10 legal risks for businesses in 2018: BLG

By Staff | January 9, 2018 | Last updated on January 9, 2018
3 min read

Canadian businesses will face legal risks this year related to regulatory changes, trade agreements, technology and workplace sexual harassment, according to a report from law firm Borden Ladner Gervais (BLG).

The firm has outlined the top 10 legal risks for businesses.

1. Cybersecurity and protecting data

Canada loses $3.12 billion annually to cybercrime, notes the report. Canada’s federal Personal Information Protection and Electronic Documents Act (“PIPEDA”) will soon impose record-keeping, reporting and notification obligations on organizations that suffer a “breach of security safeguards” regarding personal information under their control.

2. Transforming infrastructure

The federal government has renewed its commitment to infrastructure spending. It plans to invest more than $180 billion over the next 12 years, on both new and existing programs, focused primarily in the areas of public transit, green infrastructure, community culture and recreation, and rural and northern communities. However, the firm notes that concern has arisen over perceived delays by the federal government in providing funding, and its failure to spend all funds announced for certain projects.

3. Market implications of legalizing cannabis

Canada’s move towards a regulated commercial cannabis industry brings a shifting variety of paths to success, the report says.

As the number of ways to participate in the cannabis industry increases, competitive pressure may marginalize licensed producers lacking a focused plan with effective execution. Growing competitive pressure will also fuel industry consolidation, as well-financed major producers turn to acquisitions to expand production capacity and fuel an insatiable market demand. Industry maturation will also bring commoditization. Coupled with new categories and form factors for destination products—notably infused foods and beverages, concentrates, and pre-rolls—commoditization will elevate the importance of a deliberate approach to branding, technology and well-timed execution on financings.

4. Failure to consider Aboriginal and treaty rights

Despite the immense potential for emerging sources of renewable energy and the incessantly growing business opportunities afforded by more traditional energy and resource sectors across Canada, navigating through the complex regulatory and consultation processes continues to make advancing new projects a challenge.

5. Reforming the tax system

Internationally, BLG says Canada has the 13th-highest combined top tax rates for individuals (of 34 countries). Recent tax proposals by the Department of Finance will adversely affect the after-tax financial results for Canadian private enterprises, as well as the retention of after-tax corporate income to address cash flow, reinvestment, retirement savings and other cash requirements of private enterprises.

6. Trade agreements and cross-border commerce

2018 promises to be a year of both significant uncertainty and profound change for Canadians in the areas of international and internal trade, notes the report. While a number of ongoing trade disputes, such as the softwood lumber standoff, will continue to plod along during 2018, it is in the area of trade negotiations where the most important developments will occur.

7. Challenges relating to sexual harassment in the workplace

Liability for sexual harassment claims across Canadian jurisdictions will likely increase as this issue becomes even more socially unacceptable, says the firm. Sexual harassment claims that involve allegations of employer negligence or complacency may aggravate damages claimed by and awarded to employee complainants. Steps should be taken by employers to address these concerns.

8. Disruption caused by technologies

While there are certainly technological, safety, and regulatory hurdles to be surmounted before autonomous vehicles are commercially available for the average consumer, it is clear that autonomous vehicle technology is here to stay, notes the report. Thus, the legal and regulatory frameworks on which business and our society are based will have to anticipate the magnitude of this particular change, prepare for it, and adjust accordingly.

9. Environment and climate change

The rise of clean and renewable energy technologies, from batteries to electric vehicles, are quickly filling the void left by the decreasing reliance on fossil fuel energy, says BLG. These technological advancements, alongside the risks from climate change, are becoming increasingly hard to ignore. This means that investors, auditors and regulators must react to rapidly evolving requirements— and public expectations—on how they respond to climate change.

10. Class actions

Large-scale data breaches and more product recalls will make it a busy year for courts. BLG notes all signs indicate that 2018 will continue the trend of class actions becoming more common and broader in scope.

Read the full report.

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Advisor.ca staff


The staff of Advisor.ca have been covering news for financial advisors since 1998.