From a global economic perspective, Canada made it through 2012 relatively unscathed compared with many other advanced economies. Growth has been modest but steady, thanks to the lumber, auto and financial sectors, and Canada's policies and responsible banking practices have shielded it somewhat from the global economic crisis. Although the country has experienced some encouraging prospects in foreign investment and job growth, the global economic outlook remains volatile, and Canadian businesses face increasingly complex and evolving regulatory, legal and compliance requirements as they prepare to move into 2013.
"Relative to other parts of the world, the outlook for Canadian companies is encouraging," said Sean Weir, Borden Ladner Gervais LLP (BLG) national managing partner. "As we look to 2013, however, we are expecting a number of evolving and often stringent regulatory requirements, as well as increased public scrutiny. By anticipating these complex regulatory and business issues, companies can better prepare to ensure their long-term health and protect their reputation."
With this in mind, BLG has compiled what it predicts to be the top 10 business issues with legal implications for 2013.
1. Big data, big privacy concerns: Canadian businesses now face greater responsibility and increased liability in how they deal with the storage, exchange and sale of personal data – especially now that privacy commissioners are on the case.
2. Pipelines, politics and people's choice will confound the oil and gas sector: The medley of complications that come with oil and gas export is drawing huge public attention and contributing to the need for a "social licence" that's becoming increasingly difficult to attain. No project will be under the radar in 2013, and public support will be a key factor for success.
3. Riding out the pension storm: New forms of financing popping up on the pension landscape are affecting the workforce and the bottom line. Significant legal change is soon to follow.
4. What qualifies as "good" for Canada?: Critics have complained the "net benefit" test for foreign investment in Canada is opaque at best and politically driven at worst. Expect greater pressure on the federal government to review and redefine the benefits and barriers to these deals and how they affect the Canadian economy.
5. Corporate Canada will hit the road looking for growth: With so many global opportunities, how Canadian companies navigate other markets' emerging business and legal practices will have a significant impact on future international players.
6. The free-trade door will swing both ways: Canada is negotiating free trade agreements with multiple entities, which means more industry consultation and much more public controversy as consumers feel the after-effects of the compromises made to be a part of these deals.
7. Changing dynamics – a renewed focus on consumer activities: Consumer-facing businesses are subject to new and ever-changing obligations – and ignoring them might have dire consequences. Understanding the distinctive Canadian regime is crucial to avoiding unwelcome surprises.
8. Good governance or good grief: The activist investor will continue to gain steam, and the role of the board member will come under even greater scrutiny. A job that once seemed as if it might be a pleasant way to fill a few hours in retirement will come with enormous responsibility and liability.
9. A good news story about Canadian tax? As Canada's federal and provincial governments get more involved in marketing Canada to the outside world and as more businesses seek new opportunities globally, we should expect to hear more positive reports about Canada's tax environment and the incentives for doing business in Canada. (See "B.C. among North America's top tax-friendly areas for startups – BIV issue 1207; December 11-17.)
10. It's beginning to look a lot like … America: A more litigious environment is moving Canada in the direction of the U.S. with more class actions and controversial financing structures. •
Borden Ladner Gervais LLP (BLG) is a full-service, national law firm focusing on business law, commercial litigation and intellectual property.
