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 House proceeded to the consideration of 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, as reported (with amendments) from the committee.

Speaker's Ruling

[The Speaker, Geoff Regan]

There is one motion in amendment standing on the Notice Paper for the report stage of Bill C-25.

Motion No. 1 will be debated and voted upon.

I will now put Motion No. 1 to the House.

Motion in amendment

[Brian Masse, NDP, Windsor West, ON]

moved:

Motion No. 1

That Bill C-25, in Clause 107.1, be amended by replacing lines 7 to 14 on page 35 with the following:

“107.1 (1) No later than October 19, 2020, a comprehensive review of the provisions and operation of Part XIV.1 of the Canada Business Corporations Act, including an analysis of their impact on gender equity and diversity among the directors and among the members of senior management as defined by regulation, shall be undertaken by any committee of the Senate, of the House of Commons or of both Houses of Parliament that may be designated or established for that purpose.”

Mr. Speaker, I rise today to deal with Bill C-25, an act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act.

The essence of the bill is an attempt to provide some balance in Canada in terms of gender equity and racial and ethnic representation on boards of directors, especially in the corporate sector, as well as to end some practices in Canada related to the business sector that have been rather unscrupulous. There have been issues related to say on pay for shareholders. There have been issues related to bearer bonds, where there are issues of accountability. There is money laundering that could potentially take place, or is taking place, in Canada, which has become a snow washing destination for some money movement in our country.

The amendment we are debating, before we get to the main bill at a later date, is about providing some security that the very minimum the Liberals have promised is going to take place and that there is going to be accountability.

During the committee process, we heard testimony from experts from the business sector and the not-for-profit sector. We also heard expert testimony from the academic community and from Canadians.

The bill is supposed to improve gender equality on boards of directors, which has been championed by this government, but nowhere in the bill does it include the word “gender”. In fact, we had a number of witnesses who identified the weaknesses in the bill, and I brought forward several amendments based on that testimony. Some of the witnesses were from the legal sector and some represented groups and organizations. They had contributions to the bill that we later crafted into amendments. They were not even necessarily from the New Democratic Party. They were ideas and thoughts we thought would be helpful, but they were ones that were presented by witnesses. That is the reason we have public hearings at committee.

Sadly, they were defeated by the Liberals. There was co-operation with the Conservatives, and even when there was disagreement over language, there was a working environment to improve it. There was a recognition that there is a continual front, a quite disgusting front, by the Liberals to use nothing short of disguise and deceit to try to put one over Canadians, but they are not that naive. Today is about defending what the bill proclaims it should do by at least having an amendment in it on oversight.

One of the first things the government did not do when it tabled Bill C-25 was have any review process. For example, in corporate Canada, the representation of women is one of the lower percentages in a model called comply or explain used by the provinces. It does not actually work in many respects and has shown very little progress. Canada is stuck at around 20%.

The Liberals will talk about gender equality, talk about gender inclusion, talk about the so-called feminist Prime Minister, but when it comes to significant or specific actions, the bill is hollow. Not only that, the Liberals hollowed out any accountability for any future government in the legislation. Amazingly, this legislation has only been looked at twice in the last 40 years, and this time, the Liberals built a bill that would have no accountability.

Witness testimony from organizations that represent women in corporate Canada and women in general identified this weakness and the significant differences from what other countries were doing. How did the Liberals respond to this? They gutted further accountability. To be specific, they left out a review of the bill. They actually came through with an amendment for that, eventually, after they were shamed and embarrassed into this position, so there will be a five-year review after this bill gets royal assent.

However, the reality is that right now, in this day and age, the percentages are becoming more challenging. In fact, we have seen the representation of women on boards of directors shrink. That change should be looked at, and there should be some type of measurement, some impetus, to push the minister in a direction that is positive, if need be.

The Liberals changed their bill to include a review after five years, but if we go through the parliamentary schedule, we will find that it will actually take up to 10 years to conduct the review.

The first part of the legislation calls for a review of gender equality and diversity among directors and senior management, as defined by regulation, to be done by a specific date to make sure it is going to happen. We actually get diversity in the bill. If we look at representation on Canada's corporate boards, in some places, whether it be Toronto or Montreal, whether it be racial or gender diversity, we have seen some setbacks. There has been a reduction. That is important, because Canadians want accountability.

I will point no further, for a current example of accountability, than Bombardier. For its corporate board, there is say on pay, another amendment the Liberals made sure was not going to be part of the bill. There is some accountability to the shareholders. They have some say with regard to compensation for CEOs. The Conservatives have raised this in the House of Commons and have asked some very good questions. It is interesting that on the Bombardier lending file, the model of loan they built in for the CEOs of Bombardier encourages practices that could often lead to job losses for Canadians. It built that into the system.

The second part that is very important is that the word “shall” will be put in the bill. It will change the bill to make sure that this review takes place. Instead of “may”, we have “shall”, so that legally, it will set a predictable amount of time to review the current situation.

A series of things has taken place with regard to Bill C-25, which will come later, but most importantly, the accountability aspect will be in it. Without these amendments, the Liberals will get away with sending the bill in its final form and not having any oversight whatsoever. We have seen that as we go through electoral cycles, none of this will happen.

What is ironic is that the rest of the world, including the United States and other places, is acting on this much more significantly. We follow comply or explain. If we look at corporate boardrooms, currently the Canadian average is 20% for women. If they lower it to 15% or raise it to 22%, which is still very minor compared to the rest of the world, especially for countries like Canada, they will have to explain it. What is the consequence if five to seven years from now a company is still at a 15% or 20% rate and not even meeting the Canadian average of women on corporate boards? What is the penalty? It is nothing.

