House of Commons Hansard #37 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was americas.

Topics

Financial Consumer Agency Of Canada Act
Government Orders

12:10 p.m.

Some hon. members

Agreed.

Financial Consumer Agency Of Canada Act
Government Orders

12:10 p.m.

Some hon. members

No.

Financial Consumer Agency Of Canada Act
Government Orders

12:10 p.m.

The Acting Speaker (Ms. Bakopanos)

All those in favour of the motion will please say yea.

Financial Consumer Agency Of Canada Act
Government Orders

12:10 p.m.

Some hon. members

Yea.

Financial Consumer Agency Of Canada Act
Government Orders

12:10 p.m.

The Acting Speaker (Ms. Bakopanos)

All those opposed will please say nay.

Financial Consumer Agency Of Canada Act
Government Orders

12:10 p.m.

Some hon. members

Nay.

Financial Consumer Agency Of Canada Act
Government Orders

12:10 p.m.

The Acting Speaker (Ms. Bakopanos)

In my opinion the yeas have it.

And more than five members having risen:

Financial Consumer Agency Of Canada Act
Government Orders

12:10 p.m.

The Acting Speaker (Ms. Bakopanos)

The recorded division on Motion No. 14 stands deferred. I will now put Group No. 3 to the House.

Financial Consumer Agency Of Canada Act
Government Orders

12:10 p.m.

Bloc

Yvan Loubier Saint-Hyacinthe—Bagot, QC

moved:

Motion No. 3

That Bill C-8 be amended by adding after line 20 on page 28 the following new clause:

“54.1 Subsection 46(2) of the Act is replaced by the following:

(2) The shareholders of a bank shall, by resolution at the meeting of shareholders called pursuant to subsection (1), a ) approve, amend or reject any by-law made by the directors of the bank; b ) subject to section 168, elect directors to hold office for a term expiring not later than the close of the third annual meeting of shareholders following the election; c ) appoint an auditor or auditors to hold office until the close of the first annual meeting of shareholders; and d ) adopt a code of internal procedure respecting the conduct of meetings of shareholders.

Motion No. 4

That Bill C-8, in Clause 63, be amended by replacing lines 21 to 33 on page 31 with the following:

“63. Subsection 138(1) of the Act is replaced by the following:

  1. (1) Notice of the time and place of a meeting of shareholders of a bank and the complete minutes of the last meeting of shareholders, whether that meeting was an annual or a special meeting, shall be sent not less than twenty- one days or more than fifty days before the meeting, a ) to each shareholder entitled to vote at the meeting; b ) to each director; and c ) to the auditor or auditors of the bank.

(1.1) A bank with equity of five billion dollars or more shall set out in the notice of a meeting the number of eligible votes, as defined under subsection 156.09(1), that may be cast at the meeting as of the record date for determining those shareholders entitled to receive the notice of meeting or, if there are to be separate votes of shareholders at the meeting, the number of eligible votes, as defined in that subsection, in respect of each separate vote to be held at the meeting.”

Financial Consumer Agency Of Canada Act
Government Orders

12:10 p.m.

Bloc

Pauline Picard Drummond, QC

moved:

Motion No. 5

That Bill C-8, in Clause 65, be amended by replacing line 6 on page 32 with the following:

“in whose names the shares are registered in the institution's registers and entitled to receive notice of a meeting under”

Financial Consumer Agency Of Canada Act
Government Orders

12:15 p.m.

Bloc

Yvan Loubier Saint-Hyacinthe—Bagot, QC

moved:

Motion No. 6

That Bill C-8 be amended by adding after line 33 on page 34 the following new clause:

“70.1 Section 160 of the Act is amended by striking out the word “and” at the end of paragraph (h) and by adding the following after paragraph (i): j ) a person who is a director of another financial institution; and k ) a person who has, directly or indirectly, an interest in the supply of products or services to the institution.

Motion No. 7

That Bill C-8 be amended by adding after line 20 on page 35 the following new clause:

“71.1 The Act is amended by adding the following after section 161:

161.1 (1) The position of chairman shall be separate from the position of chief executive officer and shall not be held by the same person.

(2) For greater certainty, the role of the chairman shall be to ensure that the board of directors assesses the management of the institution, while the role of the chief executive officer shall be to manage the institution's day- to-day activities.”

Madam Speaker, basically, these amendments have three purposes. The first is to give more power to shareholders of financial institutions. Earlier, we spoke about the special ownership structure of the Canadian financial sector and that is precisely the idea of the first motion. We said, for example, that for large banks 20% of the shares can be held by a single shareholder and that 80 % of voting shares would be widely distributed in the public.

The effects of such a distribution can be negative since small shareholders have very little to say, particularly during annual meetings of the large Canadian banks, and the bill is designed to strengthen the powers of those small shareholders.

We add our voice to that of the Association de protection des épargnants et des investisseurs du Québec, the APEIQ. We want to give our support to its campaign for more democracy at annual meetings of banks, as well as in the way the boards of directors of financial institutions operate.

On this point, in our first group of amendments, we say that shareholders, no matter how small, have a right to be heard and to participate in any decision made by the financial institutions. To do so, they must receive prompt and timely notice of a general meeting. They must have all the documents relevant to this meeting and they must also be allowed to be heard, not just on matters having to do with the profitability of the financial institution, but also on any other matter which directly or indirectly affects the activities of the institution per se.

