Industry Committee on Feb. 21st, 2017

[Claire Woodside]

One of the things to remember is that if Canada wants to go to the Financial Action Task Force and other international bodies and say, “We have eliminated bearer shares”, it cannot do that with the text of the current bill. That's something to keep in mind, because the text of the current bill does nothing to impact the existing bearer shares that are floating out there in the ether. If you're a criminal and you're holding a bearer share, you can still exercise the rights associated with those shares.

The amendments that Mora has helped Publish What You Pay Canada draft will ensure that if you're a criminal holding those shares, before you exercise those shares, you have to register them. It's simple. It's one further step to ensure that Canada can say it has taken every measure possible to eliminate bearer shares.

[Brian Masse, NDP, Windsor West, ON]

Would doing that bring us closer to our G20 partners? That's not an extra step that puts Canada as an outlier, but it actually stops us from potentially becoming “snow washers” and is more appropriate, I guess, to our international agreements.

[The Chair, Liberal, Dan Ruimy]

We're out of time. Very briefly, please.

[Claire Woodside]

Canada is one of the last, or the last, G7 country to eliminate bearer shares.

[The Chair, Liberal, Dan Ruimy]

Thank you.

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

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Mr. Chair, and I'll be sharing my time with Mr. Sheehan.

Thanks for great presentations this morning from both groups.

I want to dive in a little further on what Mr. Dreeshen was leading towards, and that is the success rate of other jurisdictions—this is for Ms. Woodside—on distributing versus non-distributing transparency on targeting money laundering and tax evasion schemes. In other jurisdictions, like the EU, where there are 27 member countries that are more transparent now because of the legislation that they've put forward, you said that it's a little early to see success. Is there something they have been able to show so far, or is there something they're leading towards trying to show?

[Claire Woodside]

Yes. I think it's not too early to know that being able to share beneficial ownership across jurisdictions among law enforcement agencies is critical to detecting money laundering, terrorist financing, and cracking down on tax evasion. The evidence of that is very clear within many international studies that have looked at this. Even recently a study showed that the tax gap in Canada is up to $50 billion. We know the amount of money and crime at stake is huge.

One of the things a public register does is narrow the field. It's a corruption prevention tactic. Obviously you're less likely to want to register publicly if you're a criminal, so you're closing the door to criminals. That's one of the steps.

The impacts at this point are hard to measure, simply put, because the public information in the U.K. has only been available for six months. But the knowledge that having a central registry of beneficial owners is very clear internationally. It's been identified repeatedly as one of the key elements that states must take to ensure that we're able to take effective action in those cases of tax evasion, money laundering, etc.

[Mora Johnson]

I'll add a quick point. One of the challenges with a complete opacity of privately held companies is that it's very difficult for law enforcement to detect suspicious transactions. For example, if it's just routine for numbered companies to buy mansions in Vancouver, and hundreds and thousands of people do it this way, it's very difficult for law enforcement to know which are nefarious and which are just regular transactions. As Claire says, when you create a more transparent business culture, which is ultimately what we're doing, it's much easier for law enforcement to see the outlier, the problem, and the suspicious transactions, and to investigate them.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you. That will help us a lot in our report.

Ms. Beckton, I've been involved as a recruiter for boards. When I was a president of a chamber of commerce they'd ask who I knew. It was always word of mouth, and it was always who your network was. Is there a more formalized system that Canada has, or could have, that could help us to find women who want to be on boards who are on the sidelines right now?

[Clare Beckton]

Yes. We certainly recommend that if you really want to move toward getting more women on boards, you look to the organizations such as the Canadian Board Diversity Council, Catalyst, and other organizations that are creating and have created lists of pre-qualified women ready to serve on boards, as well as to seek recruiters and give them specific instructions that they need to find qualified women candidates who need to be presented.

I dare say that the old boys' network of who you know creates the same results. I think it's very dangerous for corporations, because they're getting the risk of same think, instead of bringing in a wide range of diversity.

[Lloyd Longfield, Liberal, Guelph, ON]

That's a point the minister was making. We were trying to get diversity of thought through this legislation.

[Clare Beckton]

I also think it's important. If you look at other countries, Canada has fallen behind in its equality leadership. We used to be fairly high. Also, women on boards has fallen behind. The countries that have been successful have identified increasing women on boards as a key issue, and not simply lumping it into diversity.

