Debt Financing and Banking


When it comes to Debt Financing and Banking, our highly skilled and multidisciplinary team will be able to address your concerns, whatever they may be, while taking into account all of the intricate rules of this very specific area of law. Our team will guide you through each crucial step of your transaction from negotiations to implementation. Lavery’s expertise in this field is recommended by the Canadian Legal Lexpert Directory.

Our excellent reputation in Debt Financing and Banking allows us to offer in-depth experience with respect to:

  • Debt financing
  • Subordinated debt and mezzanine loans
  • Hybrid financing – debt and equity
  • Syndicated financing
  • Real estate financing
  • Bridge financing
  • Financing of equipment and aircraft
  • Factoring
  • Lease, leasing and conditional sales agreements
  • Agricultural and farm loans
  • Project financing
  • Asset-based financing
  • Film and tax credits financing
  • Securitization
  • Cross-border financing
  • Derivatives
  • Banking law
  • Creation of security interests on all types of assets
  • Consignment agreements
  • DIP (debtor-in-possession) financing as part of arrangements with creditors

Our specialized knowledge is called upon by public and private companies in cutting-edge industries such as aeronautics and aviation, energy and natural resources, mining and forestry, hydroelectricity, natural gas and liquefied natural gas (LNG), automobile, entertainment, film and sports.


We advise borrowers and lenders for all their financing needs, including in connection with the following services:

  • Drafting and negotiation of loan and credit agreements and related documentation
  • Drafting and negotiation of inter-creditor agreements
  • Creation of security interests in moveable and immoveable property on all types of assets
  • Drafting and negotiation of documentation related to lease, leasing and conditional sales transactions and other types of equipment financing (aircraft, heavy equipment, rolling stock)
  • Drafting of consumer loan documents
  • Negotiation of derivatives contracts (ISDA)

Representative mandates

  • Counsel to the Caisse de dépôt et placement du Québec in the financing of Stornoway Diamond Corporation for a total investment by the Caisse of $100 million in the form of debt, equity and resource streaming (the purchase of part of production)
  • Counsel to Héroux-Devtek Inc. and its Canadian, U.S. and British subsidiaries in the renewal of a $200 million operating line of credit
  • Counsel to the purchaser of the Montréal Canadiens in connection with credit facilities granted to it for the purposes of the acquisition
  • Counsel to a lending syndicate with respect to operating lines of credit in the amount of $148 million granted to a major transportation company headquartered in Québec and to its Canadian and U.S. subsidiaries
  • Counsel to the lender in the financing of the construction and acquisition of a Bombardier Global 6000 business jet for a client of BAL Global Finance Canada Corporation, the Canadian affiliate of Bank of America Leasing. This transaction led to the arrangement of interim financing through progress payments during construction and then permanent financing of the acquisition
  • Counsel to a lending syndicate in the financing in the amount of $81 million granted to a world-renowned manufacturer of particleboard
  • Counsel to a Canadian bank in the financing of up to $50 million for the fleet of vehicles of a major Canadian leasing company and in the negotiation of inter-creditor agreements
  • Counsel to the lender in connection with credit facilities for more than $66 million in favour of a professional sports team and its operators, including the creation of security interests on sports facilities

