Bill C-25 (Historical)

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

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.

[The Chair, Liberal, Dan Ruimy]

I call the meeting to order.

Thank you, everybody, and welcome back. This is meeting number 44 of the Standing Committee on Industry, Science and Technology. Pursuant to the order of reference of Friday, December 9, 2016, we are studying 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.

Today, from the Department of Industry, we have Mitch Davies, assistant deputy minister, strategic policy sector, and Mark Schaan, director general, marketplace framework policy branch, strategic policy sector.

You have 10 minutes.

Go ahead, Mr. Davies.

[Shereen Benzvy Miller, Assistant Deputy Minister, Small Business, Tourism and Marketplace Services, Department of Industry]

Thank you. Good morning, Madam Chair and distinguished members.

My name is Shereen Benzvy Miller. I am the assistant deputy minister for small business, tourism and marketplace services, at Innovation, Science and Economic Development.

I'm pleased to be here today, alongside my colleagues from ESDC and Natural Resources. Thank you for providing us an opportunity to speak to you about how ISED is supporting the economic security of women.

There is a growing understanding that addressing the constraints of women's economic empowerment is fundamental to lasting, inclusive, and sustainable economic growth and to the achievement of gender equality

However, women continue to face challenges. We know that women are generally under-represented in entrepreneurship and small business ownership, in science, technology, engineering and mathematics, and on corporate boards. In addition, sometimes general programs and services don't take into account the distinct needs of women.

Let me walk you through some of our department's initiatives and programs that aim to address these issues.

First, women entrepreneurs represent a significant source of untapped talent and potential in Canada. Only 15.7% of small and medium-sized enterprises are majority owned by women, as opposed to 64.7% majority owned by men.

As well, only 5% of women-owned businesses export, as opposed to 12% of male-owned businesses. Despite expressing high growth intentions, women are less likely to scale up their businesses and export due to a number of barriers, such as limited business networks, lack of financial literacy, inconsistent levels of training and mentorship, and lack of access to capital for financing.

For instance, Statistics Canada found in 2014 that only 78% of majority women-owned businesses that requested debt financing has those requests approved as opposed to 91% of majority male-owned businesses that requested it. That's only 78% of women-owned businesses being approved for financing.

ISED is working on determining how to best support women entrepreneurs. As part of this, the program is continually engaging with stakeholders. For instance, on November 9, 2016, the Honourable Bardish Chagger, Minister of Small Business and Tourism, hosted the Canadian Women's Entrepreneurship Conference in Toronto. Businesswomen from across the country came together, as did Minister Hajdu and Status of Women, to discuss the challenges that women entrepreneurs face and to collaborate on ideas to provide better support for them. I am very pleased that more than 250 inspiring women business owners and organizations that support them were able to participate. Going forward, this engagement will inform policies to promote the full participation of women entrepreneurs in Canada's economic development.

During the conference, Minister Chagger announced that she had asked the Business Development Bank of Canada, the BDC, to become a world-leading financial institution for women business owners. This will involve an introspective look at their business processes and how they meet the needs of women.

Minister Chagger also announced BDC's creation of three new initiatives to support women entrepreneurs in the technology sector, totalling over $50 million in investments.

BDC has also committed to increasing its term lending to majority women-owned businesses to at least $700 million over three years ending in fiscal year 2018. BDC is on track to exceed this commitment.

The six regional development agencies support women entrepreneurs and organizations that support women starting and growing their businesses.

For instance, FedDev Ontario announced in June 2016 $880,000 over two years to directly support women's entrepreneurship through Fierce Founders, a specialized program for women in technology industries.

Both Western Economic Diversification Canada, WD, and the Atlantic Canada Opportunities Agency, ACOA, provide financial support to member organizations, like the Women's Enterprise Organizations of Canada. These organizations provide critical business management skills.

ISED programs that support women in business include the Canada Business Network, a comprehensive directory of services for business provided by the federal, provincial, and territorial governments, which has dedicated a landing page for women entrepreneurs featuring the profiles of successful women entrepreneurs. I would also ask you all to follow the Canada Business Network on Twitter. Their handle is @canadabusiness.

