Why Alberta Falls Short of Becoming the Delaware of the North

Garvin Brutus, Volume 83 Articles Editor

Introduction

In 2022, Alberta’s Business Corporations Act (“ABCA”) was amended, with the intent to make the province the country’s corporate hub through regulatory changes and improved corporate efficiency.[1] The changes were inspired by Delaware’s General Corporation Law (“DGCL”), which underpins Delaware’s position as the corporate home to two-thirds of Fortune 500 companies,[2] and inspired Alberta’s ambition to be the ‘Delaware of the North.’[3] The key amendments include: (1) Introduction of corporate opportunity waivers; (2) Increased protection to directors and officers; (3) Reduction in shareholder approval thresholds; and (4) Increased court discretion for plans of arrangement.[4] Despite these changes, Alberta’s corporate law framework still lacks the critical features that define corporate law in Delaware.

Introduction of Corporate Opportunity Waivers

The most important change to the ABCA is the introduction of corporate opportunity waivers. The corporate opportunity doctrine prohibits company leaders such as directors and officers from appropriating business opportunities that belong to their company.[5] A corporate opportunity waiver enables companies to officially renounce ownership of business opportunities to release the directors, officers and shareholders from violating fiduciary duties in pursuit of them.[6] This is especially crucial for private equity and venture capital-backed companies because they can support multiple companies without breaching fiduciary obligations.[7] These waivers reduce legal risk, making Alberta more attractive to investors and increasing the chance of financing innovative ventures.[8] Waivers under these agreements can now be included as part of the Articles of Incorporation.[9] Alberta, the only Canadian jurisdiction to adopt this rule — nearly identical to Delaware’s — positions itself as a more attractive destination for businesses in doing so.[10]

Increased Protection for Directors and Officers

The amendments also broaden directors’ and officers’ protections.[11] Previously, directors with a material interest in a contract could not formally vote on whether the corporation should accept it, even where it served the corporation’s interests.[12] The amendments now allow directors to vote in these kinds of situations, and as such, directors are permitted to provide their insights and expertise while protecting the best interests of the corporation.[13]

The amendments also extend the reach of the good faith defence for directors and officers.[14] Before the 2022 amendments, directors could rely only on opinions or reports from external professionals, including lawyers, accountants, or engineers to meet the test of adequate good faith without being exposed to liability for breach of the duty of care.[15]The amendments have extended the defence to include reports or opinions by corporate employees whose professional knowledge adds credibility and forms the basis for their statements.[16] For instance, a director who relies on a financial projection for the company from the company’s finance team can argue that such a projection is free of any legal repercussion even if the financial projection is inaccurate. This amendment leads directors and officers to benefit from internal human resources without fear of personal liability.

Lastly, indemnification provisions have significantly expanded. Before the amendments, directors and officers could be shielded against payment of costs incurred in civil, criminal or administrative proceedings if they were formal parties to the action and acted in good faith.[17] However, if a director were to be interviewed in an investigative proceeding and not named as a formal party, they would not have been entitled to indemnification for legal fees spent in that investigation. Following the amendments, indemnification is now available for investigative proceedings and cases where directors or officers are not formal parties but are involved for the reasons of their office and where they are not considered to have committed any fault.[18] This amendment expands the protection of the directors and officers against personal financial risks for performing corporate duties, thereby reducing their exposure to frivolous claims.

Reduction in Certain Shareholder Approval Thresholds

The amendments reduce the shareholder approval threshold for privately held corporations.[19] Formal decisions by shareholders, usually on matters such as approving mergers, electing directors, or changing company bylaws, take the form of written shareholder resolutions. Shareholder resolutions are used to ensure that major corporate decisions meet the interests of shareholders. Consent on these resolutions used to require a unanimous vote, but now a two-thirds majority is sufficient.[20] The amendments also introduced an option for privately-held, non-distributing corporations to only require a two-thirds vote to waive the requirement for audited financial statements.[21] Though this increases financial and governance risks, it also offers companies increased flexibility and relief from administrative burdens so that corporations can reallocate resources to growth and innovation.

Increased Court Discretion for Plans of Arrangement

A plan of arrangement is a court-supervised process for overseeing complex transactions, such as mergers, acquisitions, and debt restructuring.[22] The ABCA amendments give courts more discretion in these arrangements.[23]The arrangement no longer needs shareholder approval if it does not alter shareholders’ rights or the value of their holdings and does not significantly impact shareholders.[24] The courts can also grant a stay of proceedings, which helps corporations make their strategic decisions without being challenged by the law.[25] These challenges are typicallybrought by dissatisfied stakeholders who believe that the arrangement is unfair to their interests.[26] With these changes, Alberta becomes an attractive jurisdiction for businesses to carry out their most complex transactions.

While Alberta has made significant strides with its 2022 amendments to the ABCA, it still falls short of matching Delaware’s status as the premier corporate law haven. For all its ambitions, Alberta has not replicated the critical features that establish Delaware as the unrivaled leader in U.S. corporate law. These features can be distilled into three elements: (1) the flexibility of Delaware’s General Corporation Law, (2) the Delaware Court of Chancery’s unrivaled corporate law knowledge, and (3) Delaware’s business-friendly governance.

