Industry Committee on Feb. 7th, 2017

[Brian Masse, NDP, Windsor West, ON]

Thank you. Do I have any time left?

[The Chair, Liberal, Dan Ruimy]

No. It's two seconds.

[Brian Masse, NDP, Windsor West, ON]

Thank you. We are clear on what's happening.

Thank you, Mr. Chair.

[The Chair, Liberal, Dan Ruimy]

We're going to move to Mr. Longfield. You have seven minutes.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Mr. Chair, and thanks to the members opposite for the questions.

I want to build on a few of the themes, one of them being the regulatory burden. You've talked about reporting electronically. I know that the business community, through the chambers of commerce and others, has highlighted the regulatory burden as one of the things that make Canada uncompetitive internationally. Are there ways, other than electronic filing, that you could see an impact on business in terms of the regulatory burden?

[Mark Schaan]

The changes called for here today do take a look at the ease of doing business within the corporate statute and try to facilitate an appropriate mechanism by which corporations can go about their business and govern themselves accordingly.

There are a couple of zones here where.... For instance, on notice and access, currently there is an exemption requirement that corporations have to request the permission of the director of Corporations Canada to pursue notice and access. This will now be the standard and minimize the administrative burden of having to annually ask whether or not it's okay to use a website to share their corporate information. They will now be able to pursue all of that electronically, which also has a benefit to shareholders in terms of allowing them to more easily propose measures to their boards without having to overcome the administrative burden that the corporation sometimes indicates is a challenge to those proposals.

In terms of the filing requirements to the director of Corporations Canada, we have added the diversity requirement, but in most other cases this is all easily filed through the securities commission for distributing corporations. It's one form, essentially, that allows them to meet all their requirements, both under our act and under the securities commission's rules.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

Are there other long-term outcomes that you're anticipating? You've talked about harmonization or at least some type of connection with provinces and territories to look at best practices internationally and whether this can help us in terms of global trade competitiveness or trade deals that might be coming in place. What long-term outcomes did you see that would have triggered this back in 2014 and carried it forward into our government?

[Mitch Davies]

I'll just take the opportunity of your earlier question and build on what you've asked.

Mr. Chair, I think the bill doesn't address this specifically, but another matter that's under consideration is arrangements on internal trade in order to make it easier to do business across the country. One of the areas that has been identified by the business community as a long-standing issue is multiple registration across jurisdictions. This is an area where we've worked to advance conversation with the provinces that also have jurisdiction to look at how we can streamline this process. Filing paperwork and providing information to multiple levels of government are things that we need to work on and find solutions to, in particular with the opportunity of technology allowing us to do this sort of thing. I think that's one of the trends.

I think the other is a broader trend in the shareholder democracy provisions here. There's a very active debate. I would say that the matters in the bill are those on which there is a solid consensus on bringing them forward, so obviously they are met with support here, and obviously we can see this pass through. However, there's a debate on the different approaches to enhance democracy and the overall objectives of corporations. There's a broader debate about socially beneficial corporations and social responsibility, so there's actually a wide range and a wide, broad debate. I think all of those debates will continue, and we'll continue to participate, and I take the earlier question that we need to also reflect and come back to these laws on a more regular basis to make sure we're keeping them up to date. That's a very well-founded point.

[Lloyd Longfield, Liberal, Guelph, ON]

Exactly.

That leads into my next question about the not-for-profits.

I'm thinking of the chamber of commerce network. Some of them are under provincial jurisdiction and some are under federal jurisdiction. There is quite a lot of discussion within chambers of commerce around the Boards of Trade Act and complying federally versus provincially. Would this take away any of that, or would it take that out of the equation if there was a standard process that groups like chambers of commerce would be able to fall under that would satisfy provincial requirements as well as requirements under the Boards of Trade Act?

[Mitch Davies]

There are no specific provisions in terms of those requirements in this bill. I'll leave it to my colleague if he has anything to add. I'm not fully informed in terms of different options one might look to in terms of trade acts and so forth. That's not addressed in the bill specifically.

[Mark Schaan]

That's right. There are no specific provisions on the Boards of Trade Act in this act.

It is an act that does regulate boards of trade. I would argue there haven't been a lot of incorporations under the Boards of Trade Act for quite some time. Most of them are already in existence. The regulatory burden that's imposed is something that we continue to monitor in terms of the degree to which corporations fall under multiple acts or may wish to avail themselves of different registries.