Canadian Legal Lexpert Directory

  1. Uncovering the intricacies of sports infrastructure financing

    Two Montréal landmarks have proudly hosted some of the city’s most memorable sporting events. The Olympic Stadium and the IGA Stadium (Figures 1 and 2), which have been and remain quintessential in our sporting history, are in need of renovations so that sports fans can continue to “raise the roof” for years to come. Figure 1: The Olympic Stadium: A prominent feature of the Montréal skyline. Figure 2: The National Bank Open at the IGA stadium. These stadiums may be iconic, but the issues with their roofing systems—or lack thereof—have plagued the Montréal news for over 30 years. It is estimated that installing a retractable roof over the centre court at IGA stadium could cost $70 million, and replacing the Olympic Stadium’s roof and support ring, no less than $870 million.1 These projects may be considered priorities,2 but the skyrocketing construction and renovation costs are already causing a stir.3 And to make matters worse, the problem will not be solved definitively, as the lifespan of the new Olympic Stadium roof is estimated at 50 years.4 These projects are just the tip of the iceberg when it comes to our sports infrastructure. According to the Minister responsible for Sport, Recreation and Outdoors, Isabelle Charest, “This is a huge endeavour. A good part of the infrastructure could use some work and revamping. And in some cases, we need new infrastructure, period.”5 In other words, the needs are varied and many. Investing in charming small, local skating rinks, multi-purpose municipal sports facilities and even towering stadiums used by professional sports leagues is essential to fostering physical well-being and keeping the population healthy ... or simply entertained. Mindful of the importance of physical activity as well as voters’ appreciation for sports, the Quebec government invested $300 million in the Programme d’aide financière aux infrastructures récréatives, sportives et de plein air (PAFIRSPA, financial aid program for recreational, sporting and outdoor activity infrastructure).6 One component of this program provides financing for up to two-thirds of the cost of renovating, upgrading, building or developing sports and recreational facilities, up to a maximum amount of $20 million per project. Applicants seeking financing from the program had to submit their applications by December 5, 2023. While the PAFIRSPA may seem ambitious, the projects it covers are obviously far less expensive than modern professional sports arenas, which have become true engineering and technological marvels over the years. The cost of building Tottenham Hotspur Stadium in London in 2019, for instance, has been estimated at £1.1 billion,7 which itself is a pittance compared to the US$5.5 billion needed to build the SoFi Stadium in Los Angeles, where the football teams Rams and the Chargers have been playing since 2023.8 As in most situations, money matters when it comes to sports infrastructure. A winning financing strategy is not everything—it’s the only thing. In this first instalment of our series of articles on sports law, we will focus on sports infrastructure financing and examine what lies beneath the surface, as we begin to uncover the challenges, strategies and issues. The Rules of the Game Sports infrastructure financing lies at the crossroads of the entertainment business and the public interest, and it differs from other types of financing in a number of ways. On one hand, the public’s ever-growing appetite for sporting events over the years has spawned numerous colossal projects requiring financing packages similar to those for public or industrial infrastructure projects of the same scale. On the other, the economic benefits and social impact of projects of various sizes often warrant the use of public funds, and the involvement of local communities may be imperative in the case of facilities where utility takes precedence over profitability. In addition, a wide range of financing mechanisms can be used, depending not only on the sums involved, but also on the identity of the infrastructure owners. For the purposes of this article, we will consider financing in relation to three types of ownership: (i) wholly private, (ii) public and private, and (iii) wholly public. We will be taking a closer look at specific financing options and associated issues in our next sports law article. Wholly Private Ownership Financing This refers to infrastructure owned by a private entity and operated by a private administrator, which may or may not be the same entity. One example is the Bell Centre (Figure 3), privately owned by Groupe CH, which is in turn owned by the Molson family and other investors. Figure 3: The 2022 National Hockey League Draft was held at the Bell Centre. This type of ownership usually involves wholly private financing, with the owner injecting the funds required to carry out the desired work. According to media reports, the owner of the Bell Centre invested $100 million in 2015 to renovate it.9 This amount came from Groupe CH and its investors alone. Needless to say, with this type of ownership, any kind of financing is possible, including shareholder equity investment, the issuance of bonds to private subscribers and all forms of bank debt. Combining several of these options is not at all uncommon. In the case of debt financing in particular, making lenders feel as comfortable as possible can be a challenge, and the magnitude of this challenge will depend on the amounts involved. Just how profitable a project will be hinges on whether it can be completed at the agreed-upon cost and whether it will be a commercial success once completed. Generally speaking, using a project’s assets as collateral will not be enough to get lenders on board, and they will require other forms of security, such as shareholder guarantees, fixed-price or capped construction contracts, or the involvement of subordinated lenders. When economic spinoffs are expected to benefit the community, public authorities can also be called upon to guarantee part of the loan repayment or offer various forms of public funding, including forgivable loans, thus reducing the risk assumed by lenders. Efforts to reduce the risk incurred by lenders should, in theory, result in significantly lower financial costs, or in some cases, in obtaining the required financing. Other projects rely on government procurement. Olympique Lyonnais became the first French professional soccer club to be listed on the stock exchange in 2007, when the club’s shares were put up for sale on the Euronext market in Paris. The funds raised in this way were put towards the club’s development projects, including the financing of its new stadium, which opened in January 2016. This financing package consisted of a combination of equity (including proceeds from stock issues), bank loans, traditional bonds and mandatory convertibles.10 Other supplementary yet substantial financing arrangements, such as naming rights agreements, may be used to enhance financing packages. Under such an agreement, a company can acquire naming rights to an arena for a predetermined period, generally between 3 and 20 years, in consideration of a substantial sum of money. In 2017, Scotiabank agreed to pay $800 million over 20 years to