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An Act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act

Sponsor

Navdeep Bains  Liberal

Status

Report stage (House), as of March 22, 2017

Subscribe to a feed of speeches and votes in the House related to Bill C-25.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

Part 1 amends the Canada Business Corporations Act, the Canada Cooperatives Act and the Canada Not-for-profit Corporations Act to, among other things,

(a) reform some aspects of the process for electing directors of certain corporations and cooperatives;

(b) modernize communications between corporations or cooperatives and their shareholders or members;

(c) clarify that corporations and cooperatives are prohibited from issuing share certificates and warrants, in bearer form; and

(d) require certain corporations to place before the shareholders, at every annual meeting, information respecting diversity among directors and the members of senior management.

Part 2 amends the Competition Act to expand the concept of affiliation to a broader range of business organizations.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Canada Business Corporations ActGovernment Orders

December 9th, 2016 / 10:05 a.m.
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NDP

Erin Weir NDP Regina—Lewvan, SK

Mr. Speaker, we are nearing the end of 2016. New Year's Day 2017 falls on a Sunday. The first payday of the new year will be January 2. By around noon on January 3, Canada's top 100 CEOs will, on average, have made as much money as the average full-time employee will earn over the entire year. In 2013, and again in 2014, Canada's top CEOs made an average of $9 million each. That means that the top CEOs made 184 times as much as the average Canadian worker.

This inequality is not only large, but it is growing. Figures on the top 100 CEOs only go back to 2008 on a comparable basis, but if we look at the top 50 CEOs, an even more elite group, in 1995 they made only 85 times as much as the average worker, so there has been an explosion of executive compensation over the past two decades.

Why should we care if private companies choose to pay their CEOs a lot of money? If we take the 100 top CEOs, each making an average of $9 million, that is nearly $1 billion that is not being used to hire other employees, not being invested in machinery and equipment, and not being used for needed research and development. Corporate Canada as a whole would be better off if it could pay CEOs less. However, individual corporate boards feel pressure to keep up with what CEOs of other companies are paid. This leads to a circular logic that justifies ever higher executive compensation.

Even the CEOs themselves do not really benefit from this trend. An extra million dollars does not make a material difference in their standard of living. Really, they are concerned about their relative position compared to other CEOs, so if a CEO gets paid more it increases his or her position on the league tables only by reducing the position of other CEOs. Our economy would be stronger, and even corporate Canada itself would be better off with government regulation to limit CEO compensation.

Bill C-25 includes some minor improvements to corporate governance, but what is missing is the mandatory and binding say on pay provisions that we find in other advanced economies. Currently, Canadian companies can consult shareholders on executive compensation, but they are not bound by the results of those votes. The NDP is going to propose amendments to Bill C-25 to include mandatory and binding say on pay provisions to limit executive compensation.

Beyond the scope of Bill C-25, the federal government can and should also address out-of-control executive compensation through the tax system. I believe in giving credit where it is due, so I want to recognize that this government did modestly increase the top personal income tax rate. However, the government failed to close the loophole that allows half of stock options to be exempt from personal income tax. This stock option loophole delivers the largest benefit to highly paid CEOs and corporate executives, so we need to close that loophole to address executive compensation.

Something else that the federal government could do is to limit the amount of executive compensation that a corporation can deduct in calculating its corporate taxes.

The United States currently limits the amount of CEO compensation that can be deducted in calculating corporate taxes to $1 million. Unfortunately, this limit is not very effective in the United States because it does not apply to performance-based compensation, such as stock options. However, we could easily apply a limit to all forms of executive compensation and ensure that they cannot be deducted in calculating corporate income taxes.

In conclusion, out-of-control executive compensation is a significant source of worsening inequality, and is a substantial drain on our economy. The Government of Canada can and should address this problem by strengthening corporate governance through Bill C-25, and also by implementing progressive tax reforms.

Canada Business Corporations ActGovernment Orders

December 9th, 2016 / 10:15 a.m.
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NDP

François Choquette NDP Drummond, QC

Mr. Speaker, I am pleased to rise in the House today to take part in the debate on Bill C-25, an act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act.

It is always very important to review our laws in order to improve them, and to ensure that we make them even more fair and that they will foster gender parity. This bill is a first step in the right direction.

The NDP will support enhancing the diversity of boards of directors and democracy for shareholders.

However, once again the Liberals are not walking the talk. Bill C-25 is an attempt to solve the problems of gender parity. That will not happen if we only do what is being proposed. We are going to have to do more, and I know that the NDP member who sits on this committee will make the amendments needed to improve gender-parity in this area. That is what we are proposing.

This is only the second time in 40 years that the Canadian government has looked at corporate governance issues. As I said, this is no small matter, and it is good to review these things once in a while, so this is a step in the right direction.

The government's stated objective in introducing this legislation was this: the bill proposes changes meant to increase shareholder democracy and participation, support efforts to increase women's participation on corporate boards and senior management, and improve corporate transparency and business certainty while reducing the regulatory burden.

As I was saying, generally speaking, in its current form, the bill will increase shareholders' democratic participation in order to ensure greater understanding and, for instance, require annual elections for corporate directors, ensure that shareholders can vote for individual candidates, and require a majority voting standard, which are all interesting reforms. This is all through the lens of increasing representation of women on corporate boards and in senior management.

This might improve because businesses will have to explain why they do not have any female representation on their boards. That is a step in the right direction. However, everyone will agree that it is just a small step in improving gender equality.

Hundreds of people from Drummond have come to see me to request federal pay equity legislation. Unfortunately, as we know, the Liberal government said that it might wait until 2018 before implementing such a law, when pay equity should already be a fait accompli in Canada.

However, that is not yet the case, and unfortunately, the Liberals have put off their commitment to gender equality. That is coming from a government whose Prime Minister claims to be a feminist. It is not enough for the Prime Minister to claim to be a feminist. He and his government also need to take action to show that they are actually committed to gender equality. People have been disappointed in that regard.

This issue is so important that the NPD introduced Bill C-220, an act to amend the Financial Administration Act (balanced representation). The bill's sponsor is the member for Nanaimo—Ladysmith, who is doing an excellent job of promoting gender equality.

Feminism does not only involve women. All men and women must work together to achieve parity.

As I mentioned earlier, hundreds of citizens in my riding have come to see me to talk about this. They have come to demand more action from the government. I have tabled petitions on their behalf. We are looking for more concrete measures from the government on this issue.

I have spoken about Bill C-220 from my colleague from Nanaimo—Ladysmith. This was tabled in various forms by the NDP in the past, notably by former MP Anne-Marie Day. It is clearly a long-standing commitment on our part. Everyone voted in favour of the bill except the Conservatives. I don’t know why, but they were not in agreement.

That bill was aiming for balanced gender representation on the boards of directors of crown corporations. This is an area where the government can take direct action. Unfortunately this has yet to be done. However we continue to move ahead and we will not give up. We hope that this time, in this Parliament, members from all parties in the House will be able to put partisanship aside so that progress can be made on the issue of gender parity.

The member who spoke before me mentioned another very important issue, that of executive compensation. This bill calls for the introduction of a consultative vote on executive compensation, something the investor and shareholder community has been calling for.

Bill C-25 improves the election process for board of director positions by eliminating the list system and requiring that directors be elected on a majority. Indeed, many stakeholders have asked for more of a say on the compensation for executives. The NDP was very active on CEO compensation. Unfortunately, the government did not consider any of that when drafting this bill, which is very disappointing.

Given the situation of Canada’s citizens, the deduction for stock options is a horrible fiscal loophole which must absolutely be eliminated. It serves to give an unfairly high salary to the biggest CEOs, the richest people in our society. These people are taxed on only 50% of these earnings, which is totally unfair, since Canadian citizens doing normal work are taxed on 100% of their wages. This tax loophole exists only for the benefit of CEOs, the richest people in our society. We have to tackle this injustice.

That is why the NDP called for the elimination of the deduction for stock options in its electoral platform. This loophole allows the senior officers of corporations to pay only half the income tax on their compensation paid as stock options, or 50% of the prescribed rate. If a citizen from Drummond were to do that, the Canada Revenue Agency would call him right away and order him to pay his full income tax. Yet for executives this is a legal loophole that exists.

There are certain loopholes that are legal, but are totally unacceptable in our modern society. They are totally unfair, bordering on unethical. Unfortunately, they exist, and they are legal. The government is doing very little, if anything at all, about these tax loopholes. Since it was elected, we have not really seen any strong commitment from this government on closing these unfair loopholes. This is one of the worst examples of what is lacking in this bill.

This is a truly regressive loophole. Over 90% of the benefit goes to 1% of taxpayers, those who earn over $250,000 a year. Truly, it is a minority of the Canadian population that benefits from this. This deduction is bad for the economy, since it encourages CEOs to inflate stock prices in the short term through buybacks instead of investing in the economy. The government is losing close to $750 million a year as a result. Stock option deductions are totally unfair and unacceptable.

I have spoken of my fellow citizens who continue to be very active in Drummond. Hundreds have signed a petition to put an end to tax havens. Somewhat like tax loopholes, there are also tax havens the government needs to address. As the House knows, there are many ways to either facilitate the use of tax havens or curb it. Unfortunately, the steps recently taken only serve to facilitate it.

This situation is depriving the state of the funds it needs to carry out its social mission. According to Statistics Canada, tax avoidance is costing the government from $5 billion to $8 billion every year.

Fortunately, this phenomenon is now leading to some collective soul-searching. As I was saying, hundreds of my fellow citizens have signed a petition demanding that we take more action in this area. I have joined in by tabling that petition here in the House of Commons to signal the importance of combatting tax havens and tax loopholes.