[Lloyd Longfield, Liberal, Guelph, ON]

We do have some tools to help companies find women then.

[Clare Beckton]

There are lots of tools out there. They just have to use them.

[Lloyd Longfield, Liberal, Guelph, ON]

Or know they exist....

[Clare Beckton]

If you want to bury your head in the sand, you can, but the Canadian Board Diversity Council and Catalyst are well-known organizations. Knightsbridge does a lot of work around women. The headhunter firms know very well, and should know, if they are given specific directions on what to do.

[Lloyd Longfield, Liberal, Guelph, ON]

Mr. Sheehan.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you very much.

Thank you all for the presentation.

I had the honour of being on the pay equity committee earlier, and we landed that plane just recently. During those presentations we always heard about the inequity between the pay to women and to their male counterparts. But then when we delved into it and went into newcomers, it was worse. Then when we went to the indigenous community, it was the worst. It's always a concern for me, being from Sault Ste. Marie in northern Ontario with a wife and a daughter who are Métis.

Drilling down on what Lloyd was saying, how can we encourage those particular two groups, the newcomers and indigenous women, to be more involved in the boards, and how do we find them and encourage them?

[Clare Beckton]

I think those are really important questions. There are organizations, whether it's immigrant organizations or indigenous organizations, that can help. I know that Roberta Jamieson, for example, has certainly presented names to the Canadian Board Diversity Council in terms of coming up with people who may very well be qualified to sit on these kinds of boards.

I think it's understanding those communities and how you get the information. You may not use the same information sources that you would use for other communities, so it is that awareness.

When I was increasing diversity in my organization with the federal government, I told my people to go out to different sources. Look for the leading immigrant women, for example, who are in business. Where are they? Who would likely be very good or very qualified to sit on boards?

It's the same in the indigenous.... There are a number of indigenous women now who are running businesses and who may very well be positive candidates for sitting on other boards.

[The Chair, Liberal, Dan Ruimy]

Thank you.

Mr. Nuttall, you have five minutes.

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

Thank you, Mr. Chair.

I will focus on you, Clare. You mentioned a couple of things that resonated with me. I'm from a financial services background, from the banking sector. Now that I think about it, half of my bosses have been male and half have been female. It's not something I've thought about before. Certainly they are well ahead of the field.

There's one thing I've been very frustrated about here, coming from the private sector, and my colleagues are probably tired of hearing this. When you get here, targets are like these things that don't exist. Where I come from, you set a target, you work to plan, and you either succeed or you don't succeed. I've heard you talk about targets as well, not hard targets, because I don't believe in that—I think that's a “pie in the sky” plan—but certainly being able to measure your success.

For my colleagues across the aisle, could you give them an idea of what timeline and targets you'd like to see? I think we're at 13% right now in terms of the participation of women on boards.

[Clare Beckton]

I think it depends on who you're looking at. If you're looking at the Financial Post 500, you'll see it's around 20-point-something per cent. It will vary across the various sectors.

I think your target range needs to be in the 30% to 40%...and within the next five to 10 years. It can be done very quickly if you start requiring the boards to turn over more quickly, for example, by having board terms for many boards that simply don't have terms at the present time. As I said before, this is leading practice.

I think you need a minimum of 30% as your target, because you will not change the dynamic on a board without at least 30% women. The ideal is somewhere between 40% and 60% in the long run, but you're not going to have a target of 50% or 60% necessarily. You certainly need to go to 30% to 40%.

I would say you need to expedite it because it's been going very slowly despite the business case. The business case is crystal clear. There are so many organizations like McKinsey, Credit Suisse, Goldman Sachs that have pointed out the business case. It's really good business also to add women to your boards.

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

Certainly, and I think we're going to see some things coming down the line

Although I look much older, I'm a millennial. My generation doesn't really see those physical features as a thing one way or the other. As the next generation comes down the road, there's going to be a move by it as well.

You're saying five years, 30%, and 10 years, 40%, essentially, within those parameters.

[Clare Beckton]

Those are really good targets.

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

Okay. Were you discouraged that there were no targets associated with the marketing of this bill?