rename the building that houses the Toronto Maple Leafs hockey club the “Scotiabank Arena.”11 In addition to renaming facilities, it is possible to sell perimeter advertising or solicit individual donors to purchase a plaque bearing their name at the entrance to a field, in rows or in the bleachers. Read our latest bulletin on this topic Promoters’ financial models are routinely enhanced by other creative revenue streams, including catering concessions, box rental agreements or preferred memberships, parking spaces, boutiques and advertising. Other sources of income include leasing agreements for various uses of the facilities. Some manufacturers in the sports field construction industry even offer financing packages whereby the purchase and installation can be paid for in monthly, quarterly or annual installments, thus reducing the amount of debt or investment required. Signing the relevant contracts before building or renovating the facilities improves the financing package for the project and increases its chances of success. Public ownership financing Ownership of infrastructure by a public entity, regardless of whether it is operated by a private entity or not, can have a significant bearing on the options available and the type of financing selected. Public and private ownership involves an owner from the public sector and a private administrator. The Videotron Centre in Québec City (Figure 4), home of the Québec Remparts hockey club of the Quebec Maritimes Junior Hockey League, is an example of this type of ownership. It is owned by Québec City and managed by Quebecor Media. Figure 4: The Videotron Centre in Québec City, inaugurated on September 8, 2015. Generally speaking, infrastructure owned and operated in this way is financed jointly using public and private funds. Although the Videotron Centre has not required major renovation work so far, the initial construction of the stadium is an example of public-private financing. It cost a total of $370 million to build. A sum of $185 million came from the Quebec government, and $15.4 million from J’ai ma place, an organization set up specifically to finance the Videotron Centre using funds from the Quebec population. Québec City provided the remaining $169.6 million, which included the $33 million that Quebecor Media paid in 2015 to acquire naming rights (which was transferred to its subsidiary Videotron for an undisclosed sum), $50 million in cash and $86.3 million in the form of a bank loan. Public ownership means that the sports infrastructure is owned and administered by one or more public entities. In such cases, standard-sized infrastructure can generally be financed entirely using public funds. This is where Quebec’s PAFIRSPA, mentioned above, comes in. For more costly projects, including a public entity in the ownership group—be it public and private or wholly public—opens the door to a range of options. In the United States, this includes using municipal taxes or issuing municipal bonds to finance infrastructure. Construction of the Barclays Center in Brooklyn, New York, which began in 2010 and was completed in 2012, was financed in part by tax-exempt municipal bonds issued by the Brooklyn Arena Local Development Corporation, an entity formed by an agency of the State of New York for financing purposes.12 Nearly 500 million U.S. dollars were raised, covering a significant portion of the arena’s construction costs, as part of a larger redevelopment effort known as Pacific Park Brooklyn (formerly Atlantic Yards). The Barclays Center is now home to the Brooklyn Nets basketball team of the National Basketball Association. We will conclude our overview with a few words on public-private partnerships (PPPs), which are particularly well suited to high-cost infrastructure projects. Under a PPP, the government or another public entity partners with a private company to develop a public infrastructure or services project. PPPs combine the resources, expertise and capabilities of the public and private sectors to deliver projects that benefit the community. PPPs take many different forms and can cover a wide range of activities, from project design and construction to operation and, in some cases, financing. In the design-build-finance (DBF) model, for example, the PPP includes the design, construction and financing of the infrastructure. Bidders participating in the call for proposals must include a project financing package in their proposal. The private company ultimately selected for the project will be responsible for both the design and construction, as well as the initial or ongoing financing of the project. Bidders must therefore negotiate with financial institutions before being awarded the construction contract in order to include a financing package in their proposal. These financial institutions will then closely monitor how the loaned funds are used and how the project is managed. The private company selected at the end of the call for proposals must therefore make undertakings both to the public authority and to its lenders concerning deadlines, construction costs and financing costs as soon as the contract is awarded. This is why the DBF model generally allows for greater efficiency in executing projects, certainty over construction costs and better management of financial risks. One example is the Stade de France, a stadium that can accommodate 81,338 spectators in a football or rugby configuration and was built for the 1998 FIFA World Cup in France. It is located in Saint-Denis, Seine-Saint-Denis, and is owned by the French government, which awarded a 30-year concession contract expiring in 2025 to the Vinci-Bouygues consortium, as part of a scheme almost identical to today’s PPP schemes. Conclusion The investments required for certain multipurpose amphitheatres and other sports facilities are comparable to those for transport infrastructure, energy projects or industrial plants. This, of course, means that sports infrastructure projects can also rely on a similar set of financing packages, along with a few additional ones specific to sports, such as sponsorship advertising in all its forms. Public authorities are more likely to get involved in projects that include ownership by a public entity or have a major social impact. This opens the door to a wide range of financing packages, tailored to each project’s specific needs. Having now covered the basics, we look forward to examining some of these packages in greater detail in future articles. Zacharie Goudreault, Le toit fixe proposé pour le Stade olympique déchire les experts, link TVA Sports, Stade IGA : le toit doit être une priorité pour Montréal selon Legault, Le journal de Québec, August 13, 2023, link Philippe Teisceira-Lessard, Le cauchemar continue, La Presse, July 27, 2023, link Goudreault, op. cit. Gabriel Côté, Québec investit 300 M$ pour les infrastructures sportives, Le journal de Québec, June 19, 2023, link link link Christopher Palmeri, Rams Owner Stan Kroenke Debuts His $5.5 Billion Dream Stadium, Bloomberg, September 10, 2020, link Maxime Bergeron, 100 millions investis au Centre Bell, La Presse, October 14, 2015, link Bouclage du financement du stade des Lumières, Décideurs, August 7, 2013, link link; Pete Evans, Scotiabank pays big for arena naming rights, but did it break the bank?, CBC News, September 4, 2017, link link

