Part 20.1 Documents in Electronic or Other Form (Clause 121)

These amendments would help to ensure that communications between the corporation and stakeholders are as facilitative as possible. Although the CBCA permits corporations to communicate electronically with government, it allows only paper-based communications with shareholders and other stakeholders. This restricts corporations from using modern and emerging technologies to reduce costs and speed up information flows to many of the parties with whom they communicate.

The amendments would facilitate and encourage corporations (and other parties with whom corporations interact) to employ new and emerging communications technologies. All shareholders would still have a right to receive everything in paper based form. The regime is structured in terms of general principles that would permit corporations and others to employ new and emerging communications technologies as they are developed.

Briefing Book
An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act

Bill Clause No. 121
CBCA Section No. 252.1: Definition of "electronic document"
Topic  Documents in Electronic or Other Form

Sources of Proposed Law 
Bill C-6: Personal Information Protection and Electronic Documents Act.

Changes From Present Law 
New

Purpose of Change 
The definition of electronic document is central to Part XX.1 since it encompasses all of the different types of documents, notices and information referred to throughout the CBCA. Mirroring the policy underlying all of Part XX.1, the definition of electronic document is intended to be enabling, technology-neutral, and expansive. It is enabling and flexible in that the parties will be able to choose the technology that best suits their purpose. It is technology-neutral in that it does not impose particular technologies on the parties subject to the CBCA. It is expansive since it is intended to encompass future technological developments. The use of the term "electronic" is not intended to be read in a literal manner and is not intended to exclude optical, digital and other technologies.

Similar Provincial Laws 
None

Current Wording 
N/A

Proposed Wording 
252.1 The definitions in this section apply in this Part.

"electronic document" means, except in section 252.6, any form of representation of information or of concepts fixed in any medium in or by electronic, optical or other similar means and that can be read or perceived by a person or by any means.

Bill Clause No. 121
CBCA Section No. 252.1: Definition of "information system"
Topic Documents in Electronic or Other Form

Sources of Proposed Law 
Commonwealth of Australia: Electronic Transactions Act 1999, No. 162, 1999.

Changes From Present Law 
New

Purpose of Change 
One of the conditions for an informed consent is that the recipient must designate an information system for receiving information by electronic means. In practice, this means that the party indicates the electronic address at which they will access this information. This provision clarifies that this term encompasses all types of technologies that may be used to create and deliver information.

Similar Provincial Laws 

Current Wording 
N/A

Proposed Wording 
252.1 The definitions in this section apply in this Part.

"information system" means a system used to generate, send, receive, store, or otherwise process an electronic document.

Bill Clause No. 121
CBCA Section No. 252.2: Application
Topic  Documents in Electronic or Other Form

Sources of Proposed Law 
None

Changes From Present Law 
New

Purpose of Change 
The Corporations Directorate utilises specific technologies. The general use of electronic documents may expose it to a variety of formats and mediums that may not be compatible with its technologies and which they may not have the capacity to handle. As such, this provision clarifies that Part XX.1 will not apply to any information sent to or issued by the CBCA Director.

Moreover, a number of policy considerations dictate that certain activities continue to be accomplished on paper. These provisions will allow these to be identified in the regulations. For example, Part XX.1 will not apply to the provisions pertaining to the share certificates (s. 48-81).

Similar Provincial Laws 
None

Current Wording 
N/A

Proposed Wording
252.2 This Part does not apply to a notice, document or other information sent to or issued by the Director pursuant to this Act or to any prescribed notice, document or other information.

Bill Clause No. 121
CBCA Section No. 252.3: (1) Use not mandatory; (2) Consent and other requirements; (3) Revocation of consent
Topic  Documents in Electronic or Other Form

Sources of Proposed Law 
Bill C-6: Personal Information Protection and Electronic Documents Act;

Uniform Law Conference of Canada: Uniform Electronic Commerce Act;

Ontario Securities Commission, National Policy 11-201 - Delivery of Documents by Electronic Means;

Securities and Exchange Commission: Use of Electronic Media for Delivery Purposes, Release No. 32-7233;

Commonwealth of Australia: Electronic Transactions Act 1999, No. 162, 1999.

Changes From Present Law 
New

Purpose of Change 
This Part is being enacted so as to permit parties to communicate with each other through efficient and economical means available to them. However, this Part is structured such that the paper-based and technology-based regime will co-exist. This provision ensures that no individual will be compelled to utilize electronic documents. Individuals can continue to operate in the paper-based environment.

