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.

[Kate Cornell, Co-Chair, Canadian Arts Coalition]

Good morning, everyone.

I want to begin my address by expressing my gratitude to the Algonquin people. It is an honour to speak here on their spectacular unceded territory today.

I am the Co-Chair of the Canadian Arts Coalition. Many of you know that the coalition is a non-partisan, volunteer movement spearheaded by a group of national arts service organizations, including my organization, the Canadian Dance Assembly. Collectively we represent thousands of artists and hundreds of arts organizations across the country.

I also want to acknowledge the incredible leaders I spoke to in preparing this brief, at arts organizations and at the funders. I especially want to recognize the co-presidents of my board at the Canadian Dance Assembly: Consultant Soraya Peerbaye, and Gitxsan and Cree Artistic Director Margaret Grenier. Canada has a truly extraordinary group of leaders paying attention to the issue of gender parity.

I have been an arts manager since 1996 and have lived the statistics that I'm going to share with you today. There are so many women working in the arts, but the jobs for women are precarious, and they are rarely stable leadership positions. Since August 2017, after the publication of Bob Ramsay's second article in the Toronto Star about the predominantly white and male boards of directors at the large legacy institutions in Toronto, I have been talking about this problem.

Ramsay's article is corroborated in many different studies, notably by the annual report card by the Canadian Board Diversity Council, which indicates that of the arts organizations surveyed, 74.5% of board members were male and 25.5% were female.

Today, I have four recommendations to present to you, about research and about regulatory action.

Here are some current statistics from several artistic disciplines. I am sure that as members of Parliament you have heard data from many different sectors. I present this data about the arts today with a sense of urgency, because although the arts sector's leadership may not be predominantly female, our audiences are predominantly female and progressive. Audiences in the arts are consistently in decline, perhaps because they don't see themselves reflected in the artwork presented. For this economic reason, the arts sector must change now.

Here come the statistics. In Canadian music, the annual salary of women was 20% lower than the industry average, and only 10% of women held executive positions.

In visual arts we see different leadership depending upon the size of gallery. On the surface, the stats look great: 70% women curators to 30% men, 92% being Caucasian. The bigger the gallery, however, the less likely it is for a woman to be the curator.

Next, we have the sector that I work in. Women form the vast majority of dancers, at 84%. Perhaps it's not surprising that dance is one of the poorest paid of the arts occupations, but men are still prioritized as artistic directors and as choreographers.

We also see women disadvantaged in the world of Canadian literature. Studies show “an undeniable gender bias, one that overwhelming favour[s] male authors”, as is evidenced by the reviewing practices: only 30% of books reviewed by male critics were written by women, which means that women's books are less likely to sell well and less likely to be considered for major awards.

Moving on to Canadian theatre, women occupy less than 35% of the major leadership roles, such as artistic director, director, and playwright.

Then in the deaf, mad, and disability arts domain, 100% of the contributors who produce deaf art, mad art, or disability-identified art are female-led organizations, yet—or perhaps as a result—these arts organizations are significantly underfunded.

Of course, this data is not surprising to any woman who works in the arts.

Although there is a clear wealth of data in the field, we need a comprehensive picture of the role of women in the arts. I want to add my voice to the other witnesses who've already appeared before the standing committee to ask the Department of Canadian Heritage to compile the existing research and paint a picture of the sector so that we know exactly where the bias exists and where we need to change.

My first recommendation is to instruct the Department of Canadian Heritage to conduct a literature review on gender parity in the arts, with attention to artistic directors and boards of directors. I want to encourage Canadian Heritage to work with the Ontario Arts Council because they are currently undertaking a study, an Ontario-focused a literature review, on this exact subject.

Why do we need to change who sits on boards of directors? For me, if we change who sits on the boards, it will impact who is hired as artistic director, who is hired as executive director, and then it goes on down to the staff level. There's a wealth of data from the organization DiverseCity onBoard and the Conference Board of Canada that demonstrate that female and diverse leaders enhance innovation, and strengthen cohesion and social capital.

In March, the president of FedEx Express Canada, Lisa Lisson, wrote on the CBC news site that “We know [that] boards with women on them outperform their rivals, deliver higher returns, and are more aggressive about taking initiative”. Lisson argues that it is just good business practice to have diverse boards.

The House of Commons and the Senate agreed with Lisson last week by passing Bill C-25. I want to thank Mr. Virani for pointing me in the direction of Bill C-25. The bill includes a provision that reads, “directors of a prescribed corporation shall place before the shareholders, at every annual meeting, the prescribed information respecting diversity among the directors and among the members of senior management”.

Unfortunately, this provision does not apply to not-for-profit organizations included in the legislation. They are not part of this specific provision. I called Corporations Canada yesterday to check. So, here comes recommendation 2, which is to instruct Corporations Canada to find a regulatory mechanism to require registered not-for-profit organizations to comply with the expectation of diversity in Bill C-25.

The Canada Council for the Arts has been quietly working on gender parity for two years. Recently, the council put out an RFP that stated, “The Council wishes to develop and pilot an online survey to track the demographic makeup of the workforce and boards of organizations that receive core funding.” The quantitative data will include “gender, age, cultural diversity, Indigenous, Official Languages, Official Languages Minority Communities, disability, age etc. The survey will be completed by the employees and Board of the organizations, not by the organizations themselves.”