This bill would add an honest approach for accountability, a measurement for racial, ethnic, and women representation on boards of corporate Canada and make companies more accountable to their shareholders and to Canadians.

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

Mr. Speaker, I thank my hon. colleague for his speech and I would like to ask him a question.

We have seen the procedures during committee meetings. First, is the bill itself a positive step? Is the requirement that the bill be reviewed after five years to determine whether it was effective also a positive step?

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I had an amendment with regard to making it two to three years, which is much more reasonable. It will take several years for the bill to go through the House, get out into the community for consultation, and then come back to the House for us to review. Having a five-year period unprescribed, unmandated, and unaccountable would allow for several scenarios to take place. It could take up to a decade before the bill is reviewed.

The government is almost two years into its mandate. If this legislation is a so-called priority for the Liberals, then why has it taken until now to come before the House? The Liberals claim this is a housekeeping matter. This legislation has taken this long to get to Parliament, and eventually it has to go through the Senate and receive royal assent. Meanwhile the world is moving on.

Other jurisdictions have quota models. Some even have hybrid quota models to ensure gender equity takes place and the culture of boardrooms gets the accountability that is necessary, where it has so long played a role historically against visible minorities, ethnic minorities, and women, keeping them down because of a collusion for their own interests over that of their shareholders and the public.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, I am wondering if my colleague could speak to the growth in inequality between wealthy CEOs and ordinary Canadians and whether he could explain if Bill C-25 usefully addresses the explosion of executive compensation.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, the bill would not do that in its current form, and that is why my amendment is so critical. It would at least put a finish line for review that has to take place.

As I mentioned, we are going to a comply-and-explain model, which has been abandoned by many other countries. Norway and France have quotas with penalties. Not only do they have quotas, but they have related penalties. I would argue that we do not have to go that far. We could actually have a hybrid model in between those two. If we do not have that, there is very little expectation.

The Liberals shut down further corporate accountability by making say on pay not something that actually would be done.

Right now as things stand, it is bad enough, but my amendment would at least set a deadline and a hard finish line for scientific and non-partisan evaluation of the quotas and the actual numbers when it comes to representation. The science has already been done by researchers not only across Canada but around the world, and it shows, for example, that Montreal has less than 5% representation by racial minorities on corporate boards despite racial minorities comprising a significant portion of its population. That is just a science-based approach. It is the same with respect to women who occupy these positions. Canada is low, with around a 20% mark on that. There would be a measurement date and deadline for that as a result of my amendment. Right now, all companies need to do is comply and explain. The way the Liberals have set up this legislation, we do not even know when that will happen because of the parliamentary process and no hard finish line, which is necessary.

Therefore the clock never starts to tick on them. We could have successive governments, over and over, and unless one of those governments takes the time to make this a priority, it will never get done and we will be talking about this for the third time in 80 years.

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

Mr. Speaker, I am pleased to rise today in support of 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.

Our government sees inclusive innovation as a Canadian value. That is why we spent all of the summer of 2016 consulting Canadians on our innovation and skills plan in order to gather ideas on how we can help position Canada as a global centre for innovation.

When we come together in our community, in the workplace, or on a board of directors, our diversity and our experiences are what bring unique ideas to the table.

I want to begin by highlighting the important work that was done during the committee review stage for Bill C-25. The committee made one amendment that is important to note because it speaks to diversity, which is at the heart of the bill. A review element was included to allow a government to come back to the bill and ensure that diversity is upheld in the spirit in which it is cast in the bill, so there is a five-year review period precisely for that reason. I want to thank members of the committee for that work they did.

I want to commend the efforts of my colleagues who sit on the committee and who brought forward this progressive addition to Bill C-25. By bringing more voices to the table, Bill C-25 would help to make another important step toward diversity.

Several studies have shown a link between diversity on boards, particularly gender diversity, and strong financial performance, heightened innovation, and enhanced client insight. For instance, in March 2016, the International Monetary Fund released its research of European firms, which demonstrated that there was a higher return on investment when there was a larger share of women in senior positions.

Some studies have also reported that, by considering diversity and new skills, corporations were able to outperform and out-innovate other companies. Why is that? It is because, when different views are heard around the decision table, it creates a place where innovative ideas can emerge.

In Canada, most provincial securities regulators have adopted rules to require listed corporations to disclose the gender representation of their boards, and senior management to disclose their policy for promoting gender diversity or to explain why they do not have such a policy.

Bill C-25 would build and expand on these existing initiatives to support diversity on boards and in senior management as a good corporate governance principle. The bill would require the Canada Business Corporations Act corporations—corporations registered under the CBCA—to disclose diversity information such as the diversity composition of boards and senior management. Corporations would also have to disclose their diversity policies to their shareholders or to explain why they do not have diversity policies. Hence, it is comply or explain.

If we do not make the most of all the diversity and the quality of our talent pool to guide our Canadian businesses, come up with creative ideas, and foster innovation, investors, our ability to compete, and the Canadian economy overall will suffer the consequences.

Whether they are small, medium-sized, or large, companies are a powerful engine of economic growth. Throughout their lifecycle Canadian businesses are a key source of innovation and employment, which helps improve Canada's standard of living and economy.

It is vital that companies continue to pave the way by creating a culture of diversity and innovation. Bill C-25 will help government and businesses work together to foster diversity and entrench innovation in their business strategies.

I would like to end my speech by pointing out that the last significant amendments to the Canada Business Corporations Act were made in 2001. The time has come for the act to reflect modern principles of corporate governance that are in line not only with changes in the marketplace, but also with the modern economy. These amendments foster inclusive innovation, diversity, and a strong and prosperous Canada.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, most of the member's comments were about the bill and not about the amendment that my colleague has brought forward.

