Friday News Finds – March 12, 2021

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 a Canadian firm’s bid to launch the world’s first Ether ETF, calls for action from MPs to get large banks to quickly address a new type of fraud, a proposed bill to speed up the development of broadband infrastructure in rural and Northern Ontario, and an announcement about the 2021 Ontario budget.

Last week, CI Financial, a Toronto-based investment manager, filed with the OSC to launch the world’s first ETF to directly invest in Ether, the second-largest cryptocurrency by market value. This follows Purpose Investment’s launch of North America’s first direct custody Bitcoin ETF and recent retail investor appetite for cryptocurrencies. The ETF is designed to provide investors with exposure to the Ether cryptocurrency by investing directly in the asset. This is not the first cryptocurrency fund listed on the TSX, but it is the first fund to follow Ether. In the past year, 3iQ Corp., CI Global Asset Management Inc. and Ninepoint Partners LP have all launched Bitcoin-based products and there are at least four more proposed funds for review, with a second Ether-based ETF already proposed by another group. This marks a milestone in growing acceptance of cryptocurrencies as an investable asset class and provides a potential case study on regulating secondary cryptocurrency investments besides the much larger Bitcoin. CI Financial’s application to launch an Ether-based product comes after the OSC’s approval of North America’s first direct custody Bitcoin ETF by Purpose Investments and suggests openness and greater acceptance of cryptocurrencies within the investment management industry. We should expect more approvals for cryptocurrency investment products and further guidance on how the OSC will regulate more sophisticated cryptocurrency offerings in the future.

On March 9, members across all parties of the federal Standing Committee on Finance expressed that banks should provide customers with a faster method to shut down accounts in case of fraud or risk facing public hearings on the matter and potential legislative action to specifically address fraud detection. Recent news investigations uncovered a widespread fake taxi scam in the GTA that duped riders into sharing debit and credit card information and exploited the ineffective fraud detection mechanisms of banks. Demand for action was previously raised by the City of Toronto, but members of the Standing Committee on Finance (responsible for overseeing banking policy) from the Liberal, Conservative, and NDP parties are now calling on major Canadian banks to create a dedicated fraud emergency line, address long wait times for customer support, and come to a special hearing on the industry’s actions to prevent fraud during COVID. Members have openly suggested that non-compliance could lead the committee to pursue further anti-fraud legislation. The pandemic has exposed many instances of business and government weaknesses in service delivery and consumer protection. Canadians can expect more public advocacy and legislative action to address these oversights, as well as legal action in support of consumer protection.

Last week, the Ontario government introduced the Supporting Broadband and Infrastructure Expansion Act, 2021. The Act amends portions of the Ontario Energy Board Act, 1998 and Planning Act to remove barriers and streamline processes relating to broadband and internet connectivity infrastructure deemed to be of provincial significance. As part of the Act, the province is amending part of the Planning Act that requires ministerial zoning orders. Under this rule, these ministerial zoning orders would not be required prior to carrying out construction for select broadband construction work outside of the Greenbelt. There are also amendments to the Ontario Energy Board Act, 1998 that would reduce or fix the annual rental charge that telecommunications service providers must pay to attach their wirelines to hydro utility poles, establish performance standards and timelines for how utility companies must respond to attachment requests made by communications providers, require utility companies to consider possible joint use (energy transmission with internet connectivity needs) of hydro utility poles during their planning process, and improve transparency around when and where hydro utility poles are scheduled for replacement or refurbishment. These changes are meant to save communications companies time and money as they seek to enter new communities. The government hopes that these changes can help speed up Ontario’s broadband expansion, increasing the province’s competitiveness, connecting the province’s unserved and underserved communities, and making life more convenient for individuals, families and workers who would then be able to work at home or further from a particular office. As many as 700,000 households and businesses in Ontario lack access to adequate broadband speeds or have no internet connection at all. At a time when much of government services and work are shifted online, this lack of access and connectivity puts certain communities at a disadvantage and likely hinders long-term economic growth. These proposed measures would speed up construction and internet infrastructure projects to help these communities connect to reliable broadband sooner so residents can work from home, learn online, connect with family and friends, and access vital services. Northern and rural connectivity have been major policy objectives of many past premiers, but the COVID pandemic has highlighted the gap in service between these regions and urban centres. This bill should speed up and lower the cost of existing efforts to build up requisite infrastructure for province-wide access to broadband connection.

On Thursday, the government of Ontario announced that it will release the 2021 budget on March 24. This is the second budget released during the COVID pandemic. This coming budget will focus on public health and safety throughout the summer and fall, and reflects the rollout of the COVID-19 vaccine and the recovery of the provincial economy. Expected programs covered in the budget include: support for industries severely impacted by lockdowns by building on fiscal supports and past legislation like the Main Street Recovery Act to support small retailers and restaurants, and healthcare reforms like free training to grow geriatric care services and the number of personal support workers. The CBLB will make sure to update you as more details about the budget are released.

This wraps up this week’s Friday Finds! Thanks for reading and come back next week for more business law stories.