The most significant safeguard included in this Part is the provision dealing with consent. No information may be provided via electronic means of communication unless the consent of the recipient is obtained. The requirement for revoking consent will be detailed in the regulations.

Similar Provincial Laws 
Saskatchewan: Bill 11: An Act respecting Electronic Information and Documents

Current Wording 
N/A

Proposed Wording 
252.3 (1) Nothing in this Act or the regulations requires a person to create or provide an electronic document.

(2) Despite anything in this Part, a requirement under this Act or the regulations to provide a person with a notice, document or other information is not satisfied by the provision of an electronic document unless

(a) the addressee has consented, in the manner prescribed, and has designated an information system for the receipt of the electronic document; and

(b) the electronic document is provided to the designated information system, unless otherwise prescribed.

(3) An addressee may revoke the consent referred to in paragraph (2)(a) in the manner prescribed.

Bill Clause No. 121
CBCA Section No. 252.4: Creation and Provision of Information
Topic  Documents in Electronic and Other Form

Sources of Proposed Law 
Bill C-6: Personal Information Protection and Electronic Documents Act;

Uniform Law Conference of Canada: Uniform Electronic Commerce Act;

Securities and Exchange Commission: Use of Electronic Media for Delivery Purposes, Release No. 33-7233;

Ontario Securities Commission, National Policy 11-201 - Delivery of Documents by Electronic Means;

Commonwealth of Australia: Electronic Transactions Act 1999, No. 162, 1999.

Changes From Present Law 
New

Purpose of Change 
This is the general provision that enables parties to create and provide information through technological means. Provided that their by-laws or articles do not impose limitations, corporations will be able to use the technologies that they choose. The consent provision in 252.3 will ensure that this freedom to use any technologies is not imposed on the recipients of the information.

Similar Provincial Laws
Saskatchewan: Bill 11: An Act respecting Electronic Information and Documents

Current Wording 
N/A

Proposed Wording 
252.4 A requirement under this Act or the regulations that a notice, document or other information be created or provided, is satisfied by the creation or provision of an electronic document if

(a) the by-laws or the articles of the corporation do not provide otherwise; and

(b) the regulations, if any, have been complied with.

Bill Clause No. 121
CBCA Section No. 252.5: (1)Creation of information in writing; (2) Provision of information in writing; (3) Copies; (4) Registered Mail
Topic  Documents in Electronic and Other Form

Sources of Proposed Law 
Bill C-6: Personal Information Protection and Electronic Documents Act;

Uniform Law Conference of Canada: Uniform Electronic Commerce Act;

Securities and Exchange Commission: Use of Electronic Media for Delivery Purposes, Release No. 33-7233;

Ontario Securities Commission, National Policy 11-201 - Delivery of Documents by Electronic Means;

Commonwealth of Australia: Electronic Transactions Act 1999, No. 162, 1999.

Changes From Present Law 
New

Purpose of Change 
Certain sections of the CBCA explicitly require that documents be in writing. The policy underlying this requirement is to provide for a durable record of the information. This policy is achieved in the technological environment by requiring that an electronic document be accessible for future use.

In a number of sections, the CBCA explicitly requires that documents be provided to the intended recipient in written form. The policy underlying such a requirement is that the recipient receive the document in a manner that gives him or her some control over the document. This policy is achieved in the technological environment by requiring that the electronic document in question is not only accessible for future use but also that the recipient be capable of retaining it.

Certain provisions of the CBCA require that multiple copies be provided. In a paper-based environment, this would imply that the person would have to provide the required number of copies. However, in the technological environment, an electronic document may easily be copied a number of times or provided to a number of recipients simultaneously. Therefore, sending one copy of an electronic document that can be copied numerous times will achieve the same result.

The CBCA requires that certain information be sent by registered mail. In the paper-based environment this is accomplished through the postal or other mail delivery system. However, in the technological environment, there is no universally-accepted system for sending registered mail. Therefore, the regulations will stipulate the requirements that must be fulfilled in order to have registered mail effectively delivered electronically.

Similar Provincial Laws 
Saskatchewan: Bill 11: An Act respecting Electronic Information and Documents

Current Wording 
N/A

Proposed Wording 
252.5 (1) A requirement under this Act or the regulations that a notice, document or other information be created in writing is satisfied by the creation of an electronic document if, in addition to the conditions in section 252.4,

(a) the information in the electronic document is accessible so as to be usable for subsequent reference; and

(b) the regulations pertaining to this subsection, if any, have been complied with.

