Canadian Securities Administrators Expand Capital-Raising Limits for Listed Issuer Financing Exemption

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To strengthen the competitiveness and efficiency of Canada’s capital markets, on May 14, 2025, the Canadian Securities Administrators (the “CSA”) announced Coordinated Blanket Order 45-935 – Exemption from Certain Conditions of the Listed Issuer Financing Exemption (the “Blanket Order”), which, among other things, effectively expands the capital-raising limits under the prospectus exemption titled the Listed Issuer Financing Exemption (LIFE) (the “Exemption”).

This change forms part of a broader initiative to enhance the competitiveness of Canadian capital markets, pursuant to which the CSA has introduced various co-ordinated blanket orders in recent months. For a discussion of the harmonized blanket orders announced in April 2025, see our article: Canadian Securities Regulators Announce Changes to Support Capital-Raising Efforts. The increased capital-raising limits set out in the Blanket Order mark an important update to National Instrument 45-106 Prospectus Exemptions (“NI 45-106”), providing reporting issuers with greater flexibility to raise funds without a prospectus pursuant to the Exemption.

Purpose and Background of the Exemption

Introduced in November 2022, the Exemption, which is set out in Part 5A of NI 45-106, provides a cost-effective and timely alternative to a prospectus offering for those issuers who are eligible to rely on it. Subject to certain conditions, the Exemption enables issuers that have been reporting issuers for at least 12 months and are up to date with all periodic disclosure requirements to raise the greater of $5 million or 10% of the issuer’s market capitalization, up to a maximum of $10 million in a 12-month period, provided that all distributions under the Exemption in the prior 12-month period does not result in an increase of more than 50% of the issuer’s outstanding listed equity securities. To rely on the Exemption, eligible reporting issuers must file and deliver a short-form disclosure document (in the form set out in Form 45-106F19) and issue a news release.

For more information on the Exemption and conditions of its use, please see our article from September 2022: Freely Trading Securities Without a Prospectus: CSA Adopts New Exemption Allowing for an Efficient Means of Raising Equity Capital for Canadian Public Companies.

According to the CSA, more than 270 issuers have used the Exemption since its adoption, collectively raising more than C$1 billion. However, feedback from market participants indicates that the original limits were often too restrictive, given the caps on the total amounts that could be raised under the Exemption.

Key Changes to the Exemption in the Blanket Order

The Blanket Order now increases the capital-raising threshold of the Exemption so that eligible issuers can now raise the greater of $25 million and 20% of the aggregate market value of their listed securities, up to a maximum of $50 million in a 12-month period, representing a substantial increase from the previous cap noted above, subject to different provisions relating to the 50% dilution limit mentioned above.

While the 50% dilution limit has been retained, a new framework in the Blanket Order offers more flexible timing for its calculation:

• If the issuer has not used the Exemption in the past 12 months, the 50% dilution limit is calculated on the basis of outstanding securities as of the date of the news release announcing the offering.
• If the issuer has used the Exemption in the past 12 months, the dilution limit is calculated based on the date of the news release announcing the first offering completed under the Exemption during that period.

Further, under the Blanket Order, issuers may exclude securities issuable on the exercise of warrants from the dilution calculation, provided that they are not convertible within 60 days of the closing of the offering. This permits issuers to increase the number of warrants they can issue, while still being eligible to use the Exemption.

The Blanket Order also adds important safeguards, including that the distribution cannot:

• result in a new control person; or
• allow any one person or company to acquire ownership of, or exercise control or direction over, securities that would allow them to elect a majority of the board of directors.

Each member of the CSA has adopted the Blanket Order, with some including jurisdiction-specific expiry dates based on local rules. The Blanket Order will expire in Ontario on November 15, 2026. In Alberta, British Columbia and Quebec, no expiry dates have been specified.

Looking Ahead

The CSA’s decision to expand the Exemption underlines its broader strategy to revitalize public markets and respond to global economic pressures. The increased thresholds offer new capital-raising opportunities, and the update has been welcomed by many stakeholders as a positive and timely enhancement to Canada’s capital markets framework.

The Capital Markets Group at Aird & Berlis LLP will continue to monitor changes announced by the CSA. Please contact the authors or a member of the group to discuss how these changes may impact your disclosure obligations or ability to access additional capital.