customer Clearing and Protection of Customer Collateral and Positions and related documents.  
• 11-334 – CSA Staff Notice 11-334 Notice of local amendments and changes in certain jurisdictions
  This Notice identifies the relevant local amendments to national rules and policies that affect activity in some CSA jurisdictions other than BC.
• 51-347 – CSA Multilateral Staff Notice 51-347 Disclosure of cyber security risks and incidents 
  This Notice reports the findings of CSA review of disclosure related to cyber security risk and cyber attacks and provides disclosure expectations for reporting issuers.
• 54-305 – CSA Staff Notice 54-305 Meeting Vote Reconciliation Protocols
  This Notice outlines CSA staff expectations on the roles of key entities that implement meeting vote reconciliation and guidance on operational processes to support accountable meeting vote reconciliation.
• 23-101 – CSA Notice – Amendments to National Instrument 23-101 Trading Rules and its related Companion Policy 
  The Canadian Securities Administrators are providing advance notice of the adoption of amendments to National Instrument 23-101 Trading Rules and its related Companion Policy.

For more information visit the BC Securities website.

Energy and Mines News:

BCUC Determines that It Has No Jurisdiction to
Approve Low-Income Rates
On January 20, 2017, the British Columbia Utilities Commission (BCUC) released its decision in a BC Hydro Rate Design Application (the Decision). The Decision addresses a number of issues related to how BC Hydro sets its rates, and will be applicable to the updated BC Hydro revenue requirement being determined in a separate proceeding. Among other things, the Decision approves the continuation of BC Hydro's two-tier residential rate structure, the simplification of BC Hydro's commercial rate structure and the termination of a legacy rate program for customers with space and water heating from BC Hydro. A summary of the Decision is set out in the BCUC's News Release explaining the Decision. One main topic addressed in the Decision is around whether the BCUC has the jurisdiction to approve separate distribution rates (or waiver from certain charges) for low-income customers. This topic arises because, in addition to the rate design approvals sought by BC Hydro, other parties in the proceeding made their own proposals. Notable among these was a series of requests/proposals from the British Columbia Old Age Pensioners' Organization (referred to as BCOAPO) and other aligned groups for approvals that would assist low-income ratepayers having difficulty with rising electricity bills. A fundamental part of the BCOAPO proposals was for the BCUC to approve an "essential services usage block" (ESUB) rate applicable to a base level of electricity consumption. The ESUB rate would only be available for qualified low-income ratepayers. Read the full article by David Stevens of Aird & Berlis LLP's Energy Group.  

President Trump's Executive Order on Keystone XL –
Encouragement but Not an Approval
On January 24, 2017, President Trump issued an executive order inviting TransCanada Keystone Pipeline LP to re-submit its application to the State Department for a Presidential Permit for the construction and operation of the Keystone XL Pipeline, and directing the State Department to expeditiously review and reach a final determination, using much of its previous analysis, within 60 days of TransCanada's application. If the Presidential Permit is granted, President Trump's executive order also directs the Department of the Army, the Department of the Interior, the Bureau of Land Management, and Fish and Wildlife to expeditiously review and approve as warranted, water crossings, rights of way and other permits required for the pipeline. This is encouraging news for TransCanada (which has already indicated that it intends to re-submit its application for the Presidential Permit), and for the US$8B, 830,000 bbl/d project that has been frustrated by regulatory and political delays since 2008. President Trump's executive order is not a Presidential Permit, however, and significant legal and commercial issues still lie ahead. Read the full article by Alan L. Ross and Peter Bryan. 

Incentives Power up the Switch to
Electric Vehicles on the Job
The Province is providing $385,000 to offer incentives for zero-emission specialty-use vehicles, helping businesses and vehicle fleets lower fuel costs and reduce greenhouse gas (GHG) emissions, and supporting the zero-emission vehicle sector in British Columbia. Specialty-use vehicles are used on the job in factories and warehouses, on campuses and city streets, at parks and resorts, malls, airports and dockyards. Zero-emission specialty-use vehicles include electric or hydrogen fuel cell motorcycles, low-speed utility trucks, heavy duty transport trucks, passenger buses and airport and port service vehicles. Michelle Stilwell, MLA for Parksville-Qualicum announced the program [January 27^th] at Canadian Electric Vehicles in Errington, near Parksville on Vancouver Island, manufacturer of the electric Might-E utility truck. Read the full government news release. 

Family and Children News:

BC Justice Education Society's Interactive
Websites Help Separating Families
Each year, 1 in 7 British Columbians gets legal help or legal education from one of the Justice Education Society's resources or programs. Last fall the Society launched two new services to help families going through separation or divorce – an online course to coach people through the process and a national website to help both parents and kids deal with the emotional realities as well as the legal responsibilities. Read the full eNews article.