Very clearly, they're not asking the executive directors to guess on the status of their board members or their staff.

It goes on to say that the “RFP is for a pilot survey with a small cohort of organizations that will inform future decisions about grant conditions.” The results of this pilot survey will be critical to move the issue of gender parity forward, because, of course, arts organizations are going to pay attention to what the major federal funders are doing.

Recommendation 3 is to require the Canada Council for the Arts to report back to the Standing Committee on Canadian Heritage on the results of the pilot survey and encourage the Canada Council to look at additional equity policies, especially in the program called Engage and Sustain, which is for the large arts organizations.

Of course, board composition is an incredibly complex issue. Boards are made up of volunteers, who can be difficult to find, especially in less populated areas. However, publicly funded organizations have a responsibility to reflect Canadian society. One problem I heard repeatedly was volunteer fatigue, particularly among indigenous, disabled, and racialized communities. Volunteering for a board of directors takes time and labour. Often, women turn down the opportunity to participate on boards because it is financially unfeasible to volunteer. Therefore, this last recommendation is pivotal.

For recommendation 4, I'm recommending that the Canada Revenue Agency permit charities—because most of the arts organizations I work with are registered charities—to change their bylaws in order to offer an honorarium to marginalized board members for their volunteer work. I think this would be a really important move to reduce volunteer fatigue so that we're not going to the same indigenous leaders over and over again to sit on all these boards, so that we could have more women and marginalized people represented on the boards. It would be a recognition of the labour that they're undertaking in taking these positions on our arts organizations' boards of directors.

Lastly, I want to point out that I have not recommended the creation of a mentorship program today. There are numerous well-established mentorship programs in the arts open to women. This is not the problem. Bias and discrimination in hiring practices in search firms and on boards of directors are the problem.

To conclude, I really want to thank the members of the Standing Committee on Canadian Heritage for your boldness to address this sensitive topic of leadership in the arts. Together I hope we can build a better, more respectful arts sector for our daughters.

Thank you.

[The Speaker, Geoff Regan]

I have the honour to inform the House that a communication has been received as follows:

Rideau Hall Ottawa

May 1, 2018

Mr. Speaker:

I have the honour to inform you that the Right Honourable Julie Payette, Governor General of Canada, signified royal assent by written declaration to the bill listed in the Schedule to this letter on the 1st day of May, 2018, at 10:55 a.m.

Yours sincerely,

Assunta Di Lorenzo

The schedule indicates that the bill assented to Tuesday, May 1, 2018, was 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.

Canada Business Corporations Act

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I am pleased to also rise in the House to briefly speak to Bill C-25 and the Senate amendments that were returned and on which we are called upon to comment. My colleagues have already done so, and I will not repeat what has been said.

I would like to start by mentioning that the bill has several flaws. Above all, it does not go far enough on certain issues. We are currently discussing similar issues at the Standing Committee on Finance as some of my colleagues know. We have even heard from witnesses on the transparency of Canadian businesses and corporate registries, which make it possible to identify the owners. One of the shortcomings pointed out by several reputable international organizations is Canada's lack of transparency with respect to corporate registries and corporate regulations. This was pointed out many times. We are ranked near the bottom on corporate transparency.

There is a new term in Canada known as snow washing. Some wealthy individuals use Canada to hide the real identities of their businesses' owners. Canada's corporate laws are not often revised. In fact, the last time they were was 40 years ago. Bill C-25 was the perfect opportunity to address these international recriminations about the lack of transparency around our businesses, but unfortunately the government chose not to do so. This is one of the reasons why we proposed amendments to try to rectify the situation. Our attempts were in vain, and I disagree with the government's position on this.

This bill was also an opportunity to fix a problem that comes up all the time at the Standing Committee on Finance. I could even talk about my colleague from Hull—Aylmer, who questioned a tax expert, André Lareau. This expert testified in committee as part of our review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, which touches on what we are debating today. Prof. Lareau told the committee that Bill C-25 was a step in the right direction because it would prohibit bearer shares, which make it pretty easy to conceal shareholders' real identities. Unfortunately, Prof. Lareau said that this would not stop the existing shares from being converted into registered instruments.

My colleague even confirmed the existence of this loophole, saying that we had to look at all of the shares that are out there, not just those that will be issued after the bill receives royal assent. Unfortunately, to date, we have rarely had the opportunity to review our laws on corporations, co-operatives, and non-profit organizations. Nevertheless, we hope that the government made note of that loophole and will consider doing something about it in the near future.

In short, corporate transparency around the identity of beneficial owners remains an important issue that has not been sufficiently addressed in this bill. The government should examine that issue soon since Canada will continue to draw criticism regarding corporate transparency.

The government has already taken some action in that regard. It reached an agreement with the provincial ministers under which every company must enter the name of its beneficial owner in the provincial registries. That is a step forward and even though there are dissenting voices that say that this is not the way to go, there is still an apparent willingness to have a registry of beneficial owners, which our party believes is extremely important. I hope that the government intends to consider this issue soon in order to resolve the major problem of corporate transparency.

I hope that I have done the member for Windsor West proud. He has done remarkable work on this file. I hope that the rest of the debate on the transparency of corporations, co-operatives, non-profit organizations, and their boards of directors will be productive.