It is extremely important to do this, because the public purse is being denied hundreds of millions of dollars by tax loopholes and billions of dollars by tax havens. Public services suffer as a result.

One need only consider health. In the next 10 years, there will be $36 billion in cuts. The cuts were started by the Conservatives; the Liberals had promised to abolish these unfair cuts affecting the most vulnerable in our society, those who have health problems. Unfortunately, the Liberals want to continue on this unfair path. It is totally unacceptable to continue these sorts of cuts.

It is a way of not investing in health, for the funds diverted from the public purse cannot be used for the well-being of the Canadian population.

In the end, the NDP wants the government to take concrete steps to bring about gender parity on Canadian boards of directors. Many researchers interested in gender equality in companies and in politics feel that the “comply or explain” model of disclosure that is found in Bill C-25 in its current form does not appropriately address the issue of gender parity. Therefore, as I was saying earlier, we are going to do everything we can to ensure that amendments are made to improve this situation.

Furthermore, New Democrats want the government to take advantage of the opportunity presented by Bill C-25 to resolve the issue of executive salaries by assigning shareholders a bigger role in the establishment of compensation. That would be a start.

I will conclude by saying that the bill is a step in the right direction. We are going to make amendments to it in committee. I hope that the Liberal and Conservative members of that committee will work in a collegial fashion to improve this bill for the well-being of our citizens. That is very important, and that is why we were elected.

Canada Business Corporations ActGovernment Orders

December 9th, 2016 / 10:40 a.m.
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NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, I am not sure that I will require the full 20 minutes at my disposal, but I did want to comment before the House on some aspects of Bill C-25, which we are discussing.

The first comes up often in conversations, and that is gender parity. We know that there is presently a marked imbalance on corporate boards, in both the private and public sectors. We also know that efforts are being made by the House to try to correct this situation.

We discussed, among other things, Bill C-220 sponsored by my colleague from Nanaimo—Ladysmith, who is building on another bill introduced by my former colleague, Anne-Marie Day, who represented the riding of Charlesbourg—Haute-Saint-Charles. I believe that this type of bill is necessary as it puts the spotlight on this imbalance, this inequality that can exist.

We are often asked why we are calling for a quota system, a gender parity system. I understand why the question is asked, but it needs to be reworded. It is not about setting aside competency. On the contrary, when we say that competency trumps diversity, we are saying that there are not enough women who have the necessary skills for these positions.

That is not the problem. The problem has more to do with lack of understanding and systemic discrimination against women regarding their ability to manage organizations.

Why do we need a gender parity system and why should we even try to enforce it, while still acknowledging the importance of competency? It is these prejudices and biases that blind us and prevent us from selecting skilled women to fill this type of position.

This morning I was listening to the radio on my way to Parliament. On Radio-Canada, they were talking about how gender parity was imposed on the improv world in Quebec. That might seem like a stretch from what we are talking about, but there is a direct correlation. The Ligue nationale d'improvisation in Quebec had a gender parity system that forced every troupe to have an equal number of women and men.

That measure gave female comedians' amazing but hitherto overlooked talent a platform. In the 1970s and 1980s, there were very few women in the comedy business, and the Ligue nationale d'improvisation played a critical role in raising the profile of female comedians. This morning's guest, Christian Vanasse, shared a list of 15 female comedians who made a name for themselves thanks to the Ligue nationale d'improvisation.

Still, the problem persists. Women are never selected to host galas. Even though they are on the scene and they have star power, gala organizers do not even consider them and always opt for male comedians to host these events.

Even the gender parity system designed to put women's talent in the spotlight in the comedy world will not fix anything without a shift in people's mentality. The same holds true for the field of administration.

Getting back to administration, Bill C-25 falls short because all it does is make companies talk to shareholders about diversity. That is completely out of touch with reality and what public and private administration need right now.

The aspects of Bill C-25 on governance are quite good. The move to eliminate directors being elected as a group is quite positive, as is holding annual elections. Ensuring that directors are elected to boards of directors by majority voting is another positive aspect.

There is another interesting aspect that has not really been debated in the House and that is the elimination of what are called bearer shares. These are shares where the shareholder is not identified on the share certificate. The shares and the vote belong to the stock certificate holder. The share is not necessarily registered in the name of the shareholder, the owner of the stock.

This measure, which is being somewhat overlooked in our debates, will allow for greater transparency with regard to governance and administration.

Aside from gender parity on boards of directors and within company management, the bill falls short in other aspects. Let us not forget that the changes we have before us come out of a three-year consultation that began in 2013. One aspect that has been discussed many times is not only the gap in compensation between shareholders and corporate executives, but also the fact that shareholders still cannot vote on and approve executive compensation at shareholder meetings. This is important because compensation is taken from the company's revenue and profits and therefore the returns that the shareholders can expect.

I think that is a major shortfall of this bill. That is why we are voting in favour of the bill at second reading but proposing amendments. If the bill is not improved, then voting in favour of it at second reading does not guarantee that we will be voting in favour of it at third reading.

Canada Business Corporations ActGovernment Orders

December 9th, 2016 / 10:55 a.m.
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NDP

Marjolaine Boutin-Sweet NDP Hochelaga, QC

Mr. Speaker, with Bill C-24, the Prime Minister boasted of having created a gender-balanced cabinet. However, what we have here is pay equity and not equity in terms of responsibilities.

So Bill C-24 was not about feminism, but rather an appearance of feminism, and that is also the impression we get from Bill C-25. We do not believe that the changes it brings are meaningful.

The NDP wants to propose an amendment to verify whether the “comply or explain” approach would really have the expected effects. We are asking for an audit to be done after five years, and we are not sure whether the government will accept that request.

I would like to hear my colleague’s comments on everything I have just said.

Canada Business Corporations ActGovernment Orders

November 25th, 2016 / 12:15 p.m.
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Conservative

Karen Vecchio Conservative Elgin—Middlesex—London, ON

Mr. Speaker, I will be splitting my time with the member for Calgary Confederation.

I am pleased to stand to discuss Bill C-25, an act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act. The proposed amendments to the act cover a variety of objectives, but today I would like to focus on the proposal of the bill relating to the increased representation of women, as well as diversity, on corporate boards and in senior management.

Referring to the report that was completed by the Government of Canada advisory board, and provided to the minister of status of women in 2013, there was a new focus put forward to increase the representation of women on Canadian boards, with a national goal of 30% of women by 2019.

The report was titled “Good for Business: a Plan to Promote More Women on Canadian Boards”. In relation to the report, Michael Cooper, the COO from Dream Unlimited Corp., stated in The Globe and Mail in 2014:

Everything we do in this area we do with a mercenary attitude to enhance our own benefits and profitability, and I think that’s what makes it sustainable...I wonder where the other leaders are that they don’t know successful women.

It is important to note that while women now represent nearly half the Canadian workforce, they only hold 20.8% of board positions at Canadian stock index companies.

The program, “It Starts with One – Be Her Champion” was launched in 2014 by the minister of status of women. Leaders in all fields were encouraged to make a difference.

I remember that week quite well. As everyone knows, when we put forward bills and motions, the Government of Canada usually provides a little portfolio. My former boss, Joe Preston, came home to the riding and provided me with the information to do some work around the community. I told Joe that it was great he was doing this for me. I look at him as one of those guys, one of those champions for us.

Therefore, today I want to speak about how men and women together have done things like that. Joe, once he became a member of Parliament, hired a managing partner for his business. Marcy Pearse, from the St. Thomas area, has become one of the most successful Wendy's owners in Canadian history, and has only increased the productivity of the Wendy's corporation in St. Thomas. I know it is her extreme leadership and her great work ethic that has made that a dream for her.

I also look at myself. I had the opportunity of working as an executive assistant. I was always given a very long leash, and I was rarely pulled in for discussions. It is because of people believing in me and giving me that mentorship that today I am able to sit in the House of Commons.

Those are just some things I wanted to discuss because it is really about the grassroots level of what we can do.

Referring back to the report “Good for Business”, there was a summary of recommendations. I will read these recommendations because they should be on the record. These are very important facts. The report was given to the minister of status of women back in 2013. The recommendations are:

The following summary of recommendations is influenced by best practices, from across Canada and internationally, and informed by the experience and expertise of the Advisory Council for Promoting Women on Boards members. Based on these factors, the Council is offering the following recommendations for the Government of Canada.

1. Aspire to 30% over five years (2014-2019) as a reasonable national goal to achieve gender balance, with the longer term goal being gender balance on boards.

This initiative was started in 2014. They goes on to say:

2. The Advisory Council encourages the Government of Canada to: Build on past progress and work towards greater gender balance in its own appointments; Monitor and report on gender diversity in Governor-in-Council (GIC) appointments; Simplify and promote the GIC process; Ensure greater participation in the recruitment of women to leadership positions and GIC appointments by working with Government agencies, including the leadership of Crown Corporations; and Promote networking and mentoring between public and private sector corporations.

3. Institute a “comply or explain” approach for moving publicly traded companies toward an identified goal within published annual reports, with an explanation of results or lack thereof.

4. Promote increased representation of women on boards by mobilizing and working with key stakeholders, including prominent Chairs, Financial Post (FP) 500 companies, national business associations, shareholder groups and advocacy organizations. It would be advantageous and critical to work towards:

Adopting a strong commitment, sound implementation strategies and reporting mechanisms, while maintaining flexible approaches;

Making gender balance on boards a priority to be advanced by board governance through policies, human resources, and board recruitment and nomination committees; and

On any of the boards I have joined or have been part of in the last 10 years, those are the steps we have seen within our own community, in the Elgin—Middlesex—London area. We recognize that the work and diversity of the group brings greater results. It is important to get different ideas and opinions from a diversity of women and men, young and old.

