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.
4 p.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Thank you, Mr. Chair.
Someone starting a small or medium-sized business often has a good idea, is hardworking, but may not be a corporate lawyer. It seems to me the act is very complex, very detailed, and technical.
What kind of service do you provide in terms of making the act accessible or understandable for the average person?
4:05 p.m.
Director, Compliance and Policy Branch, Corporations Canada, Department of Industry
We have a number of support materials. One of our most used support materials is the Guide to Federal Incorporation to Help Small Businesses Incorporate Federally. We have that online and we have it on paper. A Google search for “incorporation” or “incorporate” comes right after the Wikipedia entry, so it's a very high-demand guide. It was written to be very user-friendly, with samples of articles on how to incorporate and on share structures.
We also have our 1-800 number, which is available until 8 p.m. eastern time, which could provide assistance to small businesses.
4:05 p.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Could you say what the 1-800 number is, in case someone is Googling and comes across the testimony here? It would be good for them to find this.
4:05 p.m.
Director, Compliance and Policy Branch, Corporations Canada, Department of Industry
It is 1-866, actually.
4:05 p.m.
Manager, Policy Section, Corporations Canada, Department of Industry
It is 1-866-333-5556.
4:05 p.m.
Director, Compliance and Policy Branch, Corporations Canada, Department of Industry
They can get a certificate of incorporation within hours on our online filing. They can choose it as an option. If they want a very simple share structure, we have one provided for them. They can just click that. And if they want a numbered name they can click that and get it almost automatically.
We continuously strive to make our forms and our online transactions user-friendly and we keep revisiting our guide to make sure it responds to the needs of small businesses, because we recognize they have other things to do than meeting regulatory requirements.
4:05 p.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
I want to follow up on that, because it's one of the things we have worked on as a government. Diane Ablonczy, the Minister of State for Small Business, worked very hard on reducing the paperwork burden. You talked about the online filing. I am just wondering if you could speak to how important that is to reducing that paperwork burden on businesses. What is the difference for a company filing online versus the old way of filing?
4:05 p.m.
Director, Compliance and Policy Branch, Corporations Canada, Department of Industry
With online filing they are still required to give us the same information, but you could give them more assistance--for instance, a predefined share structure so they don't have to do all that work. If they did it on paper they would be incorporated within five days, whereas online they could do it within 24 hours, or a few hours if it's a very simple incorporation. It has reduced the regulatory burden tremendously.
4:05 p.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Just thinking about the references to international rankings in your presentation, it sounds to a large extent as if our legislation serves as a model internationally. What is it about our legislation that causes us to rank so highly?
4:05 p.m.
Director, Compliance and Policy Branch, Corporations Canada, Department of Industry
Where we rank very highly on the World Bank's ease of doing business index is for starting up. What they've measured is how long it actually takes to incorporate and get your necessary account. Because you could incorporate very quickly, within a day—and we also are in partnership with the Canada Revenue Agency to provide a business number to corporations—that's considered a step in the World Bank ranking. They've calculated that the time to actually get all that done is two days, and two days put us as number two in the whole process.
4:05 p.m.
Conservative
4:05 p.m.
Director, Compliance and Policy Branch, Corporations Canada, Department of Industry
Yes. They actually measure how many steps you have to take and how long it takes. Some jurisdictions take months, for instance, to incorporate, so we look very good compared to them.
4:05 p.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
When I look at the ranking for ease of doing business, eighth is a pretty good ranking, but there are still seven countries ahead. I always like to be number one when we can. What is it that the others might be doing better that we could learn from them to get up to number one?
4:05 p.m.
Director, Compliance and Policy Branch, Corporations Canada, Department of Industry
It goes actually beyond the CBCA. One of them is access to financing, trade, and contracts, in terms of contract negotiations that have contract enforcement. So there are other things that are really outside of the CBCA.
4:05 p.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Okay.
It's interesting, you spoke a little bit about a sort of technological aspect, in terms of your presentation and the strength in our system. You talked about holding meetings electronically for organizations. What does that look like?
4:10 p.m.
Manager, Policy Section, Corporations Canada, Department of Industry
We've never participated in one.
The basic framework behind CBCA says it's self-enforcing. That means we put a framework in place. A lot of the rules the corporations deal with themselves. We're not enforcing them; it's really to facilitate them to communicate.
For meetings, you can put everybody in a room; you can put half the people in the room and half the people on a conference call, or on some kind of video conferencing over the computer; you can put everybody into conferencing over the computer. It's left to the corporations to figure out what works for them.
Since we have no involvement with them—unless one of us happens to be on the board or a member of the corporation—we've never participated. What we know is solely out of the newspapers.
4:10 p.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Prior to 2001 they weren't allowed to participate in that way, or set up meetings in that way?
4:10 p.m.
Manager, Policy Section, Corporations Canada, Department of Industry
No. The concept in the late 1990s of collection of proxies by telephone came in. The technology suddenly hit about 1997, 1998, and CBCA companies weren't allowed to do it because the act itself prevented it.
One of the things we changed was the rules. You're looking at the principle. What do you want? You want people to be able to participate. Does it really matter if they're in a room together, on a computer, on a conference call, or in a chat room, those kinds of things? What we did with the 2001 amendments is make it clear that if you're going to participate in a meeting, you have to be able to hear everybody else and participate meaningfully. But the act is not going to tell you how that happens. We went very generic: we simply said that as long as you meet the principles, it's up to you to determine how you want to run the meeting, whether it's one person electronically, ten people, or everybody.
4:10 p.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
I have just a last question regarding witnesses. You've named a couple, I think the Canadian Bar Association and the Canadian Coalition for Good Governance. Are there any other witnesses who should be on our radar in terms of this study, people who are experts in the technical aspects of this law?
4:10 p.m.
Senior Project Leader, Corporate and Insolvency Law Policy and Internal Trade Directorate, Department of Industry
The other one that comes to mind is SHARE from Vancouver, the Shareholder Association for Research and Education. They were very involved in the 2001 amendments. They helped us immensely with framing some of the shareholder communications proposals and how they would operate. They're responsible with a lot of venture capital and union capital or ventures. We have a very good relationship with them, and I know they would be very interested in appearing before the committee to make representations.
November 4th, 2009 / 4:10 p.m.
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
Thank you, Mr. Chair. I have to ask you a quick question first, being new here and filling in today. Is this my only chance?
4:10 p.m.
Conservative
The Chair Conservative Michael Chong
It may be. We only have about 45 to 50 minutes left, because we have votes. The bells will ring at 5:15 today.
Go ahead, Mr. Marston.
4:10 p.m.
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
I happen to be the pension critic for our party. There are some things that have surfaced of late because of the downturn—5,000-plus companies going bankrupt, and those things.
Recently we had some changes to the BIA, under the wage earner protection program. How does that relate to pension severance, how they are ranked or prioritized during bankruptcy proceedings? That would be one question.
Second, in the event a company goes into bankruptcy proceedings, the pensions of the employees are called special payments, I understand. Now, from our perspective we're talking about deferred wages, and we'd like to see a philosophical change to that. I'd like you to comment on whether you see these special payments—that designation—as being acceptable or even just. I'll leave you the chance to absorb those a bit.