By Bryan Yau
Happy Friday! With the week wrapping up, it is time for another installment of Friday Finds! This week, we will be discussing the launch of North America’s first Bitcoin ETF, proposed changes to Ontario’s Accelerating Access to Justice Act, 2021, and an update on Air Canada’s proposed acquisition of Transat A. T.
On February 18, Purpose Investments, a Toronto-based investment manager, launched North America’s first direct custody Bitcoin ETF. First announced on February 12, Purpose Investment stated that it received approval from the OSC after working with them to address regulatory requirements and additional technical considerations for cryptocurrency. The ETF is designed to provide investors with exposure to the cryptocurrency by investing directly in physically settled Bitcoin. This means that the ETF is backed by physical versions of the asset. These assets will also be held in “cold storage” – meaning that the digital wallet holding these assets will be stored on a platform unconnected to the internet (for security purposes). This is not the first Bitcoin fund listed on the TSX, but it is the first fund to track the asset itself rather than cryptocurrency-linked derivatives. In the past year, 3iQ Corp., CI Global Asset Management Inc., and Ninepoint Partners LP all launched derivative-based products and there are at least four more proposed funds for review. This marks a milestone in growing acceptance for cryptocurrencies as an investable asset class. Investors should expect that the OSC’s approval of the ETF will lead to greater acceptance of the asset within the investment management industry, more approvals for cryptocurrency investment products, and further guidance on how the OSC will regulate more sophisticated cryptocurrency offerings in the future.
On February 16, the Ontario government announced the introduction of the Accelerating Access to Justice Act, 2021. The Act proposes further reform to the justice system by building on changes proposed in the COVID-19 Economic Recovery Act, 2020 and other pre-COVID legal reforms. This slate of proposals aims to modernize processes in provincial courts, the Ontario Land Tribunals, estates law, family law and child protection. As part of the Act, the province is proposing to consolidate the Ontario Land Tribunals by merging the Local Planning Appeal Tribunal, Environmental Review Tribunal, Board of Negotiation, Conservation Review Board and the Mining and Lands Tribunal into a single tribunal called the Ontario Land Tribunal. The new Ontario Land Tribunal would create a single forum to resolve disputes and eliminate any overlap between cases. This is designed to make the dispute resolution process more efficient and easier for all involved parties. All hearings would be brought under the single tribunal but hearing and appeal rights before the tribunal would not be affected. In the areas of wealth management and family law, there is a proposal to make permanent virtual witnessing of wills and powers of attorney, so long as one of the witnesses is a paralegal or lawyer licenced in Ontario. This change should allow individuals, their families, and wealth managers to facilitate more virtual work beyond the pandemic and perform such activities when key individuals are abroad or unable to meet in-person.
Finally, in an update to the proposed acquisition of Transat A. T. by Air Canada, the Canadian federal government provided its final approval on February 11. However, the deal may still fall through as Air Canada has indicated that it has no intention to extend its self-imposed February 15 deadline to complete the deal. Air Canada is currently waiting on the European Commission’s competition review and approval. Transat A. T. and Air Canada are two of the major suppliers for numerous routes between Canada and some European destinations. It was believed that Air Canada would need to make concessions on these routes where it would become the dominant competitor before receiving conditional approval from European regulators. As a result of breaching this deadline, the current status of the acquisition is uncertain. There is still an alternative offer from Quebecor president Pierre Karl Péladeau, which should not raise the same antitrust concerns as Air Canada, but it would likely take months for Transat to go through the same merger approval process.
This wraps up this week’s Friday Finds! Thanks for reading and come back next week for more business law stories.