COVID-19 COVERAGE - CANADA Compiled by Publisher's Staff.1 May 18, 2020

Thomson Reuters Regulatory Intelligence

The COVID-19 pandemic has created unprecedented challenges for compliance professionals around the world, including those in Canada. The following is a selection of federal and provincial legislative and regulatory actions as well as news and analysis articles compiled by the Thomson Reuters Regulatory Intelligence editorial staff. The selection includes Regulatory Intelligence and Reuters news coverage. More COVID-19 news and information can be found via the TRRI platform's search facility.

Additional COVID-19 resources are also available on the Thomson Reuters COVID-19 Resource Center. For a regularly updated list of U.S. federal regulations related to the COVID-19/novel coronavirus update, please visit the Skopos Labs Coronavirus Policy Tracker.

You can create your own custom My Updates through the Create a Custom My Updates link on the Regulatory Intelligence homepage. Select your geography and/or content types you would like resources from and include the following keyword search: covid! or coronavirus.

IN THIS OVERVIEW

FEDERAL AND PROVINCIAL COVID-19 LEGISLATION AND REGULATIONS Provincial Legislation ➢ COVID-19 Response and Reforms to Modernize Ontario Act, 2020 (Bill 190, 2020) Federal Regulations ➢ Interim Order No. 4 Amending the Employment Insurance Act (Employment Insurance Emergency Response Benefit)

FEDERAL AND PROVINCIAL REGULATORS - COVID-19 UPDATES Federal Regulators ➢ Bank of Canada ➢ Office of the Superintendent of Financial Institutions (OSFI) Provincial Regulators ➢ Autorité des Marchés Financiers (Québec) (AMF) ➢ Financial Services Regulatory Authority of Ontario (FSRA)

SROS, EXCHANGES AND SECURITIES REGULATORS ➢ British Columbia Securities Commission (BCSC)

OTHER NEWS AND SUMMARIES

1 This COVID-19 Coverage was compiled by Thomson Reuters Regulatory Intelligence editorial staff and other contributors. ➢ IMPACT ANALYSIS: Disclosure relief comes with compliance challenges for Canadian issuers ➢ CANADA STOCKS-TSX slides after dismal factory data ➢ Canadian investors shed record level of foreign securities in March

COVID-19 COVERAGE - CANADA

FEDERAL AND PROVINCIAL COVID-19 LEGISLATION AND REGULATIONS

PROVINCIAL LEGISLATION

Ontario

COVID-19 Response and Reforms to Modernize Ontario Act, 2020 (Bill 190, 2020) (May 12, 2020)

Schedule 1 to Bill 190 enacts the Alternative Filing Methods for Business Act, 2020, Act permits documents required or permitted to be filed by in-person delivery or mail under certain business statutes to instead be filed by alternative methods, and permits electronic signatures and electronic copies in respect of certain documents, to address public health and safety concerns in respect of an emergency declared under the Emergency Management and Civil Protection Act, R.S.O. 1990, c. E.9.

Schedule 10 to Bill 190 amends the Extra-Provincial Corporations Act, R.S.O. 1990, c. E.27, to permit for electronic signatures on certain documents, to permit for copies of certain documents to be used in place of originals and to accommodate alternative methods of filing under the Alternative Filing Methods for Business Act, 2020.

FEDERAL REGULATIONS

Interim Order No. 4 Amending the Employment Insurance Act (Employment Insurance Emergency Response Benefit), SOR/2020-95

Under subsection 153.3(1) of the Employment Insurance Act, S.C. 1996, c. 23, the Minister of Employment and Social Development may make interim orders for the purpose of mitigating the economic effects of the coronavirus disease 2019 (COVID-19). Workers may be eligible for the Employment Insurance Emergency Response Benefit if they cease working for reasons related to COVID-19 or they would otherwise have qualified for Employment Insurance (EI) regular or sickness benefits under the normal rules. The Interim Order expands eligibility for the Employment Insurance Emergency Response Benefit to self-employed fishers who recently exhausted EI fishing benefits and are unable to start working for reasons related to COVID-19.

The Interim Order is temporary and will cease to have effect when it is repealed or expires.

