Bill C-18 Committee on Nov. 3rd, 2011

[Ryan Rempel]

It's the definition of grain in section 2 of the existing Canadian Wheat Board Act. It would be wheat, oats, barley, rye, flaxseed, rapeseed, and canola.

[The Chair, Conservative, Blaine Calkins]

Thank you, Mr. Easter. Does that satisfy...? Okay.

Is there any further debate on proposed new clause 9.1? All in favour?

(Amendment agreed to)

That is carried.

There is another amendment--in your name, Mr. Valeriote--that is identical to the amendment that was just passed. In my discussion, the only reason yours did not come up first was that these were received on a first-come basis, and the motion from Mr. Hoback, which was identical to yours, was received by the clerk first. Therefore, I don't see any reason.... We can't actually proceed with it, so we're going to skip that and move on to clauses 10 and 11.

There are no proposed amendments to clauses 10 and 11. Shall clauses 10 and 11 carry?

[An hon. member]

On division.

[The Chair, Conservative, Blaine Calkins]

(Clauses 10 and 11 agreed to on division)

(On clause 12--Directors)

Moving to clause 12, it has a proposed amendment by the New Democratic Party. I have a ruling on this one. This goes back to an earlier decision that was taken by the committee: if clause 3 is adopted, which it was, the New Democratic Party's amendment 4 cannot be put as it would make the bill inconsistent with an earlier decision that was taken. I will have to rule that particular proposed amendment out of order according to our rules.

Therefore, there are no other amendments proposed for clause 12, so I will....

Mr. Easter, would you like to speak to it?

[Wayne Easter, Liberal, Malpeque, PE]

I have a question on that, Mr. Chair. It really does relate to the directors, and you may or may not allow this question, but for the directors who are to be appointed by the government, what are the conflict of interest rules surrounding these?

Are they allowed to hold shares in grain companies? Just what are the criteria on which a director can be appointed? There are all kinds of protections for these directors in this act—that they cannot be sued, etc., etc.—but we would certainly like to ensure that when they are appointed, they're actually there to do the job of the Canadian Wheat Board in the best interests of the farm community, not in their personal interests.

If we go back a while, one of the directors who currently sits on the Canadian Wheat Board as an appointed director was rejected by the agriculture committee by motion but is still there. So we would worry about the conflict of interest that these directors may or may not have.

[Greg Meredith]

The new purpose of the corporation, once the bill has passed, is to work in the interests of producers who choose to use the corporation. There are currently in the act no clauses that deal with conflict of interest, so the directors who are appointed will be working on behalf of the producers who choose to use the board.

[Wayne Easter, Liberal, Malpeque, PE]

If I might say so, Mr. Chair, that is extremely worrisome because, as Mr. Martin pointed out earlier, there is a lot of concern about how rapidly this is going through, and this is one of the key points. There's a fear among those--the 62%--who support the current single-desk selling that the new board may operate very differently. It may operate in the self-interests of a few individuals or a few grain companies. How is the government going to protect against that?

I was in Winnipeg last Friday, and what we're really seeing here, with this bill, is an expropriation of farm assets by the government. There has to be some way, for heaven's sake, to protect against a conflict of interest for somebody who may be working for Viterra or Archer Daniels Midland or Cargill in regard to basically using this corporation for either their self-interest or another company's self-interest. We're talking about the grain trade here.

[Greg Meredith]

If I could just go back to an earlier part of your first question, Mr. Chair, the liability clauses that the member refers to are standard clauses for most corporate entities. They just limit personal liability as long as the director is working with prudence and due diligence, and that requirement is captured in the new bill, in the interim act, in clause 16, which burdens directors with a duty of care, including acting “honestly and in good faith” to exercise the “care, diligence and skill” of a reasonably prudent person in the conduct of the corporation's affairs, which, again, binds the directors to a level of care and prudence that is typical of corporate—

[Wayne Easter, Liberal, Malpeque, PE]

I have one last question on this point, then. If that is the case, and the directors can't be sued—they're protected under the act—and they do not act in the duty of care--and I would question whether some of the current appointed directors are--then what recourse does the farm community have? If a member doesn't operate with the duty of care, yet he's protected against being sued and the minister, for whatever reason, has appointed a friend and won't fire him, what's the recourse that farmers have against this agency?

[Greg Meredith]

Just to add a small clarification, the act doesn't say that directors cannot be sued. It says they cannot be held liable if they are acting with the due diligence and prudence required by the act in the interests of the corporation and the producers who choose to use the corporation.

I will ask counsel to elaborate on that.

[Ryan Rempel]

Yes, under proposed section 16 of the interim operations act, the directors owe their duty of loyalty to the corporation and have to act in the “best interests of the Corporation”. While the act does not have complex procedures for dealing with a conflict of interest, it's true that under proposed section 16 the directors do have a duty to act only in the corporation's interest. They cannot act in a different conflicting interest. So the duty exists; the complex procedures to deal with that duty are not present in the bill.

[The Chair, Conservative, Blaine Calkins]

Thank you, Mr. Rempel.

Thank you, Mr. Easter. The Liberal time on this section has expired.

Mr. Martin, you expressed an interest in addressing this.

[Pat Martin, NDP, Winnipeg Centre, MB]

Yes, only to explore the content of that clause and to understand better how in fact our amendment is out of order. Nothing in our suggestion, I believe, contradicts what was passed on division in clause 3. In other words, we argue that every person holding office as an elected director immediately before the day on which this part comes into force and effect should continue to be a director.

Your clause 3 talks about the government appointing four other directors. We had other amendments that would have challenged the idea that the government should appoint the new directors. But I don't see anywhere where it's contradictory to have the current democratically elected directors maintain their position when the new bill comes into effect.

[The Chair, Conservative, Blaine Calkins]

Mr. Martin, I will explain the rationale as it's been explained to me by the legislative clerk.

Because an earlier decision has been taken on a previous clause, if we do change clause 12 as it's being proposed, your amendment changes the part when it comes into force. If we go back to clause 2, it will effectively make clause 2 ineffective because it would come into force, if I understand it that way.

If you would like to seek a more clear answer from the legislative clerk, I would be happy to give him the floor.

[Pat Martin, NDP, Winnipeg Centre, MB]

I have a feeling that if I challenge the ruling it wouldn't succeed anyway, so let's move on.

[The Chair, Conservative, Blaine Calkins]

Thank you.

Is there any other debate on clause 12? Shall clause 12 carry?

[An hon. member]

On division.

[The Chair, Conservative, Blaine Calkins]

(Clause 12 agreed to on division)

Moving on to clause 13, I see no amendments.

Shall clause 13 carry?

[An hon. member]

On division.

[The Chair, Conservative, Blaine Calkins]

(Clause 13 agreed to on division)

Ladies and gentlemen--

Mr. Easter?

[Wayne Easter, Liberal, Malpeque, PE]

Would you read the first words of clause 13? You're going so fast we can't keep up here. That's what happened on clause 2 and the five directors. There's no need to steamroll it through. You have until 11:59 tonight.

[The Chair, Conservative, Blaine Calkins]

You would like me to read clause 13 of the bill...?

[Wayne Easter, Liberal, Malpeque, PE]

Does it start, “In respect of the pool...”?

[The Chair, Conservative, Blaine Calkins]

That would be subclause 13(1) in the bill, “In respect of the pool...”.

[Wayne Easter, Liberal, Malpeque, PE]

Okay, it's passed. That's fine.