The recommendations continue to state:

Encouraging nomination and recruitment committees and executive search firms to ensure that equal numbers of qualified women and men candidates are presented for consideration for board vacancies.

5. Develop a coordinated pan-Canadian approach by working with provincial and territorial governments.

6. Support the adoption of short- and medium-term goals in the private and public sectors, recognizing that some sectors are further ahead than others.

7. Publicly traded companies should establish and publish, through annual financial statements, two- and five-year goals...

8. Publicly traded companies should report and explain annual results against their goals, reinforced as required by regulatory authorities...

9. Launch a national initiative led by the Government of Canada, to encourage the private sector to attain gender-balanced boards.

10. Develop a sustained and deliberate communications strategy to mobilize all relevant stakeholders

11. Encourage private companies to emulate publicly traded companies and undertake similar measures to increase representation of women on boards.

I know reading 11 points can be quite excruciating, but as I indicated, it is important we get that on record in the House of Commons. The report was done in 2013, and we were very proud to accept it from the advisory board. We saw action taken by our minister of status of women in 2014 with that initiative in mind.

Meanwhile there was an in-depth rational approach to these recommendations, specifically based on the progress of women not only in business and the labour force, but increased performance in levels of success and education and, more specific, in business and management programs.

Unfortunately, when we look at statistics from 2012, we will find some very surprising statistics. Therefore, some of these initiatives are important. We should put that at front of mind.

At one time, only 10.3% of women were on Canadian boards; 15.9% of Fortune 500 companies included zero on 40% of those boards; and 31% of federal GIC appointments.

We know from just sitting in the House of Commons the diversity of many of our female members and their incredible success. I am proud to sit in the House with a female engineer, an orthopaedic pediatric surgeon, a former associate dean from New Brunswick, a family physician, a provincial government whip, a college athletic director, lawyers, wonderful teachers, classically trained pianists, and many more. We have such diversity here, and we can show what great work we can do.

Turning to the necessary need to update the ability for corporations to communicate in other methods is another very important thing. Here as members of Parliament, we can attest about electronic communications in our day-to-day operations, whether it is informing members of a vote, notice of meetings, or providing background information on bills. Electronic communication has become a way of life.

By providing corporations that ability to permit notice and access systems, we are providing them the same opportunities that we have as parliamentarians. We all know we cannot live without our BlackBerrys, our Smartphones, and our iPads. This has become the way of busy individuals. By allowing the electronic communication, it will allow us, in a more active way, to communicate with our memberships, those corporations, and allow people to know what is going on. It is just a better way of communicating.

With over 270,000 federally incorporated corporations, this bill and the studies that have been completed over the past several years, these amendments are necessary. The modernization of Canada's federal corporate governance, as announced in budget 2015, is necessary. Key stakeholders are onside with Bill C-25, including the Canadian Coalition for Good Governance and the Canadian Board Diversity Council.

I thank the Minister of Innovation, Science and Economic Development for introducing Bill C-25, something many parliamentarians will recognize from our previous government.

I support this bill and support the efforts in it to provide a Canadian federal framework that is up to date and will provide support for long-term investments and, overall, contribute to Canada's economic growth. The bill would provide the tools to ensure that Canada would be aligned internationally with the best practices, including the report for good business.

Canada Business Corporations ActGovernment Orders

November 25th, 2016 / 12:25 p.m.
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NDP

Marjolaine Boutin-Sweet NDP Hochelaga, QC

Mr. Speaker, it seems that the Conservatives are going to vote in favour of sending Bill C-25 to committee.

I would like to know if they are also going to support Bill C-220, introduced by colleague from Nanaimo—Ladysmith, that seeks to improve gender diversity on corporate boards and among senior management.

A few years ago, in the last Parliament, my colleague Anne-Marie Day introduced a similar bill and the Conservatives voted against it. However, this time, they seem to want to vote in favour of this bill, which also seeks to increase the presence of women on corporate boards.

I would like to know what their position will be on my colleague's bill.

Canada Business Corporations ActGovernment Orders

November 25th, 2016 / 12:25 p.m.
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Conservative

Len Webber Conservative Calgary Confederation, AB

Mr. Speaker, I am pleased to be able to rise today to contribute to this debate on Bill C-25.

This fall, the Minister of Innovation, Science and Economic Development introduced Bill C-25, an act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act.

I may be new to the House, but this legislation and the ideas contained within in are not. These ideas were brought forward years ago by the Conservatives. This is an opportunity for me to rise to speak to their efforts.

This bill's history goes back to a House of Commons committee-led statutory review in 2010 back when the Conservatives were in government.

After that, further consultation by our Conservative government took place in 2014 to further advance diversity and equality. Many consultations took place and stakeholders raised many constructive and complex suggestions on a number of corporate governance issues during these consultations. The previous government listened to Canadians on this issue and was making clear progress.

After the previous Conservative government finished its stakeholder consultations, in 2014 a proposal was made, and ultimately announced in the 2015 budget as a move to modernize Canada's corporate governance frameworks.

Not having been a member at that time, I found the following passage from page 140 of the previous Conservative government's 2015 economic action plan. It quite clearly shows that the Conservatives were addressing this issue long before the Liberals copied the work:

...the Government will propose amendments to the CBCA to promote gender diversity among public companies, using the widely recognized “comply or explain” model.... Amendments will also be proposed to modernize director election processes and communications...strengthen corporate transparency through an explicit ban on bearer instruments.... Amendments to related statutes governing cooperatives and not-for-profit corporations will also be introduced...

I will quickly point out that this was the last balanced budget Canada will likely see for some time, as we continue to watch the Liberals spend like drunken sailors, but I digress.

As I mentioned, Bill C-25 comes from the last Conservative budget in 2015.

It is quite clear to me that the current government, without its own ideas, is happy to recycle another Conservative policy. Be it health spending, environmental targets, or gender equality issues, we see the present government time and again recycling sensible positions taken by the previous Conservative government. In fact, the minister is making this a bit of a habit. Bill C-25 is the second piece of legislation tabled by the minister that comes straight from the previous Conservative government's 2015 budget. I only wish he had also emulated the fiscal responsibility of the previous government.

I know that many of my colleagues were part of the previous government before I was elected and I imagine that watching the Liberal government photocopy their work and pass it off as its own must elicit mixed emotions of pride and frustration. I know my Conservative colleagues worked hard to serve Canadians and provide the best policies possible.

Each time the Liberal government continues to do this type of thing, I am reminded of the expression, “imitation is the best form of flattery”. However, the Liberal government promised it could do better, and it has failed. Even so, I am glad to see it is implementing some of the visionary ideas of our past government, but it only serves to highlight the fact it has none of its own.

In any event, let us go back to Bill C-25.

If adopted, Bill C-25 would result in changes to the corporate governance regime for reporting issuers incorporated under the Canada Business Corporations Act. In everyday language, this would mean that the rules for companies to report to the public would be changed. Boards of directors that do not reflect the gender and cultural diversity that is Canada would have to explain why they do not.

With this proposed legislation, there are a number of amendments that cover several key corporate governance matters. They include those related to majority voting, individual voting, annual elections, notice and access, diversity related disclosure, and shareholder proposal filing deadlines.

The one I want to focus on is the proposed comply or explain model. Basically, corporate boards in Canada do not accurately reflect the demographics of the population they serve. While things continue to improve, the pace is much slower than most would like to see.

I am pleased to see that the Liberals are moving forward with the comply or explain model that the previous Conservative government had championed. Would I would like to see corporate boards of directors be more reflective of the Canadian population? Well, who would not?

There are benefits to both the companies and society as a whole. It has been shown that more diverse boards benefit all involved. We see better overall decision-making, better organizational structure, resulting in a better economy for Canadians.

I have sat on many boards, and the more diverse the make-up of the board, the better the ideas brought to the table. This leads to better problem solving, innovative solutions, and better communication of ideas. I would encourage any board to diversify and reflect its customer base. More importantly, diversify to reflect the target customer base.

I did want to mention that the Conservative Party has a proud history when it comes to diversity. It was the Conservative Party that had the first female Prime Minister. It was the Conservative Party that elected the first female MP to the House of Commons. It was the Conservative Party that elected the first Chinese, the first Muslim, the first black, the first Latino, the first Hindu, Pakistani, Japanese, and the first physically disabled MP, and the list goes on.

What I am most proud of with respect to our Conservative history is that it was based on merit, not any forced compliance system. All those who were advanced did it because they earned it and not because it was handed to them on a silver platter. This guiding principle of merit and fairness gave us a proud history. I think it shows that forced compliance does no favours to anyone.

Since the Ontario Securities Commission implemented the comply or explain model two years ago, the number of women on boards has steadily increased to 20%. Yes, this is still too low, but it is an improvement. It is worth noting also that across Canada in the larger companies, women make up an average of 34% of the boards. Again, that is an abysmal number, but it is improving.

Over the past three decades, the participation of women in the Canadian workforce has more than doubled to approximately 47%. Women now earn over half of all Canadian university degrees, and 34.5% of MBAs granted in 2011 were to women. In addition, women represented 47% of students in business and management programs at the master's level in 2010.

The level of progress among Canadian women in just a few decades is impressive. Women are achieving success at unprecedented levels in a variety of sectors, be it law, medicine, and other professions, yet the representation of women on those boards has not followed suit. If we give a woman a fair chance of opportunity, they are quite capable of making the most of it. We have seen it first hand, and I have seen it first hand.