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  2. New corporate transparency requirements in Canada, Québec and the U.S. – What Canadian and Québec companies need to know

    Over the last several years, member countries of the OECD, including Canada and the U.S., have committed to various international undertakings dealing with corporate governance. In keeping with these commitments, since 2019, the Canada Business Corporations Act (CBCA) has required business corporations incorporated under the CBCA to prepare and maintain a register of individuals with significant control over the corporation. Nearly all Canadian provinces, including Québec, have also amended their legislation to make control of companies incorporated in their jurisdiction more transparent. For instance, since March 31, 2023, companies registered with the Québec Enterprise Register (REQ) must report their ultimate beneficiaries to the REQ. Providing greater transparency in the control of Canadian businesses is a continuing process, and additional provisions that apply to federal business corporations came into force on January 22, 2024, and others, applicable to businesses registered with the REQ, will come into force on July 31, 2024. The provisions of the Corporate Transparency Act of the United States requiring companies to report beneficial ownership information came into force on January 1, 2024; some of these provisions are of interest for Canadian companies. Canada – Public register of individuals with significant control Since June 2019, business corporations incorporated under the Canada Business Corporations Act have been required to maintain a register of “individuals with significant control” (ISCs) containing the following information: the name, date of birth and last known personal address of each ISC the citizenship, country or countries where the ISCs are residents for tax purposes the date on which each of these individuals became an ISC the manner in which the individual is an ISC and any other information required by the regulation.1 Although federal corporations must make this register accessible to the Director tasked with administering the Canada Business Corporations Act, to shareholders and creditors of the corporation and to investigative bodies, the register was not accessible to the public until recently. On November 2, 2023, the federal legislator amended the provisions of the Canada Business Corporations Act to, among others: allow ISCs to provide an address for service in addition to their personal address provide that a portion of the ISC information compiled by federally incorporated businesses must be sent to the Director tasked with administering the CBCA provide that the Director must make the following information on ISCs accessible to the public: their name their address for reporting purposes if such an address is provided or, failing which, their personal address the date on which they became an individual with significant control and a description of the manner in which each one is an individual with significant control Note that even if the date of birth, citizenship, country or countries where the ISC is a resident for tax purposes and their personal address (if they provided an address for reporting purposes) must be provided to the Director overseeing the Canada Business Corporations Act, this information will not be made public. The Director may, however, in turn provide to any police force, the Canada Revenue Agency and any provincial body that has responsibilities similar to those of the Canada Revenue Agency, bodies that have investigative powers in relation to certain offences, a provincial enterprise register or provincial agency enforcing corporate law in that province all or part of a corporation’s ISC information, which goes beyond the information it makes available to the public. A corporation must send its ISC information electronically through the Corporations Canada website, at incorporation (if incorporated after January 22, 2024), annually and concurrently with the filing of its annual declaration, within 30 days following its merger with another CBCA corporation, within 30 days of the date on which it becomes subject to the CBCA after incorporating under the laws of another jurisdiction, and within 15 days following any changes made to its register of ISCs. These amendments came into force on January 22, 2024. To assist federal corporations in drawing up a list of their ISCs, the Director tasked with administering the Canada Business Corporations Act posted a letter template on its website that federal corporations may send to their shareholders, their ISCs and to anyone who could reasonably be expected to have the relevant knowledge to identify their ISCs.2 The purpose of that letter is to help the corporation in identifying its ISCs. It is mandatory for shareholders to respond to the corporation’s request and failure to respond may result in significant fines and even imprisonment. Québec – Search a natural person by last name and first name Since April 1, 2023, most private businesses that required to register in Québec must report to the Registre des entreprises du Québec the names, residential address and date of birth of each of their ultimate beneficiaries, and the type of control exercised by them or the percentage of shares or units of the corporation owned by these ultimate beneficiaries or of which they are the beneficiaries. In general, an ultimate beneficiary of a business is a natural person who owns or is the beneficiary of 25% or more of the voting rights for that business, who owns or is the beneficiary of 25% or more of its fair market value or who has an influence that could result in de facto control over the business. The information reported on ultimate beneficiaries is accessible to the public and free for anyone consulting the REQ. The requirement to report ultimate beneficiaries applies to almost all businesses registered in Québec and is not limited to businesses incorporated under Québec law nor to business corporations. Therefore, any foreign legal person that is required to register in Québec must report its ultimate beneficiaries. The same applies to partnerships, such as general partnerships and limited partnerships, and some trusts. As of July 31, 2024, it will be possible to search the REQ using the last name and first name of a natural person. Accordingly, from that date, it will be possible to obtain the list of all businesses registered in the REQ of which a person is a director, officer, one of the three shareholders controlling the greatest number of votes and an ultimate beneficiary by searching by his or her last name and first name. The last and first name of the natural person and his or her residential address will appear in the search results. However, if a work address was reported to the register for that person, only the work address will appear. Federally incorporated businesses registered with the REQ A federally incorporated business that does business in Québec must maintain a register of its ISCs under the Canada Business