Securities regulation depends on information. Regulators cannot police every trading desk, every investment fund, or every registered dealer, and they rely heavily on insiders who see wrongdoing and are willing to report it. But insiders who raise the alarm face an obvious risk: the organization they are reporting on may retaliate, silencing them, discrediting them, or ending their engagement with the company. For the statutory whistleblower regime to function as intended, the legislature must neutralize that retaliation risk. Otherwise the incentive to report will be dwarfed by the cost of reporting.
Ontario, Alberta, British Columbia, and Nova Scotia have all introduced provisions in their respective Securities Acts prohibiting reprisals against whistleblowers. Ontario and Alberta go further by creating a statutory civil right of action, with a reverse onus on the defendant and a statutory damages remedy that is designed to make reporting worth the personal risk. These provisions sit at the intersection of securities law, investor protection, and capital markets integrity, and they are best understood as part of the broader regulatory architecture that supports Ontario Securities Commission enforcement.
In September 2025, the Ontario Superior Court of Justice released the first substantive interpretation of Ontario’s statutory protection from reprisals regime in McPherson v. Global Growth Assets Inc.. The decision adopts a broad, remedial interpretation of the statute and awards the dismissed ultimate designated person (UDP) of a registered investment fund manager over $5 million in statutory damages. The decision is a landmark in Canadian securities law and has immediate practical implications for registrants, their boards, and the executives who hold regulatory roles within them.
This article explains the statutory framework for whistleblower reprisal claims in Canada, with a focus on Ontario, and walks through the principal holdings of McPherson. It is written for registrants and their counsel who need to understand the scope of the prohibition, for officers of registrants who hold statutory compliance responsibilities, and for anyone concerned with how securities law regulates conduct by registrants and those acting on their behalf. Our securities litigation practice advises on reprisal disputes and related commercial litigation in Ontario.
The Statutory Framework Across Canada
Protection from reprisals against whistleblowers in the securities context is a relatively recent development in Canadian law. The Alberta, British Columbia, Nova Scotia, and Ontario Securities Acts all contain provisions protecting employees who report potential breaches of securities laws from retaliation by their employer or by employees who participated in the reprisal. The Alberta and Ontario Securities Acts go further by providing an express statutory civil right of action in the event of such a reprisal.
Ontario
The Ontario regime was enacted in 2016 as part of an omnibus budget bill that received Royal Assent on April 19, 2016, with the protection from reprisal provisions coming into force by July 1, 2016. The provisions were designed to complement the Ontario Securities Commission’s newly-launched whistleblower program, which provides financial incentives and confidentiality protections for individuals who come forward with information about securities law violations. Without the prohibition on reprisals, the whistleblower program’s incentives would be undermined by the fear of retaliation, and the OSC’s enforcement reach would be correspondingly diminished.
The original provisions were located in section 121.5 of the Ontario Securities Act. Effective December 4, 2023, these provisions were repealed and replaced by section 121.6 (enacted through S.O. 2023, c. 21, Schedule 10, section 4), with broadly similar substantive content but with minor amendments to the burden of proof and remedies provisions. The OSC has also published OSC Policy 15-601, which sets out the operational details of the Whistleblower Program.
Section 121.5 (and its successor section 121.6) prohibits a person or company from taking a reprisal against an employee because the employee sought advice about providing information, expressed an intention to provide information, or provided information about an act that the employee reasonably believes is contrary to Ontario securities law. The statute defines “reprisal” broadly to include ending or threatening to end the employee’s engagement with the company, demoting, disciplining, or suspending the employee, imposing a penalty related to the employee’s engagement, or intimidating or coercing the employee. Although the statute uses the language of “employment,” the core of the regime is not about the employment relationship as such but about protecting the flow of compliance information to regulators and internal compliance functions.
The statute also creates a civil right of action in the Superior Court of Justice, with a reverse onus that places the burden of proof on the person or company to show that it did not commit a reprisal in contravention of the Act.
Alberta
The Alberta Securities Act contains a comparable regime in Part 17.02, with the key provisions in sections 57.1 to 57.9 (defining whistleblower status and the prohibition on reprisals) and sections 211.0961 to 211.0965 (creating the civil right of action, the burden of proof, defences, remedies, and the relationship to other remedies). The Alberta framework is somewhat more elaborate than Ontario’s, with detailed provisions on defences (including the “but for” defence, discussed below) and on proportionate liability among multiple defendants.