I remember as a kid that practically all doctors were male. In fact, I recall people specifically mentioning that they had a woman doctor, as if it were some sort of novelty or unnatural anomaly.

Children today will grow up in a different world, an opposite world. Today, a full two-thirds of medical school graduates are women. Female doctors will be the norm in the future. Sixty per cent of university graduates are now women. Future boards will have no choice but to increase female participation if they have any hope of filling all the chairs around the table.

As a father of three daughters, this is promising and it is good news. However, women are not waiting for legislation to be passed so they can take their rightful place in society, and nor should they.

Take my family, for example. My late wife Heather was a very successful woman in her own right. She served on many boards and ran numerous large corporate projects in her lifetime. My daughters, much like their mother, are strong-minded, principled, determined leaders in their own right. They have made me proud. They have made us proud with their success, both professional and personal.

Without going into too much, it does bother me that women still encounter a wage gap in Canada today. There are excuses for this. However, excuses are not reasons.

I am grateful for the opportunity to speak to Bill C-25, and I look forward to any questions.

Canada Business Corporations ActGovernment Orders

November 25th, 2016 / 12:40 p.m.
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Conservative

Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON

Mr. Speaker, I will be splitting my time with my colleague from Sarnia—Lambton.

I would like to thank my colleague from Haldimand—Norfolk for leading the official opposition and being our critic on the issue. She is doing a great job and we appreciate everything she has done.

Bill C-25 is an act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act. I would like to begin with a quote from my colleague from Haldimand—Norfolk who said, “...Modernizing the acts addressed in Bill C-25 is a welcome improvement to the federal corporate statute and a reflection of the need to enhance companies' corporate governance practices.” If the minister wants to continue putting forward legislation straight from Conservative budgets, then bring it on, that is more than welcomed. This is the minister's second bill since taking office one year ago and just like his first bill, this one too comes straight from the Conservative 2015 budget.

Canadians, though, need more legislation that would provide positive results for Canadians.

According to the September 17 article published by The Huffington Post with data compiled from the Library of Parliament, the Prime Minister's first few months in office “were the least productive of any government in the House in more than two decades”. Parliament passed 10 bills during the member for Papineau's first nine months. By contrast, the previous government, after winning a majority in 2011, passed 18 pieces of legislation, including nine bills moved in its first 23 days. Former prime minister Jean Chrétien's first nine months in office resulted in 34 bills being given royal assent in 1994 and 38 bills after the 1997 election. Quoting my friend from Durham, “For a government that really talks about real change, and high ambition … there hasn’t been much change. They haven’t done a heck of a lot.”

It gets worse. According to Statistics Canada, as of October 2016, last month, Canada's unemployment rate was 7%. We all agree in the House that is far too high.

The Liberal government is running multi-billion dollar deficits and has yet to create one net full-time job in over a year. Instead of debating other pieces of legislation that could help to get millions of Canadians back to work, we are debating here changes to the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act.

In 2014, our previous government consulted with stakeholders from all across Canada about the modernization of Canada's corporate governance framework. Many of the stakeholders that we met with during the consultation process raised a number of important and complex concerns that they had with the corporate governance structure. I am pleased to see that Liberal members opposite will use legislation that our previous government worked so hard to create. It is a shame though, and I continue to say this, that we have not seen other pieces of legislation to produce positive results for Canadians.

During my year and one month here I have had an opportunity to speak with many constituents and they have raised the same concern no matter where I go, the economy, but specifically jobs, jobs, jobs. This same concern can be found from coast to coast to coast and we as legislators need to take action.

There is a trend developing with the Liberal government. It wants to consult, consult, consult, debate, debate, debate, discuss, discuss, discuss, but Canadians are still waiting for action. Canadians want to get back to work. Canadians want legislation to get them paying their bills and building their families. They are waiting for tangible results. However, it seems that making that decision piece is a bit of an issue for the Liberals.

The government was elected on a promise of change and yet, for many Canadians, they are in a worse position now than they were a year ago. The government promised to help the middle class and it continues to argue that it is helping the middle class, but Canadians who are struggling know that is not true.

The government plans to implement a carbon tax and increase CPP contributions. It is running massive deficits while at the same time taking away tax credits that provided relief for families that need it. After promising just modest deficits during the election, the Liberal government is now running massive deficits with no sign of returning to balance.

Now, the budget has a structural problem. What does that mean going forward? It means program cuts in the future, tax hikes, and at the end of the day, the Liberals are leaving this debt for future generations to pay. Therefore, I do not really see this as helping the middle class.

Our previous government, in contrast, brought Canadians the lowest tax burden in 50 years, and I am proud of that record. We also managed to balance the budget and run a surplus. However, as I have mentioned, the government has burned through that surplus. It is running massive multi-billion dollar deficits, yet we have not seen the creation of one net new full-time job. This is burdening the middle class. This is burdening future generations. This is burdening the youth who will have to pay this bill.

I would like to touch on the background of the bill. I will read from the 2015 budget on page 140.

...the Government will propose amendments to the Canada Business Corporations Act to promote gender diversity among public companies, using the widely recognized “comply or explain” model...Amendments will also be proposed to modernize director election processes and communications with shareholders and to strengthen corporate transparency through an explicit ban on bearer instruments...Amendments to related statutes governing cooperatives and not-for-profit corporations will also be introduced...

For many in the previous Parliament, that quote will sound familiar. This is because, just like the last piece of legislation introduced by the minister, the bill comes straight from the Conservative budget. While I tend to disagree from time to time with members opposite, I must say that I agreed with the minister in his first speech when he said:

Technology also allows transactions to happen quickly across the global, and the global marketplace is more interconnected than ever before. A disruption or discovery in one part of the world can have profound consequences in another.

I appreciate the work that all sides in Parliament are doing. I appreciate the work of members opposite as they work to expand the connectivity of high-speed Internet to rural communities. Many in my area saw the previous government make investments in that. I think we all recognize that there are still gaps in high-speed Internet. Therefore, with the legislation before us, I continue to support improvements in that direction and I appreciate the commitment from the members opposite for continuing the work that we did in the previous Parliament.

Canada Business Corporations ActGovernment Orders

November 25th, 2016 / 12:55 p.m.
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Conservative

Marilyn Gladu Conservative Sarnia—Lambton, ON

Mr. Speaker, recently the Minister of Innovation, Science and Economic Development introduced Bill C-25, an act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act. The proposed amendments by the Liberals to Bill C-25 stem from a House of Commons committee-led statutory review in 2010, which in turn led to a further consultation undertaken in 2014 by our previous Conservative government.

Stakeholders raised many important and complex points on a number of corporate governance issues during the consultations. After our previous Conservative government concluded the consultations in 2014, we made a proposal to modernize Canada's corporate governance framework in our 2015 budget. For those members in the House who are not aware, let me read an except from page 140 of our previous Conservative government's economic action plan 2015:

the Government will propose amendments to the [CBCA] to promote gender diversity among public companies, using the widely recognized "comply or explain" model.... Amendments will also be proposed to modernize director election processes and communications...to strengthen corporate transparency through an explicit ban on bearer instruments.... Amendments to related statutes governing cooperatives and not-for-profit corporations will also be introduced....

Bill C-25 is the minister's second piece of legislation that he has tabled since being in office now for a year. Just like his first piece of legislation, Bill C-25 came straight from our previous Conservative government's 2015 budget.

I am pleased to see that the hard work our previous government did is continuing through the Liberals, in their need to produce some form of legislation while keeping up the facade that they are hard at work. I do not call this hard at work, and neither do Canadians. However, if the Liberals want to continue taking unpassed Conservative legislation and unfinished work and bringing it forward, they will see our support.

The legislation being brought to the House, overall does not speak well for the Liberal government's priorities. With hundreds of thousands of people out of work in this country, trade deals not signed, pipeline deals stalled, and terrorism on the rise, we have spent days talking about Bill C-18, a park in Toronto, and Bill C-16, about protection of rights that already existed provincially and in the Charter of Rights, and then nearly a week talking about changes to the CPP that will not benefit anyone for 40 years. Soon we will be spending our time discussing whether to make it legal to have anal sex between the ages of 16 and 18.

Seriously, these are the priorities of the present government in the face of serious economic and security circumstances? However, I digress.

If adopted, Bill C-25 would result in changes to the corporate governance regime for reporting issuers incorporated under the Canada Business Corporations Act. The CBCA is the incorporating statute for nearly 270,000 corporations. Although most of these are small or medium sized and are privately held, a large number of Canada's largest reporting issuers are also governed by the CBCA.

The proposed amendments cover several key corporate governance matters: majority voting, individual voting, annual elections, notice and access, diversity-related disclosure, and shareholder proposal filing deadlines. I am pleased to see that the Liberals moved forward with the “comply or explain” model that our previous government had proposed. It has been proven that more diverse boards lead to better overall decision-making, better boards, better organizations, and better economies.

Our Conservative Party has never been on the sidelines when it comes to diversity firsts in Canada. It was the Conservative Party that had the first female prime minister, elected the first female MP to the House of Commons, the first Chinese, Muslim, Black, Latino, Hindu, Pakistani, Japanese, and physically disabled MPs, and, of course, the first female engineer in the House of Commons. You knew I was going to say that, Mr. Speaker. Our Conservative Party believes in merit, not quotas, and I am pleased to see that we are not going to be missing out on talent.

Since the Ontario Securities Commission implemented the “comply or explain” model two years ago, the number of women on boards has steadily increased to 20%. However, looking at Canada as a whole, in larger companies, women make up an average of 34% on boards.

Implementing the widely used model is the first step to seeing these numbers increase. If enacted, that change would affect about 600 of the approximately 1,500 companies on the TSX.

