Audit Committee Mandate and Terms of Reference for Audit Committee Chair

Our Audit Committee Charter outlines the specific roles and duties of the Committee's members.


The Audit Committee is a Committee of the Board of Directors appointed to assist the Board in monitoring (1) the integrity of the financial statements of the Company, (2) compliance by the Company with legal and regulatory requirements related to financial reporting, (3) qualifications, independence and performance of the Company's independent auditors, and (4) performance of the Company's internal controls and financial reporting process.

The Audit Committee has the power to conduct or authorize investigations into any matters within its scope of responsibilities, with full access to all books, records, facilities and personnel of the Company, its auditors and its legal advisors. In connection with such investigations or otherwise in the course of fulfilling its responsibilities under this charter, the Audit Committee has the authority to independently retain special legal, accounting, or other consultants to advise it, and may request any Officer or employee of the Company, its independent legal counsel or independent auditor to attend a meeting of the Audit Committee or to meet with any members of, or consultants to, the Audit Committee. The Audit Committee also has the power to create specific sub-committees with all of the investigative powers described above.

The Company's independent auditor is ultimately accountable to the Board of Directors and to the Audit Committee; and the Board of Directors and Audit Committee, as representatives of the Company's shareholders, have the ultimate authority and responsibility to evaluate the independent auditor, and to nominate annually the independent auditor to be proposed for shareholder approval, and to determine appropriate compensation for the independent auditor. In the course of fulfilling its specific responsibilities hereunder, the Audit Committee must maintain free and open communication between the Company's independent auditors, Board of Directors and management. The responsibilities of a member of the Audit Committee are in addition to such member's duties as a member of the Board of Directors.

While the Audit Committee has the responsibilities and powers set forth in this charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company's financial statements are complete, accurate, and in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditor. Nor is it the duty of the Audit Committee to conduct investigations, to resolve disagreements, if any, between management and the independent auditor (other than disagreements regarding financial reporting), or to assure compliance with laws and regulations or the Company's own policies.


The membership of the Audit Committee will be as follows:

  • The Committee will consist of a minimum of three members of the Board of Directors, appointed annually, each of whom is affirmatively confirmed as independent by the Board of Directors, with such affirmation disclosed in the Company's annual securityholder materials.
  • The Board will elect, by a majority vote, one member as chairperson.
  • A member of the Audit Committee may not, other than in his or her capacity as a member of the Audit Committee, the Board of Directors, or any other Board Committee, accept any consulting, advisory, or other compensatory fee from the Company, and may not be an affiliated person of the Company or any subsidiary thereof.


The responsibilities of the Audit Committee shall be as follows:

1. Frequency of Meetings

  • Meet quarterly or as often as may be deemed necessary or appropriate in its judgment, either in person or telephonically.
  • Meet with the independent auditor at least quarterly, either in person or telephonically.

2. Reporting Responsibilities

  • Provide to the Board of Directors proper Committee minutes.
  • Report Committee actions to the Board of Directors with such recommendations as the Committee may deem appropriate.
  • Provide a report for the Company's Annual Information Circular.

3. Charter Evaluation

  • Annually review and reassess the adequacy of this Charter and recommend any proposed changes to the Board of Directors for approval.

4. Whistleblower Mechanisms

  • Adopt and review annually a mechanism through which employees and others can directly and anonymously contact the Audit Committee with concerns about accounting and auditing matters. The mechanism must include procedures for responding to, and keeping of records of, any such expressions of concern.

5. Independent Auditor

  • Nominate annually the independent auditor to be proposed for shareholder approval.
  • Approve the compensation of the independent auditor, and evaluate the performance of the independent auditor.
  • Establish policies and procedures for the engagement of the independent auditor to provide non-audit services.
  • Ensure that the independent auditor is not engaged for any activities not allowed by any of the Canadian provincial securities commissions, the SEC or any securities exchange on which the Company's shares are traded.
  • Ensure that the auditors are not engaged for any of the following nine types of non-audit services contemporaneous with the audit:
    • bookkeeping or other services related to accounting records or financial statements of the Company;
    • financial information systems design and implementation;
    • appraisal or valuation services, fairness opinions, or contributions-in-kind reports;
    • actuarial services;
    • internal audit outsourcing services;
    • any management or human resources function;
    • broker, dealer, investment advisor, or investment banking services;
    • legal services; and
    • expert services related to the auditing service.

6. Hiring Practices

  • Ensure that no senior officer who is, or in the past full year has been, affiliated with or employed by a present or former auditor of the Company or an affiliate, is hired by the Company until at least one full year after the end of either the affiliation or the auditing relationship.

