In Lundin Mining Corp. v. Markowich, 2025 SCC 39, the Supreme Court of Canada clarified how issuers must identify and meet their disclosure obligations regarding “material changes” under Canadian securities laws. The Court emphasized that issuers must follow a disciplined two-step analysis in which the steps remain analytically distinct. First, an issuer must determine whether a change has occurred in its business, operations, or capital. Second, if such a change exists, the issuer must assess whether the change could reasonably be expected to have a significant effect on the market price or value of any of the issuer’s securities.
In its majority decision, the Court rejected the common practice of filtering developments based on materiality at the outset. The Court signaled that there is no bright-line test for determining when a material change occurs, meaning that the inquiry is contextual and fact-specific. Issuers can no longer rely on informal judgments to defer disclosure, including in the context of operational issues. As Justice Côté cautioned in dissent, this approach increases the compliance burden, as routine or developing operational matters may need to be escalated and documented earlier, raising the risk of over-disclosure, cost, and secondary market liability.
Background and Context
Under provincial securities legislation, including Ontario’s Securities Act, a material change exists where there has been a change in the issuer’s business, operations, or capital, and that change would reasonably be expected to have a significant effect on the market price or value of any of the issuer’s securities. The Supreme Court emphasized that these two steps must be assessed separately. For years, issuers and courts often blurred these steps, evaluating a change primarily through a market impact lens. The Lundin Mining decision rejects that approach, confirming that any change in an issuer’s business, operations or capital — in the Lundin Mining case, a change in operations — must first be recognized before its materiality is assessed.
Prior to this ruling, issuers frequently filtered events by whether they seemed likely to move the market price or value of its securities, allowing many operational developments to remain internal. Temporary, incremental, or localized issues were often excluded from disclosure, reducing burden on management. The Supreme Court’s decision requires reporting issuers to change this practice, requiring a more structured and proactive process for identifying and assessing changes – not only changes in the issuer’s business or capital but also changes in the issuer’s operations.
Key Takeaways for Issuers
- Broader Definition of Change
A material change does not need to be transformational or fundamental. Any change in the issuer’s business, operations, or capital triggers the first step of the test, with materiality assessed separately. - No Bright-Line Test
There is no fixed checklist or threshold for identifying material changes. Each change must be considered in context, based on the facts and the nature of the issuer’s business, operations or capital. - Early Identification and Escalation Are Critical
Operational developments that might previously have been treated as routine now require attention. Issuers should put in place processes for early identification of changes and ensure proper escalation to management and disclosure committees. - Robust Documentation Matters
Decisions on whether a change has occurred and whether it is material must be clearly documented. This will help to protect issuers from or in the event of regulatory scrutiny and shareholder challenges. - Organizational Implications
Boards, audit committees, and senior management may need to be involved earlier in disclosure decisions. Formalized decision-making frameworks and more frequent committee meetings may also be necessary to ensure timely and coordinated identification of changes and assessment of those changes to determine whether any such change is a material change. - Balancing Transparency and Over-Disclosure
Identifying changes early will help to prevent informational gaps, but it can also increase disclosure frequency and market volatility. Issuers must exercise judgment to provide timely information without overwhelming investors with incomplete data. - Practical Impact: The Lundin Case Example
The Lundin Mining case involved operational issues at a Chilean copper mine. Pit wall instability and, several days later, a subsequent rockslide affected production expectations, but Lundin Mining did not disclose those events immediately, waiting instead until a scheduled production guidance revision. The Supreme Court found that these events could reasonably be considered changes in operations, even though they did not fundamentally alter the business. The case illustrates the shift from a “materiality-first” approach to a “change-first, materiality-second” framework, emphasizing early identification, monitoring and documentation of operational developments.
Conclusion
The Lundin Mining decision marks a shift toward a more structured and proactive approach to continuous disclosure. Issuers can no longer rely on informal judgments or past practices to filter events based on perceived market impact. To comply with the clarified test, issuers should implement early-warning systems for operational, business, and capital changes, maintain clear records of change identification and materiality assessment, involve senior management and committees early, and strike a careful balance between transparency and over-disclosure.
By adopting these practices, issuers can significantly improve their compliance performance and supporting records maintenance in meeting their disclosure obligations while maintaining investor trust and minimizing regulatory and reputational risk.
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About the Authors:
Andre G. Poles is a Partner in Dickinson Wright’s Toronto office, with over 20 years of experience advising clients in the financial services industry on corporate finance and capital markets transactions. He counsels issuers, dealers, and fund managers on Canadian securities law, public offerings, private placements, and investment fund compliance. Drawing on his extensive in-house experience with Canadian wealth management and global financial services firms, Andre provides practical, business-focused legal advice. Outside the firm, he serves in the Canadian Forces Primary Reserve, having previously held senior leadership roles including Regimental Major with the 48th Highlanders of Canada.
Donald Sheldon
is a partner in Dickinson Wright’s Toronto office, where he focuses on corporate law, including mergers and acquisitions. He also advises clients on intellectual property and trademark matters.
Sam Friedman
is an associate in Dickinson Wright’s Toronto office, focusing on corporate transactions, including mergers and acquisitions, franchise law, and advising emerging businesses. He brings a business-minded approach to his practice, drawing on his dual business and law degree from Western University and the Ivey Business School.
Stephanie Grad is an articling student in Dickinson Wright’s Toronto office and a former summer associate with the firm. Her interests include corporate law, real estate financing, and commercial leasing, where she brings a practical, business-focused perspective.