FEDERAL REGULATORS

Bank of Canada

Bridge to Recovery: The Bank's COVID-19 Pandemic Response (May 4, 2020)

The Bank of Canada published remarks given by Senior Deputy Governor Carolyn A. Wilkins on a C.D. Howe webcast discussing measures the Bank has taken to address the COVID-19 pandemic and set the stage for recovery. For the full text of the remarks see the link here.

Office of the Superintendent of Financial Institutions (OSFI)

COVID-19 Measures – FAQs for Federally Regulated Deposit-Taking Institutions (updated May 14, 2020)

OSFI has prepared an FAQ for federally regulated financial institutions (FRFIs) about measures it has taken to address issues stemming from COVID-19. New or updated topics include: • Payment deferrals • Liquidity • March 30th letter on Capital treatment for exposures acquired through the new Government of Canada programs

For the full FAQ document see the link here.

COVID-19 Measures – FAQs for Federally Regulated Insurers (updated May 14, 2020)

OSFI has prepared an FAQ for federally regulated insurers about measures it has taken to address issues stemming from COVID-19. New or updated topics include: • Loan Payment Deferrals • LICAT Smoothing of Interest Rate Risk (IRR) Requirements for Participating Insurance

For the full FAQ document see the link here.

PROVINCIAL REGULATORS

Autorité des Marchés Financiers (Québec) (AMF)

AMF increases support to organizations providing assistance to consumers (May 11, 2020)

The AMF has announced that with COVID-19 causing financial hardship for many Québec households, the AMF is substantially increasing the support it provides to various front-line organizations that are dedicated to helping consumers, including seniors. With this additional support, the AMF is more than doubling, to $830,000, the annual amount it is providing to the 37 family economy cooperative associations (Associations coopératives

© 2020 Thomson Reuters. All rights reserved. -3- d'économie familiale – ACEFs), Québec's consumer associations and three seniors associations for 2020-2021. The additional contribution is intended to help these community organizations more effectively respond to the growing number of requests for assistance and financial advice from individuals and households in Québec that are struggling to make ends meet. The AMF is also making its financial education expertise and resources available to them as well as tools to facilitate their communications with its target. For more information see the link here.

Financial Services Regulatory Authority of Ontario (FSRA)

FSRA increases protections for consumers of mortgage-based investments (May 12, 2020)

The FSRA made an announcement that it is issuing new guidance to increase protection for consumers involved in mortgage-based investments during periods of market volatility and disruption, such as the current COVID-19 pandemic. The Mortgage Brokerages, Lenders and Administrators Act, 2006 requires specific and timely communications to consumers with respect to changes to their investment values and mortgage terms. Mortgage administrators are required to advise their clients based upon the new guidance. Consumers looking to invest in syndicated mortgage investments (SMI) need to be informed about the impact of significant market disruptions on product risks and suitability. The effective date of the new guidance is May 12, 2020.

For more information, including links to the new guidance documents, see the link here.

Credit Union Capital Treatment of Loans under the Federal Government Business Credit Availability Program (May 7, 2020)

The FSRA has issued a news release stating on March 27, 2020, the Government of Canada launched the Business Credit Availability Program to support small and medium size enterprises through the current economic challenges. This program includes the Canada Emergency Business Account, the Export Development Canada Loan Guarantee, and the Business Development Bank of Canada Co-lending Program. FSRA is releasing interpretation guidance to clarify capital and liquidity requirements for loans under these programs in accordance with the Credit Unions and Caisses Populaires Act, 1994 (CUCPA). For more information see the link here.