I will give an example. Right now, it is not possible for shareholders at a general meeting to raise matters having to do with the social aspects of a company's activities. Nor may they raise political issues. For instance, they could not ask questions about the activities of a company in which they were a small shareholder in countries where democracy was not the rule and where fundamental rights were not respected. It is not possible at a general meeting to table resolutions along these lines or even to question the board of directors. It is time that this changed. It is now 2001 and the democratic system in use at the general meetings of major financial institutions is completely archaic.

There are also other motions, one of which was to avoid any possibility of conflict of interest.

A person cannot sit on the board of a major bank and also provide that bank with goods and services. This would make him or her both judge and party to the action when it came time to make decisions relating to the financial institution.

For example, someone cannot be a member of the board of a bank and a shareholder in a company of external auditors, for instance, hired by the bank to audit its financial statements.

What we are proposing then is to ensure that there are new provisions which would, for example, call for questions to be asked and for it not to be acceptable for a board member to be directly or indirectly involved in providing the institution with products and services. Nor would it be allowed for a board member of one financial institution to also sit on the board of another. This could lead to problems.

That is the gist of what we are proposing. It is also the position of the Association de protection des épargnants et des investisseurs du Québec, APEIQ, which we totally endorse.

It is our hope that, in the spirit of greater democratization and transparency of the activities of the financial institutions, the government will support such proposals, along with the members of the other opposition parties. They cannot help but improve things from the point of view of equity, small shareholder participation, democratization and, above all, transparency of the activities of these major financial institutions.

Financial Consumer Agency Of Canada Act
Government Orders

12:20 p.m.

Etobicoke North
Ontario

Liberal

Roy Cullen Parliamentary Secretary to Minister of Finance

Mr. Speaker, Motions Nos. 3, 4, 5, 6 and 7 brought forward by the Bloc relate to the provisions of the Bank Act on crown corporation governance.

As hon. members know, the Senate is presently considering a separate bill, Bill S-11, to amend the provisions of the Canada Business Corporations Act relating to corporation governance.

The government is closely monitoring progress of Bill S-11 with a view to assessing the opportunity to apply the various initiatives included in that legislation to financial institutions.

After parliament has completed consideration of Bill S-11, the government will consult interested parties on the changes.

The consultation process will allow parties who did not take part in the amendment of the Canada Business Corporations Act to express their views on the appropriateness of making similar amendments to corporation governance provisions that apply to financial institutions.

Since the general examination of provisions of financial institution legislation concerning corporation governance will focus on the issues raised in the motions, we think there is no need to amend the bill at the moment.

Financial Consumer Agency Of Canada Act
Government Orders

12:20 p.m.

Bloc

Pauline Picard Drummond, QC

Mr. Speaker, it gives me great pleasure to speak to the motions brought forward by the Bloc Quebecois and supported by my colleague for Saint-Hyacinthe—Bagot, who worked very hard on this issue. He submitted a brief on the subject, listened to hundreds of witnesses and also took to heart most of the recommendations made by witness groups.

The problem with this bill, and it was mentioned earlier, has to do with banks with assets totalling under $5 billion.

We are also concerned with the recommendations made by the Association de protection des épargnants et investisseurs du Québec. It submitted a brief at the committee hearings on Bill C-38, which is now called Bill C-8.

The Association de protection des épargnants et investisseurs du Québec then said:

Bank ownership is widely spread in Canada and it is so intended in order to limit a big shareholder's capacity to control one or more financial institutions while these are considered to be public services. Unfortunately, this widespread shareholding has had a perverse effect—

I repeat, “a perverse effect”,

—by leaving way too much influence in the hands of the directors of major banks. This perverse effect could well be eliminated through some legislative changes to the Banking Act.

The Bloc Quebecois supports the recommendations made by the Association de la protection des épargnants et investisseurs du Québec, and that is why we brought forward the motions read earlier. We have moved many more in support of the association, but they were rejected.

The association has made numerous representations to the federal government, to the McKay Commission in 1997, to the Standing Senate Committee on Banking in 1998 and to the House Standing Committee on Finance in November 1998. Despite these many meetings, Bill C-38 and Bill C-8 did not take any of the association's recommendations into account.

For the most part, these recommendations refer to the recommendations made by the association. I would like to quote some of these recommendations if I have enough time, but I know that time flies.

First there is the restriction on the number of boards a director is allowed to sit on at any one time. Our proposal dealt with the restriction on the number of boards a director would be allowed to sit on at any one time. What exists now is the old boys' club rule where “You appoint me, I appoint you, and we appoint each other”.

Committees Of The House
Routine Proceedings

March 27th, 2001 / 12:25 p.m.

Canadian Alliance

Jim Pankiw Saskatoon—Humboldt, SK

Mr. Speaker, I rise on a point of order. I apologize for interrupting the member's speech but it is a procedural matter. I believe you would find unanimous consent to adopt Motion No. 3 on the order paper without debate.

Committees Of The House
Routine Proceedings

12:25 p.m.

The Deputy Speaker

Does the hon. member for Saskatoon—Humboldt have unanimous consent to propose the motion?