As chair of the committee on status of women, I can say that our next study will be on improving the economic circumstances of women in Canada. This legislation is aligned with what we would like to see as end results, more women in executive positions and on boards, more women in science, engineering, technology, and math jobs, and gender parity in the workforce.

Research into the effectiveness of teams shows that teams who work more harmoniously are 10% to 20% more productive. One of the findings is that adding more women to teams makes them more harmonious. I support all of these efforts to drive us in the right direction with respect to diversity and inclusion across our country.

When it comes to modernizing corporate governance and reducing red tape, our previous Conservative government made massive strides. We believed in fostering an environment in which businesses could grow and contribute to Canada's long-term prosperity. We recognized that businesses play a vital role in creating jobs and generating economic growth, and that strong business strategies are central to a company's success in creating and sustaining a competitive edge.

Changes proposed to the Competition Act will do just that. They will reduce business uncertainty, create a competitive marketplace, and prevent anti-competitive practices. These amendments will also reduce the administrative burden on businesses.

Our previous Conservative government set a precedent, the first of its kind in any country, when we introduced the one-for-one rule. It brought a new level of discipline to how governments foster a more predictable environment for business, through the reduction of red tape. We took a number of steps to reduce red tape for businesses. Since 2012, the red tape reduction action plan has been proven to be a successful system-wide control on the growth of regulatory red tape. Our previous government saved Canadian businesses over $22 million in administrative burden, as well as 290,000 hours in time spent dealing with unnecessary regulatory burden.

Further enhancing the changes we had made while in government, Bill C-25 was to be our next step in modernizing corporate governance. More accountability and transparency are key for any organization or government. A high performance board is accountable.

The right to vote is important for shareholders and fundamental to democracy. I am pleased to see that shareholder democracy and participation will better align with securities rules, and will require corporations under CBCA to hold annual elections, elect directors individually, and use a majority voting standard. This proposal will bring an end to the debate over those circumstances in which an under-supported director could remain on the board.

The proposed amendments in Bill C-25 will further implement many policies and practices that are already addressed under TSX rules and securities laws. Modernizing the acts addressed in Bill C-25 is a welcomed improvement to the federal corporate statute, and a reflection of the need to enhance companies' corporate governance practices.

If the minister wants to continue putting forward legislation straight from the Conservative budgets, well, those are welcomed too. Certainly, I would love to see some that would bring jobs to our country and address the tax burden that small businesses are facing, especially in light of the additional levels of carbon tax being put in place and the broken promise to reduce small businesses taxes. I would like to see the government move in a direction that will strengthen corporations and small businesses, and actually create jobs to address some of the issues we are facing in the nation.

Obviously, as the chair of the status of women committee, I applaud any moves to accelerate us in getting more women in businesses, on boards, and in senior positions. Certainly, I will be working with the whole committee to look at tangible ways that we can do that. I will bring those forward to the government, in the hope that it will implement that legislation, and those recommendations as well.

Canada Business Corporations ActGovernment Orders

November 25th, 2016 / 1:05 p.m.
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Winnipeg North Manitoba

Liberal

Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, a number of Conservatives have stood up and made reference to the legislative workload. We can talk about Bill C-2, the middle class tax cut; Bill C-26, a negotiated agreement where we have seen significant agreement across the country among different provinces and territories; and things like medical assistance in dying.

Right now we are debating Bill C-25, a bill for which the Conservative Party wants to assume the credit, saying that it is, in essence, a Conservative bill. If it is a Conservative bill and we are trying to move things along, why would the Conservatives not allow it to continue through the process?

Canada Business Corporations ActGovernment Orders

November 25th, 2016 / 1:10 p.m.
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NDP

Sheila Malcolmson NDP Nanaimo—Ladysmith, BC

Mr. Speaker, I will start by indicating that I will be splitting my time with my colleague, the member for Regina—Lewvan.

We just went through an American election that disparaged women's leadership. I would like to see Canada and all Canadian parliamentarians send a strong message about the important role of women in leadership.

Last week I was really proud when the New Democratic caucus arranged an all-women's question period lineup the first day after the U.S. election. We wanted to promote women in politics and make sure that we were showing that women who are elected take their voice and are given a voice and fight back against the sexist notions we heard throughout the U.S. election.

Women are still under-represented within our country's decision-making bodies in every area. We have a lot of work to do in that regard.

Talking today about board of director appointments, only 27% of members of boards of directors of crown corporations, agencies, and commissions across our country are women. Those are appointments the federal government has an exclusive responsibility to make, and it is not providing appointments to those boards of directors that actually reflect the diversity and gender makeup of our country.

New Democrats are proposing concrete action to ensure the equality of men and women in many areas, but in this case on crown corporation and federal commission boards. My private member's bill, Bill C-220, is an act to amend the Financial Administration Act with respect to balanced representation. It aims for gender parity in crown corporation and federal commission appointments within six years of its adoption.

This bill has been introduced by a number of New Democrat members of Parliament over the years, such as the member for London—Fanshawe, and most recently, former MP Anne-Marie Day. It was defeated by the Conservatives but supported by both the Liberals and New Democrats when it was debated and voted on in 2014.

When we have appointed women to crown agencies, we have had some great successes. Last night we were meeting with the board of directors of VIA Rail, which has gender parity on its board. Its chair is a woman who is a fantastic proponent of this very important public service. Very recently, in my own community in Nanaimo, Erralyn Thomas was appointed to a local government commission, the Nanaimo Economic Development Corporation. Erralyn Thomas is an elected Snuneymuxw First Nation councillor. I am very glad to see her take that leadership role in my community.

The Nanaimo Port Authority has a majority of female board members. I love telling the story of how this happened, because it is a bit outside the norm. We have the Laurentian Pilotage Authority, which I believe has zero women. That is another federal agency. However, the Nanaimo Port Authority has a majority of women.

I asked the, at the time, male chair of the board how this came to be. He said that the transport minister of the day, who sits in this House but now on the Conservative side, refused to approve any of the appointments being proposed by the Nanaimo Port Authority for its board of directors until it had some women in its pile of recommendations. It finally got the message. It proposed strong women in our community—engineers, accountants, community leaders—and I would argue that as a result of having appointed a gender-balanced board, the Nanaimo Port Authority meshes much better with the community of Nanaimo. It has better community relations. It is actually prioritizing relations with area first nations in a way it has not before.

We do well when our federal boards and commissions actually reflect the diversity of our country. When we prioritize gender-balanced appointments, we find those good candidates who have not been appointed up to that point.

The problem with this approach is that it relies singularly on the good intentions of the responsible person of the day, in this case a former Conservative transport minister, who asked me not to name her, because she thought she would sound like a New Democrat. I think I just did.

The same goes for the Liberal appointment of a gender-balanced cabinet. I applaud that, but that was at one point in time. There is nothing that actually benefits women on the ground. There is nothing that sets in stone that appointments in the future, at any level, will actually be gender balanced.

A significant failing of this bill we are now debating is that it makes no reference to federal crown appointments.

I am going to try to convince this House that the federal government would be more effective telling co-ops, corporate boards, and the business community to appoint gender-balanced boards of directors if it actually got its own house in order first and did its own homework on the decisions being made right at home.

This was a Liberal government commitment. They are expected to do their part to fulfill the “government's commitment to transparent, merit-based appointments, to help ensure gender parity”. That is in the mandate letter to the Minister of Status of Women. The Prime Minister asked for support for the Privy Council Office “as it develops monitoring and reporting processes to ensure that the government's senior appointments are merit-based and demonstrate gender parity”.

In a late show debate last week, the Parliamentary Secretary for Status of Women said that there are 4,000 Governor in Council and ministerial appointments to commissions, boards, crown corporations, agencies, and tribunals across the country coming up. However, although we were in a debate about gender equality, she said nothing about whether they actually were making those appointments in a gender-balanced way.

We asked the Library of Parliament. There were no stats at all on whether those appointments are being made in a gender-balanced way. I have asked the Minister of Status of Women in correspondence and have not had any answer.

We know this is a direction and a commitment of the government. We want to see it realized. It is badly needed. We have a number of crown agencies that have either no women or hardly any women.

There has been great reporting by Metro News on this recently here in Ottawa. They named, for example, the Bank of Canada, the Canadian Dairy Commission, Canada Mortgage and Housing Corporation, the National Capital Commission, and the Canadian Air Transport Security Authority as having none or few women on their boards. That is an embarrassment in 2016, or actually in any year.

Bill C-25 purports to address issues of gender parity and shareholder democracy, but it does not get its own house in order first. It makes no reference to federal appointments. There is a Senate bill, Bill S-207, the boards of directors modernization act , which is actually much more in line with the New Democrat approach. It does propose a direction and legislation on crown appointments being gender balanced. We applaud the Senate for going further than the government is.

I will finish with some criticism of the Bill C-25 approach. The “comply or explain” model, which is being relied on in this legislation, has been described by the Canadian Board Diversity Council as “not leading to meaningful disclosure and a consistent improved pace of change”. It notes “a growing sentiment that quotas may be necessary to bring about the desired change”.

Canada continues to lag behind other countries when it comes to women in leadership positions. The Liberal government, we are sad to see, seems content to apply the same aspirational targets and models that have not worked that the Conservative government had. I am dismayed to see the similarity of an approach that did not work under the Conservative government. Why would it be any different under the Liberal government?

This is only the second time in 40 years that Canada has addressed the issue of corporate governance. This is not a bill, in my view, that represents #realchange. It falls short in many respects.

