House of Commons Hansard #30 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was chair.

Topics

Order in Council Appointments
Routine Proceedings

10 a.m.

Beauséjour
New Brunswick

Liberal

Dominic LeBlanc Parliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, I have the honour to table, in both official languages, a number of order in council appointments recently made by the government.

Federal-Provincial Fiscal Arrangements Act
Routine Proceedings

10:05 a.m.

Eglinton—Lawrence
Ontario

Liberal

Joe Volpe for the Minister of Finance

moved for leave to introduce Bill C-24, an act to amend the Federal-Provincial Fiscal Arrangements Act and to make consequential amendments to other acts (fiscal equalization payments to the provinces and funding to the territories).

(Motions deemed adopted, bill read the first time and printed)

Remote Sensing Space Systems Act
Routine Proceedings

November 23rd, 2004 / 10:05 a.m.

Eglinton—Lawrence
Ontario

Liberal

Joe Volpe for the Minister of Foreign Affairs

moved for leave to introduce Bill C-25, an act governing the operation of remote sensing space systems.

(Motions deemed adopted, bill read the first time and printed)

Canada Border Services Agency Act
Routine Proceedings

10:05 a.m.

Eglinton—Lawrence
Ontario

Liberal

Joe Volpe for the Minister of Public Safety and Emergency Preparedness

moved for leave to introduce Bill C-26, an act to establish the Canada Border Services Agency.

(Motions deemed adopted, bill read the first time and printed)

Committees of the House
Routine Proceedings

10:05 a.m.

Liberal

Paul Steckle Huron—Bruce, ON

Mr. Speaker, I have the honour to present, in both official languages, the first report of the Standing Committee on Agriculture and Agri-Food.

In accordance with its order of reference of Friday, October 8, the committee has considered votes 1, 5, 10, 15, 20, 25, 30, 35 and 40 under Agriculture and Agri-Food in the main estimates for the fiscal year ending March 31, 2005 and reports the same, less the amounts granted in interim supply.

Petitions
Routine Proceedings

10:05 a.m.

Conservative

Jay Hill Prince George—Peace River, BC

Mr. Speaker, as has become a pattern here, it is a privilege to present yet another petition on behalf of our military families.

The petition was sent in by citizens of Borden, Levack, Onaping and Schreiber, Ontario. As with the previous petitions, the petitioners wish to draw to the attention of the House that the Canadian Forces Housing Agency does provide our military with on base housing. However many of those homes are substandard to acceptable living conditions and are subject to annual rent increases.

Therefore the petitioners call upon Parliament to immediately suspend any future rent increases for accommodation provided by the Canadian Forces Housing Agency until such time as the Government of Canada makes substantive improvements to the living conditions of housing provided for our military families.

Petitions
Routine Proceedings

10:10 a.m.

NDP

Nathan Cullen Skeena—Bulkley Valley, BC

Mr. Speaker, I would like to present a petition today on behalf of the residents of Queen Charlotte Islands, Haida Gwaii who are not currently considered sufficiently isolated to claim full northern residence deduction through the federal Department of Customs and Revenue.

Therefore the petitioners call upon Parliament to enact legislation that calls on the federal Department of Finance to immediately review the classification of the Queen Charlotte Islands and restore the full northern residence deduction to the residents of the islands.

Questions on the Order Paper
Routine Proceedings

10:10 a.m.

Beauséjour
New Brunswick

Liberal

Dominic LeBlanc Parliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, I ask that all questions be allowed to stand.

Questions on the Order Paper
Routine Proceedings

10:10 a.m.

The Deputy Speaker

Is that agreed?

Questions on the Order Paper
Routine Proceedings

10:10 a.m.

Some hon. members

Agreed.

Bill C-21. On the Order: Government Orders

November 15, 2004--The Minister of Industry--Second reading and reference to the Standing Committee on Industry, Natural Resources, Science and Technology of Bill C-21, an act respecting not-for-profit corporations and other corporations without share capital.

Canada Not-for-profit Corporations Act
Government Orders

10:10 a.m.

Fredericton
New Brunswick

Liberal

Andy Scott for the Minister of Industry

moved:

That Bill C-21, an act respecting not-for-profit corporations and other corporations without share capital, be referred forthwith to the Standing Committee on Industry, Natural Resources, Science and Technology.

Canada Not-for-profit Corporations Act
Government Orders

10:10 a.m.

