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When is a public company required to disclose new information to the public? The answer to this question is far from clear, and the ambiguity that lies at its core plagues securities lawyers who are tasked with advising clients on corporate disclosures. In light of this ambiguity, the Supreme Court of Canada’s (“SCC”) highly anticipated decision in Lundin Mining Corp v Markowich, 2025 SCC 39 [Lundin] was expected to provide some clarity to the question of when information relating to a company’s affairs should be disclosed. This clarity, however, remains elusive. In fact, the SCC’s decision may have amplified the existing ambiguity―at least for the near future.
Applicable Law
Generally, there are two types of information that public companies must disclose: material facts and material changes. Material facts must be disclosed in a company’s periodic disclosures and transaction-specific documents. Prospectuses, for example, must “provide full, true and plain disclosure of all material facts relating to the securities issued” (Securities Act, RSO 1990, c. S.5, s 56(1) [OSA]). Material changes, on the other hand, generally must be disclosed by press release “forthwith” upon their occurrence (OSA, s 75(1)).
The test for materiality is the same for both material facts and material changes: a fact or change is material if it “would reasonably be expected to have a significant effect on the market price or value” of the company’s securities (OSA, s 1(1)). The distinction between a material fact and a material change, therefore, rests on the meaning of “fact” and “change.” The OSA provides little guidance on this distinction, specifying only that a “change” must be “in the business, operations or capital” of the company to qualify as a “material change” (OSA, s 1(1)). There is no such limitation in the definition of “material fact.”
Facts
Lundin is a mining company with shares traded on the Toronto Stock Exchange (Lundin, para 9). On October 25, 2017, Lundin detected pit wall instability at one of its open pit mines (Lundin, para 11). Six days later, the pit wall collapsed, causing a rockslide of about 600,000–700,000 tonnes of waste material (Lundin, para 12). Lundin did not publicly disclose the pit wall instability and resulting rockslide until November 29, 2017 (Lundin, para 13). On that date, it disclosed the rockslide and announced revised copper production forecasts for the affected mine (Lundin, paras 13–14). The following day, Lundin’s share price dropped by 16% (Lundin, para 15).
Markowich is an investor who purchased shares of Lundin after the rockslide occurred but before it was disclosed to the public (Lundin, para 18). He launched a proposed class action against Lundin and several of its officers and directors for their failure to forthwith disclose the pit wall instability and the rockslide―both of which he claimed were material changes (Lundin, para 18). Such a failure to disclose grounds a statutory right of action for damages under s 138.3(4) of the OSA. As required by s 138.8(1), Markowich sought leave of the court to commence the action (Lundin, para 19).
Judicial History
The motion judge dismissed the motion for leave (Lundin, para 20). Applying the statutory test for leave―which requires that the action be brought in good faith and that there be a reasonable possibility of the plaintiff’s success at trial―he held that there was no reasonable possibility that Markowich would be successful at trial (Lundin, para 20). More specifically, he held that the pit wall instability and rockslide did not represent or result in a change in Lundin’s business, operations, or capital (Lundin, para 21). In making this holding, he defined “change” as “a different position, course, or direction” (Lundin, para 21). He also interpreted “‘business’ as ‘what the company does’…; ‘operations’ as ‘the activities conducted by the company to engage in its lines of ‘business’’…; and ‘capital’ as a corporation’s ‘share structure and rights of shareholders’” (Lundin, para 88 [citations omitted]). Applying these definitions, he found that there was no change to Lundin’s business, operations or capital that required disclosure. Interestingly, the motion judge separately noted that there was a reasonable possibility that, if a change had occurred, such change was material (Lundin, para 24).
The Ontario Court of Appeal (“ONCA”) allowed the appeal, noting that the motion judge interpreted the terms “change,” “business,” “operations,” and “capital” too narrowly (Lundin, para 26). The ONCA emphasized that the test for leave requires the plaintiff to advance a plausible interpretation of the relevant law that supports a reasonable possibility of success at trial; the motion judge thus erred in rejecting Markowich’s proposed interpretation (which was a plausible interpretation) in favour of a narrow interpretation of “material change” that was not supported by prior case law (Lundin, para 26). Lundin appealed the ONCA’s decision to the SCC.
Issues
On appeal, the SCC dealt with two general issues:
- What is a “change” for the purposes of material change disclosure?
- Does the test for leave under s 138.8(1) of the OSA require only a plausible interpretation of the statute?