In closing, we will be better as a country, our governance will be better, if our decision-making bodies better reflect the diversity and strength of our country. We would very much like to see this bill amended to incorporate the elements of my private member's bill, Bill C-220, which would get at the requirement to have gender-balanced federal commission appointments. The government should take the power it has and make the appointments it has the sole responsibility for. This should be a priority. It would be a true action that would implement the government's feminist rhetoric.

Canada Business Corporations ActGovernment Orders

November 25th, 2016 / 1:25 p.m.
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NDP

Erin Weir NDP Regina—Lewvan, SK

Mr. Speaker, we are nearing the end of the year. New Year's Day 2017 falls on a Sunday. The first paid day in 2017 is January 2. By around noon on January 3, Canada's top 100 CEOs will, on average, have made as much as the average full-time employee will earn over the entire year.

In 2013, and again in 2014, Canada's top 100 CEOs made an average of $9 million each. In other words, the average of these top CEOs makes 184 times as much as the average Canadian worker. This inequality is not only large but it is also growing. Figures on the top 100 CEOs only go back to 2008 on a comparable basis. However, if we look at the top 50 CEOs, an even more elite group, in 1995 only about 20 years ago, they made only 85 times as much as the average worker.

Why should Parliament care if private corporations decide to pay their CEOs a lot of money? Because it is a lot of money that is not being used for other purposes. If we consider 100 CEOs each making an average of $9 million, that is almost $1 billion not being used to hire other employees, not being invested in machinery or equipment, not being devoted to necessary research and development.

Corporate Canada as a whole would be better off if companies could pay CEOs less, but individual corporate boards feel the need to keep up with other companies. This produces a circular logic to justify ever-increasing executive compensation. Even for the CEOs themselves, there is no real benefit to these pay increases. For one of the top 100 CEOs, another million dollars does not actually mean a higher material standard of living. It just means a change in the relative ranking.

Our economy would be stronger and even corporate Canada would be better off with government regulation to limit CEO compensation.

Bill C-25 includes some minor improvements to corporate governance, but what it is missing is mandatory and binding “say on pay” provisions as have been adopted in other advanced countries. Canadian companies can put executive compensation to a vote of shareholders but they are not bound to the results. Bill C-25 should require companies to have votes on CEO and executive compensation and be bound by the results.

Canada Business Corporations ActGovernment Orders

October 26th, 2016 / 3:20 p.m.
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Mississauga—Malton Ontario

Liberal

Navdeep Bains LiberalMinister of Innovation

moved that Bill C-25, An Act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act, be read the second time and referred to a committee.

Mr. Speaker, I rise to speak to Bill C-25. This government is making innovation a priority. That means means helping Canadian companies drive growth and create jobs that strengthen the middle class. It also means growing companies that can compete in the global marketplace.

The government's inclusive innovation agenda is a plan to drive economic growth through innovation. As legislators, we have a responsibility to set the ground rules for doing business, and we have the means to create the winning conditions for people and companies to innovate and thrive.

It is no accident that our innovation agenda has the word “inclusive” attached to it.

This government recognizes that our country is at its most prosperous when everyone has a fair chance to succeed.

Bill C-25, which I present to the House today, makes important adjustments to the framework laws that govern the Canadian marketplace. These laws set out how corporations are organized.

They also promote investor confidence and a competitive marketplace. These conditions support long-term investment and economic growth, and this bill would make it easier for Canadian companies to harness their innovation to succeed. It would also position businesses to operate in the global and digital marketplace.

Before describing these changes in more detail, I will speak to the global context in which these framework laws operate.

Today's marketplace is complex and changing rapidly. Global companies are becoming local companies and competitors, and new technologies are providing companies with vast amounts of information to make decisions.

Technology also allows transactions to happen quickly across the global, and the global marketplace is more interconnected then ever before. A disruption or discovery in one part of the world can have profound consequences in another.

To remain competitive, companies must understand how their partners, suppliers, competitors, and customers do business. Our government is committed to making Canada a global innovation leader.

This means enabling businesses to grow, increasing our country's productivity, and creating well-paying jobs for the middle class. It also means Canada's marketplace framework laws must be updated to reflect a global and digital economy.

These laws must be updated to enhance investor confidence, foster competition, and contribute to an inclusive economic growth agenda. These laws should also support investment and innovation without unduly burdening businesses.

The amendments I have tabled today would provide the foundation for a 21st century marketplace.

They will align Canada’s framework laws with best practices in jurisdictions around the world.

The bill sets out measures to modify the way corporate directors are elected. The bill also contains measures to improve diversity on corporate boards and in senior management level positions.

The goal is to attract the best and brightest from as wide a talent pool as possible. This is how Canada can make full use of the competitive advantage granted to us by this extraordinary diversity of our population.

Additionally, Bill C-25 would improve corporate transparency.

It will eliminate outdated instruments of commerce and modernize shareholder communications. These changes will reflect the new norms and practices of a digital economy.

The bill would increase business certainty and flexibility as well. It would allow Canadian businesses to focus on what makes them most productive, efficient, and innovative. The laws being amended in this bill include the Canada Business Corporations Act, or CBCA.

This statute sets out the rules that facilitate the interaction among shareholders, directors, management, and other interested parties involved in corporate decision-making. In 2015, there were approximately 270,000 companies incorporated under the act. The CBCA serves as a model for other governance laws.

The Canada Cooperatives Act is the framework legislation for federally incorporated non-financial co-operatives. The Canada Not-for-profit Corporations Act is the framework law for non-share capital corporations. In 2015, there were more than 19,000 federally incorporated not-for-profit corporations under the act.

The Competition Act is a law of general application that addresses anti-competitive business conduct. It examines and seeks to address the activities of firms that may be harming competition in the marketplace. By improving and clarifying the rules under which our firms operate, we are positioning them for long-term growth.

We are also aligning Canada’s practices with international best practices in corporate governance.

October is Women's History Month. This is a time when we celebrate the women who have shaped Canada's history as leaders, entrepreneurs, scholars, artists, and trailblazers in all spheres of life. Let me address what the bill does for diversity.

As I have said before, I firmly believe it is our moral duty to promote diversity and inclusion.

Under-representation of different segments of our population is not only a question of fairness, it affects the bottom line. In the boardroom, as in life, taking into consideration viewpoints from a variety of perspectives can lead to innovative thinking and better performance. Innovation requires fresh ideas, new ideas, and the best ideas can come from anyone, anywhere.

We live in an age when anyone with a smartphone can connect, create, collaborate, trade, and sell, regardless of distance. Because the tools to create knowledge and value are now available to everyone, a teenager can start her own technology company.

A university student can launch a social-media platform that becomes a global sensation overnight.

The broader the talent pool, the greater the potential for the next great app to emerge.

Our government is committed to doing all we can to unlock the full potential of Canadians, especially those who are under-represented in certain sectors of today's economy. I know that all parliamentarians support this goal as well.

Earlier this year, this Parliament unanimously passed, and this was a point of pride, Bill C-11, which allowed Canada to become the first G7 country to adopt the Marrakesh Treaty. I was proud to announce this piece of legislation in the House and see it receive the support of all parliamentarians.

The Marrakesh Treaty benefits three million Canadians who are visually impaired or print disabled. As a result of the treaty, they will have better access to books and other copyrighted materials. As a result of better access to knowledge, these Canadians will be able to fully participate in the economy. That is how our government's commitment to diversity allows Canadians from all walks of life to become productive members of society.

Bill C-25 builds on that commitment to innovation and prosperity through diversity.

As part of the reforms to the CBCA, corporations would be required to disclose to shareholders the composition of their boards and senior management. They would also be required to make public their diversity policies. Those corporations without a diversity policy would have to explain why they do not have one.

This amendment will complement existing measures already adopted by most provincial securities regulators.

It would apply to all publicly traded CBCA corporations, regardless of which securities regulator they reported to.

By taking into account the composition of boards, investors could make informed choices when they exercised their voting rights.

These reforms are designed to facilitate a conversation between shareholders and corporations on how they are promoting diversity.

The goal is to encourage corporations to consider a broader range of candidates and skill sets among their senior leaders.

The second set of amendments contained in Bill C-25 aims to promote greater shareholder democracy. The goal is to ensure that the voting process allows shareholders to have their voices heard in a meaningful way.

The bill would make three key reforms to the process of electing corporate directors. These reforms would affect publicly traded CBCA corporations and publicly traded co-operatives incorporated under the Canada Cooperatives Act.

First, the bill would require the prescribed corporations and co-operatives to hold annual votes for the election of corporate directors. Currently the law permits directors to hold office for up to three years before a vote is required. The entrenchment of company boards can hamper innovative thinking.

Ensuring that shareholders can make changes more often is a step in the right direction.

Second, directors under the CBCA would be elected individually, not as a slate or a group of candidates. An all-or-nothing approach prevents voters from meaningfully exercising their democratic rights and bringing in the board they want.

Third, the bill would permit shareholders to vote explicitly against a candidate in an uncontested election, that is, when the number of candidates was the same as the number of board positions to be filled. Even when there was no competing candidate, a prospective director would still need enough votes in support of her candidacy to make up a majority of the votes cast to be elected.

Of course, there is more to shareholder participation than simply voting. Transparency and clarity are important to shareholders as well.

The bill would modernize shareholder communications to align practices with how businesses are conducted today. The bill would permit CBCA corporations and co-operatives incorporated under the Canada Cooperatives Act to provide their shareholders or members with online access to relevant documents related to an annual meeting. This notice and access system would reduce costs, conserve resources, and increase business efficiency.

In addition, the bill would simplify the deadline for shareholders to submit proposals to directors so that they could participate in meetings more often and effectively.

