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Summary
Part 17 permits the use of electronic documents for communication between
the corporation and its members. It does not apply to material that must
be provided to the Director. A corporation may provide information electronically
if the recipient has consented in the prescribed form (in writing) and
other matters are complied with. Another condition on the use of such
documents is that the electronic form must be usable by the recipient
and retrievable for future reference. (Sections 263-266)
Statutory declarations or affidavits may be created as electronic documents,
provided they meet the criteria established in this Part. Matters pertaining
to the use of electronic signatures are addressed. (Sections 267-268)
The use of electronic documents has become very common and it is appropriate
that they should be addressed by a modern corporate law instrument. One
area that has caused concern regarding electronic documents is the need
for secure signatures. It is for that reason that this matter is specifically
addressed by this Part.
Briefing Book
An Act Respecting Not-for-Profit Corporations and
Other Corporations Without Share Capital
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Bill Clause No. 262
Section No. 262
Topic: Documents in Electronic or Other Form
Proposed Wording
262. The following definitions apply in this Part.
"electronic document" means, except in section 267, any form
of representation of information or of concepts fixed in any medium in
or by electronic, optical or other similar means and that can be read
or perceived by a person or by any means.
"information system" means a system used to generate, send,
receive, store or otherwise process an electronic document.
Rationale
Section 262 provides the definition of two terms, "electronic document" and "information
system", that are used in Part 17.
The definition of "electronic document" is central to this
Part since it encompasses all of the different types of documents, notices
and information referred to throughout the Act. Mirroring the policy
underlying Part 17, the definition of "electronic document" is
intended to be enabling, technology-neutral, and expansive. It is enabling
and flexible in that the parties will be able to choose the technology
that best suits their purpose. It is technology-neutral in that it does
not impose particular technologies on the parties subject to this Act.
It is expansive since it is intended to encompass future technological
developments. The use of the term "electronic" is not intended
to be read in a literal manner and is not intended to exclude optical,
digital and other technologies.
One of the conditions for an informed consent is that the recipient
must designate an "information system" for receiving information
by electronic means. In practice, this means that the party indicates
the electronic address at which they will access this information. This
provision clarifies that this term, "information system", encompasses
all types of technologies that may be used to create and deliver information.
Present Law
None.
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Bill Clause No. 263
Section No. 263
Topic: Documents in Electronic or Other Form
Proposed Wording
263. This Part does not apply to information, including information
in a notice or other document, sent to or issued by the Director under
this Act or prescribed for the purposes of this section.
Rationale
Section 263 states that Part 17 does not apply to any information sent
to or issued by the Director
Corporations Canada utilises specific technologies. The general use
of electronic documents may expose Corporations Canada to a variety of
formats and mediums that may not be compatible with its technologies
which they may not have the capacity to handle. As such, this provision
clarifies that Part 17 will not apply to any information sent to or issued
by the Director Appointed Under the Act. The Director has the authority
to establish the requirements for electronic communication with him.
Present Law
None.
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Bill Clause No. 264
Section No. 264
Topic: Documents in Electronic or Other Form
Proposed Wording
264. (1) Nothing in this Act or the regulations requires a person to
create or provide an electronic document.
(2) Despite anything in this Part, a requirement under this Act or the
regulations to provide a person with information, including information
in a notice or other document, is not satisfied by the provision of an
electronic document unless
(a) the addressee has consented, in the manner prescribed,
and has designated an information system for the receipt of the
electronic document; and
(b) either the electronic document is provided to the designated information
system or any other prescribed action is taken.
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(3) An addressee may revoke the consent referred to in paragraph (2)(a)
in the manner prescribed.
Rationale
This section ensures that no individual is compelled to use electronic documents
and that they can continue to operate in the paper-based environment.
The provisions of Part 17 permit parties to communicate with each other
through efficient and economical means available to them. However, it
is structured such that paper-based and technology-based regimes will
co-exist. As such, subsection 264(1) provides that no individual will
be compelled to utilise electronic documents.
Subsection 264(2) deals with consent with respect to the use of electronic
communication devices. It states that no information may be provided
via electronic means of communication unless the consent of the recipient
is obtained. This is a significant safeguard designed to ensure that
the use of any technologies is not imposed on the recipients of the information.
Subsection 262(4) provides that consent to communicate through electronic
means can be revoked at any time by the recipient of the information.
Present Law
None.
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Bill Clause No. 265
Section No. 265
Topic: Documents in Electronic or Other Form
Proposed Wording
265. A requirement under this Act or the regulations that information,
including information in a notice or other document, be created or provided
is satisfied by the creation or provision of an electronic document if
(a) the by-laws or the articles of the corporation
do not otherwise provide; and
(b) the regulations, if any, have been complied with. |
Rationale
This section is a general provision that enables parties to create and provide
information through technological means. Provided that their by-laws or articles
do not impose limitations, corporations will be able to use the technologies
that they choose. The consent requirement in section 264 will ensure that
this freedom to use any technologies is not imposed on the recipients of
the information.
Present Law
None.
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Bill Clause No. 266
Section No. 266
Topic: Documents in Electronic or Other Form
Proposed Wording
266. (1) A requirement under this Act or the regulations that information,
including information in a notice or other document, be created in writing
is satisfied by the creation of an electronic document if, in addition
to the conditions in section 265,
(a) the information in the electronic document is accessible
so as to be usable for subsequent reference; and
(b) the regulations pertaining to this subsection, if any, have been
complied with. |
(2) A requirement under this Act or the regulations that information,
including information in a notice or other document, be provided in writing
is satisfied by the provision of an electronic document if, in addition
to the conditions set out in section 265,
(a) the information in the electronic document is accessible
by the addressee and capable of being retained by the addressee,
so as to be usable for subsequent reference; and
(b) the regulations pertaining to this subsection, if any, have been
complied with. |
(3) A requirement under this Act or the regulations for one or more
copies of a document to be provided to a single addressee at the same
time is satisfied by the provision of a single version of an electronic
document.