Futurpreneur Canada, another ISED program, is a national not-for-profit organization that supports young entrepreneurs aged 18 to 39. Over 40% of Futurpreneur's clients are women.

ISED is also committed to working to improve the representation in the STEM disciplines. For instance, ISED is working with ESDC to help employers create more co-op placements and work-integrated learning opportunities in the STEM and business fields for young Canadians, including young women and indigenous peoples.

The Natural Sciences and Engineering Research Council of Canada's, or NSERC, chairs for women in science and engineering program was launched in 1996 to increase women's participation in STEM disciplines and to provide career role models for women in those disciplines. NSERC's PromoScience program also helps promote STEM culture by supporting non-profit organizations that generate public excitement in STEM and motivate and encourage youth, specifically young women and girls, to participate in STEM activities.

Increasing women's diversity on boards is also recognized as important. To address this, Bill C-25 was tabled in the House of Commons on September 28, 2016, by the Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development. The bill concluded its second reading on December 9, 2016, and has been referred to the Standing Committee on Industry, Science and Technology for further study. It will require directors of federally incorporated companies to disclose to shareholders the diversity of their boards.

In conclusion, ISED's policies and programs are helping to foster a workforce that is more inclusive for women. ISED is striving to better support women entrepreneurs and ensure the representation of women in STEM, and to improve diversity on corporate boards. Moreover, by applying the GBA lens to new initiatives, ISED will ensure that women are considered in policies and programs. Together, these actions contribute to the economic empowerment and security of women.

Furthermore, as we look to the future, ISED's new innovation agenda will pursue inclusive economic growth to help realize our country's full economic potential and help strengthen the middle class.

The innovation agenda will help unleash the economic potential of women and other under-represented groups in Canada's entrepreneurial ecosystem.

Thank you for your attention and I look forward to your questions.

Canada Business Corporations Act

[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.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, we have talked a fair bit about inequality between men and women in the workplace and on corporate boards, but I wonder if my colleague from Rimouski-Neigette—Témiscouata—Les Basques could also speak a bit about another aspect of Bill C-25, which is inequality between CEOs and their employees. What type of negative consequences does that growing inequality have for our society and what kinds of policies could the government implement to address it?

[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.

[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.

[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.

The House resumed from November 25 consideration of the motion 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.

Business of the House

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons and Minister of Small Business and Tourism]

Mr. Speaker, for the rest of today, we will debate Bill S-4, on tax conventions.

Tomorrow, we will call Bill C-25, the business framework legislation, followed by Bill C-30, regarding CETA.

Monday and Tuesday we will proceed with Bill C-31, an act to implement the free trade agreement between Canada and Ukraine. In the days following, we will put Bill S-4 at the top of the Order Paper so that we can pass it before the Christmas recess.

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons and Minister of Small Business and Tourism]

Mr. Speaker, today we are continuing with opposition day. Tomorrow the House will consider the report stage of Bill C-29, the second budget bill, and it will continue studying that bill Monday and Tuesday of next week.

For the remainder of the week, we plan to call the following bills: Bill S-4, the tax conventions legislation, and Bill S-3, the Indian tax amendment, provided we get these two bills from the Senate; Bill C-25, the business frameworks bill; and Bill C-30 concerning CETA. All these bills are at second reading.

It is my hope that parties will be able to negotiate on how to proceed in advancing these very important initiatives. Something I have committed to is working well with other parties, and I will continue to do that.

[Karen Vecchio, Conservative, Elgin—Middlesex—London, ON]

Yes, Bill C-25.

[Karen Vecchio, Conservative, Elgin—Middlesex—London, ON]

Excellent.

I spoke the other day on Bill C-25, which is the corporations act. They are changing a variety of things like that.