British Columbia and Nova Scotia
The British Columbia Securities Act (section 168.04) and the Nova Scotia Securities Act (section 146A) also prohibit reprisals against whistleblowers. However, unlike Ontario and Alberta, these provinces do not currently provide an express statutory civil right of action. Enforcement in those jurisdictions proceeds primarily through complaint mechanisms administered by the relevant securities commission.
The Protected Activity: What Must the Employee Have Done?
To come within the protection of Ontario’s reprisal provisions, the employee must have engaged in one of several categories of protected activity. The core protected activities under the Ontario statute are seeking advice about providing information, expressing an intention to provide information, or actually providing information about an act that the employee reasonably believes is contrary to Ontario securities law. The recipient of the information need not be an external regulator. The protection applies whether the information is provided to the company itself, to the Ontario Securities Commission, to a recognized self-regulatory organization, or to a law enforcement agency.
This is an important feature of the Ontario regime. An employee who raises concerns internally, to their manager, to the board of directors, or to an internal compliance function, is protected to the same extent as an employee who files a formal complaint with the OSC. Employees need not “go public” or escalate to regulators in order to qualify for statutory protection. In many cases, the internal raising of concerns is the more prudent first step, and the statute recognizes this by extending protection to internal whistleblowing.
The “Reasonably Believes” Requirement
The information provided or intended to be provided must concern an act that the employee “reasonably believes” is contrary to Ontario securities law. The meaning of “reasonably believes” was addressed by the court in McPherson, which adopted the interpretation given to the same phrase by Chief Justice Strathy of the Ontario Court of Appeal in R. v. Geil. The court held that “reasonable belief” requires both a subjective and an objective component: the employee must subjectively believe that the conduct is contrary to securities law, and that belief must be objectively reasonable in light of the information available to the employee at the relevant time.
The threshold is not high. A belief is an acceptance of the truth of something without necessarily having personal knowledge of its truth. It is stronger than suspicion but weaker than knowledge. A belief is “reasonable” if a reasonable person would hold it based on objective evidence. The statute does not require the employee to prove that a breach of securities law actually occurred. It requires only that the employee have a subjective belief, objectively grounded in the available information, that a breach occurred, is occurring, or is about to occur.
What Qualifies as a Breach of Ontario Securities Law?
“Ontario securities law” is defined in the Securities Act to include the Act itself, the regulations and rules made under the Act, and any decision of the Commission or a Director to which the person or company is subject. In the context of a registered entity (such as a registered dealer, adviser, or investment fund manager), Ontario securities law also includes the requirements of National Instrument 31-103, which sets out the duties of the ultimate designated person (UDP) and the chief compliance officer (CCO), among other registration requirements.
A breach of the UDP’s or CCO’s obligations under NI 31-103 is a breach of Ontario securities law. This was an important point in McPherson, where the plaintiff’s core concern was that his employer’s organizational restructuring interfered with his ability to discharge his supervisory responsibilities as UDP.
The Meaning of “Reprisal”
Section 121.5(2) of the Ontario Securities Act defines “reprisal” non-exhaustively as any measure taken against an employee that adversely affects their employment, and includes (a) ending or threatening to end the employee’s employment, (b) demoting, disciplining, or suspending the employee (or threatening to do so), (c) imposing or threatening to impose a penalty related to the employee’s employment, and (d) intimidating or coercing the employee in relation to their employment.
The list is broad and the statutory language (“includes but is not limited to”) signals that the category of reprisals is open-ended. Any adverse employment action can potentially qualify. Courts will look to the substance of the employer’s conduct, not its formal characterization, in determining whether an action constitutes a reprisal.
In McPherson, the reprisal at issue was the termination of the plaintiff’s employment. There was no dispute that termination qualifies as a reprisal; the dispute was over whether the termination was “because” of the plaintiff’s protected activity, which is the question addressed next.
The Causation Question: What Does “Because” Mean?
The most contested interpretive question in McPherson was the meaning of the word “because” in section 121.5(1). The provision prohibits reprisals “because” the employee engaged in protected activity. The question is how strong a causal connection must be established between the protected activity and the reprisal.
The Defendants’ Position: Sole Cause or Predominant Cause
The defendants in McPherson argued that the court should import a demanding causation test from US whistleblower jurisprudence under 18 U.S.C. § 1514A. Under that approach, a reprisal claim fails if the company can articulate a legitimate, non-retaliatory reason for the adverse action (such as poor performance), particularly if that rationale predated the protected activity. The defendants also argued that Ontario tribunals interpreting other Ontario anti-reprisal regimes had adopted a similar deferential approach and that the court should follow suit.