Chatham-Kent—Essex
Ontario

Liberal

Jerry Pickard Parliamentary Secretary to the Minister of Industry

Mr. Speaker, it is my honour and privilege today to come before this House and speak to Bill C-21, an act respecting not for profit corporations and other corporations without share capital.

The legislation, which would enable the governance regime for federally incorporated not for profit organizations, is a long overdue replacement of the present Canada Corporations Act, or CCA. The CCA, which, to this point, has set the rules for some 18,000 organizations, was first enacted in 1917 and has not been substantially changed since.

Needless to say, the CCA no longer responds to today's needs for the not for profit sector. For example, it is silent on major elements of modern corporate governance which creates uncertainty in the public mind.

Second, it is an administrative burden on the sector and the government.

Finally, it fails to provide adequate protection for men and women who manage or operate these corporations.

In the years since the CCA was originally enacted, the world has changed dramatically and the not for profit sector faces governance challenges that cannot be dealt with under the existing legislation.

In response to these challenges, the government has taken a measured and reasonable approach to addressing the urgent need to reform the not for profit statute. It has looked at the Canada Business Corporations Act as a model of worldclass corporate statute. It then built on the provisions of the CBCA to reflect the requirements of the not for profit sector. It utilized, where appropriate, examples found in provincial not for profit statutes.

Finally, it was benchmarked against similar legislation in the United States. As a result, the new act will be one of the most modern statutes of its kind, measuring favourably against the best features of similar statutes throughout North America.

It may be asked: why now? Why has Parliament not addressed this in the last 80 years? In fact, there have been four previous attempts to reform the CCA but, for a variety of reasons, members of this House or our partners in the other place have never been able to complete the necessary scrutiny of previous bills before they died on the order paper.

We are now presented with an opportunity to bring this legislation up to date and to position federal not for profit law as the new benchmark for other jurisdictions.

The development of a new not for profit corporations act has been a long journey. It began with a commitment under the voluntary sector initiative in June 2000, followed by two rounds of cross-country consultations with shareholders.

The not for profit sector plays many important roles in Canadian society and our economy. It mobilizes citizens and creates a sense of community, enhances democracy, fosters community participation and strengthens our ties to one another. From national corporations created to fight disease to local sports associations, from faith organizations to facilities that provide job training and education to new Canadians, the sector touches most aspects of Canadian life. It is essential to our national identity and to our economy. Many are important government partners in providing services to Canadians.

The Government of Canada recognizes the importance of strengthening Canada's social economy and the thousands of entrepreneurial enterprises that form its backbone. These organizations are not only the key to social economy, but they are also an important pillar of the economy as a whole.

Research indicates that there may be up to 160,000 not for profit organizations creating opportunity in this country. When universities and hospitals are included in these figures, the revenue of the sector is estimated up to $112 billion a year.

The not for profit sector is one of the country's largest employers, employing more than 2.2 million people, with payroll expenditures as high as $64.1 billion. Most of these corporations are incorporated provincially. However more than 18,000 are federally incorporated and many are among the largest and most influential not for profit corporations in Canada.

The proposed new statute would demonstrate the government's commitment to strengthening its partnership with the sector. Current federally incorporated organizations include national charities such as the United Way of Canada and the Heart and Stroke Foundation of Canada. It includes umbrella organizations such as the Canadian Centre for Philanthropy and the Consumers' Association of Canada and several national businesses. It includes religious groups such as the Canadian Jewish Council.

There are health and community based organizations, environmental organizations, and cultural and heritage societies. Also included are transport related organizations such as airport authorities and small harbours. There are also many private foundations that pursue philanthropic objectives to the benefit of Canadians. Each of these and thousands of other small and large organizations perform an important function for their members, their communities, the recipients of the services and, collectively, all Canadians.

Replacing the CCA with a new framework law was a commitment made and reaffirmed many times over the last years. Fulfillment of this commitment would ensure that federally incorporated enterprises are governed by a modern legislative framework that is flexible enough to meet the needs of both small and large organizations while providing the accountability and transparency necessary to secure the support of the Canadian public.

The proposed new act provides a perfect example of smart regulations. It would reduce the administrative burden by making it easier and faster to incorporate and develop internal arrangements that suit the needs of the organization. It would promote good governance by emphasizing accountability and transparency to members and self-regulation more generally. At the same time, it would enhance the scope of governmental and public oversight by requiring greater financial disclosure requirements for organizations that solicit funds from the public or receive government funding.

The act is good for Canadians. It is good for them as individuals and it is good for our communities. I urge all members of the House to support the legislation.