I am very surprised that the government resisted all of the amendments that came forward at committee asking to define diversity. In my role as chair of the status of women committee, I know we do not seem to have a problem defining what that is and adding that to our scope: indigenous women, immigrants, people with disabilities, people of colour. We put these things in all the time.

I wonder if the member could comment on why the government did not want to be more inclusive in its definition of diversity.

[David Lametti, Liberal, LaSalle—Émard—Verdun, QC]

Mr. Speaker, the concern raised by my hon. colleague is an important one, and one that the committee and the government takes to heart.

We felt that the guidance we would give on diversity would be done in the regulations. There is proposed text along the lines of the federal government's Employment Equity Act. It may end up looking like that at the end of the day, but it is there to help guide corporations.

A number of the expert witnesses who came in front of the committee thought it could go either way, either in the legislation or in the regulations. We felt that, in the history of Canadian diversity jurisprudence and diversity regulation and laws, it was better to maintain the flexibility in terms of defining through open-ended guidance in the regulations than it was to cast something within the statute.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I will ask the parliamentary secretary to maybe tell us who those witnesses were who said it was okay to put it in regulations.

My recollection, and from checking with the minutes, was that witnesses were not okay with that, and that a definition of race and gender inequity would be an advantage in terms of the legislation. I find that particularly interesting.

I will follow that up with the testimony that took place at the committee hearing. I am interested to hear what the parliamentary secretary says to actual testimony that was provided there. It started with his own member, the member for Richmond Hill asking a question to one of our witnesses, Prof. Aaron Dhir, who answered:

I would have to say that I suspect that [the member for Windsor West] is right, that five years with respect to the diversity provision in particular, will be too long.

The member for Richmond Hill then said:

I'm going to interrupt you because I want to give Tanya about 45 seconds to also give her input on this.

The answer from Ms. Tanya van Biesen was:

In terms of time frame, I would say no more than three years.

What witnesses can the parliamentary secretary provide today that would actually corroborate his statement?

[David Lametti, Liberal, LaSalle—Émard—Verdun, QC]

Mr. Speaker, I cannot name the names, but when asked, they said in the legislation and if not in the legislation then in the regulations. It is a decision we made as a government, as a committee. Committee members had a vivid discussion in committee. There is a good reason.

When the Charter of Rights came into force in 1981 in Canada, had we had a fixed definition under section 15, we would not have had LG, and a few years later we would not have had BT or Q2. There is an evolution in diversity, in the way we think about diversity in this country, and it is worth maintaining that flexibility in the regulations.

As to the period for review, we felt that the three-year period was too short. We think a five-year period gives us time to actually analyze how well the bill is working.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Mr. Speaker, to me Bill C-25 is a very important bill. It is about diversity.

At this point, we still have the opportunity, as we stand here today and as we listen to these speeches, to go out and promote awareness of the value of women and men of diversified backgrounds on boards, and also to share that with shareholders. I have to say that I actually take offence at the notion of quotas, because I believe everyone wants the best talent to be appointed to a board, not based on quotas.

I am wondering if my colleague could speak to the unintended consequences of quotas for appointments to boards.

[David Lametti, Liberal, LaSalle—Émard—Verdun, QC]

Mr. Speaker, there was a fair bit of discussion on quotas. There are a number of people who feel that quotas can be counterproductive and lead to the appointment of people who may or may not be qualified for those positions.

I am not going to take a position on that. I think quotas are within the tool kit of a government in moving forward with this kind of legislation. However, we have chosen a comply-and-explain model. It has worked well in the U.K. and in Australia. We feel that it closely resembles what is already being done at the provincial level with securities regulators and in other statutes.

We feel this is a good, positive step forward that will lead to positive results. We have put in the five-year period for review. If at some point down the road, after that five-year review, we feel we have to change it, we will.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Mr. Speaker, I am pleased to see the member for Windsor West put forth this motion today regarding a timeline for a comprehensive review of the diversity aspect that will be added to the Canada Business Corporations Act after Bill C-25 is passed. As the member is aware, our party members on the industry committee put forth a similar amendment, which would call upon the government of the day to do a review of the diversity policy after three years to determine how effective it has been. Initially, the member for Windsor West had suggested a timeline of two years. Obviously, I am happy to see that he listened to the arguments made by the member for Red Deer—Mountain View, who put forth the three-year amendment, and is now agreeing with him.

I would like to talk a bit about diversity, and then I will elaborate on why this review and this specific timeline are so important.

I have mentioned in the past that our Conservative Party has never been on the sidelines when it comes to diversity firsts in Canada. In fact, it was the Conservative Party that had the first Canadian female prime minister, that elected the first female MP to the House of Commons, and the first Chinese, Muslim, black, Latino, Hindu, Pakistani, and Japanese MPs. We had the first Mennonite cabinet minister, the first female engineer MP, and even the first quadriplegic MP and later cabinet minister, my dear friend Steven Fletcher. We had the first married couple to sit in this House at the same time. We even had the first husband and wife team to sit in both Houses at the same time anywhere in the Westminster parliamentary system.

None of those MPs was nominated or elected to meet or fill some regulatory quota. They themselves chose to run for us because they knew that we, on this side of the House, believe in merit and not quotas. I think the list that I just read makes it clear that talent and skills know no boundaries, be they racial, religious, or gender. In fact, talent and skills are only enhanced when discussions around boardroom tables, and even debates in this chamber, are between people of different backgrounds and different perspectives. Because each of us has had unique experiences that have shaped our view of the world and how we respond to the challenges that we encounter, each of us brings something unique to the table, and I would like to think that we are all the richer for that.