The fourth amendment would make it clear that CBCA corporations and federal non-financial co-operatives would be prohibited from issuing share certificates and share warrants in bearer form. Much like cash, a bearer share is owned by whoever holds the physical stock certificate. The issuing firm neither registers the owner nor tracks any transfers of ownership, and when these instruments are issued in blank form, they can be used as a vehicle for money laundering or terrorist financing. That is because they are easily transferrable and untraceable.

This amendment would require all shares to be registered. It is a preventive measure that would be particularly relevant to law enforcement.

It will ensure that Canada aligns its rules with the recommendations of the international Financial Action Task Force.

The bill would also amend the Competition Act to broaden the understanding of what makes one business entity affiliated with another. Currently, because of its outdated definition, there is a risk that business between affiliates could be viewed under the law as a joint action with competitors.

The existing law does not fully account for non-corporate structures, such as sole proprietorships, partnerships, or trusts. This uncertainty could lead to companies being needlessly exposed to sanctions under the act, and re-organization among affiliated companies could be interpreted as a merger of competing firms.

That process could require notifying the Commissioner of Competition. It could also incur a fee and a significant amount of paperwork. There is also the risk that a collaborative project between two affiliated companies could be treated as an arrangement between competing firms. It could be misrepresented or misinterpreted as harmful competition or outright collusion.

To address this legislative gap, the bill would update the Competition Act's rules on affiliation and would make the rules business-structure neutral. This update would ensure, clearly and explicitly, that businesses that are engaged in joint ventures with their affiliates are not subjected unwittingly to the act's enforcement provisions.

This amendment will create certainty and replace an outdated framework that can cost businesses unnecessary time and resources.

One of the key features of this bill is that it positions Canada among world leaders in corporate governance. For example, most member states of the European Union have implemented gender diversity legislation. Both the United Kingdom and Australia have required disclosure, including a comply or explain model in the latter case, which saw significant improvements in terms of board representation.

In the United States, publicly listed companies have adopted policies on majority voting for corporate directors. Even in Canada we have seen provincial securities regulators adopt similar rules that promote greater shareholder participation and corporate diversity.

These amendments are an important step forward.

They would modernize corporate governance laws to align with today's technological realities and support business efficiency. They would promote greater transparency, accountability, and public confidence in the marketplace and give investors the information they need to make informed decisions about their investments.

Above all, these amendments recognize the great asset that is our country's diversity. Canada's business community would have a crucial role in promoting diversity. Some have already done so, and I know that others will step up to show that they are committed to growing our economy by tapping Canada's full potential. By modernizing our ground rules and aligning with international standards, Canada can position itself for the inclusive innovation and growth that would propel this country going forward.

I am proud to be launching this important initiative today on behalf of the Government of Canada.

Canada Business Corporations ActGovernment Orders

October 26th, 2016 / 3:50 p.m.
See context

Conservative

Diane Finley Conservative Haldimand—Norfolk, ON

Madam Speaker, the Minister of Innovation, Science and Economic Development introduced Bill C-25, which is an act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act.

The proposed amendments by the Liberals in Bill C-25 stem from a House of Commons committee-led statutory review in 2010, which in turn led to further consultation undertaken in 2014 by our previous Conservative government. Stakeholders raised many important and complex points on a number of aspects of corporate governance during those consultations.

After our previous Conservative government concluded the consultations in 2014, we made a proposal to modernize Canada's corporate governance framework in our 2015 budget. For those in the House who may not be aware, let me read an excerpt from page 140 of that 2015 economic action plan:

...the Government will propose amendments to the Canada Business Corporations Act to promote gender diversity among public companies, using the widely recognized “comply or explain” model...Amendments will also be proposed to modernize director election processes and communications... to strengthen corporate transparency through an explicit ban on bearer instruments...Amendments to related statutes governing cooperatives and not-for-profit corporations will also be introduced...

I hate to steal the minister's thunder, but Bill C-25 is the minister's second piece of legislation he has tabled since being in office now for one year. Just like his first piece of legislation, this, Bill C-25, came straight from our previous Conservative government's 2015 budget.

I am really pleased to see that all the hard work that our previous government did is continuing through the Liberals, and their need to produce at least some form of legislation, but I cannot help but wonder if this is what the Liberals meant when they talked to Canadians about real change.

If adopted, Bill C-25 would result in changes to the corporate governance regime for reporting issuers incorporated under the Canada Business Corporations Act. The CBCA is the incorporating statute for nearly 270,000 corporations. Although most of these are small or medium-sized and privately held, a large number of Canada's largest reporting issuers are also governed by CBCA.

The proposed amendments cover several key corporate governance matters, including majority voting, individual voting, annual elections, notice and access, diversity related disclosure, and shareholder proposal filing deadlines.

I am pleased to see that the Liberals moved forward with the comply or explain model that we recommended. It has been proven that more diverse boards lead to better overall decision-making, better corporate performance, better organizations, and, indeed, better economies.

Our Conservative Party has never been on the sidelines when it comes to diversity firsts in Canada. In fact, it was the Conservative Party who had the first female prime minister; who elected the first female MP to the House of Commons; the first Chinese, Muslim, Black, Latino, Hindu, Pakistani, Japanese, and physically disabled MPs; and that list goes on. That is a record of which to be proud.

Our Conservative Party believes in merit not quotas. I am pleased we are not going to be missing out on talent, nor will we be losing out on that talent because of artificial quotas.

Since the Ontario Securities Commission implemented the comply or explain model just two years ago, the number of women on boards there has steadily increased to 20%.

However, looking at Canada as a whole, in larger companies women make up an average of 34% of boards. Implementing the widely used comply or explain model is the first step to seeing those numbers increase too. If enacted, that change would affect about 600 of the approximately 1,500 companies on the TSX.

When it comes to modernizing corporate governance and reducing red tape, our previous government made massive strides. We believe in fostering an environment in which businesses can grow and contribute to Canada's long-term prosperity. In fact, we recognize that businesses play a vital role in creating jobs and generating economic growth, and that strong business strategies are central to a company's success in creating and sustaining a competitive edge.

The changes proposed to the Competition Act, as we are discussing today, will do just that. They would reduce business uncertainty, create a competitive marketplace, and prevent anti-competitive practices. The amendments would also reduce the administrative burden on businesses.

Our previous Conservative government set a precedent, the first of its kind in any country in fact, when we introduced the one-for-one rule, which brought a new level of discipline to how government fosters a more predictable environment for business through the reduction of red tape.

We took a number of steps to reduce red tape facing businesses. Indeed, since 2012, the red tape reduction action plan has proven to be a successful, system-wide control on the growth of regulatory red tape. Our previous government saved Canadian businesses over $22 million in the administrative burden, as well as some 290,000 hours in time spent dealing with the unnecessary regulatory burden.

Further enhancing the changes that we made while in government, Bill C-25 was to be our next step in maximizing corporate governance.

More accountability and transparency are key for any organization in government, and a high performance board is one that is accountable. The right to vote is important for shareholders and for fundamental democracy.

I am pleased to see that shareholder democracy and participation will better align with securities rules and that corporations would be required under the CBCA to hold annual elections, elect directors individually, and use a majority voting standard. This proposal will bring an end to the debate over those circumstances in which an under-supported director may remain on the board.

The proposed amendments in Bill C-25 would further implement many policies and practices that are already addressed under TSX rules and security laws. Modernizing the acts addressed in Bill C-25 is a welcome improvement to the federal corporate statute and a reflection of the need to enhance companies' corporate governance practices.

If the minister wants to continue putting forward legislation that comes straight from Conservative budgets, well, those would be welcome too.

Canada Business Corporations ActGovernment Orders

October 26th, 2016 / 4:20 p.m.
See context

NDP

Brian Masse NDP Windsor West, ON

Madam Speaker, I am here to speak to something that is very important and it is good that this Parliament is bringing this forward. I think Bill C-25 is a positive initiative.

The minister mentioned the Marrakesh Treaty. That was a treaty that Canada signed onto through a bill passed here, which was important for the blind and for other Canadians, for larger print. It is one of the indications that we can actually move things through the House of Commons and we can have things done for Canadians.

The bill is movement in the right direction. As New Democrats, we are going to support it, for sure. There is no way that we would not support the initiatives of the bill, but there are some shortcomings with the current proposal. We will point out a couple of those, but we want to hear testimony from witnesses as well.

Bill C-25 is an act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act. Essentially what we are talking about is boards of governance in general, when we put the three core elements together. It is an opportunity to update and to include modern changes that are reflective. On the private sector model with the private corporations, blue chip corporations, and others, they have been very derelict, quite frankly, across the world in not having more of an inclusive nature. This is why it has come to the forefront, not just in Canada but across the world.

When we look at Europe and even at the United States, Canada has become known as a laggard with regard to this and there is no doubt about it. When the Conservatives talk about this getting through, after the 10 years it took them to bring something forward, right now we are happy to do so. Unfortunately, we are getting into a bragging competition between the Liberals and the Conservatives about this. However, I wonder why the bill is being launched again, another year and a bit later, basically the same as what it was before, especially given what we have seen with the more fundamental changes that are taking place in Germany and other places, which I will get into later, that are very important.

We are here today to at least take that first step forward in this process. To be clear, the most recent change to the measures in the bill was in 2001. That was just prior to my time here. It was under Jean Chrétien's government at that time, and prior to that it was decades before. We are really looking at nearly 40 years of letting them have the whole show so to speak. Right now, and this is how far things have come along and how difficult it still is, we require a legislative arm on this because still the right thing is not being done. Our corporate boards and tables across this country, where decisions are made about employees and about Canadians, do not even reflect anywhere near the diversity they should, and that is a shame. It is a shame that we have had to come this far.