Canada Not-for-profit Corporations Act
Government Orders

10:15 a.m.

The Deputy Speaker

As this bill is being referred to committee before second reading, we will have 10 minute speeches and no questions and comments.

Canada Not-for-profit Corporations Act
Government Orders

10:15 a.m.

Conservative

James Rajotte Edmonton—Leduc, AB

Mr. Speaker, I understand that I have 10 minutes with no questions or comments, with no actual real debate in the House today.

I rise today to speak to Bill C-21, an act respecting not-for-profit corporations and other corporations without share capital. The bill would also commonly be known as the Canada Not-for-profit Corporations Act.

I want to begin by addressing the new practice of the Liberal government of sending bills such as Bill C-21 to committee before second reading. Bill C-21, like the other industry bill before the House, Bill C-19 on competition policy, which we addressed a week ago, has been referred to committee for study.

In theory, the purpose of sending a bill to committee before second reading is to allow the committee members to introduce a broader scope of amendments to the legislation. The committee is allowed to propose changes that are outside the principle of the bill, which is what we debate at second reading: the principle of the bill.

In my view, however, the government is abusing this process. Eleven of the 23 bills that have been introduced by the government have gone or are going to committee before second reading. Debate in the House on this issue is limited to 180 minutes instead of the unlimited debate that would occur under regular second reading rules. Thus, through the back door, the government is limiting debate on this and 10 other bills. We are limited to 10 minute speeches with no time for questions and comments and no time to question the minister on the bill.

The fact is that a reference to committee before second reading is a handy scapegoat for a minority government. Rather than giving each legislative initiative careful thought and defending it, the government can tell Canadians that if they do not like the bill they can take their concerns to committee. This is also a very effective way and a strategy of this government to tie up a committee's time. A committee is supposed to be the master of its own house, to debate and deliberate policy on its own.

The Standing Committee on Industry, Natural Resources, Science and Technology has a bigger mandate in this Parliament with the addition of the combination of natural resources and industry. This is a minority government and the opposition wants to discuss issues like smart regulations and energy policy, as advanced by the member for Kelowna, but the fact is that those issues then get pushed to the back because we are studying these complex bills that are introduced one week before.

I just want to touch upon the process here. This bill was introduced last week. It is about 152 pages long with well over 300 clauses. A briefing was set up for the opposition last week. The member for Kelowna--Lake country went to the briefing. The briefing for Liberal members was extended so the briefing for Conservative members was essentially cancelled. Finally a briefing by the department was set up again for yesterday. The bureaucrats were late, by the way, so my colleague from Kelowna and I sat there twiddling our thumbs waiting for the government bureaucrats. They came in with an eight page briefing, in size 20 font, and here now are some of some of the wonderful things those officials told us.

They said the bill is complex and technical; well, that really indicates to us what is in the bill. They said information kits will provide essential elements; we are still waiting for these information kits. They also said that the bill was expected by stakeholders and some of them will seek to participate in the committee review process. Of course they will. This is the most common, basic information. Of course people interested in the bill will appear before the committee. Did we need a briefing to tell us that?

That was what we were told at the briefing on this very complex bill that the government wants sent to committee before second reading to tie up the committee because the government does not want to actually debate the issue in the House. Quite frankly, with respect to the minister and his staff, I have dealt with four industry ministers in a row and I have to say I am very disappointed with the way they have dealt with the opposition, particularly in a minority government. If the government is interested in passing this legislation, perhaps it ought to pass it over to us and give us maybe a week to prepare for it.

The government could tell us what it likes in the bill and what it thinks we should support about it because “we as a minority government recognize that we need at least one other party, in some cases two other parties, to support our legislation”. That is what it could say. Instead, the government is introducing Bill C-21 without debate, sending it to committee before second reading and frankly, in my view, avoiding the entire legislative process.

Having gone on that tirade, I do want to touch briefly upon the actual substance of the bill. I do not know if I will have time within the 10 minutes allotted, but I do want to also state publicly that the Conservative Party does not support sending this bill to committee before second reading and we are also not supportive of the substance of the bill at this time.

We have some concerns about this bill, the first under monitoring and enforcement. The fact is that Industry Canada has drawn up a very complex set of regulations and laws for record keeping, conflict of interest within these corporations, communications with membership, and financial reporting, to name just a few issues. But there will be no one at Industry Canada who will police or monitor the not for profit corporations' struggles with these requirements.