Decision
The Majority’s Decision
Writing for the majority, Jamal J began his analysis of the first issue by providing a comprehensive summary of the law governing material facts and material changes (see Lundin, paras 32–62). Applying the insights from that summary, Jamal J found three errors in the motion judge’s holding. First, the motion judge erred in relying on a restrictive dictionary definition of “change” as a “different position, course, or direction” (Lundin, para 64). Jamal J instead preferred the ONCA’s interpretation that “a change is a change” (Lundin, paras 64, 71). Noting the legislature’s choice to leave the term undefined in the OSA, he stressed the importance of maintaining a simple and flexible understanding of “change” (Lundin, paras 71–74).
Second, Jamal J noted that the motion judge erred by considering only important or substantial developments in a company’s affairs to be “changes” (Lundin, para 76). The magnitude of the change is not a proper consideration when assessing whether a change occurred; magnitude is only relevant when assessing the materiality of a change (Lundin, para 77). To require a threshold level of significance before a change is considered a change is inconsistent with the text of the OSA, prior case law, and the policy rationale of the timely disclosure requirements (Lundin, paras 80–84).
Third, Jamal J held that the motion judge erred in assigning rigid definitions to the terms “business”, “operations,” and “capital” (Lundin, para 88). He found that these terms, properly understood, reflect a holistic standard aimed at advancing the purpose of material change disclosure: to reduce information asymmetry between public companies and investors (Lundin, para 94). As such, they require that the change be internal to the company, but they should not be applied and analyzed as distinct concepts (Lundin, paras 51, 94).
Moving on to the second issue, Jamal J clarified that the test for leave under s 138.8(1) of the OSA requires a plausible application of the correctly interpreted law to the evidence available (Lundin, paras 119, 121). In contrast to the approach taken by the motion judge and the ONCA―both of which sought a plausible interpretation of the relevant law―Jamal J emphasized the need for the applicable law to be correctly interpreted on a motion for leave (Lundin, paras 115, 118).
In light of this legal framework, Jamal J held that there was a reasonable possibility for Markowich to successfully establish that Lundin had failed to disclose material changes relating to the pit wall instability and rockslide (Lundin, para 126). Accordingly, he, writing for the majority, dismissed the appeal.
Justice Côté’s Dissent
Côté J―the sole dissenter―took a different approach. Her reasoning identified four occurrences that do not, by themselves, constitute “changes” according to the common law: (1) developments that are external to the company; (2) fluctuations in production or revenue that represent mere changes in results; (3) internal developments that remain uncertain or speculative, such as negotiations for a potential merger; and (4) developments that do not disturb the company’s status quo (Lundin, paras 187–209).
To identify what does constitute a “change,” Côté J applied the textual, contextual, and purposive approach to statutory interpretation. She held that “only changes to high-level or core elements of [a company] constitute a change in its ‘business, operations or capital’” (Lundin, para 211). This limitation is not one of magnitude but rather one of location: the change must occur in these high-level or core elements of the company (Lundin, para 220). On this understanding, Côté J accepted the motion judge’s interpretation of “change,” “business,” “operations,” and “capital” (Lundin, paras 221–222).
Côté J was heavily critical of Jamal J’s interpretation of “change.” She noted that interpreting “change” so broadly would (1) eliminate the distinction between material facts and material changes; (2) impose a disclosure burden that is more onerous than that which is contemplated by the OSA; and (3) undermine the delicate statutory balance between transparency in the market and the burden of compliance (Lundin, paras 133, 226–256). She also expressed concern regarding the potential real-world impacts of the majority’s decision. She noted that, for one, companies may be incentivized to over-disclose or prematurely disclose information to avoid liability. This increased disclosure may result in increased operation costs for companies and may create unnecessary “market noise” that would ultimately overwhelm investors (Lundin, para 245–247). Additionally, she emphasized that the majority’s broad interpretation may place an unworkable burden on the senior management of companies to assess the materiality of every minor change that occurs (Lundin, para 250–251). Finally, she noted that the majority’s approach may impact the availability and cost of director/officer insurance and may narrow the pool of individuals willing to serve as directors/officers (Lundin, paras 254–256).
Despite her dissent on the first issue, however, Côté J concurred with Jamal J’s conclusions on the second issue: the definition of “material change” must be correctly interpreted on a motion for leave under s 138.8 of the OSA (Lundin, paras 262–270).
