On June 19, 2025, Dentons Canada's Securities and Corporate Finance group hosted a webinar regarding current issues in public company disclosures. An overview of the key themes and considerations discussed during the webinar is provided in this insight.
Overview of the current environment
Canadian public companies are operating in a period marked by heightened economic uncertainty, evolving trade policies—including the imposition and fluctuation of tariffs—and rapidly changing disclosure expectations. This environment is further complicated by diverging regulatory and policy approaches between Canada and the United States, particularly in emerging areas such as climate-related disclosure and diversity, equity and inclusion (DEI). The regulatory landscape is dynamic, with both incremental and more significant changes under consideration, requiring issuers to remain agile and proactive in their disclosure practices.
Continuous disclosure: the imperative of timely and tailored risk reporting
A central theme is the critical importance of updating risk factors in public company disclosures to reflect material developments, such as the impact of tariffs and trade disruptions. Continuous disclosure obligations—encompassing financial statements, management's discussion and analysis (MD&A), annual information forms (AIFs) and material change reports—are designed to ensure that investors have access to current, relevant information for informed decision-making.
Risk factor disclosure must be tailored to the issuer's specific industry and business context. For example, the impact of tariffs may manifest as increased costs, supply chain disruptions or decreased demand, with varying effects across sectors such as retail, mining and transportation. Companies are expected to periodically review and update their risk disclosures, not only to meet regulatory requirements but also to mitigate the risk of enforcement actions or securities class actions.
Forward-looking information and the challenge of uncertainty
The current climate of uncertainty—driven by geopolitical developments, trade tensions and economic volatility—has led some issuers to refrain from providing quarterly outlooks or forward-looking guidance. While regulatory requirements for disclosure remain unchanged, companies are increasingly cautious, often limiting their disclosures to historical performance and minimum regulatory standards. This approach is particularly prevalent in sectors most exposed to tariff-related risks, such as the automotive, airline and consumer goods industries.
Nevertheless, issuers are still expected to provide meaningful commentary on known trends and uncertainties in their MD&A, including the potential and actual impacts of tariffs. The guidance from regulators, particularly in the United States, emphasizes the need for reasonable assumptions, clear dating of projections, and explicit cautionary language regarding the limitations of forward-looking statements.
Divergence in climate-related disclosure and DEI : Canada vs. the United States
A significant point of divergence between Canada and the US is evident in the regulatory treatment of climate-related and DEI disclosures and objectives. In the US, there has been a marked shift towards deregulation, with the SEC effectively revoking its own climate-related disclosure rule and DEI initiatives encountering strong opposition from the Federal executive branch. In contrast, Canadian regulators, while pausing the development of new mandatory rules on climate, continue to recognize climate risk as a mainstream business issue and support the use of international standards such as those developed by the Canadian Sustainability Standards Board (CSSB) and the International Sustainability Standards Board (ISSB).
For DEI, Canadian public companies continue to face various mandatory disclosure requirements, while some US Federal regulatory bodies are actively discouraging or even penalizing DEI initiatives. This divergence creates complex dual compliance challenges for companies operating in both jurisdictions.
Best practices for dual jurisdictional compliance
For companies with significant operations or investor/stakeholder bases in both Canada and the US, a nuanced approach to disclosure is essential. In climate-related reporting, Canadian issuers are encouraged to assess material risks and, where appropriate, align their disclosures with CSSB and ISSB standards, balancing investor expectations with the risk of greenwashing. In the DEI context, companies should ensure compliance with Canadian mandatory requirements while carefully considering the scope and framing of their disclosures to avoid potential regulatory or stakeholder backlash in the US.
Recent trends indicate a move towards providing only the required DEI disclosures, with less emphasis on voluntary, expansive statements. Disclosures should be expressly tied to the company's specific business context and the relevance of diversity to its operations and strategy.
Regulatory responses and the path forward
Canadian securities regulators have responded to the current environment with a series of incremental reforms aimed at facilitating capital formation and streamlining disclosure requirements, particularly for new issuers and in the mining sector. However, these changes are largely technical and do not represent a wholesale shift in regulatory philosophy. The broader question remains whether more significant reforms will be forthcoming in response to ongoing economic and geopolitical challenges.
Conclusion: strategic disclosure in a complex environment
The evolving regulatory and economic landscape demands that Canadian public companies adopt a strategic, tailored and proactive approach to disclosure. This includes:
- Regularly updating risk factors to reflect material developments such as tariffs and supply chain disruptions;
- Exercising caution and clarity in forward-looking disclosures, with robust assumptions and clear limitations;
- Navigating the divergent regulatory regimes in Canada and the US, particularly in climate and DEI reporting, with a focus on compliance, stakeholder expectations and reputational risk; and
- Leveraging international standards where appropriate to enhance the credibility and comparability of sustainability disclosures.
Ultimately, the ability to provide transparent, relevant, and timely disclosure that is also sensitive to the relevant regulatory focuses will be a key differentiator for public companies seeking to maintain investor confidence and regulatory compliance in an era of uncertainty and change.
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