To help see more diversity on boards, Bill C-25 suggests the comply or explain model. This was proposed by the previous Conservative government after extensive consultation in 2014 in order to modernize Canada's corporate framework. Through consultation, we have seen across the world, and even within our own borders, the positive effects that this model produces. For example, countries like the U.K. and Australia have implemented comply or explain models similar to the one that we are discussing today that focus particularly on increasing gender diversity on corporate boards, and they have seen significant results. In fact, one of the witnesses who appeared before committee said that in Australia, “women's representation shot up from 10.7% in 2010 to 22.7% in 2016”, and in the U.K., “women's representation on FTSE 100 boards has more than doubled from 12.5% in 2011 to 26.1% in 2015.” Both cases were a result of implementing this policy.

Here at home in Ontario, we have seen rises in the number of women who sit on boards as well. Just over two years ago, the Ontario Securities Commission implemented the comply or explain model, and since then the number of women on boards has steadily increased to 20%. However, looking at Canada as a whole, in larger companies women make up an average of 34% of corporate boards. Implementing the widely used comply or explain model is the first step to seeing these numbers improve.

Most successful companies know that in today's society they must diversify to prosper and to be effective. Good companies diversify their product lines, their target customers, and their geographic markets, because they do not want to put all of their eggs in one basket. When they are smart, they diversify their workforce and their corporate boards, too. I say when they are smart, because numerous studies have shown that companies that employ people with disabilities almost invariably see their workplace morale, attendance, and productivity go up. Corporate boards with higher percentages of women almost invariably have higher growth and profitability rates than those that do not.

Our party is not here today to tell private companies how to run their businesses, but we do need to make sure that people of diverse backgrounds, genders, and ethnicity are considered at the table for the reasons I just mentioned. I think the comply or explain model provides the right balance to do this, but a review is a crucial part of determining the right balance. That is what we are discussing here today, the need for a comprehensive review of the diversity disclosure section.

Like many pieces of legislation created and presented in the House, it is important to look back on what was implemented to see if results have actually been achieved. In fact, most pieces of legislation do have a built-in review process. As we used to say when I was in the corporate world, “What gets measured gets managed.”

During committee, it was unanimously agreed upon by the members and by the witnesses who appeared that a review of the diversity and the comply or explain model should be done, but the opinion on timing was varied. While only a few people, and I stress only a few people, suggested five years, most agreed that five years would be too long to analyze the effects of this policy and said a two-year or three-year window would be more appropriate.

Members on this side of the House listened to those suggestions. In fact, the member for Red Deer—Mountain View put forth an amendment in committee with the hopes of seeing a three-year review take place. Unfortunately, the Liberals must have been experiencing a bit of selective hearing at that time. While the Liberals originally amended the bill to include a five-year review of the Canada Business Corporations Act, most witnesses expressed concern that this was in fact too long.

Our party believes that three years is an optimal time frame for review. First, it is important to provide enough time to see results. Witnesses stated that good, solid results would be seen within this time frame. While we need to make sure that we can actually get enough data to see the effects, we also need to make sure that a review is done in a timely manner. If changes need to be made, it is better to do them sooner rather than later.

One other thing we need to consider is we need to be mindful of the scheduled 2019 election. The member for Windsor West originally suggested that the review be done in two years, but that review process has the potential to conflict with an election that is scheduled for two years from now. This means the review could be interrupted or even swept under the rug until an election is over.

For those reasons, we believe that a three-year period would get us past an election so that a new Parliament could take a look at it.

Unfortunately, the amendment was shot down by the Liberals. As the member for Windsor West has suggested, this review process will occur before October 19, 2020, which brings us to about three and a half years from now.

I am happy to see that he took our suggestions and that he listened to the points that were made, especially by so many witnesses. It is for these reasons that I will be supporting the motion, and I encourage my colleagues to do the same.

[Anita Vandenbeld, Liberal, Ottawa West—Nepean, ON]

Mr. Speaker, I would like to thank my hon. colleague for her support of the bill, a bill which I think we all acknowledge would do a lot. It is a big step forward in making sure that corporate boards would be more diverse in terms of gender, but also in terms of intersectional identities.

In my colleague's speech, she mentioned that the U.K., Australia, and some other countries have implemented similar measures which almost doubled the number of women on boards.

I wonder if she could elaborate on the ways in which shareholders being able to see exactly what diversity policies companies have or do not have would incentivize those companies to put more women and more diverse people on their boards. We all know that increases profits, increases innovation, and makes the boards more effective. Perhaps the hon. member could elaborate on that.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Mr. Speaker, I referenced my years in the corporate sector prior to the privilege of being in the House. It was very true that what gets measured gets managed. If we measure the wrong things, then the wrong things get managed. It is the same thing when it comes to talent. Talent knows no boundaries, but that being said, we must make sure that everyone who has talent gets a chance to participate, that people are not excluded from being on corporate boards or indeed in management for the wrong reasons.

One of the best ways for shareholders to know what a company's policy is, is to see what it does. When this becomes law, as long as companies understand the government's intention of the definition of diversity, they will comply or they will have to explain to their shareholders, because the shareholders will be able to ask at the annual general meeting or at any time what they are doing in that regard.

It is really important that the comply or explain model be brought in. It provides accountability without telling companies exactly how to run their businesses.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I thank my colleague for supporting the amendment and for her contribution here today. One thing that is clear is that we are not discussing in the amendment the way things can take place, whether it be comply or explain, or whether it is quotas, or whether it is a hybrid system. They all have their advantages and disadvantages and there is a lot of discussion about that in general and also positions that are taking place.

