Does a shareholder need court permission before starting a derivative action in Ontario?

Yes. Ontario's Business Corporations Act requires a shareholder (or other eligible complainant) to obtain leave - formal permission from the court - before starting or continuing a derivative action on the corporation's behalf. This requirement exists to screen out claims that aren't genuinely worth pursuing in the corporation's interest before the corporation is put through the time and expense of litigation it didn't choose to bring itself.

To get leave, the applicant generally has to show they gave reasonable notice to the directors of their intention to apply if the directors don't act, that they're acting in good faith, and that the proposed action appears to be in the corporation's interest. Courts also typically want to see that the applicant made a genuine effort to have the board address the issue first, since a derivative action is meant to be a backstop when the normal governance process has failed, not a first resort. Because the leave application is itself a real procedural hurdle with its own evidentiary requirements, it's generally the first major stage of the case and should be prepared as carefully as the underlying claim itself.