[Maxime Bernier, Conservative, Beauce, QC]

Mr. Speaker, my colleague has spoken at great length on the amendments that the Senate made to Bill C-25. I would therefore like to talk a bit more about the general content of the bill.

It is important to state why the official opposition voted for the bill or why it has the unanimous support of the House. It is because it is intended to modernize the acts governing Canadian corporations, namely the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act.

The bill seeks to reform some aspects of these acts to make the process for electing directors of certain corporations more modern and efficient. It also seeks to modernize communications between corporations and their shareholders and clarify that corporations and co-operatives are prohibited from issuing share certificates and warrants in bearer form. However, the most important part for those tuning in is that the bill will affect over 270,000 federally regulated companies, many of them small and medium-sized businesses across Canada. They will be positively affected by these changes.

As my colleague said, the amendments made to these acts stem from a study conducted by a House of Commons committee in 2010 and extensive consultations held by Industry Canada in 2014. Consequently, it was high time that the House modernized this bill.

Furthermore, financial regulators have already adapted to these amendments, and some have adopted regulations in order to comply with the future legislation.

I would like to remind my colleagues that we in the House are responsible for modernizing the legal environment that corporations operate in. That is a good thing. It is a noble and meaningful goal. However, we also need to think about the economic environment that these small and medium-sized businesses operate in. There are more than 200,000 SMEs across Canada.

That concerns me a bit more. The current economic environment is not conducive to investments. Let us be honest. The investments made by these small and medium-sized enterprises, as well as the larger companies, are what create wealth and drive the economy. More investment means more jobs. Today, because of the Liberal government's policies, investments are on the decline.

My colleague, the finance critic, said during question period that capital is leaving Canada. It is a disaster. Where is it going? It is going across the border to the United States where President Trump lowered the corporate interest rate from 35% to 21%. The U.S. is attracting capital because the Government of Canada is raising taxes and adding more regulations, which is another way of telling foreign investors not to invest in our energy economy.

The fact is that government red tape and slow moving processes have caused investments in Canada's energy industry to drop by more than $84 billion over the past two years. Indeed, $84 billion in investments in the Canadian energy sector were simply cancelled. Imagine the impact that has on job creation in the country.

That is not all. As everyone knows, Canada has been open to foreign investment ever since Brian Mulroney's first government in 1984. The Liberal government of the day had set up an agency to select foreign investors. When Mr. Mulroney's government took over in 1984, one of the first things it did was get rid of that agency and welcome foreign investment because it knew that investment creates wealth. Since then, Canada has made much progress thanks to foreign and domestic investment.

Now, however, foreign investors are stampeding for the exit. They are leaving Canada. Direct foreign investment in Canada plunged from 42% in 2016 to 27% in 2017 under a Liberal government. Why? Because the economic environment is not conducive to investment and wealth creation. Today we are glad the legal environment is good because Bill C-25 will modernize the Canada Cooperatives Act and the Canada Business Corporations Act. We agree with that.

However, we need to change the economic environment. We need to attract foreign investment. To do that, as the official opposition has been saying for months, we need less regulation and lower taxes. Crucially, the government has to stop taxing Canadians and funnelling the proceeds to big corporations in the form of subsidies and non-repayable loans.

I would add that businesses have lost confidence in Canada. Canadian business investment has declined by 5%, or $12.7 billion, since 2015. What happened in 2015? Oh right, the Liberal government took office and proceeded to scare off foreign investment. Our business people are now reluctant to invest because of this government. This spells disaster for our country's economic future.

We will understand the impact of this drop in investments in the months and years ahead. Fewer investments mean fewer jobs. That is the sad part of all this.

I fully agree with the government on the need to modernize the legislative framework surrounding business corporations. That is a good thing and we support it. However, we do take issue with the economic environment the Liberal government has created for our country. It will spell disaster for future generations.

That being said, I have to say that we fully support all the amendments to this bill brought forward by our colleagues in the Senate. I hope the House passes this bill as soon as possible. I also hope the Minister of Finance understands the situation in which Canadian entrepreneurs are being forced to operate and can assure them of a brighter future.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I thank my colleague for his comments and his speech. I also thank the members in the other chamber for contributing to this debate.

My question is about how the bill has been roundly criticized for being weak. There are some very important issues surrounding corporate transparency in Canada. The Standing Committee on Finance is discussing money laundering and proceeds of crime, an issue that is often raised. Another such issue concerns beneficial ownership, or knowing who, exactly, owns a business. Unfortunately, this bill is yet another missed opportunity to address the lack of transparency in Canada's provincial and federal business registries.

Can my colleague explain why they decided to consider these transparency proposals but not to not include them in Bill C-25? If they intend to do so, when?

[Maxime Bernier, Conservative, Beauce, QC]

Mr. Speaker, I thank my colleague for his speech on Bill C-25 and I would like him to know that the official opposition fully supports it. As we know, the House voted unanimously in favour of the bill a few months ago. The hon. member did a fine job explaining the changes, but could he clarify whether these changes also apply to both the Canada Business Corporations Act and the Canada Not-for-profit Corporations Act?

[David Lametti, Liberal, Parliamentary Secretary to the Minister of Innovation]

Mr. Speaker, I am pleased that this chamber has the opportunity to consider 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 one final time. At this point, I think we are all aware that Bill C-25 would make a number of targeted amendments to our economic framework laws in an effort to bring them up to date for our modern economy.