(2) A requirement under this Act or the regulations that a notice, document or other information be provided in writing is satisfied by the provision of an electronic document if, in addition to the conditions set out in section 252.4,

(a) the information in the electronic document is accessible by the addressee and capable of being retained by the addressee, so as to be usable for subsequent reference; and

(b) the regulations pertaining to this subsection, if any, have been complied with.

(3) A requirement under this Act or the regulations for one or more copies of a document to be provided to a single addressee at the same time is satisfied by the provision of a single version of the electronic document.

(4) A requirement under this Act or the regulations to provide a document by registered mail is not satisfied by the sending of an electronic document unless prescribed.

Bill Clause No. 121
CBCA Section No. 252.6: Statutory Declaration and Affidavits
Topic  Documents in Electronic and Other Form

Sources of Proposed Law 
Bill C-6: Personal Information Protection and Electronic Documents Act

Changes From Present Law 
New

Purpose of Change 
In a number of sections, the CBCA requires that parties provide an affidavit or a statutory declaration. In the paper-based regime, these are governed by the rules enacted in the Canada Evidence Act. Bill C-6 (Personal Information Protection and Electronic Documents Act) provides a detailed regime for the electronic creation of these types of documents. Moreover, the regime enacted in Bill C-6 is applicable to the Canada Evidence Act, which governs the admissibility of these types of documents in court proceedings. For these reasons, the regime created in Bill C-6 will be applicable to affidavits and statutory declarations required under the CBCA.

Similar Provincial Laws 
None

Current Wording 
N/A

Proposed Wording 
252.6 (1) A statutory declaration or an affidavit required under this Act or the regulations may be created or provided in an electronic document if

(a) the person who makes the statutory declaration or affidavit signs it with his or her secure electronic signature;

(b) the authorized person before whom the statutory declaration or affidavit is made signs it with his or her secure electronic signature; and

(c) the requirements of sections 252.3 to 252.5 are complied with.

(2) For the purposes of this section, "electronic document" and "secure electronic signature" have the same meaning as in subsection 31(1) of thePersonal Information Protection and Electronic Documents Act.

(3) For the purpose of complying with paragraph (1)(c), the references to an "electronic document" in sections 252.3 to 252.5 are to be read as references to an "electronic document" as defined in subsection 31(1) of thePersonal Information Protection and Electronic Documents Act.

Bill Clause No. 121
CBCA Section No. 252.7: Signatures
Topic  Documents in Electronic and Other Form

Sources of Proposed Law 
Bill C-6: Personal Information Protection and Electronic Documents Act;
Uniform Law Conference of Canada: Uniform Electronic Commerce Act.

Changes From Present Law 
New

Purpose of Change 
A number of provisions of the CBCA require that documents be signed or executed. Enacted when documents were solely in paper format, such requirements may be an impediment to the use of technological means for creating or sending documents. The proposed amendment effectively allows for the use of technological means to communicate information by permitting signatures through these means.

Generally, signatures are personal to the signatory, evidence that the person intended to be associated with the document that they have signed and identify the person signing. These premises are maintained in the technological context. First, in a technological environment, a signature will not have to "look like" a handwritten signature, provided it is distinguishable from other signatures. Second, in a technological environment, a signature will not necessarily be attached to an electronic document in the same manner that an ink signature is placed onto paper. The person's signature may be "associated" with the document by mathematical logic or otherwise. Third, in a technological environment, the "physical appearance" of the signature may not permit the immediate identification of the signatory, provided that verification of the signature is subsequently possible.

Similar Provincial Laws 
Saskatchewan: Bill 11: An Act respecting Electronic Information and Documents

Current Wording 
N/A

Proposed Wording 
252.7 A requirement under this Act or the regulations for a signature or for a document to be executed, except with respect to a statutory declaration or an affidavit, is satisfied if, in relation to an electronic document, the prescribed requirements pertaining to this section, if any, are met and if the signature results from the application by a person of a technology or a process that permits the following to be proven:

(a) the signature resulting from the use by a person of the technology or process is unique to the person;

b) the technology or process is used by a person to incorporate, attach or associate the person's signature to the electronic document; and

(c) the technology or process can be used to identify the person using the technology or process.