Stewart, Fenner L. --- "A history of Canadian corporate law: a divergent path from the American model?" [2018] ELECD 82; in Wells, Harwell (ed), "Research Handbook on the History of Corporate and Company Law" (Edward Elgar Publishing, 2018) 451

Book Title: Research Handbook on the History of Corporate and Company Law

Editor(s): Wells, Harwell

Publisher: Edward Elgar Publishing

ISBN: 9781784717650

Section: Chapter 17

Section Title: A history of Canadian corporate law: a divergent path from the American model?

Author(s): Stewart, Fenner L.

Number of pages: 29

Abstract/Description:

Chapter 17 connects the development of Canadian corporation law to both Canada’s distinctive social-economic-political development and its complicated attitude towards its neighbor to the South. Initially, Canadian corporate law and the Canadian corporation itself lagged behind those of the US; in particular, with the exception of disclosure requirements, where Canada was a leader, its corporate law was less developed and more fragmented than that of the US well into the twentieth century. Indeed, Canadian corporate law was not thoroughly reformed until the late 1960s and early 1970s, at which time Ontario adopted a Business Corporations Act that drew heavily on US models; a Federal act, called the Canada Business Corporations Act (CBCA), followed five years later and set the pattern for other provincial corporate laws. These acts were surprisingly shareholder-friendly given their borrowings from US models, a development explained here by the larger political context, particularly the growth of Canada’s robust welfare state beginning in the 1940s. In this account, Canadian stakeholders did not demand protections in corporation law because they felt well-protected by other legal frameworks. Despite these differences, it concludes that in fact Canadian corporation practice has diverged little from that of the US; its more shareholder-friendly statutes, and later judicial decisions that suggested a stakeholder-friendly approach as well, have not translated into shareholder (nor stakeholder) empowerment, and ‘the reality is that managerial power is at least entrenched as it is in the United States’.