The bill would modernize the director elections for publicly traded CBCA corporations, requiring individual annual elections and introducing a new majority voting mechanism for uncontested elections. It would also allow these companies to take better advantage of modern technology through the notice and access system.

The part of the bill that has received the most exposure is, of course, on the measures to promote diversity on corporate boards through new informational requirements and a comply-or-explain model for having a diversity policy put in place. The bill, moreover, would require bearer share options and warrants to be in registered form, as the shares themselves must already be, as an effort to promote transparency. It would also update the Competition Act to account for a greater variety of business structures.

The measures in Bill C-25 would allow us to embrace best practices, add clarity to the law, and minimize the regulatory burden.

This bill was sent to us by the other place after careful consideration in committee and debate in the Senate chamber. The other place made a certain number of amendments that clearly improve this bill. A small but important amendment was made in clause 13, specifically to subsections 106(6) and 106(6.1), to prevent a board of directors from being paralyzed after a vote to which the majority voting rule applies fails.

The majority voting requirement introduced by the bill would set out the rules that would apply in an uncontested election. That is, where candidates ran unopposed, they would have to receive a majority of votes cast “for” over all votes cast in order to be elected. Directors who failed to be re-elected because of the operation of this provision would cease acting as directors immediately after the election.

After hearing from stakeholders, it became clear that the strict application of the majority voting rule could lead to unintended consequences. The decision-making structure of a publicly traded corporation could be disrupted, as some or even all the directors could fail to be re-elected. While ensuring shareholders' wishes is a key principle of good corporate governance, this principle should not lead to a corporation being without a decision-making body. This would not only be contrary to good corporate governance but could endanger, albeit for a short period of time, the ability of a corporation to make important decisions affecting market and product strategies and the bottom line.

Our colleagues in the other place have carefully assessed this situation and the potential risks associated with it. Based on suggestions from stakeholders and corporate governance experts, they have adopted a simple but effective solution. It would guarantee corporate boards affected by a director's defeat through majority voting a respite of up to 90 days. The amendment is intended to mitigate the risk that the sudden loss of directors would result in unexpected disruptions in corporate decision-making. It would provide a specific grace period of up to 90 days in which directors could continue acting until replaced. The amendment would be largely consistent with provincial securities law and Canadian corporate practices, and it results from a consensus among stakeholders who have an interest in corporate governance.

Shareholders are entitled to vote out directors who are no longer proposing a vision or direction that is expected from them or who have not delivered according to shareholders' expectations. Bill C-25 would reinforce shareholder democracy through majority voting. This is a positive development. However, within the context of this policy objective, it must also be acknowledged that the immediate effect of voting out directors can pose challenges. For these reasons, this amendment, adopted by the other place, should be carried.

I would note that a similar amendment has been reflected in the provisions on elections to boards of co-operatives. For the same reasons I just explained, that amendment is also an improvement to the bill.

Clause 24 of the bill has also been amended by our hon. colleagues. That is section 171.1 of the CBCA. This amendment addresses a slight oversight and would enable the use of electronic communications in a broader range of circumstances.

Everyone agrees that in today's world, we should give people every incentive to communicate electronically. The bill makes it easier to use electronic communications with shareholders through something called notice and access. This allows shareholders to access corporate documents electronically through a link provided to them instead of having to request paper copies from the corporation. Many companies provide this service and those who invest directly in Canadian corporations are already aware of the benefits of using this service.

The use of “notice and access” is common, particularly in relation to publicly traded corporations, such as those traded on the Toronto and Montreal stock exchanges. There is no reason not to extend the availability of the notice and access system to every corporate document that is required to be shared with shareholders, with the exception, perhaps, of notices of shareholder meetings, in some circumstances.

Proposed subsection 172.1(1) would require directors of a publicly traded corporation to place before the shareholders, at every annual meeting, a policy on diversity among the directors and members of senior management. This provision, which has drawn large public attention, is a key feature of the bill.

The amendment proposed by the other place would allow corporations to choose the time at which they wished to send the diversity policy, either at the time of sending the notice of meeting or when sending the proxy circular. In the absence of the amendment, the policy would be required to be sent in paper form, in many situations, if sent with the notice of annual meeting. This amendment would be useful and consistent with the trend that has been observed in relation to rules established by Canadian securities commissions.

I have outlined some of the ways Bill C-25 would support our modern economy and the various improvements it has undergone in the other place. I thank the other place for its work in making those amendments.

The amendments made by Bill C-25 would be quite targeted, as they arose from issues with the clearest consensus during consultations. However, modest change should not be mistaken as being unimportant. This bill would help advance the laudable goals of ensuring transparency, clarity, and fairness, empowering shareholders while presenting the opportunity to address important issues such as diversity.

The process has been long, but I look forward to royal assent.

The House proceeded to the consideration of amendments made by the Senate to 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.

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, this afternoon we will debate the Senate amendments on Bill C-25, business frameworks.

Monday, we will continue second reading debate of Bill C-74, on the budget.

Tuesday and Thursday shall be allotted days.

Wednesday, we will resume third reading debate of Bill C-55, on ocean protection.