SROS, EXCHANGES AND SECURITIES REGULATORS

British Columbia Securities Commission (BCSC)

COVID-19: BCSC Response (BCSC Hearings updated 11 May 2020)

The BCSC has updated its "BCSC Hearings" section on its "COVID-19: BCSC Response" page to indicated that the BCSC will not be holding in-person hearings until at least June 15, 2020. The Hearing Office will reach out to parties with hearings scheduled after that time to determine if a hearing may proceed, including via teleconference or in writing. Further, given the current circumstances involving COVID-19, panels presiding over current hearings before the Commission will adopt the direction provided by the Supreme Court of British Columbia for commissioning affidavits in civil proceedings where it is not possible, or medically unsafe, for the deponent of an affidavit to physically attend before a

OTHER NEWS AND SUMMARIES

IMPACT ANALYSIS: Disclosure relief comes with compliance challenges for Canadian issuers (May 12, 2020)

(Reuters) - Canadian securities regulators are giving listed companies more time to fulfill compliance obligations related to annual general meetings, but they still expect issuers to adhere to quality and specificity standards when they eventually deliver disclosure documents.2

Listed companies face challenges in meeting these regulatory expectations. As Canada moves to reopen after a two-month lockdown, financial and operational outlooks for the coming weeks will be tentative given uncertainty over whether the economy will deteriorate further. This significant uncertainty will complicate efforts to prepare the detailed forward-looking analyses that regulators expect in disclosures.

CSA grants filing relief for AGM disclosures

Earlier this month, the CSA announced that it would provide all listed companies with conditional and temporary relief from certain filing and delivery requirements related to annual general meetings (AGMs).

Listed companies usually are required to deliver the disclosures to investors ahead of their AGMs. Executive compensation disclosures for venture companies are due within 180 days of their yearend, and within 140 days for non-venture companies. Companies are also required to send investors, on request, copies of other disclosures such as financial statements and management discussion and analyses (MD&As).

Under the blanket relief, listed companies have until the last day of this year to file their executive compensation disclosure. However, issuers that intend to delay disclosing executive compensation filings must first issue a news release to notify investors that the disclosure will be delayed. The CSA said that companies are expected to give investors “sufficient lead time” to review executive compensation disclosure before their AGM.

The CSA is also providing temporary relief from requirements to send copies of annual or interim financial statements and MD&A.

Securities regulators said that the temporary relief is meant to give companies more time to prepare their disclosures and respond to requests from investors for disclosure documents. Listed companies are still expected to comply with all their disclosure obligations and deliver the documents that investors would normally receive ahead of an AGM.

The extension on filing deadlines is likely to be received with relief from listed companies. However, volatility related to the coronavirus pandemic is likely to affect market conditions for some time. Issuers will have to determine how best to assess their current financial

2 Helen Chan, IMPACT ANALYSIS: Disclosure relief comes with compliance challenges for Canadian issuers, Regulatory Intelligence (May 12, 2020).

© 2020 Thomson Reuters. All rights reserved. -5- condition and future prospects in order to fulfill their disclosure obligations to shareholders. Providing future projections and forward-looking information are likely to be challenging given the degree of market uncertainty.

Canadian issuers disclose impact and estimate future outlook

Canadian issuers have outlined the continued impact of the pandemic on their operations and provided additional disclosures, generally, on how business prospects could be affected if market conditions were to further deteriorate. The content and focus areas of disclosures have differed across issuers as they try to address risks and conditions specific to their business in line with regulatory expectations. However, specifics have been difficult to provide.

Magna International, an auto-parts maker, recently disclosed its first quarter financial results for 2020. The company included information on its performance prior to the pandemic along with estimates on the impact of COVID-19 on sales, income and operations.

Suncor Energy, which had an operating loss of C$309 million in the first quarter of this year, focused its recent quarterly report on how the company intends to increase stabilize its financials in order to respond to current market conditions and anticipated volatility in the near future.

Additional considerations for disclosure

Recent guidance from the U.S. Securities and Exchange Commission (SEC) on the implication of the pandemic on earnings disclosures provides points worth considering for Canadian issuers, especially companies that are also listed on US stock exchanges.

The SEC said that listed companies should disclose information to address investor concerns, with the financial and operational impact of the pandemic being a key topic for businesses in majority of sectors. Issuers should disclose details on their current financial position, any operational challenges posed by the pandemic, their response plan and forward-looking information on projections for business continuity. The SEC further noted that historical information “may be relatively less significant,” suggesting that issuers should focus more on what may lie ahead.

Canadian law firm Torys LLP recognized that despite the relief on disclosure deadlines, issuers are still under time pressure to sort through high volumes of information, often with little certainty as to whether these developments will have a significant impact on their stock price. The law firm advised listed companies to take the time to evaluate disclosures and make informed decisions over what to disclose and when, as opposed to racing to keep time with every market development.