Corporations Act and report information on its ultimate beneficiaries to the REQ. Although most ISCs of a federally incorporated business will also be the ultimate beneficiaries under the Act respecting the legal publicity of enterprises and vice versa, the two acts do not define an ISC and ultimate beneficiary in exactly the same way. A person may be an ultimate beneficiary under the Act respecting the legal publicity of enterprises without necessarily being an ISC under the Canada Business Corporations Act (and vice versa). Consequently, the content of the register of ISCs for a federally incorporated business — and thus information it will have reported to the Director in charge of the Canada Business Corporations Act — may not be identical to the ultimate beneficiary information it will have reported to the REQ. However, federally incorporated businesses that do not do business in Québec are not required to register under the Act respecting the legal publicity of enterprises. All other provinces, except for Alberta,3 have now incorporated provisions into their business corporations legislation requiring corporations registered under the laws of that province to maintain a register of individuals with significant control. As a result, these provisions only apply to business corporations incorporated under the law of the province and, therefore, do not apply to business corporations incorporated under the Canada Business Corporations Act or under the business corporation act of another province. Corporate Transparency Act in the United States coming into force – Impact on Canadian businesses On January 1, 2021, the Corporate Transparency Act, part of the U.S. Anti-Money Laundering Act of 2020, came into force. Just like the amendments made to the Canada Business Corporations Act and to the Act respecting the legal publicity of enterprises (Québec), the aim of the Corporate Transparency Act is to prevent and fight against money laundering, terrorism financing, corruption, tax fraud and other illicit activities, among others, by increasing the transparency of private companies incorporated in or registered in the United States. On January 1, 2024, the reporting requirements in the Corporate Transparency Act to identify “beneficial owners,” which are basically equivalent to ISCs under the Canada Business Corporations Act and “ultimate beneficiaries” under the Act respecting the legal publicity of enterprises (Québec), came into force. Businesses covered by the act and incorporated before January 1, 2024, have until January 1, 2025, to file their first Beneficial Ownership Information Report. Businesses incorporated after that date must file their first report no later than 30 days after the date they first register with a U.S. government authority. Reports on beneficial ownership of businesses are filed with the Financial Crimes Enforcement Network, an agency of the U.S. Department of the Treasury, better known by its acronym FinCEN. Reporting businesses must submit an updated report within 30 days of any change in information previously reported to FinCEN. Reports on beneficial ownership are not accessible to the public and are not subject to the U.S. Freedom of Information Act. The information contained in these reports will be, however, generally accessible to United States law enforcement agencies and United States federal tax authorities. Foreign law enforcement authorities may also be granted access in certain circumstances through United States federal intermediary agencies. Provided they have received the consent of their clients, financial institutions will also have access to the information to facilitate compliance with customer due diligence requirements under applicable law. All corporations incorporated in the U.S. must file beneficial ownership information reports unless they are legally exempt. Exempt businesses include: most businesses whose securities are registered under the Securities Act of 1934 large businesses, i.e., businesses with more than 20 full-time employees in the U.S., having a facility in the U.S., and having reported over U.S.$5 million in gross revenues or sales in the previous reporting period. It follows that in most cases, unless it is exempted, usually because it will qualify as a “large business” due to the number of its employees and its revenues, a  U.S. subsidiary of a Canadian corporation will have to comply with the act and report the identity of its Canadian beneficial owners. A reporting business must, among other things, report the full name, the date of birth and the address of all its beneficial owners. The U.S. subsidiary of a Canadian corporation must also submit a copy of the Canadian passport (or from the country of citizenship of the person in question) for each of its beneficial owners. A person is deemed a beneficial owner of a corporation if he or she is a natural person who, directly or indirectly, exercises substantial control over the reporting corporation, or owns or controls at least 25% of the corporation’s ownership interests (shares, units or others), in voting rights or in value. The definition of “substantial control” for the purposes of the Corporate Transparency Act is much broader and more specific than what is found in equivalent Canadian legislation. An individual has “substantial control” over a reporting corporation under the Corporate Transparency Act if such individual (i) is a senior officer in the corporation, (ii) has authority to appoint or remove certain officers or a majority of the directors (or similar body) of the reporting corporation, (iii) is an important decision maker of the reporting corporation or (iv) has any other form of substantial control over the reporting corporation. The Corporate Transparency Act imposes serious penalties on individuals who willfully fail to file or update beneficial ownership information or who willfully file false information. These penalties include civil penalties of up to U.S.$500 per day of violation, fines of up to U.S.$10,000, as well as potential; imprisonment for a period up to two years. Note that the act contains a presumption against senior officers in respect to reported information that is false, incomplete or not up to date. These officers could therefore be held personally held liable for civil penalties and fines and could be subject to imprisonment if the reported information proves to be false or incomplete or not up to date. Senior officers must therefore be especially vigilant and ensure that the reporting requirements under the Corporate Transparency Act are met. The Director tasked with administering the Canada Business Corporations Act has posted a template for the register of ISCs on its website. This register can be found at: This template can be found at: This template can be found at: The three territories, Yukon, Northwest Territories and Nunavut, still have yet to amend their legislation to require a register of individuals with significant control to be maintained for business corporations incorporated under the business corporation acts of those territories.