What is clear by the amendment and was made clear by the Conservative Party is having accountability and making sure there would be a specific measurement and finish line in regard to having companies explain under this model if their measurement system shows them to be deficient. Some companies would probably come in very well and others may not.

Comply or explain in the way the Liberals have built the bill would be such that the minister really has no powers in it. I would ask the member to comment on this. The Conservatives had an amendment similar to ours regarding three years, but five years is what was passed. At least with this amendment it sets a hard finish date for that versus that of several years or a decade from now when we do have a review process taking place, so the finish line is hard and fast and the intention is strong and astute.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Mr. Speaker, I thank the member for Windsor West for the amendment and for being willing to listen to the arguments put forward by the witnesses as to why it should be a three-year hard deadline. It gets us past an election without letting things drag out too long. If there is some problem with the implementation of this policy, then it would be better to review it now and fix it than to wait too long and let things get out of hand by saying that we cannot touch it because it will be reviewed in a couple of years anyway.

My bigger concern was when the definition of diversity was voted down by the Liberals. To many in the corporate world, diversity in hiring means the board should be made up of someone from accounting, someone from marketing, someone with legal experience, functional diversity in the corporate background as opposed to background relating to gender, ethnicity, or religion. That is where we develop different personalities, view the world with different perspectives, and we bring different solutions to any of the given problems that are being presented.

[The Deputy Speaker, Bruce Stanton]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Mégantic—L'Érable, Employment; the hon. member for Edmonton West, Public Services and Procurement; the hon. member for Beauport—Limoilou, Public Services and Procurement.

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Mr. Speaker, thank you for giving me the opportunity to speak this afternoon. I am pleased that you are the one in the chair right now.

I am rising today to share some of my thoughts and, of course, those of Her Majesty's official opposition 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 important to begin by saying that this bill targets some 270,000 federally incorporated companies, which are, for the most part, small and medium-sized businesses that do not sell shares and to which the changes will not apply.

It is important to remember that the amendments proposed in Bill C-25 are the result of a legislative review that was conducted by a House of Commons committee in 2010, two Parliaments ago. Consultations were then held by our government and Industry Canada in 2014.

Like the majority of my colleagues who have spoken to Bill C-25, I think it is commendable and fantastic in many ways that the current government was open enough to use old legislation from the Conservatives' 2015 budget to develop Bill C-25.

However, what my opposition colleagues and I find a little unfortunate is the lack of substance in the bill we have before us at the current stage and, in fact, the lack of substance we see all too often in the current government's bills. I would even say the lack of bills, quite simply. No more than 50 bills have been tabled by the Liberal government since October 19, 2015. The minority government of the Right Hon. Stephen Harper had tabled three times as much legislation by 2007.

Certainly, the bills lack substance. In addition, there is a lack of real change. I will come back to the bill after this aside. The Liberals campaign slogan was “real change”. We can certainly change the things we say. That is obviously what the Liberals have done. However, Canadians expect legislative change, and that is not what we are seeing currently.

The Liberal government is missing several opportunities to do a good job in the House and bring in concrete measures for Canadian society, to address problems affecting workers, seniors, the unemployed, and corporate boards. This is how I am getting back to the bill.

We are delighted that the Liberal government is using legislation that the previous Conservative government worked very hard on. However, in committee, we brought forward two main amendments that, it appears, do not suit the opposition, or rather the government. Excuse me. I misspoke. I saw the future and called the government the official opposition. That will be two and a half years from now.

During the committee stage of Bill C-25, the Conservatives proposed amendments that would have strengthened the bill. First, we proposed to define the word “diversity”, which is an integral part of the bill.

It is one of the key components of the bill since the other side of the House wants to impose diversity, which is still undefined, within various federally regulated corporate boards and institutions.

The amendment we wanted to bring forward would define the word correctly. The need for this was also raised by a number of the witnesses who appeared before the committee. The official opposition critic responsible for this issue and several of my Conservative colleagues met with these witnesses.

The second amendment would require a review of the diversity policy in three years.

There is a reason why the Liberal government did not accept this amendment, which would define the word “diversity”. One of the things this government most often does is present sweeping concepts that they do not want to define. In this case, it is diversity. In another case, it is the 1%. For the next two and a half years I will repeat that the 1% does not exist. We are one of the world’s fairest societies, one of the societies where wealth redistribution is unparalleled in the history of mankind. I really find it incredible. I had the chance to go to university and I can say that any professor or academic would tell you that there is no such thing as the 1%.

I would like to give a parallel example that will explain why imposing diversity could have consequences that are not necessarily what the government intends. I will go out on a limb: I assume that by diversity, they mean cultural minorities of all kinds. Today it is rather fashionable to identify all kinds of minorities, when what really counts is protecting the political minority, first and foremost. I will give an example of some of the consequences that sometimes result from a desire found only in rhetoric. When the Liberals talk about a gender-balanced cabinet, I see rather significant consequences. It is not in law, thank God, but if by misfortune the next government decides to continue with that, this would then become a convention. We would have a sort of parliamentary convention to have a gender-balanced cabinet.

According to the Liberals, having a convention saying that cabinet must be gender balanced means that women will forever hold half the power in the cabinet that forms the government. From another perspective, this also means that from now on, women will never be the majority in cabinet. Is that not a bit ironic to think that for centuries, cabinet was composed mostly of men, and now, with this convention we end up never seeing a cabinet composed mostly of women?

