Industry Committee on June 12th, 2023

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Schaan.

Mr. Lemire, the floor is yours.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

I just have a question about the translation. In the French version, it says “aux fins de signification”.

Is that the right translation for “address for service”?

[The Chair, Liberal, Joël Lightbound]

As far as I know, that’s the case.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

[The Chair, Liberal, Joël Lightbound]

I think it really is the case, Mr. Lemire.

Any further comments?

There are none.

I call the vote on amendment number 12518066, moved by Mr. Perkins.

(Amendment negatived: nays 7; yeas 4. [See Minutes of Proceedings])

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Madam Clerk.

Are there other amendments on clause 4?

There are none.

(Clause 4 agreed to)

(On clause 5)

We have Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

I have an amendment, NDP-3. I move that Bill C-42, in clause 5, be amended by adding after line 9 on page 4, “(2) Subsection 21.4(5) of the Act is replaced by the following: (5) A person who commits an offence under any of subsections (1) to (4) is liable on summary conviction to a fine not exceeding $1,000,000 or to imprisonment for a term not exceeding five years or to both.”

Again, that is consistent with allowing a more responsible penalty, especially as some of our current penalties could even cost the public. The overall framework of this is “up to”. The discretion is there, so it won't get others caught in the situation.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Masse, for moving amendment NDP-3.

Are there any comments or questions on amendment NDP-3?

There are none. In that case, I call the vote.

(Amendment agreed to: yeas 11; nays 0.)

[The Chair, Liberal, Joël Lightbound]

Are there any other amendments on clause 5?

(Clause 5 as amended agreed to)

(Clauses 6 to 14 inclusive agreed to)

(On clause 15)

[The Chair, Liberal, Joël Lightbound]

Are there any other amendments members wish to move on clause 15?

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Yes. I'd like to move CPC-73, which would amend Bill C-42 (a) by adding after line 26 on page 7 the following:

(2.1) The Director may, with the approval of the Minister, enter into an agreement or arrangement with a provincial corporate registry or with a provincial government department or agency that is responsible for corporate law in the province for the purpose of facilitating timely access to beneficial ownership information that could relate to the commission or potential commission of wrongdoing as described in paragraph (3)(b).

In (b), it would add after line 34 on page 7 the following:

(4) In this section and in sections 21.1 to 22, corporation includes a corporation that is incorporated under a Act of the legislature of a province that has entered into an agreement under subsection (2.1).

Of the approximately 4.3 million businesses in Canada, just 400,000 are incorporated federally and subject to CBCA regulations. Businesses incorporated provincially would be included in this public registry. Once an agreement between the province and the federal government is reached, however, they would not be subject to the penalties for non-compliance. This amendment will ensure that provincially incorporated businesses, in agreement to be part of the registry, face the same penalties as those incorporated federally.

Thank you, Mr. Chair.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Vis.

Are there any comments or questions on amendment CPC-73, which was proposed by Mr. Chong and moved here by Mr. Vis?

Mr. Perkins.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

I'm just curious to hear Mr. Schaan's views.

[Mark Schaan]

I'll be honest, Mr. Chair, that our reading of the amendment is not aligned with the description that was just provided in the second portion. On the first portion, yes, this would allow the director to provide information about wrongdoings. That, to our estimation, can already be shared with the relevant provincial authorities for corporate wrongdoings, and that is the provincial police.

The understanding that by sharing this information those provincial entities would constitute themselves as being subject to the penalties of the act would not be our read or understanding of the act.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

It's not what I said.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

I'm sorry. I think he said it exempts them from the penalties of the act. The provincial penalties would exist, not the federal ones, for non-compliance. It's just incorporating whatever is in a provincial registry into the federal registry. That's all it is.

[Mark Schaan]

Perhaps, Mr. Chair, the member could reread the sentence. I understood that they would now be subject to federal penalties. If that's not the case, I'm....

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

I'll just read that back.

I said in my notes here that businesses incorporated provincially would be included in this public registry. However, once an agreement between the province and the federal government is reached, they would not be subject to the penalties for non-compliance. Therefore, this amendment would ensure that provincially incorporated businesses face the same penalties as those incorporated federally.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

They just wouldn't be subject to the non-compliance provisions. That's all.

[The Chair, Liberal, Joël Lightbound]

Thank you.

Mr. Vis.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

If there is an agreement.... When the minister was speaking, we asked how we were going to ensure that the provinces actually participate in this registry. He said, “I wrote them a letter.” I thought, and Mr. Chong, who is watching this thought, thought that's not really enough assurance to ensure the interoperability of this registry moving forward with provincial beneficial ownership registries.

Secondly, we thought a way of ensuring that provincial businesses would be subject to the same penalties for non-compliance would be this clause.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Vis.

Everyone has heard the proposed amendment.

Are there questions or comments on amendment CPC-73?

Mr. Lemire, you have the floor.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

I just want to make sure I’m interpreting this correctly.

If there were a penalty to apply, which regime would take precedence, the provincial or the federal one?

[The Chair, Liberal, Joël Lightbound]

I assume your question is addressed to Mr. Schaan.

Mr. Schaan, you have the floor.

[Mark Schaan]

I thank the member for the question.

From what we know of the effects of this bill, it would make provincially incorporated companies corporations for the purposes of the Canada Business Corporations Act. I have difficulty understanding this, because of the many aspects of the Canada Business Corporations Act that distinguish the federal regime from that of the provinces and territories. If we adopt an approach whereby all companies having entered into an agreement with the Government of Canada are considered corporations for the purposes of sections 21.1 to 22, those companies will be subject to the same requirements as federally incorporated companies, since they will be considered corporations within the meaning of the Act.

I don’t know which penalty would apply, as the regimes differ widely. For example, the maximum fine for the province of Quebec is $25,000, whereas the maximum fine that was passed today, which was originally set at $200,000, is now $1 million. So I don’t understand the second part of the amendment. I’m sorry. This is what it says:

In this section and in sections 21.1 to 22, corporation includes a corporation that is incorporated under an Act of the legislature of a province

It suggests that it is subsuming those corporations for the purposes of sections 21.1 to 22.

They would be subject to the same requirements as federally incorporated companies.