Evidence of meeting #42 for Industry, Science and Technology in the 40th Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cbca.
A recording is available from Parliament.
Liberal
Anthony Rota Liberal Nipissing—Timiskaming, ON
Will you be contacting stakeholders? Will you be open to the public?
Director General, Marketplace Framework Policy Branch, Department of Industry
We don't have plans to actively contact stakeholders. We're assuming that stakeholders will be interested in appearing before the committee. We're certainly happy to suggest names of stakeholders that we think might have comments to make.
Liberal
Siobhan Coady Liberal St. John's South—Mount Pearl, NL
More specifically, have you received any interventions on this bill since 2001? I know you haven't done the outreach, but has anyone come to you asking for changes to this bill that you're aware of at this point?
November 4th, 2009 / 3:50 p.m.
Director General, Marketplace Framework Policy Branch, Department of Industry
We've had some specific suggestions of areas. We've also been sort of perceiving in the media some discussions about corporate governance that have been going on. If that's the kind of thing you're interested in hearing about, I can tell you what some of those issues were.
Liberal
Siobhan Coady Liberal St. John's South—Mount Pearl, NL
Yes, and whether they're technical changes or substantive.
Director General, Marketplace Framework Policy Branch, Department of Industry
Some of the suggestions we've heard about from stakeholders--and none of the ones on my list that I'm about to give you are particularly technical--concern executive compensation, for example: what are the possibilities in terms of limiting or restricting compensation or making the details of executive compensation packages more transparent? Also, we think that stakeholders may want to raise the issue of shareholder approval of executive pay packages. So there is the whole issue of shareholders' say on pay. That's one.
The other one concerns the rules governing the election of directors, specifically the rules around when and how shareholders can nominate, elect, and remove individual directors, as opposed to the common practice in Canada now, which is to elect by slates of directors.
Another issue would be the removal, as I mentioned earlier, of the securities transfer provisions of the act and whether that shouldn't just be left to the provinces to deal with, as they deal with it now.
A final one that we've heard about is whether shareholders should be given the ability or stronger tools to approve major acquisitions of other firms, for example, or mergers, particularly where new shares are issued and the value of their shares is diluted or affected as a result.
Those are the significant issues we've heard about.
Do you have anything else to add to that?
Coleen Kirby Manager, Policy Section, Corporations Canada, Department of Industry
I think the only thing to add is there are a fair number of technical issues. Usually, as soon as the bill gets out there, you'll get a phone call from a lawyer saying what does this mean, or you have an extra word there, or should this comma be moved, or the English and French aren't matching. We always have a fairly long list of technical issues whenever the bill gets opened. There's a ton of them.
Conservative
The Chair Conservative Michael Chong
Thank you, Madame Downie and Madame Kirby.
Mr. Bouchard, you have the floor.
Bloc
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Thank you, Mr. Chair.
Thank you for being here this afternoon.
As you may know, Quebec enforces the Charter of the French Language. Furthermore, Parliament has recognized the Quebec nation. And one of the shared values of the Quebec nation is the French language. Just recently, the NDP put forward a motion having to do with the precedence that Quebec gives the French language in the case of immigrants to Canada.
Did your analysis take into account the province in which companies set up when registering or incorporating under the Canada Business Corporations Act, specifically, whether it is Quebec or elsewhere in Canada?
Director, Compliance and Policy Branch, Corporations Canada, Department of Industry
The only thing we collect from them is where they're going to locate their province of registered office. We don't ask them where they're going to conduct their activities.
Bloc
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
So, only the head office is taken into account.
Would it be possible for officials or anyone who reviews applications to tell companies whose operations and head office are solely in Quebec that they have an obligation to respect the Charter of the French Language, which is a Quebec law?
Director General, Marketplace Framework Policy Branch, Department of Industry
My understanding is that there are no restrictions in the legislation to that effect currently. That would require changes to the Canada Business Corporations Act. Currently there are no legal restrictions in the act around where a business can operate. That's left to businesses to decide.
Bloc
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
If I understand you correctly, the act does not impose any restrictions. So it does not happen when officials evaluate applications of companies wanting to register under the Canada Business Corporations Act. Is that right?
Director General, Marketplace Framework Policy Branch, Department of Industry
I do not think the act permits it.
If it were to be done, it would require amendments to the legislation to permit it. But it is currently not done. You're correct.
Bloc
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
If I understand what you are saying correctly, a company operating in Quebec, outside Quebec and in Canada wanting to incorporate under the Canada Business Corporations Act would be able to do so in English only.
Are there any questions asked about that? Do officials in any way suggest or indicate that companies cannot do that because they are in Quebec, which has the Charter of the French Language? Are companies asked about that at all?
Director, Compliance and Policy Branch, Corporations Canada, Department of Industry
No, there isn't. However, if they do operate in Quebec, they have to comply with Quebec legislation, including the language charter. If they operate in any of the provinces they do have to register in the province. And Quebec also has specific registration requirements, one of them being that they would have to have a French name. If they are operating in Quebec, they would have to comply with the laws of Quebec.
Bloc
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
You know that banks that incorporate under the Canadian legislation are not required to respect the Charter of the French Language. Unless I am mistaken, the act would have to include a provision requiring a corporation whose head office is in Quebec to respect the Charter of the French Language in Quebec. That is how I understand it. Am I right?
Director, Compliance and Policy Branch, Corporations Canada, Department of Industry
My understanding is that any CBCA corporation who is operating in Quebec would have to respect Quebec legislation, including the language charter.
Bloc
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
That is the case for corporations registered in Quebec. But I do not think that is the case for corporations registered under the Canada Business Corporations Act.
The fact of the matter is that banks are not required to respect the Charter of the French Language. That is the reality. But, could we compel a corporation that has just registered under the Canadian law to respect the Charter of the French Language? That is not done. I do not know the law; you are more familiar with it than I am. Is there a provision in the act that could compel a corporation registering under the Canadian law to respect the charter?
Director General, Marketplace Framework Policy Branch, Department of Industry
I think it would be very difficult, because I would question whether it would be constitutional for the federal government to introduce an amendment to effectively enforce a provincial law.
Bloc
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
I think we have covered the topic, and we have the answer: it does not currently apply.
The purpose of my question was to make you aware of the fact that public institutions such as Parliament have recognized the Quebec nation. A motion was moved recently. And Quebec has the Charter of the French Language.
When companies incorporate under the Canadian legislation, they do not respect that reality when they come to Quebec.
Conservative
The Chair Conservative Michael Chong
Mr. Bouchard, there will be another round. You can ask more questions then, if you wish.