Navigating ‘Material Change’: Takeaways From the SCC’s Decision in Lundin Mining

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On November 28, 2025, the Supreme Court of Canada (“SCC”) released its decision in Lundin Mining Corp. v. Markowich, providing important clarification on one of the more nuanced areas of Canadian securities law: the distinction between a “material fact” and a “material change” under the Ontario Securities Act (the “Act”).

In an 8-1 decision, the SCC dismissed Lundin Mining Corp.’s (“Lundin”) appeal, thereby affirming Markowich’s position and confirming that the concept of a “material change” must be interpreted broadly, contextually and in a manner consistent with the investor‑protective purposes of securities legislation, rejecting the narrower, “manager-friendly standard” when it comes to what constitutes a “material change” under the Act.

The Securities Act: Material Fact vs. Material Change

Canadian securities law draws a deliberate distinction between “material facts” and “material changes,” imposing different disclosure obligations for each.

A material fact is defined broadly in the Act as any fact that would reasonably be expected to have a significant effect on the market price or value of an issuer’s securities. The definition is intentionally expansive. A material fact need not arise from an internal corporate development and may be external to the issuer, such as market conditions or other external events affecting performance. Disclosure of material facts typically occurs through periodic disclosure documents, including financial statements, management’s discussion and analysis, and prospectuses.

A material change, by contrast, is defined as a change in the business, operations or capital of the issuer that would reasonably be expected to have a significant effect on the market price or value of its securities. While the scope of what may constitute a material change is narrower than that of a material fact, the disclosure obligations are more immediate. Reporting issuers are required to disclose material changes “forthwith” (i.e., within 10 days).

The differing disclosure regimes make the distinction between a “material” fact and change critical. Mischaracterizing an event as a material fact rather than a material change can result in delayed disclosure and potential liability for the issuer. The SCC’s decision in Lundin Mining addresses how that distinction should be drawn and cautions against interpreting the concept of a “change” too narrowly.

Background and Disclosure Issue

The case arose from two events at Lundin’s copper mine in Chile: the identification of pit wall instability on October 25, 2017, and a rockslide on October 31, 2017. At the time, the rockslide was initially estimated to affect less than 5% of Lundin’s annual copper production. After the events occurred, but before they were publicly disclosed at the end of November of that year, investor Dov Markowich (“Markowich”) acquired 10,000 shares of Lundin without knowledge of either event. Lundin did not publicly disclose the pit wall instability or rockslide until November 29, 2017, when it issued a routine operational update. In that release, Lundin announced a downward revision of approximately 20% to production guidance for the Chilean mine. The following day, Lundin’s share price declined by approximately 16%.

In 2018, Markowich commenced a proposed national class action alleging that Lundin breached its timely disclosure obligations under s. 75(1) of the Act by failing to disclose material changes forthwith.

1. the Motion Judge

   Appearing first in the lower court, the motion judge denied Markowich leave to proceed under s. 138.8(1) of the Act, adopting a restrictive, dictionary‑based interpretation of the term “change.” On that approach, the motion judge concluded that neither the pit wall instability nor the rockslide constituted a change in Lundin’s business, operations or capital.

2. the Court of Appeal

   The Ontario Court of Appeal (“ONCA”) allowed Markowich’s appeal of the motion judge’s finding and reversed the motion judge’s decision. The ONCA held that the motion judge applied an unduly narrow interpretation to statutory terms that the legislature intentionally left undefined to allow for flexible, contextual application.

3. the SCC’s Decision

The SCC dismissed Lundin’s appeal and endorsed the ONCA’s broader, purposive approach. Central to the SCC’s reasoning was the role of timely disclosure in maintaining fair and efficient capital markets. The SCC emphasized that overly restrictive interpretations of disclosure obligations risk undermining investor protection and the integrity of the secondary market regime.

Clarifying the Meaning of a ‘Material Change’

The SCC reaffirmed in Lundin Mining that a two‑step test for determining whether an event constitutes a material change is the appropriate and required framework.

First, there must be a change in the business, operations or capital of the issuer. This inquiry is qualitative and focuses on whether something has changed in how the issuer conducts its business or operations. At this stage, the SCC made clear that the threshold is deliberately low. A change does not need to be “important,” “significant” or “substantial” in order to qualify as a change. Requiring importance or magnitude at the first step improperly conflates the existence of a change with its materiality.

The SCC stressed that the legislature’s decision not to define the terms “business,” “operations” or “capital” was intentional. Those terms are meant to be interpreted flexibly and contextually, so that the disclosure regime can adapt to the wide variety of factual circumstances faced by public issuers. Narrow or technical definitions risk excluding operational developments that, while incremental or evolving, nonetheless alter how a business is conducted.

Second, once a change is established, the analysis turns to materiality to determine whether the change would reasonably be expected to have a significant effect on the market price or value of the issuer’s securities. Only at this stage does the magnitude or importance of the change become relevant. Both steps must be satisfied to trigger the obligation for timely disclosure.

The SCC held that the motion judge erred by requiring that an event be “important and substantial” in order to qualify as a change. The SCC reasoned that “the narrower disclosure standard is inconsistent with the text of the legislation, which, apart from the question of materiality, simply refers to a ‘change’, not an important, substantial, significant, core, key, or high-level change.”^[1] That approach collapsed the two‑step test into a single inquiry and imposed a higher threshold than the statute requires.

Distinction Between Facts and Changes

The SCC also clarified how material facts differ from material changes. Material facts are broader in scope and may arise from external circumstances affecting the issuer, such as economic conditions or weather events. By contrast, a material change must be internal to the issuer’s business, operations or capital. The SCC emphasized that: “External political, economic, and social developments cannot give rise to a material change, unless the development results in a change in the business, operations or capital of the issuer, and unless the change is material.”^[2] As the SCC noted, external events may constitute material facts without giving rise to a material change unless they result in an internal change to how the issuer operates.

This distinction reinforces why the concept of a “change” must be interpreted flexibly. Internal operational developments may evolve over time and may not initially appear dramatic yet still alter the issuer’s operations in a way that ultimately proves material to investors.

Conclusion

The SCC’s decision confirms that the concept of a material change should be interpreted broadly and purposively in alignment with “the core concern of securities law: the asymmetry of information that exists between issuers’ managers and current and prospective investors in these issuers.”^[3] The SCC’s rejection of a requirement that a change be “important” or “substantial” at the threshold stage lowers the barrier for identifying changes that may require immediate disclosure. The SCC emphasized that “there is no bright line test and this determination is not a science, but rather a matter of judgment and common sense applied to the unique circumstances of each case.”^[4]

From a practical perspective, Lundin Mining increases the risk associated with delayed disclosure where issuers wait for greater certainty about the magnitude of an operational issue. The decision signals that uncertainty about impact does not excuse a failure to disclose once a qualifying change has occurred. Ultimately, Lundin Mining reinforces the long‑standing principle that reporting issuers should err on the side of timely disclosure when assessing whether an internal development may constitute a material change under Canadian securities law.

The Capital Markets Group at Aird & Berlis LLP will continue to monitor matters related to timely disclosure and developments in Canadian securities law. If you are a reporting issuer, investor or market participant and have any questions on how to best navigate continuous obligations or what is considered a material change under the law, please contact the authors or a member of the group.

[1] Lundin Mining Corp. v. Markowich, 2025 SCC 39 at para 80.