More than two decades ago, the folks at the Ontario Securities Commission had an idea for a new form of disclosure: Any time a company had to make a correction in its securities filings, its name would go on the regulator’s website, with an explanation of the problem. The OSC hoped its Refilings and Errors List would be replicated across the country, with other provincial securities regulators producing their own.
Almost 22 years later, none has followed the OSC’s lead. That’s created a bifurcated system: Companies that goof in Quebec, Alberta or British Columbia, as examples, are slipping under the radar; companies subject to the purview of the OSC, however, are named and shamed.
In short, there’s no national refilings and errors list. So I’ve decided to make one.
After some coaxing and pleading – and one open-records act request – I have now received some level of co-operation from every provincial securities commission large enough to perform reviews of the financial statements of public companies they regulate. (A number of small provinces don’t do that – there simply aren’t enough public companies there to justify having staff reading filings.)
The result is a list, posted on The Globe and Mail’s website, of nearly 500 companies that have had to correct more than 800 filings from the beginning of 2020 to the end of 2023. Of those, 130 are on the OSC’s previously published list. The vast majority are previously undisclosed. (If you’re reading our print edition, see the list at tgam.ca/refilings.)
Let’s be clear what this is not: In most cases, these companies have not formally restated their financials, which is a very serious matter; instead, there are plenty clarifying existing disclosures or fixing omissions. There are many mining companies on the list that failed to file a technical report on one of their projects, for example.
And while some had their errors caught by folks at the provincial commissions, many companies caught their errors themselves and decided to refile.
The bottom line, however, is that the first take wasn’t good enough.
When it introduced its list in 2002, the OSC said companies that amend documents or retroactively implement an accounting change to fix an error are acknowledging they haven’t met Ontario Securities Act regulations. “Accordingly, it is our view that these are significant events that should be generally disclosed to the market.” (The OSC declined to provide anyone for an interview for this column; its communications staff sent statements drawn from previously published OSC documents.)
The errors can sometimes lead to more serious matters. The British Columbia Securities Commission (BCSC), in responding to my queries, pointed out public enforcement actions it took in 2021 and 2022 that came out of its reviews of company filings. The BCSC also has a pending action against a mining company that it alleges filed a technical report with the signature of someone who did not review, sign or consent to the filing of that report.
Most of the companies on this new nationwide list are small, but not all. Several companies in the S&P/TSX 60 index refiled for various reasons. One overstated the assets of subsidiaries guaranteeing a debt offering. Another left out disclosure in five of its certifications of financial statements. And yet another left gross profit out of a table. Turquoise Hill Resources Ltd., acquired by Rio Tinto Group in 2022, managed to do three refilings in a little over a month in late 2021 because it omitted auditor’s letters and details in a technical report.
You can dismiss these as unimportant, excusable administrative errors. Or you can consider them sloppy and wonder why some companies don’t have a better handle on the finer details. But unless you’re religiously checking companies’ SEDAR+ filings each day, you might miss them, absent a regulator’s list.
There are also companies that have refiled more than once. Cannabis company HEXO Corp., acquired by competitor Tilray Brands Inc. in 2023, had to make three sets of revisions in the first four months of 2020 – and the revised disclosure showed the OSC found the company’s management discussion and analysis severely wanting.
A Quebec company called D-BOX Technologies Inc. revised documents five times from 2020 to 2023. The issues included a filed management discussion and analysis that was not in final form, clerical errors in a table in an annual report for operating results and a reclassification of an expense that, once fixed, reduced the company’s gross margin. (Josh Chandler, who became the company’s chief financial officer earlier this year, declined to comment.)
The story of The Globe’s brand-new national refilings and errors list wouldn’t be complete without the tale of how it came together.
Some time ago, I e-mailed the communications staffs at all the provincial securities regulators. The only provinces that maintain a corporate finance division, other than Ontario, are Quebec, British Columbia, Alberta, Manitoba, Saskatchewan, Nova Scotia and New Brunswick. Companies in the smaller provinces select a principal regulator based on a number of factors, including the location of the stock exchange.
