The Federal Budget, trends in Canadian securities litigation, court decisions on AI hallucinations and more in Timely Topics – May 2024
Timely Topics with McCarthy Tétrault curates the latest market trends on a monthly basis to help you stay informed of developments that can affect your business. This content is current as of May 9, but please connect with us if you have any questions on any of the topics below.
Here are this month’s trending topics:
1) Federal Budget
2024 Canadian Federal Budget Commentary – Tax Initiatives
The Canadian federal government released its 2024 budget on April 16. Among this year’s noteworthy items are: (i) an increase to the capital gains inclusion rate for all taxpayers; (ii) additional particulars in respect of the design of the Clean Electricity Investment Tax Credit and a new EV Supply Chain Investment Tax Credit; (iii) the introduction of new and enhanced power to assist the CRA in obtaining information during audits; (iv) further amendments to the alternative minimum tax; and (v) a number of measures intended to make housing more affordable.
The devil is in the details, and our National Tax Group has authored its highly anticipated commentary and in-depth analysis to help businesses and individuals understand the proposals.
| With nearly 60 dedicated tax law professionals across Canada, our National Tax Group is one of the strongest in the country. Speak to one of our partners about how you can most effectively plan and respond to the federal government’s latest budget. |
2) Securities Litigation
Canadian Securities Litigation: Trends to Watch 2024
Capital markets players face strong headwinds this year. Climate-disclosure litigation and related securities class actions continue to increase, regulatory scrutiny of auditors and the quality of market participants’ financial disclosures is growing, shareholder activism is on the rise and crypto remains a key market disruptor.
This second annual trends publication from our Securities Litigation Group provides in-depth analysis for the sector’s business leaders to help them anticipate trends and stay agile this year.
| Many of the biggest developments from 2023 continue to affect the market in 2024. Speak to one of our authors or Wendy Berman, head of the Securities Litigation Group, to explore your best legal and business options for meeting these challenges. |
3) Artificial Intelligence
Landmark Decision About Hallucinated Legal Authorities
A decision has been rendered in the highly publicized case of a BC lawyer who filed a notice of application containing legal authorities “hallucinated” by ChatGPT. Despite finding no grounds for elevated costs against the lawyer, the judge ordered the lawyer to pay her client’s costs personally. The court also opined on lawyers’ professional responsibilities associated with AI and the risk of hallucinations generally.
Relevant to all lawyers incorporating AI into their practice, this article explores the court’s reasoning, as well as directives and guidance from other provincial courts, the Federal Court of Canada and the Law Society of BC.
| McCarthy Tétrault is at the forefront of responsibly incorporating AI into business and law. Speak to partners Charles Morgan and Daniel G.C. Glover or David Cohen, Senior Director, Client Service Delivery, about responding to the opportunities and risks posed by AI’s use in the workplace. |
4) ESG and Sustainability
New Proposed Canadian Sustainability Disclosure Standards
The Canadian Sustainability Standards Board (CSSB) has released proposed Canadian Sustainability Disclosure Standards. They substantially align with those of the International Sustainability Standards Board (ISSB) but with modifications giving Canadian entities additional time for compliance. Public comments are open until June 10, 2024.
In this article from our Canadian Securities Regulatory Monitor, we review the CSSB standards against those of the ISSB, the framework proposed by Canadian securities regulators in 2021 and the recently published climate-related financial disclosure rules from the U.S. Securities and Exchange Commission.
Read the analysis here (Available in English only)
| Mandatory reporting for sustainability and climate-related disclosures will impose significant obligations on organizations of all sizes. If you’d like to discuss commenting on the proposed standards or to prepare for the future of reporting, speak to any member of our inter-disciplinary ESG and Sustainability Group or contact Sonia J. Struthers or Robert J. Richarson, CD. |
5) Communications
Government of Canada Proposes New Responsibility Regime for Social Media Operators and Direct Content Distributors
Bill C-63, the Act to enact the Online Harms Act, is now in its first reading before the House of Commons. It proposes amendments to the Criminal Code, Canadian Human Rights Act and other legislation to shift responsibility for certain online harms to social media operators and other distribution services.
Read our in-depth review of the proposed legislation to prepare for this watershed in responsibilities and reporting to mitigate online harm in Canada.
Read the review and key takeaways
| As the Bill is in its first reading, changes are expected. We will continue to report on developments. Speak to one of our authors if you’d like to begin preparing for the change, Karine Joizil, Charlotte Simard-Zakaib or Mariame Touré. |
6) Public Law
SCC Weighs in on Impact of UNDRIP on Canadian Law
The Supreme Court of Canada has concluded that the federal government’s Act respecting First Nations, Inuit, and Métis children, youth and families is constitutional and within Parliament’s legislative jurisdiction. It has important self-governance implications for First Nations and how Canada and the courts will interpret the United Nations Declaration on the Rights of Indigenous Peoples.
Read our case analysis to understand the court’s decision and find out what the implications are for Parliament’s jurisdiction and future developments involving UNDRIP.
| Our Public Law Group helps individuals and organizations of all types navigate Canada’s public sector. Speak to Caroline Zayid or Michael Feder, to find out how we can help you achieve your goals and objectives efficiently and effectively. |
7) Podcast
Appealing Briefs
Hosted by McCarthy Tétrault partner Adam Goldenberg, Appealing Briefs provides updates on important cases from Canada’s courts of appeal in short, insightful interviews with the country’s leading lawyers and business advisors.
In the series’ first episode, get key takeaways for businesses and government on the SCC’s decision in Reference re Impact Assessment Act. Adam speaks with Kimberly Howard, partner and Co-leader of McCarthy Tétrault’s Environmental Group, and Wayne Wouters, Strategic Policy Advisor to the firm and former Clerk of the Privy Council of Canada.
Listen now (Available in English only)
| Adam Goldenberg, host of the award-winning podcast Law in the Time of COVID-19, brings his impeccable interview style to this new series, giving listeners access to the thoughts and musings of some of Canada’s brightest legal minds. |
This newsletter is designed to provide general information only. This newsletter does not provide legal advice on specific issues. You are encouraged to consult with legal counsel should you require assistance in addressing a particular issue or concern.
Tell us what you think! Do you have feedback for the Timely Topics newsletter or topics you’d like for us to explore? Let us know at [email protected].