The recent decision in McPherson v Global Growth Assets Inc., 2025 ONSC 5226, (McPherson) is the first time the Ontario Superior Court of Justice has interpreted the protection from reprisal provisions under Ontario’s Securities Act (Part XXI.2) (OSA).
The protection from reprisal provisions came into force on July 1, 2016 and prohibit companies from reprising against an employee because the employee engaged in certain protected activities. Such activities include providing information to the company about an act the employee reasonably believes is contrary to Ontario securities law. The no-reprisal provisions provide employees with a statutory right of action in the Superior Court of Justice for alleged reprisals in such instances. Importantly, actions under the no-reprisal provisions have a reverse onus, placing the burden of proof on the company to establish that it did not commit a reprisal contrary to the OSA.
Along with clarifying the interpretation and application of the no-reprisal provisions, the court in McPherson confirmed that an employee need only show that engaging in a protected activity under the OSA was a factor in the decision to terminate employment and need not be the sole or dominating reason. This interpretation is consistent with the interpretation of anti-reprisal provisions in other Ontario statutes (e.g., the Employment Standards Act, 2000, the Occupational Health and Safety Act, and the Human Rights Code).
Background
Mr. McPherson was hired in August 2018 as Chief Executive and Ultimate Designated Person at Global Growth Assets and Global RESP Corporation (collectively, Global). Global had a history of compliance issues with the Ontario Securities Commission (OSC). One of Mr. McPherson’s primary tasks was to bring Global into compliance with Ontario securities law. Indeed, as UDP, Mr. McPherson was directly responsible for “promoting a culture of regulatory compliance” and ensuring the effectiveness of Global’s compliance.
Global was indirectly owned by Mr. Bouji, who had previously been sanctioned and suspended from his role as CEO and UDP by the OSC. Mr. Bouji’s daughter, Ms. Bouji, held an executive role at the company and served as chair of the board. Before Mr. McPherson joined Global, Ms. Bouji had also been rejected by the OSC as UDP based principally on concerns that her close relationship with her father could result in similar non-compliance issues.
Despite being rejected as UDP, Ms. Bouji continued as an executive at Global and had oversight over many of its departments with responsibility for compliance with Ontario securities law. Initially, Ms. Bouji reported to Mr. McPherson however, in January 2019, Global’s board ordered that Ms. Bouji would no longer report to Mr. McPherson (a decision made without consultation with Mr. McPherson).
Mr. McPherson was concerned with the board’s decision to remove Ms. Bouji from his oversight, believing the move was a way for Mr. Bouji to reassert control over Global through his daughter, without the necessary oversight and in violation of the OSC’s orders. Mr. McPherson further believed that removing Ms. Bouji from his oversight would prevent him from discharging his role as UDP.
Mr. McPherson attempted on several occasions to raise his concerns with board members throughout January and February 2019, warning that there would be consequences if the board could not explain how and why Ms. Bouji was no longer reporting to the CEO and UDP. Rather than address Mr. McPherson’s concerns, the board terminated his employment, without cause, on February 28, 2019. Following Mr. McPherson’s termination, Mr. Bouji resumed providing direction to Global staff in contravention of the OSC’s orders.
The Courts Decision
Global maintained that Mr. McPherson was terminated because of poor performance. Despite its position, the letter terminating Mr. McPherson’s employment did not mention any performance concerns. The evidence at trial confirmed that Mr. McPherson had never been reprimanded, notified he was acting negligently or otherwise provided a written warning that his performance did not meet expectations.
The court ultimately rejected Global’s position that Mr. McPherson was terminated for performance concerns, finding instead that the company reprised against Mr. McPherson in contravention of the OSA after he raised concerns about his obligations as UDP and violations of Ontario securities law.
The court determined that: Mr. McPherson reasonably believed Global’s actions were contrary to the OSA; he provided or expressed his intention to provide information to Global; and his termination was, at least in part, motivated by his providing (or expressing his intention to provide) information to Global that he reasonably believed was contrary to Ontario securities law.
The court awarded Mr. McPherson damages of C$5,379,808.22, which was two times the total remuneration (i.e., inclusive of his base salary and discretionary bonus) he would have earned from the date of the contravention (i.e., his termination on February 28, 2019) to the date of judgment (i.e., September 12, 2025), plus pre- and post-judgment interest. The court did not deduct any amounts from the damages award for amounts earned by Mr. McPherson as mitigation, nor did it consider amounts paid to him by Global on termination to comply with his statutory and contractual entitlements.
The court did, however, reject Mr. McPherson’s additional claims for wrongful dismissal damages, aggravated damages and punitive damages. In doing so, the court held that the statutory damages far outweighed any wrongful dismissal damages available to Mr. McPherson. The court also found that Mr. McPherson did not prove the requisite level of mental distress or moral harm to award aggravated damages, and that Global’s actions did not rise to the level of “malicious, oppressive or high-handed conduct” necessary to warrant punitive damages.
Key Takeaways
- The no-reprisal provisions under the OSA are powerful and, where applicable, can result in outsized damages awards (without regard for post-employment mitigation earnings). Decisions to terminate senior and key personnel should be carefully considered with experienced counsel where there is a risk the no-reprisal (or other, similar remedial statutory protections) are potentially engaged.
- Without clear, cogent and objective evidence underlying the decision to take disciplinary action against an employee it will be difficult for companies to establish they are not in breach of the no-reprisal provisions given the reverse onus and because an employee need only show engaging in protected activities was a part of the motivation for reprisal (rather than the sole or primary reason)
Bennett Jones