New Aboriginal Family Court Program
Aims to Keep Families Together
Vulnerable indigenous families worried about losing their children will now have a stronger voice in court through the Aboriginal Family Healing Court Conference pilot program that includes band Elders in proceedings as a source of support and guidance. "Today's announcement marks an important step toward our goal to improve outcomes for Aboriginal children and families," said Suzanne Anton, Attorney General and Minister of Justice. "It's important to note that it was the Elders who brought this idea to us. We listened carefully to their ideas about keeping families together and are pleased to help bring a new approach to BC's courtrooms for Aboriginal families." Read the full government news release. 

BC Court of Appeal Overturns Ruling that Laws Protecting
Asbestos Removal Workers Were too Complex to Enforce
The BC Court of Appeal has overturned a ruling that found laws protecting asbestos removal workers from the deadly substance were too complex to enforce. In February last year, BC Supreme Court Justice George Macintosh refused to find that Mike Singh, the owner of a Lower Mainland asbestos-removal contractor, and his son, Shawn Singh, were in contempt of court for violating a 2012 court order. The judge found that the terms of the order requiring the Singhs to comply with the Workers Compensation Act and its regulations were too voluminous and difficult to understand. The order, also directed at Singh's company Seattle Environmental Consulting Ltd., came after WorkSafeBC issued 237 asbestos violation notices to the company and two men between 2007 and 2012 and imposed fines in excess of $200,000. WorkSafeBC appealed Macintosh's ruling and earlier this month, a three-judge panel of the BC Court of Appeal found that Macintosh had made a number of errors in his ruling. Read The Vancouver Sun article. 

Lab Test Confirms Carfentanil is Being Ingested
As part of the surveillance related to the opioid overdose public health emergency, the province has confirmed through laboratory testing that carfentanil is present in the illegal drug supply in the lower mainland and being ingested. Urine lab testing found carfentanil present in 57 of 1766 urine drug tests conducted from Jan. 10-24, 2017. Positive results were detected in samples originating from treatment facilities in Vancouver, Surrey, New Westminster, Maple Ridge, and Richmond. This is a limited sample size but does provide confirmation of the presence of carfentanil in BC. Read more. 

Local Government News:

New Liquor Act Comes into Force
The new Liquor Control and Licensing Act came into force on Monday, January 23, 2017. The Act incorporates legislative changes necessary to implement some of the 73 recommendations made as part of the Province's 2013 Liquor Policy Review. Using a gradual implementation process that began in 2014, the Province has now implemented 64 of the 73 recommendations. Read the UBCM article. 

Miscellaneous News:

Notice to Registered Property Owners: Mortgage Releases
Will be Submitted Electronically Starting March 1, 2017
The Director of Land Titles has announced changes to the Director's Requirements to File Land Title Forms Electronically [DR-06-11]. Legal professionals and lending institutions will soon be required to electronically submit mortgage releases, saving property owners time and money. Learn more on the BC Land Title and Survey website. 

Risky Business: BC Court of Appeal Lets Action about
Foreign Operations Proceed in Canada
On January 26, 2017, the B.C. Court of Appeal's (Court) decision in Garcia v. Tahoe Resources Inc. (Garcia) challenged the premise that claims will be dealt with where they occur. The decision will be a factor in future cases where defendants argue that claims against them for overseas events should be stayed in favour of foreign jurisdictions, especially where there is a real risk that justice will not be provided abroad.

Claim
The defendant in Garcia was a British Columbia company, but its presence in the province was limited to its registered and records office and occasional annual general meetings and directors' meetings. Based in Nevada, the defendant operated a silver, gold, lead and zinc mine in southeast Guatemala through a wholly-owned local subsidiary. According to the Guatemalan plaintiffs, during a protest outside the gates of the mine, security guards allegedly opened fire on the crowd, injuring protesters. The plaintiffs started a lawsuit in British Columbia against the defendant on the basis of direct and vicarious liability for battery and liability for negligence as a result of the security guards' conduct.

Read the full article by Mathew Good and Joshua Hutchinson of Blake, Cassels & Graydon LLP. 

BC Motorcyclists Want "Lane Splitting" Legal
A number of British Columbia motorcyclists are asking for the green light to zip through traffic jams by riding in between lanes of slow-moving vehicles. So-called "lane-splitting" is illegal in the province, but many frustrated riders are skirting the law to avoid traffic bottlenecks. Proponents say the practice will ease congestion and speed up traffic flow for everyone on the road. Jamie Dick of Action Motorcycles in Victoria says the outlawed manoeuvre is popular among his customers. "I think it's a great idea for two wheels. Let them go through," he told CTV Vancouver Island. "It's just what motorcyclists do." Lane splitting is legal in a number of countries, including Sweden, Ireland, and Singapore. California became the first U.S. state to formally allow the move in August. Read the CTV News article. 