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  3. Complaint processing: New framework to come for financial institutions and financial intermediaries

    Last September, the AMF published its draft Regulation respecting complaint processing and dispute resolution in the financial sector (the “Draft Regulation”). The consultation period for it ended on December 8, 2021. The AMF is currently reviewing the many comments it received. The Draft Regulation1 aims to harmonize and improve complaint processing in the financial sector by providing for new mechanisms to ensure prompt and efficient complaint processing, among other things. In the insurance industry, only firms and insurers are currently required to adopt and apply a complaint processing and dispute resolution policy. The Draft Regulation will make these obligations apply to independent partnerships and representatives. It also introduces new requirements and restrictions as well as monetary penalties for not including mandatory content in communications to a complainant, for example. Here are some of the Draft Regulation’s new provisions: Broadening of the definition of “complaint” to: Any dissatisfaction or reproach; That cannot be remedied immediately and for which a final response is expected; In respect of a service or product offered by a financial institution or financial intermediary; That is communicated by a person who is a member of the clientele of the institution or intermediary. The Draft Regulation does not contain a requirement that a complaint must be made in writing.2 It does make it mandatory for financial institutions and financial intermediaries to implement a complaint drafting assistance service.3 It also requires that a note be left in each record to indicate whether a complainant requested this service. Prohibition on the use of the term “ombudsman” in any representation or communication intended for the public to refer to the complaint process or to the persons assigned to its implementation.4 Specific requirements as concerns the mandatory content of a complaint processing policy, an acknowledgment of receipt and final response to a complainant, a complaint record and a complaints register.   For each complaint received, the complaint record must include the following information: The complaint Whether the complainant requested the complaint drafting assistance service The complainant’s initial communication A copy of the acknowledgment of receipt sent to the complainant Any document or information used in analyzing the complaint, including any communication with the complainant A copy of the final response provided to the complainant New time limits: Within 10 days of receiving a complaint, the insurer must notify the complainant in writing that they must also file the complaint with any other financial institution, financial intermediary or credit assessment agent involved, and the insurer must provide the complainant with their contact information.5 The complainant must be given 20 days to assess and respond to an offer to resolve the complaint, with sufficient time for the complainant to seek advice for the purpose of making an informed decision.6 If the complainant accepts the offer, the insurer has 30 days to respond.7 Financial institutions and financial intermediaries have a strict 60-day time limit to provide the complainant with a final response.8 There is a new 15-day time limit to send the complaint record to the AMF.9 There is a streamlined process for complaints that are resolved within 10 days of being recorded in the complaints register: The final response serves as an acknowledgment of receipt and must contain the following information: The complaint record identification code The date on which the complaint was received by the insurer or insurance representative The name and contact information of the employee responsible for processing the complaint referred to in section 7 of the Draft Regulation or in the Sound Commercial Practices Guideline A summary of the complaint received The conclusion of the analysis, including reasons, and the outcome of the complaint A reference to the complainant’s right to have the complaint record examined by the AMF The signature of the complaints officer A statement to the effect that the complainant has accepted the offer to resolve the complaint New monetary administrative penalties The Draft Regulation also provides for monetary administrative penalties ranging from $1,000 to $5,000 for failure to comply with certain requirements and prohibitions of the Draft Regulation. For example, the following will be subject to a monetary administrative penalty of $5,000: Attaching a condition to an offer to prevent the complainant from fully exercising their rights. Using the term “ombudsman” or any other similar title in any representation or communication intended for the public to refer to the complaint process or the persons assigned to its implementation to suggest that such persons are not acting on behalf of the financial institution or financial intermediary. In the latter case, a monetary administrative penalty may be imposed even where no complaint is involved, because the prohibition covers “any representation or communication intended for the public.” Insurers and financial intermediaries should review their communications as soon as possible, and especially the summary of their complaint processing policy appearing on their website. It concerns all entities regulated by the AMF, but the bulletin more specifically addresses financial institutions and financial intermediaries in the insurance industry. As currently indicated on the AMF’s website. Draft Regulation, s. 11. Id., s. 26, para. 2. Id., s. 15. Id., s. 13. Id. Id., s. 12, para. 4. Id., s. 25.

