Directors’ Liability: Legislative Amendments Since 2022

Company directors’ liability varies from year to year, as new provisions are added, withdrawn or amended. In light of this fact, we would like to call attention to the major legislative changes that have occurred since 2022, both in Québec and at the federal level. 

Environmental Protection 

In Québec 

The Act respecting certain measures enabling the enforcement of environmental and dam safety legislation and the Act ending exploration for petroleum and underground reservoirs and production of petroleum and brine place new environmental restrictions on companies operating in Québec. Accordingly, if a corporation commits an offence, the directors are deemed to have committed it as well and, as a result, may face a fine of between $1,000 and $1,000,000 and/or imprisonment for up to three years. 

At the Federal Level 

The Canadian Environmental Protection Act establishes that director who influence or direct the policies or activities of a corporation that commits an offence under this Act are also considered co-perpetrators of the offence and may face a fine of between $15,000 and $1,000,000 and/or imprisonment for up to three years. 

Labour Laws 

Two new laws regulate workplaces and entail directors’ liability, namely, the Act to ensure the protection of trainees in the workplace and the Fighting Against Forced Labour and Child Labour in Supply Chains Act. 

Act to ensure the protection of trainees in the workplace (at the provincial level)  

This law sets standards for working conditions, such as the observance of public holidays and allowance of at least ten days’ sick leave per year. If a corporation fails to comply with the law’s required standards, its directors are deemed to have committed the offence themselves and may be fined between $600 and $1,200. 

Fighting Against Forced Labour and Child Labour in Supply Chains Act (at the federal level)  

This law, that we discussed in this article, attempts to curtail the potential for forced labour and child labour by requiring businesses to produce annual reports setting out the measures in place to reduce such risks. The directors of a corporation that violates the law are considered co-perpetrators of the offence and may face a fine of up to $250,000. 

General Liability 

Canada Business Corporations Act 

Directors of corporations incorporated under the Canada Business Corporations Act must now disclose their nationality. Moreover, the maximum penalty incurred by a director for providing false or misleading information and for improperly keeping individual records is now $1,000,000 and/or five years of imprisonment, whereas it was only $200,000 and/or six months of imprisonment prior to January 2024. 

In Québec 

Directors who assist or who, by encouragement, advice, consent, authorization or order, induce a lawyer or notary to commit an offence under the Act respecting the Barreau du Québec or the Notaries Act, respectively, or under the Professional Code or any regulation thereunder may be fined from $5,000 to $125,000. Furthermore, directors may now be held liable as perpetrators of the offence if the corporation under their stewardship breaches the Consumer Protection Act. This liability entails a fine of between $600 and $16,000. 

Charter of the French Language  

The Charter levies fines ranging from $700 to $20,000 upon directors whose corporations do not comply with its language requirements. 

The Online News Act

This law entails directors’ liability on an equal footing with the corporation’s, whereby they face a fine of up to $10,000 if they breach the law, in particular by failing to comply with the negotiation process for which the law provides. 

For more information on all the legislative sources of directors’ liability, please view our directors’ liability summary table. 

BCF's mission is to support local businesses in their development. Our team is aware of the challenges you face and stands ready to help you make the best use of available resources. Please feel free to contact us for advice on your obligations as a director. 

This article is the result of a collaboration between our professional Didier Culat and our students Frédérique Savard and Catherine Gagnon.