When developing this sort of legislation that has to do with women on boards, was Status of Women part of that preamble so this legislation could be created? It really does have the GBA+ portion that needs to be looked at, so I am wondering if you were incorporated in those discussions on that legislation. It does include women on boards as a big part of it.

[Navdeep Bains, Liberal, Minister of Innovation]

Thank you very much, Chair.

I'm delighted to be here again. It's great to see a lot of familiar faces and a few new faces as well. I'm very grateful for the opportunity to address this esteemed committee.

I'd like to welcome ministerial colleague Dr. Kirsty Duncan, who will be joining you in the next hour to update you on her role and her mandate as the Minister of Science.

Not here today but an integral part of our ministerial team is the Honourable Bardish Chagger. In addition to her critical role as government House leader, Minister Chagger is working with us to drive economic growth in the small business and tourism sectors.

I would also like to acknowledge my deputy minister, John Knubley, and Kelly Gillis, our associate deputy minister.

I've been invited, as you mentioned, to update the committee on the content of the latest round of supplementary estimates that we've recently tabled.

Innovation, Science and Economic Development—the ISED portfolio—is presenting an increase of $409.6 million, resulting mainly from new funding under budget 2016. The highlights are as follows: $249.3 million to the post-secondary institutions strategic investment fund to enhance and modernize research facilities on Canadian campuses; $64.8 million to support investigator-led research under the research support fund and the grants and scholarships programs; and $40.6 million to the Canada first research excellence fund. I suspect that my colleague Minister Duncan will speak to these specific investments.

We've also invested $20.8 million to support internships under the youth employment strategy; and $10 million to support cutting-edge research and development through the European Space Agency's advanced research in telecommunications systems programming.

I'd also like to give the committee an idea of what we've been up to since my last appearance here in April.

My main focus has been leading the development of an inclusive innovation agenda.

The inclusive innovation agenda is our government's plan to drive economic growth by making Canada a global leader in innovation. It will create well-paying jobs for the middle class and for those working hard to join it.

The first and most important phase in developing this plan was to hear from Canadians. As you know, Chair and colleagues, the government does not have a monopoly on good ideas. Over the summer, we held 28 round table discussions. We invited Canadians from coast to coast to visit our website and to comment on social media. In all, we received more than 1,500 ideas on how to make Canada a global leader in innovation.

I want to take this opportunity to quickly highlight three themes that came from those conversations and discussions.

First, we heard about the need for more people with the right skills and experience to drive innovation.

Second, we heard about the need to harness emerging technologies to achieve big things.

Third and last, Canadians told us it was important to develop the next generation of globally competitive companies.

In the coming months, those ideas will help inform our government's work as we prepare the budget.

It is also worth noting

that Budget 2016 made several important down payments in support of the innovation agenda.

It allocated $2 billion to renew university and college campuses across the country. The budget also committed $800 million over the next four years to strengthen innovation networks and clusters. More than $1 billion is being invested in the development of clean technologies. These are bold investments designed to drive economic growth through innovation and to create, again, good-quality jobs for the middle class.

The consultation process for the innovation agenda has given me the opportunity to travel to many communities across the country.

I am always impressed during these visits with the work being done by our regional development agencies to support the economic growth of communities across the country.

Our government has chosen to align all the regional development agencies under one portfolio. The goal, and I've said this on numerous occasions, and I'm glad we're succeeding in doing this, is to elevate their importance and make them part of our government's overall agenda for economic growth. I'm pleased to report that this change has resulted in the alignment of priorities and best practices amongst the agencies.

The focus of these agencies now includes developing young companies, so we want to have a strong pipeline of companies, but we want to identify opportunities for these companies to scale up and grow, one of the key themes we heard from Canadians. Diversifying our regional economies still remains a priority because we understand the unique nature of each of the respective regions. Other goals are promoting clean technology and supporting our indigenous communities.

This theme of collaboration informs all our actions as a government.