The Court’s Holding: Any Part of the Motivation Is Sufficient
The court rejected the defendants’ interpretation. Justice Centa held that section 121.5(1) means that no company shall take a reprisal against a person if any part of the motivation for the reprisal was the fact that the person engaged in protected activity. The court reasoned that if the legislature had intended to require a sole or predominant causal connection, it could have used words like “solely because” or “only because” (as it did elsewhere in the Securities Act). The absence of such qualifying language, combined with the remedial purpose of the statute and the need to support the OSC’s enforcement and whistleblower programs, pointed to the broader interpretation.
The court declined to import the more demanding US causation test, noting that the Ontario legislature had enacted section 121.5 against the backdrop of Ontario’s own regulatory regime, not the US regime, and that importing a foreign causation test would undermine the statute’s investor-protection purposes.
The practical consequence of this holding is significant. A company cannot defeat a reprisal claim simply by pointing to other, legitimate reasons for its adverse action. If the protected activity was any part of the motivation, the claim succeeds, and the company is liable for the statutory remedy regardless of whether it would have been entitled to take the same action for other reasons.
The Reverse Onus
Section 121.5(5) of the Ontario Securities Act places the burden of proof on the person or company to show that it did not take a reprisal in contravention of the Act. This is a significant departure from the ordinary rules of civil litigation, under which the plaintiff bears the burden of proving each element of its claim. The reverse onus is one of the defining features of the statutory regime and a conscious policy choice by the legislature to facilitate enforcement.
In practice, the reverse onus shifts a substantial evidentiary burden to the defendant. Once the plaintiff establishes that they engaged in protected activity and that an adverse action followed, the defendant must prove, on a balance of probabilities, that the adverse action was not a reprisal. In most cases, this requires the defendant to produce its decision-makers as witnesses and to submit their credibility to cross-examination.
In McPherson, the defendant directors testified that they terminated the plaintiff solely because of poor performance and not because of his protected activity. The court simply did not believe them. The court found their testimony lacking in credibility for reasons including documented inconsistencies with contemporary records, shifting explanations for the termination, and the timing of the termination in close proximity to the plaintiff’s escalating internal compliance complaints. The reverse onus is a powerful tool for plaintiffs because it forces the defendant to produce its evidence first and allows the court to draw adverse inferences from any gaps or inconsistencies in that evidence.
The Alberta “But For” Defence
The Alberta Securities Act includes an explicit statutory defence that is not present in the Ontario regime. Under section 211.0962 of the Alberta Act, a defendant is not liable if it proves either (a) that it would have undertaken the measure or engaged in the course of conduct that is alleged to constitute a reprisal in the absence of the plaintiff being a whistleblower (the “but for” defence), or (b) that at the relevant time, the plaintiff did not reasonably believe the information respecting the alleged wrongdoing.
The “but for” defence in Alberta allows a defendant to avoid liability by proving that it would have taken the same action even if the plaintiff had never engaged in protected activity. This is a mixed-motive defence that is absent from the Ontario statute. The Ontario court in McPherson noted the absence of such a defence from the Ontario Act as one of the reasons for adopting its “any part of the motivation” test, because the Ontario legislature chose not to include a “but for” escape hatch.
For plaintiffs, the lack of a “but for” defence in Ontario is significant. It means that even where a company has a legitimate non-retaliatory reason for the adverse action, and would have taken that action regardless of the protected activity, the claim can still succeed in Ontario if the protected activity was any part of the motivation.
Remedies Under the Statutory Regime
The remedies available for a proven reprisal under the Ontario and Alberta statutes are distinctive and substantial. They reflect the legislature’s policy choice to create a self-contained statutory regime with its own damages framework, rather than leaving the matter to be addressed through other causes of action.
Ontario Remedies
Under section 121.5(6) of the Ontario Securities Act (and its successor section 121.6(7)), a court that finds a contravention of the protection from reprisal provisions may order one or more of the following remedies. First, reinstatement of the employee with the same seniority status they would have had if the contravention had not occurred. Second, payment to the employee of two times the amount of remuneration the employee would have been paid between the date of the contravention and the date of the order, with interest. Third, under the successor provision in section 121.6, payment of additional compensation in the amount the court considers just, having regard to the reprisal and any loss attributable to it.
The “two times remuneration” remedy is the headline feature of the Ontario regime. It provides a statutory multiplier that reflects the legislature’s decision to make the cost of unlawful reprisals significant enough to meaningfully deter them. In McPherson, the court awarded the plaintiff more than $5.3 million in statutory damages, representing twice the amount of remuneration he would have earned had the contravention not occurred, calculated from February 2019 through the date of judgment in September 2025. The court also held that the statute imposes no obligation on the plaintiff to mitigate, and declined to deduct the plaintiff’s post-contravention earnings from the statutory award.