Budget Implementation Act, 2018, No. 1

[Lloyd Longfield, Liberal, Guelph, ON]

Madam Speaker, I am pleased to stand in support of the proposed budget, Bill C-74, the budget implementation act, 2018, No. 1, which really has the four areas that we have been looking at as a government, taking input from across Canada and working with all parliamentarians. Those include growth, progress, advancement, and reconciliation. It is a wide-ranging budget that covers all aspects of Canadian society and business, as well as our environmental needs.

This is the first legislation our government is tabling to implement budget 2018. Budget 2018 continues to prioritize the needs of all Canadians.

Over the last two years, Canada's economic growth has been fuelled by a stronger middle class. Canadians' hard work, combined with historic investments in people and communities, has helped to create good jobs, almost 600,000 of those jobs created since November 2015. This budget means more help for those who need it, those who then go on to reinvest in their families and businesses in the communities in which they live.

Canada has renewed its relationship with neglected researchers, scientists, and universities and colleges, with the largest commitment to fundamental research in Canadian history. We have also reignited the reconciliation process after the scrapping of the Kelowna accord in 2006, and have removed 57 boil water advisories. This is an example of what we are doing, working with our indigenous partners.

Over the last two years, the environment has been at the heart of our policy and is inseparable from our economic success. By protecting our coasts, we protect our fisheries. By protecting whales, we protect one of our great natural inhabitants that share the country with us. Our tax credits for clean energy are helping to generate clean tech jobs, the jobs of the future.

Women represent half of Canada's population, and their full and equal participation in Canada's economy is essential for our future. Removing the systemic barriers to women's full economic participation will support economic growth, strengthen the middle class, and build a fairer society that gives everyone a real and fair chance at success. The McKinsey Global Institute estimates that by taking steps to advance greater equality for women, such as reducing the gender wage gap by employing more women in technology and boosting women's participation in the workforce, Canada could add $150 billion to its economy by 2026.

Equality in pay cannot be achieved without transparency. In the spirit of transparency, our government will provide Canadians with more information on pay practices of employers in federally regulated sectors. The government will commit $3 million over the next five years, starting in 2018-19, to implement this pay transparency policy.

As a member of the Standing Committee on Industry, Science and Technology committee, I was proud to play a role in reviewing Bill C-25, which is an act to emphasize diversity on corporate boards, getting women around boardroom tables to make decisions on behalf of business in Canada.

Canada's economic success rests not only on the hard work of Canadians, but also on strong trade relationships we have in an increasingly globalized world. Canada is, and always has been, a trading nation. Canadians recognize that done properly, trade can be a positive force for change. The ratification of CETA, which began under the previous government, and also the resurrection of the TPP, which is now the CPTPP, reflect the determination of our government as we open markets for Canadian goods.

Our government is also focused on rural Canada. Agriculture is at the heart of our rural economies. To support Canadian farmers, we have introduced the Canadian agricultural partnership. I was pleased to sit on the agriculture committee as we reviewed and made recommendation toward this new policy. This program will provide hundreds of millions of dollars to protect farmers and bring new innovative technologies to Canadian farms, while at the same time increasing innovation and public trust.

To make use of new agricultural technologies, farmers need reliable Internet access. The government is investing $500 million to extend high-speed Internet services to rural and remote communities across the country.

Budget 2018 also proposes additional funding of $100 billion over five years for the strategic innovation fund to support low earth orbit satellites and to develop the next generation of rural broadband. These satellites will be going on a north-south route versus an east-west route, which will help our northern communities and our fly-in communities in northern Canada.

Federal government scientists enrich Canada's research environment, contributing to research focused on the public interest as well as the kind of discovery science that breeds innovation. To accomplish this goal, budget 2018 announces a reimagined National Research Council and proposes to provide $540 million over five years. Coupled with the largest investment in fundamental research in Canadian history of $3 billion, Canadian scientists now have the tools they need to compete with and to attract scientists around the world.

This budget also advances Canada on the path to reconciliation with indigenous, Métis, and Inuit peoples. Together, we are working hard to improve the quality of life for first nations, Inuit, and Métis peoples, as well as forging a new relationship based on recognition of rights, respect, co-operation, and partnership.

In addition to the $11.8 billion invested in budgets 2016 and 2017, the government proposes to invest an additional $5 billion over five years. This investment will go to ensuring indigenous children and families have an equal chance to succeed in life, to build the capacity of indigenous governments, and to accelerate self-determination, as was announced by the Prime Minister on February 14.

To date, as I mentioned, we have removed 57 boil water advisories from reserves across Canada. I am pleased to serve as a champion to the Minister of Indigenous Services, working on water on first nations.

The government also understands that reconciliation entails a new relationship between the government and Canada's indigenous peoples. That is why budget 2018 proposes to invest $8.5 million over two years to work with first nations to understand how to make the programs more responsive to the needs of individuals and families on reserves.

Budget 2018 also continues the important work initiated in 2016 to build a greener and more sustainable Canada. To support the implementation of this historic national plan, the government has allocated $5.7 billion over 12 years, including $2 billion for the low-carbon economy fund to combat climate change and to advance clean technologies in Canada.

In November 2016, the government also launched a $1.5 billion national oceans protection plan to improve marine safety and responsible shipping, to protect Canada's marine environment, as well as to offer new possibilities for indigenous and coastal communities. This is being discussed in the House a lot lately as we talk about pipelines on the west coast.

