An issuer in compliance with the certification requirements in section 302(a) of the Sarbanes-Oxley Act may be able to rely upon the exemptions from the annual certificate and interim certificate requirements. However, the issuer is not exempt from filing the annual and interim certificates on Forms 52-109F1 and 52-109F2 if the issuer files annual and interim financial statements prepared in accordance with Canadian GAAP, unless the issuer files those statements with the SEC in compliance with the requirements of section 302(a) of the Sarbanes-Oxley Act. Canadian issuers who prepare two sets of financial statements, one in Canadian GAAP and one in US GAAP, must file certifications with their Canadian GAAP financials.

If an issuer does not have a chief executive officer or chief financial officer, then each person who performs similar functions to a chief executive officer or chief financial officer must certify the annual filings and interim filings. It is left to the issuer’s discretion to determine who those persons are.

Chief executive officers and chief financial officers (or persons performing similar functions to a chief executive officer or chief financial officer) holding such offices at the time that annual certificates and interim certificates are required to be filed are the persons who must sign those certificates. Certifying officers are required to file annual certificates and interim certificates in the specific form (without any amendment) and failure to do so will be a breach of MI 52-109. In Forms 52-109F1 and 52-109F2, the certifying officers are required to represent that they have designed (or caused to be designed under their supervision) disclosure controls and procedures and internal control over financial reporting. There may be situations where an issuer’s disclosure controls and procedures and internal control over financial reporting have been designed and implemented prior to the certifying officers assuming their respective offices. In these situations, certifying officers may have difficulty in representing that they have designed or caused to be designed these controls and procedures. In such cases, where: (a) disclosure controls and procedures and internal control over financial reporting have been designed and implemented prior to the certifying officers assuming their respective offices; (b) the certifying officers have reviewed the existing controls and procedures upon assuming their respective offices; and (c) the certifying officers have designed (or caused to be designed under their supervision) any modifications or enhancements to the existing controls and procedures determined to be necessary following their review, then the certifying officers will have designed (or caused to be designed under their supervision) these controls and procedures for the purposes of Forms 52-109F1 and 52-109F2 and may therefore sign the certifications.

Form 52-109F1 requires the certifying officers to represent that they have evaluated the effectiveness of the issuer’s disclosure controls and procedures and have caused the issuer to disclose in the annual MD&A their conclusions about the effectiveness of the disclosure controls and procedures based on such evaluation. MI 52-109 does not specify the contents of the certifying officers’ report on its evaluation of disclosure controls and procedures. However, given that disclosure controls and procedures should be designed to provide "reasonable assurance" of achieving their objectives so that the officers can provide their certifications, the report should set forth, at a minimum, the conclusions of the certifying officers as to whether the controls and procedures are effective at the "reasonable assurance" level.

An officer providing a false certification potentially could be subject to quasi-criminal, administrative or civil proceedings under securities law. Officers providing a false certification could also potentially be subject to private actions for damages.

The chief executive officer and chief financial officer must each certify that their issuer’s financial statements and other financial information "fairly present" the financial condition of the issuer for the relevant time period. These representations are not qualified by the phrase "in accordance with generally accepted accounting principles" which Canadian auditors typically include in their financial statement audit reports. This qualification has been specifically excluded from MI 52-109 to prevent management from relying entirely upon compliance with the issuer’s GAAP in this representation, particularly where the issuer’s GAAP financial statements may not reflect the financial condition of an issuer (since the issuer’s GAAP does not always define all the components of an overall fair presentation). MI 52-109 requires the certifying officers to certify that the financial statements (including prior period comparative financial information) and the other financial information included in the annual filings and interim filings fairly present the issuer’s financial condition, results of operation and cash flows. The certification is intended to provide assurances that the financial information disclosed in the annual filings and interim filings, viewed in their entirety, meets a standard of overall material accuracy and completeness that is broader than financial reporting requirements under GAAP.

A formal definition of fair presentation would encompass a number of qualitative and quantitative factors that may not be applicable to all issuers. Fair presentation includes but is not necessarily limited to: (a) selection of appropriate accounting policies; (b) proper application of appropriate accounting policies; (c) disclosure of financial information that is informative and reasonably reflects the underlying transactions; and (d) inclusion of additional disclosure necessary to provide investors with a materially accurate and complete picture of financial condition, results of operations and cash flows. The concept of fair presentation as used in the annual certificates and interim certificates is not limited to compliance with the issuer’s GAAP. However, it is not intended to permit an issuer to depart from the issuer’s GAAP recognition and measurement principles in the preparation of its financial statements. In the event that an issuer is of the view that there are limitations to the issuer’s GAAP based financial statements as an indicator of the issuer’s financial condition, the issuer should provide additional disclosure in its MD&A necessary to provide a materially accurate and complete picture of the issuer’s financial condition, results of operations and cash flows.

In each of the annual certificates and interim certificates, the chief executive officer and chief financial officer must each certify that their issuer’s financial statements fairly present the financial condition of the issuer for the relevant time period. MI 52-109 does not formally define "financial condition." The term "financial condition" in the annual certificates and interim certificates is intended to be used in the same manner as the term "financial condition" is used in The Canadian Institute of Chartered Accountants’ MD&A Guidelines and NI 51-102. Financial condition encompasses a number of qualitative and quantitative factors which would be difficult to enumerate in a comprehensive list applicable to all issuers. Financial condition of an issuer includes, without limitation, considerations such as liquidity, solvency, capital resources, overall financial health of the issuer’s business, and current and future considerations, events, risks or uncertainties that might impact the financial health of the issuer’s business.

Issuers are required to prepare their financial statements on a consolidated basis under the issuer’s GAAP. As a result, the representations of the certification will extend to consolidated financial statements. In addition, these representations will indicate that their issuers’ disclosure controls and procedures provide reasonable assurance that material information relating to their issuers and their consolidated subsidiaries is made known to them. Regardless of the level of control that an issuer has over a consolidated subsidiary, management of the issuer has an obligation to present consolidated disclosure that includes a fair presentation of the financial condition of the subsidiary. An issuer needs to maintain adequate internal control over financial reporting and disclosure controls and procedures to accomplish this. In the event that a chief executive officer or chief financial officer is not satisfied with his or her issuer’s controls and procedures insofar as they relate to consolidated subsidiaries, the chief executive officer or chief financial officer should cause the issuer to disclose in its MD&A his or her concerns regarding such controls and procedures. An issuer’s financial results and MD&A may consolidate those of a subsidiary which is also a reporting issuer. In those circumstances, it is left to the business judgment of the certifying officers of the issuer to determine the level of due diligence required in respect of the consolidated subsidiary in order to provide the issuer’s certification.