Ultimately, even if further updates to the Canadian legal landscape concerning DEI matters are likely not forthcoming, Canada’s current rules remain unchanged. Canadian public companies must continue to meet their public disclosure requirements on governance-related diversity and assess the business case for appropriate DEI initiatives.
6. Burden Reduction in Canadian Capital Markets In 2025, the CSA continued to chip away at its objective to reduce regulatory burden with a handful of exemptions and other initiatives designed to bolster Canadian issuers’ participation in public equity markets by facilitating capital raising and, in some cases, harmonizing Canadian securities laws with the corresponding U.S. regime. Although none of the 2025 initiatives were unexpected or transformative, we remain hopeful that more substantial progress on burden reduction will be made in the coming years. For more on this topic, see Capital Markets Burden-Reduction Efforts (Page 14). 7. A ctivism in Canada: Surprising Resilience and Shifting Dynamics Shareholder activism in Canada proved resilient in 2025, with activity levels consistent with those in 2024, despite factors that might have otherwise presented challenges for activists seeking targets. Geopolitical and economic uncertainty in early 2025 led to a general market slowdown and suggested a slower year for capital markets activity in general. Despite that inauspicious start, 2025 ultimately delivered stellar stock market returns and witnessed a second-half revival of M&A activity. Activists were also generally rewarded for their efforts, as evidenced by their track record of success in 2025. Indeed, activists achieved all or part of their objectives in approximately two-thirds of campaigns that sought board representation — higher than the success rate achieved by activists in the two years prior. Large-cap issuers continue to be disproportionately targeted, with U.S.-based activists principally leading these high-profile efforts. Notable campaigns included Elliott Investment Management’s engagements with larger cap issuers such as, most recently, Lululemon Athletica, as well as Browning West’s push for change at CAE on the heels of its successful 2024 campaign at Gildan Activewear. We expect this trend to continue in 2026, especially given the increase in newly formed U.S. activist funds seeking to carve out a niche, including in the Canadian market. The rising number of players in the space may precipitate an increase in issuers being approached simultaneously by multiple activists, forcing the issuer to defend against competing demands.
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Governance Insights 2026
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