Alberta Remedies
The Alberta regime, under section 211.0963, mandates specific remedies where the plaintiff succeeds. If the plaintiff’s employment was terminated or suspended, if the plaintiff’s remuneration was reduced, or if the plaintiff was denied a monetary benefit, the plaintiff is entitled to up to two times the amount of remuneration that would have been received between the date of the reprisal and the date of the determination of damages. If the plaintiff was subject to non-monetary adverse treatment (a transfer, change of workplace, change in hours, reprimand, or similar), the court must order that the measure be reversed where practicable, with compensation not exceeding the amount of remuneration received during the relevant period.
Proportionate and Joint and Several Liability
The Alberta Act includes detailed provisions on the allocation of liability among multiple defendants. Under section 211.0964, the court must determine each defendant’s responsibility for the damages, and each defendant is liable only for its proportionate share. However, the employer that employed the plaintiff at the relevant time remains jointly and severally liable for the entire damages award, subject to a right of contribution from other defendants. This means that an employee can recover the full award from the employer, which then bears the burden of seeking contribution from individual directors or officers who participated in the reprisal.
Preservation of Other Rights and Remedies
Under the Alberta Act’s section 211.0965, the statutory right of action is in addition to, and does not derogate from, any other rights or defences the plaintiff or defendant may have. A remedy granted under the statutory regime must not be reduced as a result of any other remedy granted in another proceeding between the parties. The statutory regime is therefore best understood as a free-standing securities-law remedy, not as a substitute for or subset of other causes of action a plaintiff may have.
The Facts and Analysis in McPherson
The decision in McPherson v. Global Growth Assets Inc. illustrates how the statutory regime operates in practice and provides important guidance for future reprisal claims.
The Background
Global Growth Assets Inc. and Global RESP Corporation (together, “Global”) were registered investment fund managers and scholarship plan dealers regulated by the Ontario Securities Commission. Global was indirectly owned by Issam El-Bouji, who had served as the company’s CEO and ultimate designated person (UDP) until the Commission permanently prohibited him from acting as a registrant or as a director or officer of any reporting issuer or registrant. Global attempted to have Mr. Bouji’s daughter, Hanane Bouji, approved as UDP. The Commission refused on the ground that she had not demonstrated the ability to prevent her father from acting as a de facto officer of Global.
Ian McPherson was hired as CEO and UDP in August 2018, in circumstances where the Commission’s oversight of Global was ongoing and the company’s compliance with securities law was in question. Ms. Bouji continued to work as a senior executive at Global and remained chair of its board. Under a typical corporate structure, she would have reported to Mr. McPherson as CEO, but in January 2019 the Global board ordered that she would no longer report to Mr. McPherson. The board made this decision without consulting Mr. McPherson and left Ms. Bouji to explain the change to him.
Mr. McPherson believed that Ms. Bouji was at the company to represent her father’s interests and that her removal from his supervision would interfere with his ability to discharge his responsibilities as UDP. He repeatedly raised these concerns with the independent directors and requested in camera meetings, warning of consequences if the board could not explain the change. The board did not grant him an in camera meeting. Instead, on February 28, 2019, the board terminated his employment on a without-cause basis. Following his termination, Mr. Bouji resumed providing direction to Global staff, in contravention of the Commission’s orders.
The Court’s Analysis
Justice Centa accepted that Mr. McPherson engaged in protected activity when he raised his concerns with the independent directors. The court found that Mr. McPherson subjectively believed that Global’s conduct was contrary to Ontario securities law, specifically because the removal of Ms. Bouji from his oversight interfered with his discharge of his regulatory responsibilities as UDP under NI 31-103. The court also found that this subjective belief was objectively reasonable, given the Commission’s prior findings about Ms. Bouji’s conduct and the evident risk that Mr. Bouji would reinsert himself into the company through his daughter.
The court then turned to whether the termination was a reprisal “because” of the protected activity. Applying its “any part of the motivation” test, the court held that Global’s decision to terminate Mr. McPherson’s employment was a reprisal because the board’s motivation was at least in part attributable to Mr. McPherson’s protected activity. The reverse onus required the defendants to prove that they did not take a reprisal contrary to the Act; the court found that they had failed to discharge that burden.
