Top 10 Legal Risks For Business In 2016

BLG's Top 10 Legal Risks for Business in 2016 is our annual thought leadership report forecasting the key trends and regulatory changes that will have legal implications for our clients in the year ahead.

Climate Change

By Alan Ross and Marie-Claude Bellemare Canada's greenhouse gas regime is poised to be one of the country's leading business challenges in 2016. From Paris to provincial legislatures, big changes are coming, with Canadian companies - and large carbon emitters across a range of industries - still determining what the impacts will be on their bottom lines. Nationally, there will be significant changes to Canada's energy systems and economy, heavily weighted in natural resources. With green energy sources likely to play a larger role, experienced renewable project developers with strong balance sheets and a low cost of capital are likely to be some of the biggest winners in 2016. In Alberta, Premier Rachel Notley announced a far-reaching and comprehensive climate change strategy, with sweeping new regulatory requirements for the electricity, oil and gas industries. The result for a province already reeling from low commodity prices is an economy-wide carbon tax, a 100 megatonne cap on oil sands emissions and a phase-out of coal. Ontario has proposed a cap and trade program, to take effect in 2016, which will be its primary vehicle to achieve emissions targets. Depending upon the industry, new policies in Edmonton and Ontario may reflect an operational cost, a barrier to entry or a reason to shut down entirely. Companies with emissions-reducing technologies, or venture capital/private equity focused on renewable and energy efficiency project financing are currently well-placed for success. However, even outside of Alberta, de-carbonization and structural changes to the oil and gas industry will have significant commercial implications, for example, on manufacturers in Central Canada, large energy consumers and overall currency valuation. In the upcoming year, business will look ahead to not only the implementation of provincial carbon initiatives, but also to the federal government pursuing its own climate change agenda. This involves new international obligations arising from the 2015 United Nations Climate Change Conference, as well as a commitment to set national emissions targets. 2016 will therefore be a watershed year for Canadian business in navigating the shoals of carbon policy and economic transition. Changes are expected to be rapid and multi-dimensional, effects complicated. Tax Authorities Continue to Pursue Non-privileged Information

By Steve Suarez and Charles Marquette Canadian tax authorities continue to aggressively pursue taxpayer information, using the extensive powers granted to them under tax legislation. Sensitive communications with, and work product prepared by, accountants and other non-lawyers represent fertile ground for the Canada Revenue Agency. This was illustrated by the CRA's success before the Federal Court of Canada in Minister of National Revenue v. BP Canada Energy Company, in June 2015, in forcing disclosure of the taxpayer's list of uncertain tax positions prepared for financial statement purposes, for use as an "audit roadmap." Governments' need for tax revenues and the global trend towards greater tax transparency will only make revenue authorities more aggressive in seeking confidential information. Lawyer-client privilege constitutes the one defence to information demands that Canadian courts have consistently upheld, and well-advised taxpayers will ensure that tax-sensitive communications and work product are prepared on a privileged basis to the greatest extent possible. Privacy Class Actions are on the Rise in Canada

By Ira Nishisato and Éloïse Gratton There is a new trend in Canada towards privacy class actions being launched following a cybersecurity breach or an improper disclosure of personal information. Indeed, privacy class actions triggered by data breaches are growing in popularity in Canada, with between twenty and thirty privacy class actions currently pending or already certified. These lawsuits follow either a cybersecurity or another similar data security breach, or the launch of a new privacy-sensitive product or innovative marketing program. On the data security front, businesses, particularly small to mid-size entities, often lack breach response policies, proper governance tools, and employee privacy training programs to prevent or promptly respond to breaches. They lack cybersecurity preparedness, which makes them vulnerable to privacy class actions following a security breach involving personal information. On the privacy front, many businesses have recently received bad press because of new advertising programs, online business models and services. Canadian...