In the end, Côté J held that the motion judge did not err in denying Markowich leave to bring the action (Lundin, paras 271–280). The risk of pit wall instability and the occurrence of rockslides are routine in open pit mining, and the subsequent “resequencing” that Lundin undertook was part of its regular business activities (Lundin, paras 275–276, 279). Côté J, therefore, would have allowed the appeal.
Analysis
Unfortunately, securities lawyers who expected Lundin to provide clarity to the meaning of “material change” will likely find themselves disappointed by the majority’s decision. While the decision does emphasize that “change” should not be construed narrowly, it does not place any limits on how broadly the term should be applied. A review of articles published by several law firms following the Lundin decision illustrates the continuing ambiguity on this point. Many emphasize the broad and flexible interpretation of “material change” and caution companies to err on the side of disclosure.1 Some go a step further, recommending that companies update their disclosure controls and procedures to ensure adequate reporting of material changes.2 Together, these articles reflect the view that the Lundin decision increases the scope of material change disclosures for public companies. On the other hand, one article suggests that Lundin may only make a nominal impact on companies’ disclosure practices and plaintiffs’ willingness to litigate.3 In other words, the breadth of material change disclosure is seen to be unaffected by the Lundin decision. Another article, however, suggests that the impact of the decision will only become clear as time passes, appealing to the legislature to provide further guidance on the matter.4 Together, this diversity of views reflects the uncertainty created by the majority’s decision.
I predict that the majority’s approach in this case will increase the breadth of material change disclosures, but it is difficult to predict the extent of this increase. As noted by Côté J, the effect of the majority decision may be that “almost every ‘event’ that affects the affairs of [a public company] will have to be reviewed for materiality and almost every analysis of ‘material change’ will become a question of materiality alone” (Lundin, para 234). In essence, by refusing to attribute distinct meaning to the terms used in the definition of “material change,” the majority’s decision equates a “change” to a “fact that is internal to the affairs of the company.” With respect, by interpreting “change” in this way, the majority ignores the statutory distinction between a material fact and a material change. The legislature intentionally chose to define a material change as “a change in the business, operations or capital of the [company]…” (OSA, s 1(1)). By advancing an interpretation of “material change” that undermines the unique features of this definition, the majority’s decision erodes the limits placed on the breadth of material change disclosure. Again, while this erosion will likely increase the scope of disclosures, the extent of this increase will only become clear as time passes.
This article was edited by Donya Tamehi
- Caitlin Sainsbury et al, “Lundin Mining v. Markowich: Has there been a material change to ‘material change’?”, Borden Ladner Gervais LLP (1 December 2025), online: <blg.com/en/insights/2025/12/lundin-mining-v-markowich-has-there-been-a-material-change-to-material-change>; Andrew McCoomb & Katherine Prusinkiewicz, “Supreme Court of Canada rejects narrow interpretation of disclosure standard for ‘material changes’”, Norton Rose Fulbright Canada LLP (28 November 2025), online: <nortonrosefulbright.com/en-ca/knowledge/publications/de84ae28/supreme-court-of-canada-rejects-narrow-interpretation>; Al Weins et al, “When is a Change Material? The Supreme Court of Canada Clarifies Timely Disclosure Obligations in Lundin Mining Corp. v. Markowich”, Wildeboer Dellelce LLP (3 December 2025), online: <wildlaw.ca/legal-updates/when-is-a-change-material-the-supreme-court-of-canada-clarifies-timely-disclosure-obligations-in-lundin-mining-corp-v-markowich>. ↩︎
- Bill Gilliland et al, “A material change to the meaning of ‘material change’? – Practical takeaways from the SCC’s decision in Lundin Mining Corp. v. Markowich”, Dentons (3 December 2025), online: <dentons.com/en/insights/articles/2025/december/3/a-material-change-to-the-interpretation>; Wiens et al, supra note 1. ↩︎
- Paul D Davis et al, “A Material Decision without a ‘Material Change’: Lundin Mining Corp. v. Markowich – SCC Analysis of Material Change and Leave Requirements in Securities Class Actions”, McMillan LLP (1 December 2025), online: <mcmillan.ca/insights/publications/a-material-decision-without-a-material-change-lundin-mining-corp-v-markowich-scc-analysis-of-material-change-and-leave-requirements-in-securities-class-actions/>. ↩︎
- Luis Sarabia, Jonathan Bilyk & Matthew Howe, “Supreme Court of Canada Affirms Broad Definition of ‘Material Change’”, Davies Ward Phillips & Vineberg LLP (1 December 2025), online: <dwpv.com/insights/2025/supreme-court-canada-broad-definition-material-change>. ↩︎