One example of how these investments can make a real difference in our communities is the energy neutral waste water treatment project at the city of Guelph. Utilizing a whole-of-government approach, both the federal and provincial governments came together with industry and invested $1.5 million in an initiative to make our waste water plant energy neutral. We are also using research from the University of Guelph.

Our partnerships between the research community, the business community, and our governments at all levels really are advancing the clean technology agenda for Canada. Projects like this demonstrate how this type of collaboration and targeted investments build results for Canadians, results we can share across Canada, and around the world.

I encourage all members of the House to support budget 2018, our equality and growth budget.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Thank you, Professor Lareau.

I, too, read Bill C-25, and you would appear to be right. The bill would add new subsection 29.1(1), which seems to confirm what you're saying.

Are you saying the committee should recommend that existing bearer shares be converted without the holder's prior consent?

[Prof. André Lareau]

No, not enough. I have worked in the field of bearer shares, but I am not the right person to answer questions about beneficial ownership.

With regard to bearer shares, it should be noted that, despite the amendments to Bill C-25, bearer shares that have been issued will continue to be legal. In this regard, we could learn from the Netherlands, where bearer shares are no longer allowed. For the outstanding shares, namely, those that have been issued, a period of two years has been allowed for those shares to be returned into the system and for the shareholder to be authenticated. The Netherlands are a good example as regards bearer shares.

Financial Statement of Minister of Finance

[Arif Virani, Liberal, Parliamentary Secretary to the Minister of Canadian Heritage (Multiculturalism)]

Madam Speaker, on February 27, we tabled budget 2018. I am proud to rise today to speak in the House about what the budget will deliver for my constituents in Parkdale—High Park and to Canadians right across this country.

This budget is about access. It is about dismantling the barriers to success that many Canadians still face. In budget 2018, we are investing in order to advance gender equality, indigenous reconciliation, the growth of small businesses, and the strengthening of our nation's cultural diversity. These progressive investments will facilitate and promote positive economic growth across all demographics, not just for the wealthiest but for all Canadians.

These investments will help ensure that a social and economic structure is in place to propel all Canadians to success.

Let us start with women and girls. There is no doubt that women in Canada continue to face significant barriers. They carry the majority of the burden of child care. They face gender discrimination and pay inequity in the workplace. They lack equitable access to a variety of male-dominated sectors. As a government, we are determined to facilitate real opportunities for women to overcome their barriers to success.

This means implementing concrete, tangible policies and investing in the promotion of gender equality.

We are addressing the double burden placed on women of both raising children and working full time. Budget 2018 will invest $1.2 billion into the new EI parental sharing benefit, which means that there will be an additional five weeks of paid leave available for a second parent. This means that the primary parent can have the support of their partner while they transition back into the workforce. Another five weeks means that paid parental leave goes from 35 to 40 weeks of shareable time, split in any way that works for individual families. It is an arrangement that empowers families and that will also benefit children, who will have the opportunity for more direct contact with both parents during that formative first year of development.

Let us talk about pay equity and under-representation.

Our government is also committed to ensuring that women receive equal pay for equal work. In 2018, women still receive, on average, 69 cents on every dollar earned by their male counterparts on an annual basis. That is an injustice plain and simple. It is an injustice that calls for intervention at the national level. That is why in budget 2018 we are targeting federally regulated industries by introducing proactive pay equity legislation that will apply to about 1.2 million Canadians. We will also be providing an additional $1.65 billion in new financing for women entrepreneurs through the Business Development Bank of Canada and Export Development Canada.

Our government will also publicly recognize the corporations that commit to promoting women directors in order to improve gender representation in corporate Canada, building on the measures included in Bill C-25. These steps are imperative not only because they are morally imperative but because they make good economic sense.

By minimizing barriers to women’s success in traditionally male-dominated fields and by facilitating their participation in the labour force, we will add $150 billion to Canada’s economy by 2026.

When we support women’s entry into the labour force and foster their success, our society and our economy reap the benefits.

I will now turn to reconciliation with indigenous persons.

I hosted a town hall in my riding of Parkdale—High Park to discuss the importance and the work of indigenous reconciliation. What I heard from my constituents loudly and clearly is that it is unacceptable in 2018 that there are still areas in Canada, including many indigenous reserves, where people do not have access to clean drinking water.

There is no reason why anyone in a developed country like ours should not have access to safe drinking water. We are a rich nation, but for too long that wealth has not been shared equally with indigenous persons, who have suffered under colonial policies and the institutional racism of the residential school system. That is why in this budget we have invested an additional $172 million on top of the $1.8 billion committed in budget 2016 to get clean water on reserves across the country.

Thus far we have lifted 54 long-term drinking water advisories in Canada, and with these additional funds committed in this budget, we will be able to fast-track the eradication of the 81 long-term advisories that are still in place. By increasing this funding, we are committing to completing 25 water infrastructure projects by 2020 rather than 2021 as was originally planned.

This is an important, indeed, I would say, a vital step in the right direction. Without providing access to clean water, the broader goal of truly advancing indigenous reconciliation could never be realized.

Now I want to talk about small businesses.