7. Independence Test

  • Take reasonable steps to confirm the independence of the independent auditor, which shall include:
    • insuring receipt from the independent auditor of a formal written statement delineating all relationships between the independent auditor and the Company, consistent with the Independence Standards Board Standard No. 1 and related Canadian regulatory body standards;
    • considering and discussing with the independent auditor any relationships or services, including non-audit services, that may impact the objectivity and independence of the independent auditor; and
    • as necessary, taking, or recommending that the Board of Directors take, appropriate action to oversee the independence of the independent auditor.

8. Audit Committee Meetings

  • At the request of the independent auditor, convene a meeting of the Audit Committee to consider matters the auditor believes should be brought to the attention of the Directors or shareholders.
  • Keep minutes of its meetings and report to the Board for approval of any actions taken or recommendations made.

9. Restrictions

  • Ensure no restrictions are placed by management on the scope of the auditors' review and examination of the Company's accounts.
  • Ensure that no Officer or Director attempts to fraudulently influence, coerce, manipulate or mislead any accountant engaged in auditing of the Company's financial statements.


10. Scope

  • Consider, in consultation with the independent auditor, the audit scope and plan of the independent auditor.

11. Review Process and Results

  • Consider and review with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61, as the same may be modified or supplemented from time to time.
  • Review and discuss with management and the independent auditor at the completion of the annual examination:
    • the Company's audited financial statements and related notes;
    • the Company's MD&A and news releases related to financial results;
    • the independent auditor's audit of the financial statements and its report thereon;
    • any significant changes required in the independent auditor's audit plan;
    • any non-GAAP related financial information;
    • any serious difficulties or disputes with management encountered during the course of the audit; and
    • other matters related to the conduct of the audit, which are to be communicated to the Audit Committee under generally accepted auditing standards.
  • Review, discuss with management and approve annual and interim quarterly financial statements prior to public disclosure.
  • Review and discuss with management and the independent auditor the adequacy of the Company's internal controls that management and the Board of Directors have established and the effectiveness of those systems, and inquire of management and the independent auditor about significant financial risks or exposures and the steps management has taken to minimize such risks to the Company.
  • Meet separately with the independent auditor and management, as necessary or appropriate, to discuss any matters that the Audit Committee or any of these groups believe should be discussed privately with the Audit Committee.
  • Review and discuss with management and the independent auditor the accounting policies which may be viewed as critical, including all alternative treatments for financial information within generally accepted accounting principles that have been discussed with management, and review and discuss any significant changes in the accounting policies of the Company and industry accounting and regulatory financial reporting proposals that may have a significant impact on the Company's financial reports.
  • Review with management and the independent auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures, if any, on the Company's financial statements.
  • Review with management and the independent auditor any correspondence with regulators or governmental agencies and any employee complaints or published reports which raise material issues regarding the Company's financial statements or accounting policies.
  • Review with the Company's General Counsel legal matters that may have a material impact on the financial statements, the Company's financial compliance policies and any material reports or inquiries received from regulators or governmental agencies related to financial matters.


  • Review filings with the Canadian provincial securities commissions and the SEC and other published documents containing the Company's financial statements.
  • Review, with management and the independent auditor, prior to filing with regulatory bodies, the interim quarterly financial reports (including related notes and MD&A) at the completion of any review engagement or other examination. The designated financial expert of the Audit Committee may represent the entire Audit Committee for purposes of this review.


  • Meet periodically with management to review the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures.
  • Assess risk areas and policies to manage risk including, without limitation, environmental risk, insurance coverage and other areas as determined by the Board of Directors from time to time.


Annually review this Charter and propose amendments to be ratified by a simple majority of the Board of Directors.


The Chair is appointed annually by and reports to the Board. The Chair's primary role is managing the affairs of the Committee, including ensuring the Committee is organized properly, functions effectively and meets its obligations and responsibilities. The Chair works with the Chief Operating Officer ("COO") of the Company to ensure effective relations with Committee members. The Chair maintains on-going communications with the COO and with such other Officers of the Company as the Chair determines appropriate. The Chair, in conjunction with the Committee, maintains ongoing communications with the Company's external auditors. The Chair has the responsibility to lead the Committee and report to the Board after each Committee meeting.

The Chair also has the responsibility to ensure the Committee is alert to its obligations to the Board and pursuant to law and to chair Committee meetings. The Chair must also:

  1. assist the Board in its recommendation of Committee members and its review of the performance and suitability of the Committee;
  2. ensure the co-ordination of the agenda, information packages and related events for Committee meetings in conjunction with the Board Chair, the COO and the Corporate Secretary;
  3. maintain a liaison and communication with Committee members, other Directors and the Board Chair to co-ordinate input from Committee members and Directors, and optimize the effectiveness of the Committee;
  4. in collaboration with the COO and other Officers, ensure information requested by Committee members is provided and meets their needs;
  5. in conjunction with the Nomination and Corporate Governance Committee, the Board and the Board Chair, review and assess Committee attendance, performance and compensation and the size and composition of the Committee; and
  6. in conjunction with the Compensation Committee, lead the Committee in assessing the performance of the Company's financial management team.