(4) A requirement under this Act or the regulations to provide a document
by registered mail cannot be satisfied by means of an electronic document
unless the regulations so prescribe and, in such case, only in accordance
with the prescribed requirements.
Rationale
This section states that electronic documents are the functional equivalent
of their written counterparts. The writing requirement may be satisfied by
the provision of electronic documents so long as the information in the electronic
document is accessible and can be retained for subsequent retrieval.
Subsection 266(1) deals with documents under the Act or the regulations
that are explicitly required to be in writing. The policy underlying
this requirement is to provide for a durable record of the information.
This policy is achieved in the technological environment by requiring
that an electronic document be accessible for future use.
Subsection 266(2) deals with documents that are required to be provided
to the intended recipient in written form. The policy underlying such
a requirement is that the recipient receives the document in a manner
that gives him or her some control over the document. This is achieved
in the technological environment by requiring that the electronic document
in question be not only accessible for future use but also that the recipient
be capable of retaining it.
Subsection 266(3) deals with provisions of the Act or regulations where
multiple copies are required to be provided. In a paper-based environment,
this would imply that the person would have to provide the required number
of copies. However, in the technological environment, an electronic document
may easily be copied a number of times or provided to a number of recipients
simultaneously. Therefore, sending one copy of an electronic document
that can be copied numerous times will achieve the same result.
Subsection 266(4) deals with provisions of the Act or the regulations
which require that certain information be sent by registered mail. In
the paper-based environment this is accomplished through the postal or
other mail delivery system. However, in the technological environment,
there is no universally-accepted system for sending registered mail.
Therefore, the regulations will stipulate the requirements that must
be fulfilled in order to have registered mail effectively delivered electronically.
Present Law
None.
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Bill Clause No. 267
Section No. 267
Topic: Documents in Electronic or Other Form
Proposed Wording
267. (1) A statutory declaration or an affidavit required
under this Act or the regulations may be created or provided in an electronic
document if
(a) the person who makes the statutory declaration
or affidavit signs it with his or her secure electronic signature;
(b) the authorized person before whom the statutory declaration or
affidavit is made signs it with his or her secure electronic signature; and
(c) the requirements of sections 264 to 266 are complied with. |
(2) For the purposes of this section, "electronic document" and "secure
electronic signature" have the same meaning as in subsection 31(1)
of the Personal Information Protection and Electronic Documents Act.
(3) For the purpose of complying with paragraph (1)(c), the
references to an "electronic document" in sections 264 to 266
are to be read as references to an electronic document as defined in
subsection 31(1) of the Personal Information Protection and Electronic
Documents Act.
Rationale
This section states that statutory declarations and affidavits require secure
signatures within the meaning of the Personal Information Protection
and Electronic Documents Act.
In a number of sections of the Act parties are required to provide an
affidavit or a statutory declaration. In the paper-based regime, these
are governed by the rules enacted in the Canada Evidence Act.
The Personal Information Protection and Electronic Documents Act (PIPEDA)
provides a detailed regime for the electronic creation of these types
of documents. Moreover, the regime enacted in PIPEDA is applicable to
the Canada Evidence Act, which governs the admissibility of
these types of documents in court proceedings. For these reasons, the
regime created in PIPEDA will be applicable to affidavits and statutory
declarations required under this Act.
Present Law
None.
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Bill Clause No. 268
Section No. 268
Topic: Documents in Electronic or Other Form
Proposed Wording
268. Except with respect to a statutory declaration or an affidavit,
a requirement under this Act or the regulations for a signature or for
a document to be executed is satisfied in relation to an electronic document
if the prescribed requirements, if any, pertaining to this section are
met and if the signature results from the application by a person of
a technology or a process that permits the following to be proven:
(a) the signature resulting from the use by the person
of the technology or process is unique to the person;
(b) the technology or process is used by the person to incorporate,
attach or associate the person's signature to the electronic document; and
(c) the technology or process can be used to identify its user.
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Rationale
A number of provisions of this Act require that documents be signed or executed.
This section effectively allows for the use of technological means to communicate
information by permitting signatures through these means. Specifically, this
section stipulates that an electronic signature is considered to be the functional
equivalent of a hand-written signature where it satisfies three elements:
that the signature is unique; that the signature can be associated with the
electronic document; and that the person using the technology can be identified.
Present Law
None.
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Bill Clause No. 269
Section No. 269
Topic: Documents in Electronic or Other Form
Proposed Wording
269. On application of the corporation, the Director may, on any terms
that the Director thinks fit, relieve – including retroactively – a
corporation from complying with any requirements of this Part if the
Director reasonably believes that the members will not be prejudiced
by the dispensation.
Rationale
This section provides that a corporation can apply to the Director Appointed
Under the Act to waive one or more of the requirements of this Part. The
Director can grant a waiver, including retroactively, on any terms the he/she
thinks fit, so long as the Director reasonably believes that members of the
corporation are not prejudiced by the waiver. Providing the Director with
the ability to waive the requirements of this Part provides flexibility with
respect to electronic communication within corporations.
Present Law
None.
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Corporate and Insolvency Law Policy