The Remedy
The court awarded Mr. McPherson $5,379,808.22 plus prejudgment interest, representing two times the amount of remuneration he would have been paid between the date of the contravention (February 28, 2019) and the date of judgment (September 12, 2025). The court declined to deduct Mr. McPherson’s post-contravention earnings, holding that the statute imposes no obligation to mitigate. The court also declined to award additional damages at common law (on the ground that the statutory award was itself the appropriate remedy) or punitive or aggravated damages. The defendants’ $53.5 million counterclaim for slander, intentional interference with economic interests, and gross negligence was dismissed.
Practical Implications for Employers and Employees
McPherson has immediate and significant practical implications for registrants, their boards, their executives, and their counsel.
For Registrants and Their Boards
Registrants and their boards should recognize that the statutory protection from reprisals is not a narrow prohibition against overt retaliation. It is a broad protection that captures any adverse action taken where the protected activity was any part of the motivation. A registrant that takes adverse action against an officer following a period of internal compliance complaints faces significant litigation risk, even if the registrant can articulate other legitimate reasons for the decision. The reverse onus makes contemporaneous documentation of the decision-making process critically important, and the timing of adverse actions in relation to internal compliance complaints will be closely scrutinized by a reviewing court.
Boards of directors should also be attentive to the risk of personal liability. The statutory prohibition applies to persons acting on behalf of the company, and directors who participate in adverse decisions can potentially be named as defendants. Under the Alberta regime, directors and officers can be held proportionately liable for reprisals. The Ontario regime similarly permits personal claims against individuals who participated in the reprisal.
For Officers with Regulatory Responsibilities
For executives of registrants, particularly CEOs, UDPs, CCOs, and other officers with statutory compliance responsibilities, the reprisal provisions are a powerful tool for protecting the independence of their regulatory functions. The UDP of a registered investment fund manager has a statutory duty under NI 31-103 to supervise compliance with securities law. When the board or shareholders of the registrant take action that interferes with the UDP’s ability to discharge that duty, the UDP’s protected activity in flagging the interference is precisely the kind of conduct the statute is designed to shield.
McPherson illustrates this point vividly. The plaintiff was the UDP of a registered investment fund manager. His protected activity was raising concerns that the board’s organizational changes interfered with his ability to supervise compliance with NI 31-103 and to prevent a person previously banned by the OSC from influencing the company’s operations. The termination of his engagement following those concerns was precisely the kind of reprisal the statute is designed to address, and the court awarded him substantial statutory damages.
For Counsel Advising Registrants
Securities counsel advising registrants on compliance matters and governance decisions must now consider reprisal risk as part of any adverse action taken against a person who has raised compliance concerns. The analysis extends beyond traditional corporate governance and common law principles. Counsel must also assess whether the person engaged in protected activity under the Securities Act, whether the protected activity might be found to be any part of the motivation for the adverse action, and whether the registrant can discharge the reverse onus in subsequent litigation.
Counsel advising registrants defending against a reprisal claim face a particularly challenging task. The reverse onus shifts the evidentiary burden to the defendant, and credibility findings play a central role in the outcome, as McPherson demonstrates. Early engagement with the documentary record, careful preparation of witnesses, and a clear and consistent theory of the adverse decision are essential.
The statutory protection from reprisals against whistleblowers under Ontario’s Securities Act is a powerful but still-developing area of securities law. Whether you are a registrant defending against a reprisal claim, an officer with regulatory responsibilities whose independence has been interfered with, or a party seeking to understand how the statute intersects with your compliance program, the analysis requires a careful understanding of the statutory framework and the evolving case law. Our securities litigation practice advises on securities reprisal disputes and related commercial litigation in Ontario. Contact Grigoras Law to discuss your situation.
Conclusion
The statutory protection from reprisals against whistleblowers is one of the most important developments in Canadian securities law in recent years. The Ontario framework, with its broad definition of protected activity, its reverse onus, its “any part of the motivation” causation test as interpreted in McPherson, and its “two times remuneration” remedy, provides significant protection for individuals who raise compliance concerns within registered entities. The Alberta framework adds mixed-motive defences and detailed rules on proportionate liability, but offers a similarly generous remedy structure.
McPherson v. Global Growth Assets Inc. is the first substantive interpretation of Ontario’s reprisal provisions and will be the leading authority for future cases. The decision confirms that the statute is to be interpreted broadly and remedially, that the threshold for “reasonable belief” is low, that the “because” requirement is satisfied where protected activity is any part of the motivation for the reprisal, and that the reverse onus places a meaningful evidentiary burden on the defendant. For registrants, the decision is a sharp reminder that governance decisions affecting officers who have raised compliance concerns require careful thought, documentation, and an understanding of securities law that goes well beyond standard corporate practice.