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  4. Reimbursement clause for extrajudicial fees by a surety: valid or invalid?

    On April 6, 2021, the Court of Appeal, per Justice Mark Schrager, rendered an interesting decision in Bank of Nova Scotia c. Davidovit (2021 QCCA 551). The Bank of Nova Scotia (the “Bank”) had granted a commercial loan to a company, of which Aaron Davidovit (“Davidovit” or the “Surety”) was the principal, for the operation of a gym. Under a clause contained in the personal guarantee (suretyship) signed by Davidovit, he was to reimburse all costs and expenses incurred by the Bank to collect amounts owed to it by the principal debtor or Surety, including, but not limited to, legal fees on a solicitor/client basis (the “Clause”). The Bank was claiming $31,145.22 in extrajudicial fees and legal costs from Davidovit, while the amount claimed from the Surety in capital and interest amounted to $35,004.49. The trial judgment The trial judge, the Honourable Frédéric Bachand, concluded that the contract of suretyship was a contract of adhesion within the meaning of article 1379 of the Civil Code of Québec (the “C.C.Q.”) and agreed with Davidovit’s arguments that the Clause was invalid because it was excessively and unreasonably detrimental to the adhering party and contrary to the requirements of good faith, in violation of article 1437 C.C.Q. Justice Bachand emphasizes two main problems with the Clause: (i) it was unilateral, thus giving a disproportionate advantage to the Bank while the Surety did not benefit from such an advantage; (ii) it could restrict access to justice in that it could deter the Surety (who was already vulnerable vis-a-vis his opponent) from contesting the Bank’s claim, the Clause thus doing little to promote the rule of law.  Appeal decision The Court of Appeal reversed Justice Bachand’s judgment on the invalidity of the Clause, but confirmed Davidovit’s personal condemnation as Surety. Firstly, the Court of Appeal pointed out that a unilateral clause is not in itself abusive. All of a borrower’s obligations under a loan agreement or a surety’s obligations under a contract of suretyship are unilateral, but that this fact alone cannot determine whether a clause is abusive. The logic applied by the trial judge would lead to the conclusion that the repayment of a balance due at the end of a loan is abusive, because it is unilateral. Secondly, the fact that one party finds itself at a disadvantage is also not reason to conclude that a clause is abusive. Section 23 of the Quebec Charter of Human Rights and Freedoms, raised by Justice Bachand in dealing with equality of arms in a judicial process, did not apply in this case, despite the fact that a bank may appear to have more means to initiate legal proceedings than a surety does. Thirdly, just because the law provides for a monetary sanction, such as payment of legal fees or other damages (e.g. in application of article 54 or 342 of the Code of Civil Procedure) for an abusive situation (e.g. a frivolous defence of a surety), this does not mean that contracting parties cannot agree to provide for such payment. The judges of the Court of Appeal held that, on the contrary, a clause for the reimbursement of extrajudicial costs and fees allows for legitimate claims to be pursued before the courts against principal debtors and sureties who refuse to pay. Justice Schrager also took the liberty of commenting on the trial judge’s conclusion regarding the qualification of the contract of suretyship as a contract of adhesion. However, considering that neither party questioned this qualification, the Court of Appeal did not formally rule on this aspect, but pointed out that the mere fact that the terms of a contract appear on a preprinted form does not necessarily mean that it constitutes a contract of adhesion, although a preprinted form may be an indication that the terms imposed are not negotiable. The reasonableness of the amount claimed under the Clause Although valid, the Clause must still be subject to control by the courts to ensure that the amount claimed for extrajudicial costs and fees is not abusive and is claimed in good faith. The Court found that the reimbursement of more than $31,000 in legal fees where the principal claim amounts to just over $35,000 is unreasonable and disproportionate. Given 1) the complexity of the case, 2) the amount of the claim against the Surety, 3) that the burden of demonstrating the reasonableness of the costs was on the Bank, 4) that claims for reimbursement of extrajudicial costs and fees must be exercised reasonably and in good faith (in accordance with articles, 6, 7 and 1375 C.C.Q.), the Court of Appeal reduced the claim and arbitrarily established it at $12,000. Conclusion Clauses for the reimbursement of extrajudicial fees have a certain acceptability in society, particularly in the commercial sphere. Even in a contract of adhesion, they are not necessarily abusive and invalid, but their application is subject to control by the courts so that they are exercised reasonably and in good faith.

