Industry Committee on March 7th, 2017

[The Chair, Liberal, Dan Ruimy]

Seeing no further debate—

Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Just really quickly, what we're talking about here, just so people are clear, is the minister having the authority, if they don't meet the quotas, to actually do nothing, or if they want, to fine a penalty of a dollar. There is nothing in here that would make a small corporation, under comply or explain, or under this model.... They still have the opportunity to appeal to the minister about that, so it's at the statement level. This is five years from now, too, so it's over five years there will be a chance to do that. Many not-for-profit boards already meet these requirements. In fact, they sometimes exceed it.

That's all we're talking about here, a potential element for the minister to have a little bit of influence and use his discretion about that influence to improve the gender element, and it works both ways. Just so you know, the legislation works 70:30 both ways for male and female.

We had some very good work from the legislative branch to help us make sure we weren't interfering with other things, so this cuts both ways, and I think that's reasonable. Again, it doesn't fine everybody outright for doing that. What this does is give the minister some powers if he has an egregious situation, which I don't think they want to go through, but it will create awareness.

Thank you, Mr. Chair.

[The Chair, Liberal, Dan Ruimy]

Thank you.

Mr. Albas.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you, Mr. Chair.

I have a question for Mr. Schaan. Again, I wasn't here for the actual study of the bill so I want to take what Mr. Masse's saying and weigh it appropriately.

In regard to the bill, the application is for Canadian corporations. As you said, they may be large or small. Does this apply to provincially regulated? This would only be for those that apply for that designation.

[Mark Schaan]

The distinction is that, in Bill C-25 as it's currently set up, distributing corporations, those trading shares to the public, would be required to disclose prescribed information related to gender and diversity to their shareholders on an annual basis. The act does not apply to non-distributing corporations.

The distinction here would be that this would apply to all CBCA corporations, distributing and non-distributing, as opposed to prescribed information through the regulations, and would require a direct submission to the minister with respect to the gender makeup of 70:30.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Does the act currently have provisions, as Mr. Masse says, where current corporations have to appeal to the minister for some variance? Is there anything in the act right now that is similar that we can juxtapose?

One of the things you always worry about is that this is a big country. If there is a case where an individual corporation has a situation to apply to a minister for remediation of that situation, it may be difficult depending on how established the criteria is and how responsive the minister of the day is.

[Mark Schaan]

Currently in the act, the exemptions by and large for particular sets of the legislative requirements are to the director of Corporations Canada, and they are via a form. For instance, when we get to the notice and access provisions, right now there's an exemption for notice and access for corporations to be able to exempt themselves, but they do it through the director of Corporations Canada. I'm not aware of a provision right now that allows people to appeal directly to the minister for failure to comply.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Could I ask Mr. Masse a question?

[The Chair, Liberal, Dan Ruimy]

Go ahead.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

With this, you're specifically requesting that this would go to the minister and not to the....

I wanted to see because it does seem to be an established mechanism, for dealing with paperwork and whatnot, that they don't appeal to a minister of the crown versus a department. Is there a specific reason in your motion why you chose to go that route?

[Brian Masse, NDP, Windsor West, ON]

It's a levy of fines, and then, second, in our proposed subsection 102.1(2), “A corporation that, without reasonable cause, fails to comply with subsection (1) is guilty of an offence”. It's without reasonable cause, so we've built exemptions in there.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

If someone is facing fines and there's a reason, they're forced to go to the minister rather than being dealt with by what some might say is non-political, non-partisan staff. I'm just asking the question of why you chose the minister.

[Brian Masse, NDP, Windsor West, ON]

I believe that the minister in this situation.... There needs to be some government oversight from Parliament and again, it's about gender inclusion. I think a statement is—

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

You can hold the minister to account.

[Brian Masse, NDP, Windsor West, ON]

Yes.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Okay. That's fair.

Thank you.

[The Chair, Liberal, Dan Ruimy]

Thank you.

Seeing no further debate, shall NDP-9 be adopted?

(Amendment negatived [See Minutes of Proceedings])

(Clause 12 agreed to)

(On clause 13)

We'll move to clause 13 and NDP-10.

Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

This is out of the scope, I believe.

[The Chair, Liberal, Dan Ruimy]

Yes, it is.

[Brian Masse, NDP, Windsor West, ON]

It's a separate vote for shareholders, so I'm going to quickly make a point with regard to making sure there's no intimidation and there's proper due diligence. I'll leave it at that.

[The Chair, Liberal, Dan Ruimy]

Okay.

You are correct. It's inadmissible as the amendment goes beyond the scope of the bill.

We're going to move to Liberal-1.

Mr. Sheehan.

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

Thank you.

Clause 13 sets out the requirements for majority voting in uncontested elections. This clause, as it is written, can apply to the person who is nominated as a director to be excluded from the appointment. The amendment makes it clear that only a person who is nominated as a director in an uncontested election, but fails to be elected due to a lack of majority support, is prohibited from the appointment, except in the prescribed circumstances.

I can continue, but it's pretty much housekeeping.

[The Chair, Liberal, Dan Ruimy]

Is there any debate?

(Amendment agreed to [See Minutes of Proceedings])

Mr. Masse, we now have NDP-11.

[Brian Masse, NDP, Windsor West, ON]

This is consistent with some of the advocacy we received regarding turnovers of boards and basically piercing the establishment of some of the long-standing boards that haven't had a changeover or haven't had a thorough review about how to include gender, diversity, and all of those things. We're suggesting that no director shall hold office for more than six consecutive years. The important thing is the “consecutive years”, so it doesn't mean that a director on a board can't come back. They usually have two-year terms, so we're looking at three general cycles of two years. Then, if they do want to come back, that is a possibility in the organization for the board.

One of the things we've heard a great deal of testimony about is the lack of opportunities. You have people from either established families or established connections who end up being on the board. Nepotism, quite frankly, is even part of the board culture, whereas there are supposedly many opportunities for those outside of the traditional realm. We saw that laid out in the evidence from Montreal, for example, that was put in front of us. I believe that racial minorities made up something like 1% or 2% of boards in Montreal. I also come at this from the point of persons with disabilities, who have a hard time. When you look at persons with disabilities in general, there is a 50% unemployment rate among those who are looking for jobs. That's not counting all the people who have missed out on those regular jobs, let alone those who are trying to get into boards and so forth. The turnover aspect here will bring some awareness. It will also provide a more open democratic board selection process and voting for shareholders that will provide an opportunity for other people to get into the system.

I'll leave it at that.

I think once again we're looking at a culture that needs to be broken. This is one of the ways in which you can do so that is not egregious. It also provides opportunity and lessens the excuse necessary on comply or explain. With comply or explain, one of the various things you can probably do is to go to the minister and say that these are existing board members who have stayed on continually and there has been no opportunity for renewal or change.

This will actually provide that window so the minister under comply or explain can say, “Well, listen, you actually had a turnover of four, five, or six spots, whatever it might be, in the last year. Why are you coming out with the same type of people with no improvement of gender or diversity?” That provides an opportunity for there to be some more analysis. Again, I believe a political statement is necessary, as part of this bill, in good bound principles. This is one of those ones that could provide an opportunity without it being egregious.

To conclude I will say again that it doesn't bar a person from ever being part of that board again. It just provides a pause for the board members and the people to think about their terms.

[The Chair, Liberal, Dan Ruimy]

Thank you.

This amendment is up for debate.

We have Mr. Arya followed by Mr. Longfield.