When planning for calls with a closed group to discuss earnings or material events, Canadian law firm Blakes LLP cautioned listed companies to be mindful of selective disclosure, where the attendees receive material non-public information ahead of the public. Management should be especially careful of how they respond to questions and ensure that they do not disclose information that is not yet public. As a recommended practice, listed companies should first disclose all of the information that they plan to discuss on calls through proper channels such as press releases. Managers should be briefed ahead of the call on what they can or cannot discuss and prepare their responses accordingly.

CANADA STOCKS-TSX slides after dismal factory data (Reuters) - Canada’s main stock index slid on Thursday after data showed domestic factory sales slumped in March and as the World Health Organization warned the coronavirus may never go away.3

* The coronavirus that causes COVID-19 could become endemic like HIV, the World Health Organization said on Wednesday, raising fears of a longer-than-expected economic recovery.

* Adding to the downbeat mood, data showed Canadian manufacturing sales in March plunged 9.2%, the biggest drop in over 11 years, as the coronavirus pandemic forced the shutdown of many businesses.

* At 9:42 a.m. ET (13:42 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 219.65 points, or 1.51%, at 14,283.56.

* Material stocks, up 1.3%, was the only sector on the main index trading higher, lifted by higher gold prices.

* Healthcare stocks led losses with a 4.5% drop, followed by the energy sector, which tumbled 3.4%.

* The energy services company Shawcor Ltd fell 15.7%, the most on the TSX, after the company reported first quarter results.

* The second biggest decliner was Hexo Corp, down 9.4%, after the cannabis company received a notification from NYSE saying the company is no longer in compliance with price listing standards.

* On the TSX, 35 issues were higher, while 194 issues declined for a 5.54-to-1 ratio to the downside, with 37.17 million shares traded.

* The largest percentage gainer on the TSX was power producer Northland Power Inc, which jumped 6.1%, after the company reported quarterly results.

* Its gains were followed by Torex Gold Resources Inc , which rose 3%, after the company said it will resume full production at its El Limón Guajes mining complex by end of this month.

* The most heavily traded shares by volume were Manulife Financial Corp, Enbridge Inc and Trevali Mining Corp.

* The TSX posted no new 52-week high and one new low.

* Across all Canadian issues there were four new 52-week highs and five new lows, with total volume of 56.20 million shares.

3 Amal S, CANADA STOCKS-TSX slides after dismal factory data, Reuters (May 14, 2020).

© 2020 Thomson Reuters. All rights reserved. -7- Canadian investors shed record level of foreign securities in March (Reuters) - Canadian investors divested a record-breaking C$42.2 billion ($30 billion) in foreign securities in March amid heightened market volatility caused by the coronavirus pandemic, Statistics Canada data showed on Friday.4

Canadian investors sold C$29.3 billion in U.S shares, by far the largest since data have been compiled, Statscan said, noting investors also sold off C$11.5 billion in foreign bonds in March, with nearly half in U.S. Treasury bonds.

The previous record for Canadian sales of foreign securities was C$15.5 billion in January 2016.

Global stock and capital markets began to show higher volatility in late February, the agency said, as the global COVID-19 crisis intensified.

That volatility, which in Canada was marked by the start of a severe decline in stock prices and government bond yields in the last few days of February, extended to March, Statscan said, as officials shuttered non-essential businesses and urged people to stay home to slow the spread of the virus.

The S&P 500 .SPX plunged to its lowest in more than three years in March, down as much as 35.4% from a record high in the previous month.

Meanwhile, foreign investors also reduced their exposure to Canadian securities in March by C$9.8 billion, largely on sales of shares.

Foreign investors sold C$6.1 billion in Canadian shares in March, with the banking and energy and mining sectors the largest contributors to the foreign divestment seen in the month, the agency said.

Canadian stock prices declined 17.7% in March, but have been trending upwards since the end of that month, Statscan said.

4 Kelsey Johnson, Canadian investors shed record level of foreign securities in March, Reuters (May 15, 2020).