Delaware’s General Corporation Law

The DGCL is more flexible than the ABCA, Canada’s Business Corporations Act (“CBCA”), and Ontario’s Business Corporations Act (“OBCA”), offering a unique corporate governance framework. For example, section 141(f) of the DGCL provides that the board can act without a meeting if all members consent in writing or electronically.[27]Additionally, section 144 demonstrates that the DGCL is flexible in that transactions involving conflicted directors or officers may be consummated if disclosed, approved by disinterested parties, and deemed fair to the corporation.[28] The CBCA and OBCA prohibit conflicted directors from voting on related matters and have more stringent disclosure requirements with less flexibility for certain transactions to proceed.[29] The DGCL’s governance framework is more expansive than that of any Canadian jurisdiction.

The doctrine of independent legal significance embedded in the statute illustrates its adaptability.[30] Under this doctrine, when a transaction meets the requirements of one section of the DGCL, Delaware courts will not annul the transaction for failing to meet the requirements of another section even though the transaction could have been structured under the other section.[31] For example, section 251 enables corporations to pursue a merger or consolidation through various methods, such as stockholder approval or written consent.[32] In other words, where a transaction could be effected through multiple legal methods, the board is more free to select the method that is more predictable in its consequences depending on the circumstances. Similarly, section 271 allows directors to approve a sale of a corporation’s assets through various means.[33]

In contrast, the doctrine of independent legal significance does not exist under Canadian corporate statutes, such as the ABCA, CBCA, or OBCA. Rather, these statutes apply a more rigid framework consisting of stricter compliance with the procedural prerequisites for transactions stipulated in the statutory provisions. While Canadian statutes afford flexibility through, inter alia, plans of arrangement, these tools necessitate additional procedural steps, such as court approval, and they do not afford the same deference to the board’s chosen method of execution. The DGCL’s philosophy is to give corporations maximum flexibility in structuring their affairs.[34] Therefore, it is not surprising that Delaware has attracted many of the most influential companies in the U.S. to incorporate in the state.

Delaware Court of Chancery

The Delaware Court of Chancery is a specialized business court tasked exclusively with resolving corporate law disputes.[35] It was established in 1792 and is known for its deep expertise in corporate law.[36] While many other states have since established specialized business courts, Delaware remains unique because of its well-established body of case law.[37] These precedents provide corporations with a high degree of predictability in how their business disputes may be resolved. For instance, the landmark Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc. ruling held that if a company is for sale, the company’s board of directors has a fiduciary duty to maximize shareholder value.[38] This decision has since influenced how companies respond to hostile takeovers. This court system, because of its corporate law expertise and predictable judicial decisions, plays a key role in why companies choose to incorporate in Delaware.

In contrast, in the Court of King’s Bench of Alberta, only the Commercial List has been established, which deals with specific time-sensitive commercial cases, including insolvency, bankruptcy and receivership.[39] Unlike the Delaware Court of Chancery, the Commercial List is part of the broader Court of King’s Bench system.[40] It is not a separate court; the Commercial List refers urgent cases to judges who are not exclusively commercial law judges but are assigned to deal with commercial cases. While this initiative streamlines the handling of pressing commercial cases, it lacks the specialized focus, authority, and predictability of the Delaware Court of Chancery, which is supported by a robust body of case law. The judges on the Commercial List do not have the same level of expertise and influence, and the initiative does not offer the same volume of legal precedent, as Delaware’s Court of Chancery. The Commercial List is valuable for the quick resolution of commercial matters in Alberta but is less sophisticated and more limited than the Delaware Court of Chancery.

Delaware Governance

The Delaware executive and legislative branches are dedicated to preserving the state’s tradition as a business-friendly state, regardless of political party affiliation.[41] The legislative and executive branches have managed to gain this reputation in three primary ways. First, the DGCL is kept up to date by the state to account for the evolving needs of businesses.[42] Delaware routinely collaborates with corporate law experts from the Delaware Bar Association to seek advice on the best ways to adapt the statute to ensure it remains flexible for businesses.[43] Second, the Secretary of State’s Division of Corporations has adopted a customer-focused approach when serving the needs of Delaware-incorporated companies.[44] Advanced technology enables the division to scan and store documents electronically, provide quick access to corporate information, and expedite services such as one-hour and same-day filings.[45] Their ease with handling inquiries, taxes and filings is reflected in how staff work very hard to meet deadlines, even in the evenings — unlike other jurisdictions.[46] Lastly, the state has an entrepreneurial spirit, considering itself to be in the business of serving businesses.[47]

Alberta has made significant strides to support businesses and attract incorporation. The province offers competitive corporate tax rates, among the lowest in Canada, creating an attractive environment for businesses seeking to reduce costs.[48] Additionally, Alberta simplified its incorporation process.[49] However, Alberta’s business environment still lacks the depth and adaptability of Delaware’s, where continuous legislative updates solidify its position as a leader in U.S. corporate law.