This is similar to the Elections Act. The government is setting up a huge bureaucracy and yet Industry Canada will not have someone who will actually assist all of these not for profit organizations across the country in terms of trying to fulfill all these requirements. Instead of setting up an arbitrator to help these organizations, most of whom I think rely on volunteers, this legislation would force disputes directly to the courts.

Having a lawsuit, either criminal or civil, because both are possible under this bill, would cost a not for profit organization time and money. In terms of the cost, there would be a larger financial burden on not for profit corporations in trying to meet the legislative requirements to change their bylaws and constitutions, to hire auditors and for liability insurance, to name a few areas. If the House passes this bill, a federally registered not for profit corporation would be required to make the transition to the new act within three years of the new act coming into force. Failure to do so would result in the director of not for profit corporations at Industry Canada taking action to dissolve the corporation.

In terms of the issue of how complex this bill is with respect to regulations, when someone is stalled in getting an organization up and running quickly by government inaction or by government regulatory burdens, the fact is that it costs the organization money and it delays what the organization does and what its purpose is. Frankly, the government has paid a lot of lip service, as the parliamentary secretary just did, to smart regulation when in fact it has failed to implement its own government committee on smart regulation, which came out just this year.

In addition to the bylaws contained in this bill that must be adopted by not for profit organizations in order to be allowed to exist by Industry Canada, there is a regulatory package that accompanies this legislation.

Under the proposed regulations, the degree of financial reporting is divided into five classes. For example, the type of financial report a not for profit corporation is required to submit to Industry Canada depends on the revenue of the not for profit corporation. The more revenue earned, the more formal the reporting requirement. There are no exceptions, so if a corporation has an exceptional fundraising year, the reporting responsibilities would increase as would the costs of the corporation for possibly redoing their books and paying for a more professional audit.

The regulations outline a very strict schedule for issuing notices of meetings. The minimum notification for a meeting of members is 14 days. This is in the actual legislation. This bill would make it illegal to call an emergency meeting within less than 14 days, thus removing some of the flexibility that smaller organizations rely upon to resolve important local issues.

The regulations do allow for some exemptions, such as the publication of membership lists if, for instance, the not for profit corporation is a battered women's shelter. One could apply to the director at Industry Canada not to have that membership list published. However, this application for an exemption would have to appear in the Canada Gazette and Industry Canada estimates that it would take at least 18 months for this process to be completed. It seems rather pointless to have to wait two years for an exemption if they only have three years to comply with this legislation in the main.

I do want to touch upon one other aspect, which is the whole issue of membership lists. It is a concern. What this legislation would allow is that if someone is a member of a not for profit corporation, that person would be able to access the entire membership list of that not for profit organization. The concern there obviously relates to privacy. Many members join these groups, but they do not feel they should have their personal contact information shared with anyone else who happens to be a member of that group.

The answer we were given by the people who gave the briefing was about how what if they want to contact these people in advance of the annual general meeting to advance one of their issues or to discuss something at the AGM and they want to inform people ahead of time. That may be a legitimate point, but should there not be another way to do that other than allowing an entire membership list of that organization to be eligible to just one person who signs up for a membership for $10 a year or something like that? Therefore, we do have some serious privacy concerns as well.

We also have some concerns with respect to liability. Many directors in the not for profit sector are volunteers. However, under this new scheme they will be liable for the actions of the not for profit corporation. I think organizations across Canada should read that section carefully.

Under the new standard of care, directors will have to act honestly and in good faith with a view to the best interests of the corporation, exercise the care, diligence, and skill that a reasonably prudent person would exercise in comparable circumstances, and comply with the act, articles, bylaws, and any unanimous member agreements. My concern is that this type of liability will deplete the pool of volunteers in the small, local, not for profit corporations that are simply trying to help their communities.

I could go on, Mr. Speaker, but I assume my 10 minutes are up.

Canada Not-for-profit Corporations Act
Government Orders

10:25 a.m.

Bloc

Christiane Gagnon Québec, QC

Mr. Speaker, I share my Conservative colleague's frustration over the short and even non-existent briefing session offered on the new bill before us today.

Last Thursday, we were invited to a quick briefing session on a bill which is extremely complex. It is 150 pages long and is divided in 20 parts. We would really need more than the 10 minutes we had this morning if we are to be able to debate this bill and explain the purpose of the bill to the public and the organizations concerned.

Bill C-21 is a new piece of legislation on not-for-profit organizations. It purports to give these organizations a more modern framework, a more centralist governance system. It would repeal parts I, II, and III of the Canada Corporations Act in order to rely more on the Canada Business Corporations Act.

