How is the fair value of dissenting shares determined in an Ontario appraisal proceeding?

Once a shareholder validly exercises dissent rights under the OBCA, the corporation is generally required to offer to pay for the dissenting shares at what it considers fair value, but fair value is not a fixed formula set out in the statute — it is meant to reflect what the shares were actually worth immediately before the fundamental change that triggered the dissent, without factoring in any increase or decrease in value caused by the change itself.

If the corporation and the dissenting shareholder cannot agree on a number, either side can apply to court to have the fair value determined, and the court can consider valuation evidence from financial experts, since determining the value of shares in a private company is inherently a fact-specific, expert-driven exercise rather than something with a set formula. Courts have generally recognized that fair value in this context is meant to be fair to the dissenting shareholder specifically, which can sometimes differ from valuation approaches used in other contexts. Because valuation disputes like this can involve competing expert opinions and significant legal cost, many dissent situations are ultimately resolved through negotiation rather than a full court valuation proceeding.