After hearing the concerns of constituents and small business owners from my riding of Parkdale—High Park and indeed right around the country, our government has revised our approach to small businesses. First, we have lowered the small business tax rate to 10%, and we will further reduce it to 9% by 2019. Second, we have eliminated the proposal to tax capital gains on the transfer of a small business to a family member. Third, we have revised the proposal as it affects passive income. We heard loudly and clearly from business owners that invest in their businesses, create prosperity in our economy, and employ Canadians and boost productivity. We heard from Canadians that they use passive investment income to save for a rainy day, a bad year, sick leave, or parental leave.

These are the types of businesses we will help prosper. To ensure the tax reforms are targeted at only the wealthiest 3%, we are limiting our tax reform proposals to only those corporations that have more than $1 million in passive investments. This amounts to about 40,000 of the 1.8 million businesses in this country. It targets 3% of all Canadian corporations, so that 97% of all Canadian businesses will not be affected by these tax reforms. That is critical because we know that 97% of businesses are working to help the Canadian economy grow, are reinvesting, and are creating jobs.

I want to talk about new Canadians and how they are layered into this new budget. In this country we are strong, not in spite of our differences but because of our differences. New Canadians contribute immensely to the vibrancy of our culture and undeniably to our economic success. This economic contribution is not always attainable, because of the many institutional and systemic barriers that newcomers continue to face.

To overcome some of those barriers to employment that visible minority newcomer women face, budget 2018 will invest $31.9 million as part of a three-year pilot project to provide additional settlement support. That is a critical measure to setting newcomer women up for success, success for themselves, success for their families, and success for their new home, Canada. In addition, to ensure that newcomers have access to better supports in dealing with their immigration cases, $12.8 million will go to the Department of Justice to deal with the pressure currently on immigration and refugee legal aid.

I want to speak about multiculturalism and combatting racial discrimination. Over the past few years, we have seen an escalation of division and intolerance in this country. Despite the fact that the majority of Canadians value our diversity and pluralism, we have witnessed a rise in hate crimes, particularly those that target the Muslim community and continued anti-Semitism. As a government, we know that it is not sufficient to simply talk about championing our diversity. We need to be vigilant in defending it so that we can move beyond tolerating difference and move towards celebrating difference.

To this end, budget 2018 commits nearly $50 million to programming that will advance Canadian diversity; $23 million is dedicated to multiculturalism programming that will enable our government to empower communities and build capacity; $19 million is dedicated to the black community alone, to address mental health issues, youth, and combatting racism; and $6.5 million is allocated to a new centre for diversity statistics.

For the first time ever, Canada will be collecting and disseminating disaggregated data to allow us to accurately pinpoint and thereafter address the obstacles faced by racialized persons in this country. As the parliamentary secretary for multiculturalism, I am proud of this financial commitment of our government in budget 2018. It will allow us to conduct nationwide consultations on the development of a new national anti-racism plan. Although the previous government abolished this plan and reduced funds to the multiculturalism program, our critical investment in budget 2018 underscores our commitment to unifying our nation, rather than dividing it.

As I mentioned at the outset, the growth that we have been witnessing in the Canadian economy has not been shared by all. Budget 2018 is about overcoming barriers. It benefits no one when some Canadians are prevented from succeeding based on their gender, race, culture, or socio-economic standing.

The progressive policies and investments contained in budget 2018 are here to support all of us, to push us forward as a nation, and to ensure that all of us share in the growth being created. I know that my constituents in Parkdale—High Park want to see strong, socially conscious investment from our government, because these types of investments benefit all of us.

[Maryam Monsef, Liberal, Peterborough—Kawartha, ON]

Part of it is looking around at corporate boards. When only one in five seats is filled by a woman in a country like Canada, we have a problem, and we're working to address that.

Bill C-25, which is in the Senate right now, adopts a “comply or explain” approach. With that, in the new budget there is an opportunity to incentivize and recognize corporations that are doing well around gender and overall diversity in their corporations.

On International Women's Day I also announced $858,000 in funding for the Global Compact, which is an arm of the UN. They'll be working with some 20 champions in the private sector who are demonstrating this kind of leadership—folks like IKEA, for example. They'll be working on determining a blueprint, essentially, for what the barriers are to ensuring greater diversity in workplaces and how the private sector can be part of this work.

In terms of representation of women in under-represented fields—science, trades, technology, engineering, mathematics—there's funding in the budget to address that. There's up to $6,000 in grants for women studying trades, to be able to pay for equipment, for example. That's one barrier removed, to get them to high-wage fields. We also know that pre-apprenticeship training is important; getting that interest early on will be critical. Then there's $1.6 billion to a women's entrepreneurship strategy. When women are able to determine their destinies and create jobs for others, it's better for everyone.

These are just some of the ways we're working to address some of those contributors to the wage gap.

[Mark Schaan, Director General, Marketplace Framework Policy Branch, Strategy and Innovation Policy Sector, Department of Industry]

Thank you, Mr. Chairman and members of the committee, for the invitation to appear before you.

My name is Mark Schaan, and I serve as Director General of the Marketplace Framework Policy Branch in the Strategic and Innovation Policy Sector of Innovation, Science and Economic Development Canada.

The sector broadly includes such policy areas as innovation, telecommunications, and clean technology. However, my branch specifically analyzes the role of marketplace framework laws in meeting the department's objectives.