Conclusion

The 2022 amendments to the ABCA mark progress, but the province falls short of becoming the ‘Delaware of the North.’ Alberta has not seen a significant rise in business incorporations.[50] Despite the changes, the province’s appeal remains modest. Alberta’s legal infrastructure lacks the flexibility, judicial expertise, and robust business-friendly environment that have made Delaware a global leader in corporate law. While the amendments make Alberta more appealing to certain sectors, particularly in emerging industries and private equity, the province must continue refining its corporate governance, establish a specialized business court beyond the Commercial List, and ensure legal predictability. While Alberta’s amendments show progress, structural and cultural gaps remain. Recognizing these differences sets realistic expectations and highlights Alberta’s unique path forward in attracting businesses to the province.

[1] Government of Alberta, “SA Business Corporations Act Proclamation Fact Sheet” (2022), online (pdf): < alberta.ca/system/files/custom_downloaded_images/sa-business-corporations-act-proclamation-fact-sheet.pdf>.

[2] Delaware Division of Corporations, About the Division of Corporations, online: < corp.delaware.gov/aboutagency/>.

[3] Brad Schneider, Jason Giborski & Paul Blyschak, “Alberta’s Aim to Be Delaware North Deserves More Attention from Canada’s Business Community,” The Globe and Mail (15 October 2023), online: <theglobeandmail.com>.

[4] Government of Alberta, supra note 1.

[5] Brian Gray & Kelsey Armstrong, “Corporate opportunity waivers make their way to Canada: Implications for private equity and venture capital investments” (8 February 2023), online: <osler.com/en/insights/updates/corporate-opportunity-waivers-make-their-way-to-canada-implications-for-private-equity-and-venture/>.

[6] Ibid.

[7] Government of Alberta, supra note 1.

[8] Ibid.

[9] Ibid.

[10] Del Code tit 8 §§ 121–27 (2025).

[11] Government of Alberta, supra note 1.

[12] Ibid.

[13] Ibid.

[14] Craig A Story & Aya Taher-Donnelly, “Key Changes to Alberta's Business Corporations Act” (10 June 2022), online: <stikeman.com/en-ca/kh/corporations-commercial-law/key-changes-to-albertas-business-corporations-act>.

[15] Ibid.

[16] Ibid.

[17] Ibid.

[18] Ibid.

[19] Government of Alberta, supra note 1.

[20] Ibid.

[21] Ibid.

[22] Jordanna Cytrynbaum & Alyshea Surani, “Levelling Up: Modernizing the Alberta Business Corporations Act” (19 July 2022), online: <cassels.com/insights/levelling-up-modernizing-the-alberta-business-corporations-act/>.

[23] Story & Taher-Donnelly, supra note 12.

[24] Ibid.

[25] Ibid.

[26] Ibid.

[27] Del Code tit 8 §§ 141(f) (2025).

[28] Ibid § 144.

[29] Canada Business Corporations Act, RSC 1985, c C-44, s 120; Business Corporations Act, RSO 1990, c B-16, s 134.

[30] Leo E Strine, Jr, “The Delaware Way: How We Do Corporate Law and Some of the New Challenges We (and Europe) Face” (2005) 30:3 Del J Corp L 673 at 675.

[31]C Stephen Bigler & Blake Rohrbacher, “Form or Substance? The Past, Present, and Future of the Doctrine of Independent Legal Significance” (November 2007), online (pdf): <rlf.com/form-or-substance-the-past-present-and-future-of-the-doctrine-of-independent-legal-significance/>.

[32] Del Code tit 8 § 251 (2025). 

[33] Ibid § 271.

[34] Lewis S Black, Jr, “Why Corporations Choose Delaware” (2007) at 2, online (pdf): <corp.delaware.gov>.

[35] Ibid at 5.

[36] Ibid.

[37] Ibid at 7.

[38] Revlon, Inc v MacAndrews & Forbes Holdings, Inc, 506 A (2d) 173 (Del Sup Ct 1986).

[39] Court of King’s Bench of Alberta, “Commercial Practice Note 1 Commercial Chambers” (31 January 2025), online (pdf): <albertacourts.ca/kb/areas-of-law/commercial/practice-notes>.

[40] Ibid.

[41] Black, supra note 34 at 4.

[42] Ibid.

[43] Ibid.

[44] Ibid at 9.

[45] Ibid.

[46] Ibid.

[47] Ibid at 10.

[48] Government of Alberta, “Alberta tax overview”, online: <alberta.ca/taxes-levies-overview#jumplinks-0>.

[49] Government of Alberta, “Incorporate an Alberta corporation”, online: <alberta.ca/incorporate-alberta-corporation>.

[50] Government of Alberta, “Business Incorporations” (6 March 2025), online: <economicdashboard.alberta.ca/dashboard/business-incorporations/>.