CVSE Bulletins & Notices
The following bulletins and notices have been posted by CVSE in January:

• VI Bulletin 02-17 Air brake Component Inspection
• NSC Bulletin 01-17 Recording Hours of Service on Ferry Crossings Less than 5 Hours
• Circular 01-17 Changes to Policies Affecting Long Wheelbase Tractors

For more information on these and other items, visit the CVSE website.

Remember to Buy Your New BC Parks Licence Plate
The public is encouraged to purchase their new BC Parks plates at Autoplan broker offices starting Monday [January 30^th], and show their support for provincial parks through images of a Kermode Bear, Purcell Mountains or scenic Porteau Cove. In partnership with the Insurance Corporation of British Columbia, the specialty licence plates were unveiled by Environment Minister Mary Polak and Transportation and Infrastructure Minister Todd Stone in Vancouver [early in January]. The licence plates allow motorists to show their support, while ensuring BC Parks has additional funds to invest in new programs and improvements. To discover more about costs, fees, and license plate designs, read the BC Government Information Bulletin. 

Will BC's Foreign Buyers' Tax Administrators
Please Speak Up?
The BC government recently congratulated itself on the apparent effects of its controversial decision over the summer to impose an additional 15% property transfer tax on purchases of real estate in Metro Vancouver by foreign buyers. Since then, the previously galloping increases in local housing prices have slowed, or perhaps even reversed slightly. Foreign buyers, whose presence in the purchasing pool has reportedly diminished, nonetheless paid over $10.1 million of the additional tax during the first three months of the tax alone. The political discussion surrounding the tax has assumed that the affected purchasers are mainly wealthy individuals from overseas who are intent on snapping up Vancouver real estate in neighborhoods that are now too expensive for local income-earners to live in. However, real estate lawyers and other professionals have generally been confronted with more complicated circumstances that are potentially subject to the tax, which have largely been left out of the public discourse. This is particularly concerning when one considers the amounts at stake. For example, the average sale price of a Vancouver house is over $1.5 million, which would mean additional tax of $225,000 on a single purchase. With these kinds of numbers in play, one would expect not only complex legislative changes to underlie the tax, but also appropriately sophisticated government publications that explain the government's views on common interpretative issues expected to arise in the course of the administration of the tax. The related amendments to BC's Property Transfer Tax Act (the "PTTA") are indeed complex. But the implementation of these amendments was coupled with the publication by the government of Information Sheet 2016-006: Additional Property Transfer Tax on Residential Property Transfers to Foreign Entities in the Greater Vancouver Regional District (July 27, 2016). Nothing has been published more recently. Read the full article by Noah Sarna of Thorsteinssons LLP. 

Wills and Estates News:

BC Court Weighs in on Wills Variation
Standing for Adopted Children
In the recent decision, Boer v Mikaloff, 2017 BCSC 21, the BC Supreme Court was faced with an interesting interpretation question under the relatively new Wills Estates and Succession Act, SBC 2009, c 13 [WESA], which came into force March 31, 2014. The "wills variation" provision, at section 60 of WESA, gives the children and spouse of a deceased person the ability to challenge deceased's will on the basis that it does not make adequate provision for the spouse's or children's proper maintenance and support. Legally adopted children also have standing to make a claim under this section. The question in this case was "[d]oes a child who is adopted by other parents after birth, but who is named as a beneficiary under his birth mother's will, have standing to seek relief under [s. 60 of WESA]". Read the full article by By Joni Metherell of Pushor Mitchell LLP. 

2017 Estate Planning - A Return to Planning Uncertainty
There may be two significant changes in the estate world during 2017, with the emphasis on "may." First and most significantly, does President Trump and the Republican Congress follow through on his campaign position to repeal the estate tax. Estate tax repeal could be part of comprehensive income tax reform, or could drop off the priority list during political and budget bargaining. On one hand, with federal exemptions now at $10,980,000 for married couples and so few taxpayers subject to estate tax, why shouldn't the "very wealthy" pay estate tax at their deaths on assets exceeding those amounts? Besides, we need the revenue. On the other hand, the "very wealthy" have paid significant income taxes during their lives; why should assets they accumulate after paying income taxes be subject to another layer of tax when those assets pass to their children and descendants? Particularly, in the case of a family business, where the 40% estate tax makes it difficult to pass family businesses to the next generation. Plus, with few taxpayers now subject to estate tax, why devote the resources to collecting a tax on so few? As with any complicated issue, there are nuances to each of these positions, such as how would elimination of the estate tax affect charitable bequests: would the wealthy leave less to charity and more to family if there was not the need for a charitable estate tax deduction? Also, with appropriate planning, even family businesses can pass to children and future descendants without paying much or any estate tax. Read the full article by John Dedon.