[Lloyd Longfield, Liberal, Guelph, ON]

I'm chairing the co-op caucus, so I'm very interested in the one member, one vote idea and the provisions that co-ops would be looking at under this act. Are there areas that you weren't able to satisfy for co-ops, or are there areas that you've brought forward that are very favourable for co-ops? Could you talk about co-ops a little bit?

[Mitch Davies]

The non-financial co-op sector falls under the responsibility of the department. We have an active exchange with the sector. If I fully understand, they've been seeking support in terms of co-op financing, and this is something in all business sectors, but in particular the co-op sector. They are looking for support also. Support through the mechanisms we have for the co-op model itself is a sustainable business model, one that actually offers benefits on the social side as well as the commercial side.

All of that is of interest to the department. We put a lot of work into this. I think there's actually a motion before the House in terms of co-ops and support for co-ops, so all this, I think, is a matter we would probably deal with beyond the legislative proceeding, because the co-op sector does not have specific legislative amendments that I'm aware of that they've sought and would like to see us move forward. I think it's more overall support in terms of the model—financing support, and so forth, and more program measures—that they are seeking.

[Lloyd Longfield, Liberal, Guelph, ON]

A lot of what I've seen in the bill are provisions that really reflect the co-op movement in terms of diversity and social responsibility as well.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to move to Mr. Nuttall. You have five minutes.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Thank you, Mr. Chair.

Thank you, gentlemen, for appearing today and for taking the time to present on this bill.

One of the things that has been brought up by me and by a couple of our colleagues across the way is targets. A frustration I have with government, coming from the private sector, is that we come forward with these things that are intended to achieve something, but we never actually determine what it is we're trying to achieve in terms of measurements and a timeline to do so, which is integral to any plan.

I understand this bill was first written or at least conceived for the 2015 budget, and now it has come forward two years later. I guess the question I have is, what is the target for the participation of women on boards of directors and in senior positions? What is it you're trying to achieve over what timeline, so that we can measure the results of these changes against whatever the measurements are?

[Mitch Davies]

Thank you, Chair, for the question.

As far as the bill and the provisions in the bill go, there is no numeric target.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Do you see an issue with that?

[Mitch Davies]

I would say, just to represent the process we went through to get to this enactment of a comply and explain model, that this is where there's more consensus on the usefulness of putting this into a federal statute. I think what has been done by adding to that further is to also extend this beyond gender to diversity in the broad sense. These are both constructive.

As to consideration of targets, this is a very active, rich debate. For some parts of what we would be trying to measure, there is some decent measurement on it. Gender diversity is fairly well measured. For diversity in respect of other dimensions that could well form under this statute, those measures will have to be developed over time to get the right kind of data to be able to track it.

I think it's important that the minister has emphasized, in presenting this bill, the need to see improvement. Obviously you want to see the trends moving in a positive direction. On gender diversity, we know where we are and what improvement would look like. It's definitely north of where we are. He's obviously said that based on the experience under this act, he would decide on whether further measures would be required. I think that's as far as it goes at the moment, as this statute is being brought forward at this point.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Let me be very clear on this. Your measurement is, does it go up?

[Mitch Davies]

The act requires—

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Sorry. This is a yes-or-no question. Is your measurement and your target at this point whether they go up at all?

[Mitch Davies]

The minister has spoken of improvement in diversity, and therefore improvement would definitely mean improvement in representativeness. It's a logical extension of what he said.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

I'm hearing a lot of bureaucratic language. What I would like to hear is, what is the target? You must have internal targets. If we don't have internal targets, that's a real issue. If we have a bill that we're trying to achieve something with, what is it we're trying to achieve? Is it gender parity? Are we trying to increase the number of visible minorities to a certain point? There are all types of different measurements. We're talking about diversity. What is it we're trying to achieve with this bill in terms of real numbers?

[Mark Schaan]

As colleagues around the table have indicated, there's a whole diversity of corporations that are covered by our act, the Canada Business Corporations Act. Distributing corporations come in a whole series of forms.

What this bill does is facilitate a conversation between shareholders and their boards about what diversity looks like for them. Overall, we'll be able to see what progress looks like.

There's a whole host of civil society actors that are active in this space. There are organizations like Catalyst Canada. There are organizations like the Women's Executive Network. There are organizations like the centre on board diversity. All of those organizations have been actively working with the shareholder community to be able to arm them with the right kinds of discussions to be able to put pressure on their organizations to be able to say, “What does good look like for your company and your organization?”

Then at the aggregate level they've made things like the 30% Club or other organizations. I think that conversation is what this bill facilitates. Shareholders and corporations will now have an annual discussion on these issues, and civil society actors will continue to be exerting pressure from the outside as well to be pushing the marker upward.