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  1. Finance and M&A: Lexpert Recognizes Four Partners as Leading Lawyers in Canada

    On April 17, 2024, Lexpert recognized the expertise of four of our partners in its 2024 Lexpert Special Edition: Finance and M&A. Josianne Beaudry, Étienne Brassard, Jean-Sébastien Desroches and Édith Jacques now rank among Canada's leaders in the financial sector and in M&A. Josianne Beaudry’s practice is primarily focused on securities law, investment funds and mining law. She also advises financial sector participants on the application of regulations relating to securities and corporate governance. Josianne assists clients carrying out public and private financings, corporate reorganizations, as well as mergers and acquisitions. She also helps publicly traded companies maintain their reporting issuer status. Étienne Brassard practices business law, more specifically corporate financing, mergers and acquisitions and corporate law. In his practice, he advises local and international businesses in relation to all forms of private financing, from traditional or convertible debt to equity investments. He has thus developed extensive expertise in setting up complex financing structures, in both operational and transactional contexts. Jean-Sébastien Desroches practices business law and focuses primarily on mergers and acquisitions, infrastructure, renewable energy and project development as well as strategic partnerships. He has had the opportunity to steer several major transactions, complex legal operations, cross-border transactions, reorganizations, and investments. Édith Jacques is a partner in Montréal's Business law group. She specializes in mergers and acquisitions, commercial law, as well as international law and acts as business and strategic consultant to mid- and large-size companies.

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  2. Lavery involved in the construction of the new Île-aux-Tourtes bridge

    Following a qualification process, the Ministère des Transports et de la Mobilité durable du Québec (MTMD) issued a call for tenders in 2022 for the construction of the new Île-aux-Tourtes bridge pursuant to the project delivery method known as design-build-finance (DBF). Since this was a DBF, the financing of this project had to be included in the proposals made by the selected candidates. Lavery represented the successful consortium made up of Dragados Canada Inc., Roxboro Excavation Inc. and Construction Demathieu & Bard Inc. Our role required expertise in the following areas: (a)   Governance and corporate law  (b)  Project financing (banking and securities)  (c)   Public procurement (d)  Construction law (e)   Commercial agreements (f)    Taxation  Lavery represented the consortium from the call for proposals to the financial close, including the drafting phase leading up to the awarding of the contract to the consortium. The financing was the most complex part of this transaction. Under the hybrid approach retained for that project, a major credit facility to be granted by a bank syndicate had to be set up, as well the private placement of two tranches of bonds. This involved adjusting the rights and obligations of creditors on both sides within a sophisticated intercreditor agreement. The financing also required parent company guarantees, including from French and Spanish corporations, which required us to find common ground to accommodate the typical requirements of a North American financing and the specific corporate and commercial features applicable in France and Spain. To meet this challenge, we put together a multidisciplinary team, divided up the work in accordance with our professionals’ diverse expertises, and dedicated a team member exclusively to interactions with the MTMD, its lawyers and the issuers of performance bonds typical for this kind of projects. Sound project management practices were essential to the success of this team effort. It is a privilege for Lavery to have participated in this essential project allowing the people of Quebec to obtain a new bridge linking the regions of Montérégie and Montréal. The Lavery team was led by Josianne Beaudry, Nicolas Gagnon, Édith Jacques, David Tournier and André Vautour, and included Véronik Bonneville-Pesant, Katerina Kostopoulos, Jean-François Maurice, Joseph Gualdieri, Siddhartha Borissov-Beausoleil, Alexandre Turcotte, Luc Pariseau, Charles Hugo Gagné, Mickaël Pageau, Jean-Vincent Prévost-Bérubé and Yohann Lévy.

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  3. Lavery helps to establish an affordable housing fund worth $151 million

    On May 4, 2021, the Government of Canada, the Government of Québec, the Fonds de solidarité FTQ and Ivanhoé Cambridge announced the formation of a consortium of investors that will make $120 million available to co-ops, non-profit organizations (NPOs) and housing agencies for the construction or renovation of affordable housing. The Lucie and André Chagnon Foundation, Fondaction, the Mirella and Lino Saputo Foundation and the J. Armand Bombardier Foundation collectively added $31 million to the sum. The strategic partnership will be managed by the Association des groupes de ressources techniques du Québec (AGRTQ) starting in the fall of 2021.  Lavery Lawyers advised and assisted the project partners with the drafting and implementation of the legal structure and documentation necessary to create and start up the consortium of investors. Lavery is pleased to have put its expertise and professional and financial resources to work for the project, and to thereby contribute to an initiative that benefits both families and the economic vitality of Quebec. The Lavery team, led by Brigitte Gauthier, was composed of Jean-Sébastien Desroches, Jean-François Maurice, François Renaud, Bernard Trang and André Vautour.

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