Citing the Ontario list as an example, I asked for the names of companies that had made corrective disclosure to their filings since Jan. 1, 2020. The universal response: We do not maintain such a list.
I had a rebuttal, however: The Canadian Securities Administrators, the umbrella group for the provincial regulators, puts out a semi-annual report that quantifies how many financial statement reviews the provinces do, in the aggregate, and how many of those reviews result in a refiling. If you don’t maintain a list, I replied, how do you give the CSA any of those numbers? Shouldn’t you know the names?
What happened next is a triumph for open records in this country. With their Secret Canada project, my colleagues documented many cases of aggressive and obstinate non-compliance with the laws that were written to give Canadians access to public documents. The attitude of far too many public servants – if they can be called that – is that the average Canadian has no right to know.
Instead of taking this tack, the provincial regulators set to work. British Columbia responded quickly with a lengthy and thorough list. Other provinces followed, some faster than others, some with more robust information. Only Quebec required a formal records request, but it responded in a little over a month with a thorough list. (A follow-up request for additional information took just 20 days.)
If you peruse the database, you’ll see which provinces, aside from Ontario, provided the best data. Some provinces could only narrow down the dates of the refilings to a month or a fiscal year. Alberta was unable to provide any dates at all, or any reasons for refilings, for the 90 companies on its list.
The Alberta Securities Commission “does not track the details of the errors identified and as a result we are unable to provide dates or reasons for refilings to accompany the names on the list,” spokesperson Tanja McMorris said. She recommended investors and others interested in refilings search for amended or restated documents in the new SEDAR+ database maintained by the provincial regulators.
Other provinces had very little to report. Manitoba Securities Commission spokesperson Ainsley Cunningham said no issuers in the province had corrected their disclosure in the four years from 2020 to 2023. “Refiling of continuous disclosure has not been an issue in Manitoba,” she said.
New Brunswick had one refiling. Saskatchewan had two companies, one of which had to refile twice. Nova Scotia had six.
When you learn how few public companies these provinces regulate, it makes more sense:
- The Nova Scotia Securities Commission is the primary regulator for 34 public companies, and four of its 19 employees work on continuous-disclosure reviews.
- The Financial and Consumer Affairs Authority of Saskatchewan oversees 31 companies, including two investment funds, that submit filings; four of its 21 securities division employees review them.
- New Brunswick monitors seven active public companies, reviewing the filings of one or two per year – meaning they can review 100 per cent of companies on a four- to five-year cycle.
- Manitoba is the principal regulator for 42 companies.
By contrast, the BCSC has 287 regular and temporary full- and part-time staff, including the equivalent of 10 full-time corporate disclosure staff, plus three more who work for a dedicated mining team. The BCSC is the principal regulator for more than 2,000 companies, representing more than 45 per cent of all the companies listed on Canadian exchanges.
After receiving all the lists, I asked all the commissions, quite simply: Why do you not publish an errors and refilings list on your website, as Ontario does?
Many said they consider their current methods – which include no names, but top-level data on their disclosure reviews – satisfactory. Others, such as Alberta and Nova Scotia, note that the companies themselves file amended documents, available to all investors, and issue news releases to announce they’ve done so.
“This all provides transparency to the markets,” said David Harrison, a spokesperson for the Nova Scotia Securities Commission.
Mr. Harrison, however, added a comment that makes his province one of only two, along with Saskatchewan, that told The Globe they would consider publishing the information: “We will consider internally whether it would add to investor protection to duplicate this information on our website.”
Except it’s not a duplication. The provinces compile this information every year or so for public reports. Aside from Ontario, however, they’re not taking the simple and transparent step of placing it online, in one easy-to-find place. Instead, investors interested in learning which Canadian companies have erred with their public filings must go on a lengthy and onerous treasure hunt through a vast database.
The other provincial securities commissions should have followed Ontario’s lead two decades ago. But in this case, it’s never too late to do the right thing for investors. It’s time to see every Canadian refiling as it happens, in one place.