While the review you are now conducting covers specifically the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, or PCMLTFA, it should be acknowledged that other pieces of legislation contribute to trust and confidence in the marketplace. In that sense, they reinforce the objectives of the PCMLTFA.

Most relevant for today's discussion are the Canada Business Corporations Act, or CBCA, the Personal Information Protection and Electronic Documents Act, or PIPEDA, and the Competition Act.

We are all aware of the fallout from international information leaks that have shown the need for clear and coordinated action to detect and deter money laundering, terrorist financing, tax evasion, and tax avoidance, while continuing to facilitate the ease of doing business in Canada. Innovation, Science and Economic Development Canada, alongside government partners, has been at the forefront of a national strategy to strengthen the transparency of legal persons and legal arrangements, and to improve the availability of beneficial ownership information.

As you may already know, security holders may decide to nominate a third person as nominee to hold and trade the security on their behalf. In the case of a shareholder, a nominee would be listed as a registered shareholder in the share registry of a corporation.

Nominees can be appointed for good business reasons. One need only think of shares of publicly traded companies held through mutual funds or investment brokers. However, legitimate business practices should not foster a climate in which secrecy reigns to the benefit of wrongdoers who use the shadow of nominees to facilitate their criminal activity.

Corporate governance is an area of shared federal-provincial-territorial jurisdiction in Canada, so the Canada Business Corporations Act, CBCA, alone is not enough to address the issue of beneficial ownership. Only about 10% of corporations in Canada are federally incorporated, so an effective legal response to this issue naturally requires strong federal-provincial-territorial co-operation to ensure we have consistent standards across the country.

To this end, following up on budget commitments made in 2017, federal officials have been working with provincial and territorial counterparts toward implementing new standards for corporate and beneficial ownership transparency. Provincial and territorial interest in this process has proven to be strong, and provincial and territorial officials have been engaging with us by providing practical and thoughtful contributions to the development of a Canadian approach.

This partnership hit an important benchmark in December 2017 when the federal, provincial, and territorial ministers of finance agreed on an initial phase to a legislative strategy to enhance the transparency of beneficial ownership of corporations. The objective is simple and targeted: corporations should be required to disclose the identity of beneficial owners who control the corporate decision-making process through voting shares or because they are in a position to materially influence company decisions.

The details of the approach are currently under discussion with the provinces and territories, but with the proposed changes, Canada would bring its corporate standards further in line with those of other OECD countries.

I should also briefly mention the relevance of Bill C-25 currently before the Senate. If adopted, this bill would improve corporate transparency and accountability through the abolition of bearer share options and warrants. These instruments can be used to transfer securities without their beneficiaries having to register the transfer.

PIPEDA is technology-neutral and principles-based legislation that came into force in 2001 and sets the ground rules for how private-sector organizations collect, use, or disclose personal information in the course of commercial activities across Canada. It also applies to personal information of employees of federally regulated works, undertakings, or businesses—organizations that are federally regulated such as banks, Faith airlines, and telecommunications companies.

As a general rule, PIPEDA requires organizations to obtain the individual's consent for the use, collection, or disclosure of his or her personal information. Individuals can then choose whether or not to consent to the collection, use, or disclosure of their personal information.

With respect to certain uses and disclosures of personal information, PIPEDA provides for exceptions to the requirements related to informed consent. For example, organizations subject to PIPEDA can disclose personal information to a government institution without the knowledge or consent of an individual if the institution identifies its lawful authority and indicates that it suspects that the information relates to national security, defence, or international affairs, or for the purposes of enforcing a law of Canada.

PIPEDA also makes specific reference to disclosure to government institutions in accordance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. PIPEDA also allows for the disclosure of certain personal information to other private sector organizations without knowledge or consent in cases of suspected fraud or for the purpose of investigating a contravention of a law in Canada.

As a statute of general application, PIPEDA has broad scope and generally overrides other provisions that can be found in other federal statutes, unless expressly provided for in the other statute. As such, PIPEDA applies generally to all sectors of the economy and does not target specific sectors. Under the PIPEDA framework, some provinces have privacy legislation for the private sector that has been deemed substantially similar to PIPEDA, which means that such legislation applies instead of PIPEDA in some cases.

Protection of personal information is also included in several federal and provincial sector-specific statutes. The federal Bank Act, for example, contains provisions regulating the use and disclosure of personal and financial information by federally regulated financial institutions, and most provinces have legislation dealing with consumer credit reporting. As noted earlier, the presence of other legislation that has privacy-related provisions does not necessarily mean that PIPEDA does not apply.

The Minister of Innovation, Science and Economic Development is responsible for PIPEDA, while the Office of the Privacy Commissioner of Canada and the federal courts are responsible for its enforcement. If an individual believes that his or faceher personal information has been mishandled by an organization, he or she can file a complaint with the Privacy Commissioner, who, as an independent agent of Parliament, will investigate the complaint.

The Competition Act is a law designed to protect and promote competition in the Canadian marketplace, through administration and enforcement by the Competition Bureau. Most of its key provisions address classic anti-trust principles, such as cartel activity and merger review, but the act also contains a set of civil and criminal provisions that address deceptive marketing, particularly false or misleading representations, which includes mass marketing fraud.

I would be happy to respond to any questions you may have on any of these statutes and their relations to the PCMLTFA.

Thank you.