I believe this is a first consequence of this rather dangerous convention, based on misconceptions, dangerous social interpretations, and political capital, which, furthermore, in a way endangers—to put it bluntly—the possibility of having the best cabinet possible. I am sure that my colleague from Glengarry—Prescott—Russell, across the way, would make a wonderful minister. I was with him on the Standing Committee on Government Operations and Estimates. He is incredible, clever and has an outstanding mind. However, because of gender parity, he will probably never be as close to me on the seating plan as he could be. We will never get the best by relying on sweeping misconceptions.

Creating such misconceptions of social reality that can be interpreted differently can have consequences. We therefore need to define the word “diversity” to ensure that this bill will not have negative consequences on corporate administration.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, my colleague, who also serves on the government operations committee, suggested that inequality and the 1% represent a false concept, but I am sure he is aware of the fact that the top 100 CEOs, on average, make 193 times as much as the average Canadian employee.

I wonder he would justify this. Does he believe that these CEOs are 193 times more productive than the average worker? Maybe they are somewhat more productive, but are they 193 times more productive? I am just wondering what the explanation is, if it is not an example of unfairness and justified inequality.

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Mr. Speaker, obviously, liberalism and the capitalist system result in these kinds of problems. A good government must always ensure that wealth is redistributed in the best interests of all Canadians.

That said, if I were told that 30% of Canadians were a lot richer than others, I would say we are starting to have a problem. However, the concept of the 1% leads to dangerous political battles, since it makes Canadians cynical.

Canadians live in one of the wealthiest countries in the world, one of the only countries where anyone, even the poorest of the poor, can do their best and succeed, since there is the crown government. Canada presents all sorts of opportunities. We need to stop talking to Canadians as though they were pathetic children. Quite the contrary, we need to show them that this great country is there for them and for their future. We especially have to stop coming up with sweeping concepts that create cynicism day after day in society.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, my colleague's party has been raising some very important questions in question period related to the Bombardier sale and CEO compensation from the public. It was important in this legislation that “say on pay” was not allowed. Say on pay provides democracy from the shareholders, who help to determine corporate salaries and compensation.

I would like to hear from my colleague how, for example, the government's position on Bombardier right now allows for that, and in fact encourages Bombardier to take actions that could eliminate workers while receiving a lot of different subsidies, one from Quebec and a second one from the federal government, when we know their CEOs are actually receiving compensation for this.

I find that a paradox for his own party, which is criticizing the CEOs from Bombardier for getting rich off the loans and the grants from taxpayers.

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

All I can say, Mr. Speaker, is that I profoundly believe that the bonuses that were automatically given to the CEOs were outrageous. Twenty-four hours before people in Quebec and most political figures started to be outraged, I had already put on Twitter that it was dishonourable, dishonourable, and dishonourable.

To answer the hon. member's question more specifically, I would say that is one of the reasons I support the member for Beauce for the leadership. He just basically stands against any subsidies. He specifically said in his platform that he would strike subsidies against companies. However, I often say to my friend the member for Beauce that we still have to be cognizant of the fact that some regions in Canada need subsidies—for example, the Atlantic provinces—to make sure that we increase and support economic development there. Sometimes we have to be straight with our ideas, but we must always acknowledge the needs and the realities of the different regions.

The bonuses for the CEO are outrageous, and we should all hopefully be against that.

[Robert Gordon Kitchen, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, I am pleased to speak to the report stage of 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.

Bill C-25 aims to make changes to the corporate governance regime for reporting issuers incorporated under the Canada Business Corporations Act. The CBCA is the incorporating statute for nearly 270,000 corporations. Although most of these are small or medium-sized and privately held, Canada's largest reporting issuers are also governed by the CBCA. Professionals are able to incorporate, and in my previous life as a chiropractor, this option was available to me.

With that said, and in light of how the government conducts discussion and debates, I move:

That the House do now adjourn.

[The Deputy Speaker, Bruce Stanton]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Deputy Speaker, Bruce Stanton]

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

[Some hon. members]

Yea.

[The Deputy Speaker, Bruce Stanton]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker, Bruce Stanton]

In my opinion the nays have it.

And five or more members having risen:

Call in the members.

(The House divided on the motion, which was negatived on the following division:)

Vote #251

Canada Business Corporations Act

[The Deputy Speaker, Bruce Stanton]

I declare the motion defeated.

[The Deputy Speaker, Bruce Stanton]

It being 5:35 p.m., the House will now proceed to the consideration of private members' business as listed on today's Order Paper.

The House resumed from April 6 consideration of 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, as reported (with amendment) from the committee, and of the motions in Group No. 1.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I enjoyed listening to the debate on the previous bill. It was encouraging to hear many comments recognizing the importance of June 21, which is National Aboriginal Day. This day has been celebrated for many years. It is a celebration of Canada's indigenous culture, a very unique heritage. I look forward to celebrating tomorrow. The debate we had is a step forward. National Aboriginal Day needs to be recognized.

Let me get to Bill C-25, an act that would amend the Canada Business Corporations Act. It is important we move forward with the bill. I would encourage all members of the House to support it.

When we think of the corporations, over one-quarter of a million corporations in every region of our country fall under the Canada Business Corporations Act, or the CBCA,. Under that is a general framework for operations that in essence provides guidance.

Canada carries a tremendous amount of influence well beyond our borders. When we talk about that framework for businesses or corporations in general, whether they be non-profit, for profit, co-operatives, or whatever they might be, it is important we have an opportunity to not only demonstrate strong leadership in Canada but outside of Canada as well.

One of the things we really should spend time talking about, with respect to Bill C-25, is the opportunity for diversity, which is one of the biggest selling points for me. The bill recognizes the importance of annual general meetings, among other things, involving corporations. For me, the highlight is that we are demonstrating the benefits of Canada's diversity. When we talk about diversity, we talk not only about minorities but also of gender.

