Stewart McKelvey

held the cap as constitutional, and leave to appeal to the Supreme Court of Canada was denied. In two Nova Scotia cases, one applying that prov- ince's former cap and the other applying the legislation from Prince Edward Island, judges have noted that, but for the cap, the plaintiffs' damages would have been far greater, and the capped amount was not sufficient to fully compensate for pain and suffering. In Newfoundland and Labrador, there is no cap on damage awards for non-pecuniary loss arising out of motor vehicle accidents. Instead, these dam- ages are reduced by $2,500, regardless of the severity of injury. This operates as a deductible, and applies to accidents occurring on or after August 1, 2004. The legislated deductible eliminates the uncertainty of determining whether injuries meet a particular threshold, but raises the issue of whether there will be an increase in the reported severity of injuries to overcome the deductible. The determination of whether a claim falls within a provincial cap on general or non-pecuniary damages is very fact-specific. We would be pleased to assist with assessing this issue on any particular case, as well as with any insurance issues arising in Atlantic Canada. Scott Norton, Q.C. Halifax, NS 902.420.3349 snorton@stewartmckelvey.com SHOULD I INCORPORATE IN NEW BRUNSWICK? NOVA SCOTIA? D By Charles Reagh and Paul Smith elaware corporations are often used for American businesses, no matter which of the fifty states they operate in. No one is surprised to find a public corporation based in Texas holding a Delaware charter. What Delaware provides – including an extremely flexible corporate statute and a knowledgeable and predictable business court – makes the advantages of being incorporated miles from home far exceed the disadvantages, real or perceived. Initially, Canadians were slower to use non-local corporate entities but over the past thirty years com- petition has arisen between Canadian jurisdictions to play host to business entities for use across Canada and beyond. This is particularly the case for entities used by US and other foreign based investors in Canada. New Brunswick was early to get into this com- petition with its 1982 Business Corporations Act. At the time, New Brunswick provided major advantages over statutes in the larger Canadian provinces and over the Canada Business Corporations Act. New Brunswick did not require Canadian resident dir- ectors and had flexible rules for leveraged buyouts. New Brunswick also has the advantage of being the only bilingual province with laws and corporate doc- uments available in both official languages. With the "rediscovery" in the early 1990s of Nova Scotia unlimited companies – which can qualify for "dis- regarded entity" status for US tax purposes - Nova Sco- tia became a major player in "jurisdiction-shopping". Nova Scotia, like New Brunswick, (but unlike most other Canadian jurisdictions at the time) did not re- quire Canadian resident directors, and – given that New Brunswick offered no corresponding entity – Nova Sco- tia became the jurisdiction of choice for those needing ULCs. For "ordinary" limited corporations both Nova Scotia and New Brunswick were competitive although New Brunswick continued to have the upper hand. In 2008, Nova Scotia substantially updated its cor- porate statute to remove many irritants which had made Nova Scotia companies less popular. While the main impetus of this was to remain competitive with western provinces beginning to offer ULC-type entities, this made Nova Scotia more competitive in the broader context. New Brunswick has not substantially amended its corporate statute since its original introduction. Yukon, British Columbia and Québec may also lay claim to the title "Delaware of the North" but New Brunswick and Nova Scotia are probably the most DOING BUSINESS IN ATLANTIC CANADA FALL 2011 7

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