The bill before us will help ensure the long-term strength and vitality consolidation of the voluntary sector and of organizations in the social economy industry.

More specifically, this bill facilitates the constitution in bodies corporate of not for profit organizations, NPOs, thereby speeding up the process. It sets out standards of diligence and specific responsibilities for administrators and gives them better protection against civil proceedings. As well, the bill reinforces the rights of members of non for profit corporations to governance of these bodies. Finally, it makes closer surveillance of these organizations' finances possible.

There are, as I have said, 20 parts to the bill. We in the Bloc Québécois are in favour of the underlying principle, but feel that reference to a committee is necessary to clarify certain questionable points. I will try to summarize the problems we find very briefly, since we have only 10 minutes to debate the matter this morning.

As we know, in the 2004 Speech from the Throne, the government restated its position and made a commitment to encourage the social economy and the numerous activities relating to the not-for-profit corporations.

What is more, in its 2004 electoral campaign, and the reason we are in favour in principle this morning, the Bloc Québécois made a commitment to re-examine the federal government's economic support packages in order to make them more appropriate to the specific needs of the corporations in the social economy, as well as to ensure that such corporations can enjoy enhanced access to permanent sources of capital and other funding that suit their characteristics.

I will set out the context of the reform, although I realize that the Liberal member who has just spoken has done that to some extent. In recent years, certain community stakeholders have expressed concerns about how dated the act has become, and how it is no longer a fit with the requirements of the not for profit sector. We are therefore calling for the act to be modernized in order to respond to the objectives.

There has been public demand from stakeholders for some time. In 1989, a task force on the voluntary sector was struck by the federal government. It called for improvements to the regulations governing the sector, with the Industry Canada proposal to modernize the legislation being part of the plan.

This is why we are here today looking at a new bill, and it is our hope that the reference to a committee will provide answers to the points being queried by the Bloc Québécois.

This new legislation has four goals: flexibility and permissiveness; improved transparency and accountability; higher efficiency; and fairer treatment of not for profit organizations.

With respect to the flexibility and permissiveness of the legislation, as in the case of the classification system for not for profit organizations in the Canada Corporations Act, Bill C-21 makes no changes in the new not for profit corporations act.

Nevertheless, we think that there is still a possibility of including a classification system, which is not provided in Bill C-21, because the government believes such a system could be established with broader categories. Such a system would further improve transparency in financial management.

The second objective after transparency is accountability. The Canada Corporations Act currently requires not for profit corporations to keep detailed accounts of their activities but does not require disclosure of these accounts. To permit administrators and managers to better manage and supervise the management of the corporation would be to make it possible to monitor the financial situation of the organization between annual meetings and ensure that funds are used only in the pursuit of the stated goals and objectives.

The bill also includes a provision to ensure a balance among transparency, accountability and privacy.

I know that there are other objectives beyond this concern for transparency but I cannot go into all the details. We will certainly have an opportunity for more debate here in the House and to hear witnesses in the committee.

Let us move on to the third objective, efficiency. The act provides for a system of letters patent. In this system, creating a corporation is not a right. That is where we think there may be room for improvement.

Anyone who wants to form a not for profit entity has to apply to the Minister of Industry for a charter creating a body corporate for the purpose of carrying on objects of a national, patriotic, religious, philanthropic, charitable, scientific, artistic, social, professional or sporting character, or the like objects.

This application has to be accompanied by draft bylaws. In a system where incorporation stems from right, it would happen automatically, provided the required bylaws were submitted to the Director of Corporations. This major change means therefore an approval process that is much simpler, more flexible, more efficient, enhanced and less expensive.

Once again, we will make a point of debating this issue when the various players concerned with one or other aspect of this bill testify.

With respect to fairness, the Canada Corporations Act does not set out the fiduciary responsibilities of directors. It does not contain any provisions concerning standards of care, whereas we know very well that the new legislation on not for profit corporations will provide for the establishment of such standards.

Hon. members can see how terribly complex this bill is. We in the Bloc Québécois wonder whether it is consistent with Quebec's laws or if it could, for instance, contravene certain provisions of our legislation. We are going to be very vigilant. We know very well that standardizing the management of not for profit corporations is beneficial, but it must be done in the respect of Quebec's jurisdictions.

For example, in the implementation of governance mechanisms, the new legislation would take into account the financial position and size of the organization. It provides a relatively flexible framework for the making of bylaws. Nevertheless, we are going to be vigilant because this could violate what we have in Quebec in terms of support for not for profit organizations.