Hence, one of the amendments that the New Democrats will be bringing forth is to have some type of a review of this process in the legislation. There will be a good debate. I know some civil society organizations and some governance organizations, especially related to the advocacy of women, have questioned the voluntary element in this initiative and said that there should be some monitoring of that.

The one way we can do it, and it is a very respectful way, is to make sure we have this coming back to Parliament so that we and Canadians have a voice to ask why a company is not complying and being reflective to some degree of the Canadian people, or at least coming to the benchmarks, generally speaking, that reflect our society. There are those people historically who have popped through the different barriers that take place. However, I have a concern because of the thoughts we have had in the past related to boards. They were referred to as the “old boys' club”, and that is very real.

It is also an indication that not only is this an issue of gender, ethnicity, and diversity, but also of social class. We have people who are basically disavowed and ruled unable, unequal, or unworthy of rising through the ranks. They have to go through exceptional circumstances to break those barriers, and they have been some of the most ingenuous people we have had. However, the time and day has come when everyone should count on who they are, what they think, what they do, and how hard they work, versus whom they know or who their family are, or at the very least, what their gender is.

We need to make sure that a number of things will be looked at here. These are very important.

The bill would have annual elections for directors. Right now, it can take up to three years for a director to be looked at. An annual director position can set the course on how a corporation responds to its shareholders.

If we believe in the essence of capitalism at face value, the argument there is that the shareholder is a voter and that in a democracy there are voting rights as a shareholder for the board and the CEO who controls it at that time. However, the current situation is that those meetings are not held, and if there is not that connection between the board and the shareholders, accountability can be avoided. Accountability can also be avoided by not publicizing meetings, or by not making sure that there is enough time in advance so that people can attend the meetings. Therefore, barriers can be created, similar to what I would call “non-tariff barriers”. When we are trying to sell products in another country, we cannot do so, because the non-tariff barriers or rules are so bad. It is the same with shareholders.

When we talk about shareholders, we are talking about ourselves. They are people who have invested their pensions or earnings. They buy those shares and the company gives them that equity in it, but if they cannot have any direct control whatsoever in terms of voting, because the CEO does not have the proper rules in place or has not been following them for up to three years. Then it becomes a problem. Therefore, the bill would require an annual meeting, which we are very supportive of.

Also, there is the structure of the old boy's club that was there regarding the election of directors as individuals. They used to run slates in the old boy's club, so to speak, making it more difficult for some other individuals who were trying to advance because the old boy's club was grouped against them. We would call that bullying today, but the reality is that we had a number of people who could not get through because the fix was in, so to speak, and the slate was developed. Now, with individual votes for those board members, at least there will be an individual case to made for each person.

I think that is the right way to do it, because, for example, some slates carried baggage where one could basically say, “I like three of the four, and I can live with them”. They would come out with a number of different things, as opposed to giving the right and basically saying that a single selection should be the way to go. I think that is going to be a good advancement.

On the issue of comply or explain, I noted that different countries have done different things. However, comply or explain is a way to bring the numbers up, and the current 18% or less share of women on boards is obviously not reflective of our society. With women making up over 50% of the population, but occupying less than 18% of board positions, it is an obvious problem that has to be fixed.

In surveys we have found that when comply or explain was used in the past in other countries and there have not been improvements in these numbers as a result, they have argued that not enough qualified people applied. That is the ceiling that is created. It is hard to challenge that, because we cannot have access to the confidential documents and information about who applied, who got left behind, and a number of different personal things that are very complicated, and so the target does not move at all. That is one of the reasons Chancellor Merkel in Germany moved legislation on this and now has a target of 30%.

Germany was simply fed up and said that for CEOs and blue-chip corporations the rate would be 30% and that they would have some time to bring that in. The time was shortened because they would need some time to comply or explain. For German not-for-profit boards and others, the rate is going to be 50%. There is a difference between 30% and 50%.

I was not privy to the debate and have not looked at what has taken place in the German legislation, but I am sure it will come out in testimony. Not-for-profit boards are found in hospitals, public institutions, and so forth. On those boards, of course, the rate should be 50% because taxpayers pay for those boards, and with 50% of our population being women they are directly paying 50%. We know that to be a fact. They need to have the same representation. In fact, they deserve to have the same representation. It is an absolute shame if they do not. This can be easily corrected. If women are supposed to be equal, then they deserve an equal voice in running those boards. We New Democrats are arguing for at least a review of this.

This goes back to what we are proposing in terms of an amendment, so that people at the very least are made aware of this. There might be others who do more on comply or explain. There could be a better amendment, and New Democrats are open to that. However, we are not going to give a blank cheque to this piece of legislation. There is no way we are going to let this legislation go through without fighting tooth and nail to the end, without adding accountability to change the current situation. We will not let that happen. We have not come this far on so many other measures, and we still have much further to go, that we would basically put up our hands on the bill and say good luck, we will leave it to the other guys, and we will see everyone later. We are not going to do that. We have done that enough. I have seen that happen too often here in the chamber, most recently with another bill that looked at gender parity with respect to electoral reform, and it was turned down in the House. Sadly, it was another lost opportunity.

This cannot be another lost opportunity. This cannot go back in the record books for another 40 years without any action taking place. That is why I am particularly interested in the German case. Germany has gone through it and has changed.

We do know that the provinces have moved on this as well, and it will be interesting to hear the testimony at committee. They have moved on comply or explain and a few other things. We will be getting some of the results from them as well. I will be interested in hearing what is going on out there in committee. That will also give us a better sense of things.

Maybe we are wrong in the sense that corporations and not-for-profits will act quickly on this. I worked in a not-for-profit industry for a number of years and was successful in bringing in this model. Not-for-profits will comply and move toward that. This is our opportunity to bring it to Parliament and to Canada as a whole. We can find out if those who are laggards have a problem with it and how they are going to fix the problem. That is what we are going to see with this legislation. Hopefully we will see amendments that would make this happen, because we are just not going to leave it alone.

Another missed opportunity with respect to this issue is corporate CEO compensation. We are calling for more shareholders and investors to have a say on CEO pay. We are interested in looking at executive compensation as it is a part of the package. We have seen in Canada and around the world CEOs getting big bonuses while companies tank, and fire their workers left, right, and centre at the same time. We have to look no further than the CEOs at our banks. Their compensation was increasing at a time when banks were having some problems and we had to backstop some of them. The banks had record profits and their CEOs received increased compensation. During the last financial crisis, the average increase in their compensation was about 19%.

How is it that so many Canadians and so many small businesses are going through this problem that we have had. The challenges and the insecurity and the services they are supposed to get are challenged; government, which is funding this, is going into massive debt; and CEOs get almost 20%. Those banks have some the highest credit card costs not only in Canada but across the world. When it comes to credit card service fees, just talk to small merchants. Look at what is happening in Australia. Australia has a 0.5% cap and it is reviewing this and lowering it because banks are still making lots of money. It is bad for small business.

Here our small business people struggle when they go to the banks to get loans, and if they can get them, they are at high interest rates. Or public institutions like the BDC, or credit unions, have stepped in on riskier loans. What do the banks do in response? They fire more workers, close more branches, and they increase service fees. They do all of those things and the Conservatives set up what is basically a voluntary system for credit cards. It is like playing hockey and getting a penalty for cross-checking someone, but it is a voluntary penalty and if players want to go in the penalty box they can time themselves out if they want to. If they do not, that is okay, play on, play on.

Meanwhile CEOs are making 20% profit. This sends a message that bad behaviour is rewarded. What person does that? We do not do that in our home life. We do not reward bad behaviour, and if we do, it will probably not lead to a good solution in the end. No one does that kind of stuff and that is what we have done with CEO compensation.

Look at Target, for example. It came in and took over a Canadian company, Zellers, which was making a profit. That is key. Zellers was making a profit. It also had a unionized workforce and a wage just over the minimum. It had some benefits and it was making a profit. It was a company that was fulfilling its mandate for people, being a place to work, a place with benefits, a place that respected Canadian laws, but Target came in and what did it do? It ended up going bankrupt and shutting Zellers down, and the CEO of Target, Gregg Steinhafel, received a severance package of $61 million, just $10 million shy of the total severance package for the entire Target workforce. Great, that is capitalism at its best. That is a wonderful example of the Canadian dream being fulfilled.

I recently reviewed the Investment Canada Act, which has had so many changes made to it by previous Liberal and Conservative governments, it is in shambles with regard to this type of behaviour. There was nothing wrong with forcing Target to have some type of mandate or guarantees when it came into this country, so that we could preserve these workers' jobs and stop a bunch of black holes in shopping malls in communities across this country just because of corporate greed.

At the end of the day, with $61 million I am sure that the former CEO is not in our country. The people with the compensation are here and wondering what to do. Guess what we do as taxpayers? We have to fill in the pensions, the employment insurance, and we have make sure that employees get retrained or find other jobs. So CEO compensation is significant and it goes on. The CEO with the highest pay, but worst stock return, is Donald Lindsay. His compensation right now is $9.6 million and there is no remorse on his part. Encana Corporation compensation is $10.8 million. Scott Saxberg of Crescent Point Energy Corporation gets $8.8 million in compensation, despite the company's shareholder falling by 34.5%.

All of these things are taking place that detract from what could be in the bill and what could be greater accountability for Canadians. When we review the bill, let us make sure we crack open the elements that are necessary for full accountability. The big difference and why Canadians need to care more than ever before is that many Canadians are now investing in their own funds for their future. They go online and make purchases and that is why we need to make sure they have their rights protected.