Over the last number of decades, virtually since the creation of legislation to provide guidance, to provide that general framework, it really has not been overly successful in ensuring diversity within those thousands of corporate boards. The legislation before us would send a strong message.

I believe that message will be well-received by all those who are responsible corporate citizens, directors on boards, and who understand the true value of diversity. We recognize that excluding individuals hurts us all. Opening doors and at the very least being aware of diversity will enhance the quality of life of all Canadians.

When I reflect on what we have accomplished over the last number of months, one of the things I am proud of is the fact that we have a Prime Minister who has demonstrated from day one how important it is to recognize diversity. All one needs to do is to take a look at the individuals who sit around the cabinet table. I would challenge anyone to mention any previous government that has seen such great diversity in cabinet, which is gender balanced.

The Prime Minister has been fairly well recognized as a feminist Prime Minister, not only by individuals from every region of the country but other countries abroad. When I had the opportunity to share some thoughts on the bill, the aspect that really came to mind was diversity.

In the future, the backbone of our economy will be our small businesses? The best way to advance Canada's middle class is to ensure there is a better sense of productivity, of diversity, that we all move forward together. If we are successful in doing that, we will have a healthier middle class and those aspiring to be part of it.

Today, we find more male-dominated boards, even in ethnicity and the lack of diversification. Many corporations, and do not want to use one brush with which to paint all corporations, have recognized the value of diversity and have taken it upon themselves to act on that. Those more progressive corporations that have recognize the value of this will reap the benefits in the future.

Let us bring it to this legislation. This issue of diversity is now being promoted in a very tangible way, and it has been done in several ways. That is why I wanted to share with members very important aspect of the legislation.

I want to highlight some of the summaries. It is important to recognize that we are reforming some aspects of the process for electing directors of certain corporations and co-operatives. That is one of the greatest appeals of diversity. We are looking at modernizing communications between corporations and/or co-operatives and their shareholders or their members. It is important to recognize that we are clarifying that corporations and co-operatives are prohibited from issuing share certificates and warrants in bearer form. It is also important to recognize that we are requiring certain corporations to place before their shareholders, at every annual meeting, information about the diversity among directors and members of senior management.

These are all very important aspects, changes that affect more than just the Canada marketplace framework or assist in that framework. They go beyond the Canada Business Corporations Act.

It is important to recognize that these amendments will help increase shareholder democracy and participation. They will also increase women's participation on corporate boards and in senior management in recognition of these changes, also allowing Canada's framework laws to better reflect modern ways of doing business.

We have a wonderful opportunity to demonstrate leadership on this file, a file that touches literally well over a quarter million corporation in every region of our country. I would encourage members opposite to get behind Bill C-25. Jointly we can send a very powerful message. That message has been sent in the past, but it will be reinforced by supporting this legislation. I encourage members to vote yes.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Mr. Speaker, listening to the member opposite on this interjection, it is very hard to determine whether he meant to encourage us to support the bill based on what he called diversity. I was lost in the process on diversity whether it is a diversity of corporations or the diversity of business opportunities. He linked productivity to diversity. I would be very interested to know if the member opposite can advise us on the productivity level in Canada in comparison to other G7 countries, and whether he is satisfied with our productivity level or not. I would be very much interested in knowing where we stand in terms of productivity among similar countries.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, maybe I could answer the question by indicating that when we think of the number of corporations and the many different boards out there, one could argue that the more there is diversity from within the board, the more we would be able to apply widgets, products, or expertise, the many different skills we have to offer not only here in Canada but also to the world.

That is demonstrated through the fact that we are a trading nation, and the better we will all be. When the member makes reference to productivity, there is always room for improvement, but I believe Canada and Canadians do exceptionally well. We have seen that in many different industries in Canada. For now, by supporting this legislation, we are saying we believe in more transparency and accountability at the corporate board level. We believe in diversity at the corporate board level, along with our co-operatives and non-profits.

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

Mr. Speaker, I thank my colleague from Winnipeg North for giving such an interesting speech

I think that our government’s leitmotif is evidence-based decision-making.

My colleague raised the matter of diversity. I had the privilege of reading the study by a professor with the University of Toronto’s Rotman School of Management. He fully demonstrated how important diversity is to the resilience and profitability of Canadian businesses. The more diversity there is, in terms of either a gender balance or having individuals from cultural communities, the more these businesses are profitable and resilient in the face of change.

I wonder if my hon. colleague could expand on this.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it was interesting to listen to the minister responsible for the legislation when he brought it forward. He talked about the importance of innovation, and Canada's role with respect to that, and then tied in, as the member has done, the importance of diversity.

I have given many speeches not only inside the House but beyond the House, and in particular, in my home province. I talk about one of the natural assets Canada has which is its connections around the world. We are a multicultural society, second to no other. If we recognize just how enriched we are with our diversity, that enables us to break down many international barriers.

We have a strategic advantage over many other countries around the world. If we take advantage of that diversity, and see that incorporated in both private and public sectors, Canada and our middle class will do exceptionally well. When I say the middle class, it goes far beyond that. That is why I encourage members to look at the legislation, and see the bigger picture. Canada can develop strong leadership on this file.

[Dave MacKenzie, Conservative, Oxford, ON]

Mr. Speaker, I am pleased to speak at report stage of Bill C-25, an act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act.

I will tell members that we will be supporting the bill. It is a bill that essentially came from the Conservative Party in the last Parliament.

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

The proposed amendments in Bill C-25 cover several key corporate governance matters: majority voting, individual voting, annual elections, notice and access, diversity-related disclosures, and shareholder proposal filing deadlines. If enacted, these changes will affect about 600 of the approximate 1,500 companies on the TSX.