In June and earlier this month, I chaired meetings of my provincial and territorial counterparts. These were the first meetings of this kind in 12 years, and they set a new tone for constructive engagement. Again, we recognize that not only do we not have a monopoly on good ideas, but also that it's going to require a collective effort and that it's important that we work with provincial, territorial, and municipal counterparts. That spirit and that partnership also resulted in the Atlantic growth strategy that we launched over the summer. This strategy will target actions to stimulate the economy of all four Atlantic provinces.

Another historic result of our collaboration with the provinces and territories is our work to renew our framework for internal trade. We are on the cusp of concluding negotiations for a new Canada free trade agreement.

This agreement will provide an ambitious and modern framework for the free flow of goods and services within Canada's borders.

Our work to conclude this agreement is all the more significant at a time when the rest of the world is talking about putting up more barriers to trade. We recognize that rise in protectionism.

Another key value of this government is inclusion.

That's why we tabled a bill to promote corporate transparency and diversity. Among other things, Bill C-25 aims to increase the number of under-represented groups on corporate boards and senior management teams. Corporations will be required to make public their diversity policies, and those corporations without diversity policies will have to explain why they don't have one.

While we know that security regulators have focused on gender diversity policies, this law goes farther. The goal is to attract the best and the brightest from as wide a talent pool as possible. That's how Canada can make full use of the competitive advantage granted to us by the extraordinary diversity of our population. When we say diversity is our strength, we truly need to take advantage of that.

Also on the idea of inclusion, we've taken steps to bridge the digital divide. In today's modern age, it is critical that all Canadians have access to the Internet.

In particular, Canadians in rural and northern regions need better access to high-speed Internet.

Improved broadband connectivity can unlock tremendous economic potential, leading to the creation of new jobs, products, and businesses. I know this issue is of interest to committee members, and I've had many of you reach out to me about this. I'm pleased to let you know that very soon we will be launching Connect to Innovate, a $500-million investment that will extend high-speed Internet service to rural and remote communities.

We know that inclusion and diversity mean casting a broad net in our search for talent. We recently announced Canada's global skills strategy as part of our fall economic update. Again, this is something that we heard consistently when we engaged Canadians on the innovation agenda. The number one issue was talent and people, and this is one recommendation that we heard loud and clear. This strategy is a key part of the innovation agenda. It will make it faster and easier for Canadian firms to attract the best and brightest from around the world.

The global talent can drive innovation and help Canadian firms to grow and prosper, leading to more jobs. That's a key element. This initiative will help create more Canadian jobs.

I am excited to be working with my colleague, the Minister of Immigration, Refugees and Citizenship, on this important initiative.

Mr. Chair, I'm also aware that the committee has been engaged in a study of Canada's evolving manufacturing sector. I look forward to receiving your report. I know a lot of hard work and effort has been put into that initiative. We really look forward to the recommendations you will be presenting. I note with interest that the Canadian Manufacturers & Exporters have set the ambitious target of doubling Canada's manufacturing output and value-added exports within 15 years.

The government stands ready to be a meaningful partner to strengthen this foundational sector.

Rest assured that the innovation agenda will address many of the challenges faced by the manufacturing sector in today's global and digital economy. The innovation agenda will make the most of partnerships with universities and colleges to advance research and development. It will enable the commercialization of promising research into new products and services. It will work with industry to make skills and training a priority.

In the year ahead, my officials and I will work with Canadians to finalize and implement the innovation agenda.

We will also act on our commitment to reinforce the independence of Statistics Canada. We have already reinstated the mandatory long-form census, a decision that was received with great enthusiasm by Canadians. The 2016 census results reflect that enthusiasm, with an unprecedented response rate of 97.8%.

We will also continue to work with our regional development agencies to make strategic investments that diversify and strengthen the economies of each part of this great country. As well, we will continue to support key sectors that drive economic growth and innovation.

Mr. Chair, colleagues, I am proud to serve a government that listens to Canadians and responds to their needs.

As a government we embrace a partnership-driven approach to innovation. I think the results we have achieved during our first year point to the effectiveness of this approach.

Merci beaucoup.

Canada Business Corporations Act

[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.

[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.