Bill C-25 is also the minister's second piece of legislation that has come straight from our previous Conservative government's 2015 budget. For those in the House not aware, I will read an excerpt from page 140 of our previous Conservative government's economic action plan 2015:

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

When it comes to modernizing corporate governance and reducing red tape, the previous Conservative government made massive strides. We believe in fostering an environment in which businesses could grow and contribute to Canada's long-term prosperity. I am pleased to see that the Liberals have moved forward with the comply or explain model. It has been proven that more diverse boards lead to better overall decision-making, better boards, better organization, and better economics.

However, with all the hard work our previous Conservative government did on the bill, which is still being continued by the Liberals, the Liberals want to use our past legislation and call it their own. I suppose this does free up some time, which the Prime Minister has made clear is a priority for him. Hopefully, this will allow the Liberal Party to focus on what it feels is more important to Canadians, photo ops and selfies.

Back in 2015, the Conservative Party knew that this bill needed a couple of amendments. The motion put forward by the NDP and the proposed amendments to Bill C-25 are similar to the amendments we proposed in committee, and we the Conservative Party are in support of that motion.

In 2010, a House of Commons committee led a statutory review of Canada's federal corporate governance framework, which led to further consultation in 2014 by Industry Canada. After hearing from witnesses, the Conservative Party put forward two amendments to make the bill stronger, and like the motion put forward by the NDP, these amendments included defining the term diversity, and requested a review to take place on the diversity section after three years. Even back in 2015, these amendments were voted down by the Liberal Party. We, the official opposition, will stand with the NDP and many witnesses to the committee on the importance to define diversity in the bill.

The NDP amendment defines diversity as:

information respecting gender representation and diversity—including in regard to colour, race, religion, national or ethnic origin, age, sex, sexual orientation, gender identity or expression, or mental or physical disability— among the directors and among members of senior management as defined by regulation as well as any prescribed information respecting diversity.

For a party that claims to fight for diversity, the Liberals are not even willing to tell Canadians what they mean by the word diversity. Does this sound familiar to anyone else? Well, it should.

The second amendment, suggested by almost all witnesses, was to ensure that a review of the diversity policy would happen. The timelines varied from one to five years. As a result, the opposition agrees that a three-year review would be best. We chose this time frame, because it would allow for results to come in, and if changes were necessary, they could be made promptly. Furthermore, we took into consideration the federal election, which could cut into the review if a two-year timeline was suggested. A three-year review would occur after any upcoming election.

We recognize that businesses play a vital role in creating jobs and generating economic growth, and that strong business strategies are central to a company's success in creating and sustaining a competitive edge. Changes proposed to the Competition Act would do just that. They would reduce business uncertainty and create a competitive marketplace, and prevent anti-competitive practices. The amendments would also reduce the administrative burden on businesses.

Modernizing the acts addressed in Bill C-25 is a welcome improvement to the federal corporate statute, and a reflection of the need to enhance the corporate governance practices in companies. With these amendments, suggested by the NDP, Bill C-25 will be Canada's next step in modernizing corporate governance.

The official opposition will stand with the NDP and the committee witnesses to have these amendments made to Bill C-25.

[The Acting Speaker (Mr. David de Burgh Graham), David Graham]

Resuming debate.

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker (Mr. David de Burgh Graham), David Graham]

The question is on Motion No. 1. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Acting Speaker (Mr. David de Burgh Graham), David Graham]

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

[Some hon. members]

Yea.

[The Acting Speaker (Mr. David de Burgh Graham), David Graham]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker (Mr. David de Burgh Graham), David Graham]

In my opinion the nays have it.

And five or more members having risen:

Pursuant to order made on Tuesday, May 30, 2017, the division stands deferred until Wednesday, June 21, 2017, at the expiry of the time provided for oral questions.

The House resumed from June 20 consideration of 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, as reported (with amendment) from the committee, and of the motions in Group No. 1.

[The Speaker, Geoff Regan]

Pursuant to an order made on Tuesday, May 30, 2017, the House will now proceed to the taking of the deferred recorded division on the motion at report stage of Bill C-25.

The question is on Motion No. 1.

(The House divided on the motion, which was negatived on the following division:)

Vote #347

[The Speaker, Geoff Regan]

I declare Motion No. 1 defeated.

[Carla Qualtrough, Liberal, Delta, BC]

moved that the bill be concurred in.

[The Speaker, Geoff Regan]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Speaker, Geoff Regan]

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

[Some hon. members]

Yea.

[The Speaker, Geoff Regan]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Speaker, Geoff Regan]

In my opinion the yeas have it.

And five or more members having risen:

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Mr. Speaker, I believe that if you seek it, you will find agreement to apply the results of the previous vote to this vote, with the Liberal members voting in favour.

[Gord Brown, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Mr. Speaker, the Conservatives agree to apply and will be voting yes.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Mr. Speaker, I am certain that the NDP agrees to apply the vote and will vote no.

[Marilène Gill, Bloc, Manicouagan, QC]

Mr. Speaker, the Bloc Québécois agrees to apply the vote and votes in favour of the motion.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I agree to apply the vote and I vote yes.

[Hunter Tootoo, Independent, Nunavut, NU]

Mr. Speaker, I agree to apply, and I will be voting yes.

[The Speaker, Geoff Regan]

Is there unanimous consent to proceed in this fashion?

[Some hon. members]

Agreed.

(The House divided on the motion, which was agreed to on the following division:)

Vote #348

[The Speaker, Geoff Regan]

I declare the motion carried.