Mr. Speaker, the bill is the first major overhaul of the Canada Business Corporations Act since 1975. It also overhauls the Canada Cooperatives Act and seeks to harmonize the Canada Cooperatives Act with the Canada Business Corporations Act.
Shortly after it was elected in 1993 the Liberal government began a lengthy consultation process on overhauling the Canada Business Corporations Act, a process which has led to the introduction of the bill. The government consulted over 1,700 corporations, corporate associations and corporate law firms but only 41 citizens groups. It appears to have largely ignored the contributions of citizens groups.
Although the consultation process was drawn out over a long period it was not a fair process and the government clearly did not consult as broadly as it should have.
To add insult to injury, after waiting 25 years to overhaul the Canada Business Corporations Act the Liberal government is all of a sudden in a big rush to push the bill through the House as quickly as possible. Why is there such a rush to pass it after 25 years?
After 25 years of overhauling the act we have the Broadbent commission, chaired by Ed Broadbent, whose panel includes representatives from business and labour. The panel is going across the country holding consultations on the issue of corporate responsibility. Those two words, corporate responsibility, probably shock the heck out of the governing party.
The Liberal government is clearly rushing to get the bill passed before the Broadbent commission finishes its work next month. After waiting 25 years the government will rush the bill through within the next 30 days. It wants to avoid addressing the issues the Broadbent commission is dealing with.
The Minister of Industry has assured Mr. Broadbent he will take the commission's findings into account. If that is so, why is the government in such a rush to pass the bill after 25 years?
The minister is taking a similar approach to another bill, Bill S-17, which overhauls the Patent Act. He says there is no time to deal with the problems of the Patent Act which have caused the price of medicine to rise by 87% in the last 10 years. One in ten Canadians cannot afford the prescription medicines they need. There has been an 87% increase in prescription drug costs. This is a serious problem. However the Liberal government does not want to deal with it so it says there is no time.
The real issue is that the Liberal government is putting big corporations ahead of the sick and elderly in Canada who are struggling to pay for their medicine.
It is the same issue here. The government does not want to deal with the findings of the Broadbent commission. The Broadbent commission, unlike the government, is talking to ordinary citizens who are concerned about democracy and corporate responsibility. The Liberal government consulted only with corporations and after 25 years it is suddenly in a rush to pass the bill.
The bill has a lot of technical amendments to bring the act up to date with our current legal system and allow corporations to make better use of electronic communications. That is not a problem.
The three parts of the bill of most concern deal with director liability, shareholder rights and Canadian residency requirements. The words shareholder rights and director liability are probably not well enforced on the other side.
The bill makes it easier for corporate directors to defend themselves from lawsuits if they break their fiduciary responsibilities. Canadian governments have a long history of breaking fiduciary responsibility. They have been doing it to first nations people for decades.
At present corporate directors can use the defence of good faith reliance. They can defend themselves from lawsuits by showing they have acted in good faith and relied on reasonable information from experts like accountants, economists and engineers. Bill S-17 would replace the defence of good faith reliance with a new defence called due diligence.
The Liberal government is trying to make corporate directors even less accountable by removing the obligation to show that they base their actions on facts and expert opinions. Bill S-17 would switch to the more vague language of due diligence which could mean anything and be interpreted in almost any way by the courts.
Why is the government making the language clearer in the rest of the bill but less clear in the section dealing with director liability?
If anyone thinks corporate directors need to be less accountable, as the bill would ensure, they need only look at the Westray tragedy. The bill deals with civil and not criminal liability. However the two are related because the managers of the Westray mine avoided both criminal and civil liability for the deaths of 26 coal miners. Today one of the Westray managers manages a Canadian owned mine in Central America.
I want every member of the House to recognize that it was Justice Richard's inquiry, a long, drawn out inquiry into the Westray tragedy, and its recommendations that prompted the government to put in place criminal liability for corporate directors and executives who knowingly put lives at risk. It was Justice Richard who asked the government to respond.
What has the government done? Nothing. To this day, nine years after the tragedy, nine years yesterday, the government has done nothing. It has already been a number of years since Justice Richard's recommendations were made.
Prior to the election the government made a big show of how it would come forth with legislation to deal with the issue. What are we now hearing? The government will consult industry. After Justice Richard's lengthy inquiry that is its biggest concern. It would rather not deal with the issue at all.
We need to put the bill before committee and have public hearings on it. Let us listen to what industry has to say because a lot of corporations live by the rules and have ethics. They are not the ones for which we bring in laws. It is for the ones which do not have ethics and do not care about workers that we have laws. Not all citizens will commit criminal acts but we want to be able to charge those who do and hold them accountable. The corporate manslaughter issue is about holding corporations responsible.
We have been waiting for the bill for how many years? How many years has the issue been dragging on? Since 1993 the government has had lengthy discussions. We are rushing the bill through now, but where is the legislation on corporate manslaughter? Why is it not being rushed through the House? Why do we not have it on our plates to deal with? It is because the government is not concerned about it.
Hon. members might gather that I am very passionate about the Westray tragedy. I come from a mining community and have seen numerous deaths over the years. Some were accidental and unavoidable, but for a number of others there should have been accountability. When workers go into those places they do not have the same rights as each of us. If we get killed in the House, if someone gets us at the door coming in, they will be liable for murder. It is not the same for ordinary workers going into their workplaces. We are protected. Other workers are not, and that is because the government has failed to bring in legislation.
To give credit where it is due, the bill makes progressive changes on the issue of shareholder rights. My colleague from the Bloc mentioned a number of them. Although the bill does not go far enough in giving shareholders real influence over corporations, it is an improvement.
Bill S-11 would allow shareholders to submit resolutions at annual meetings on any issue pertaining to the business of the corporation. At present, shareholder resolutions pertaining to social or other issues not related to the profitability of the company are not allowed.
However in my view social issues are related to profitability. I do not buy from companies which have substandard labour legislation or take part in human rights violations. For years I made a point of boycotting grapes because of the treatment of farm workers in California and throughout the world. I make a point of making a statement. If a product's country of origin is not marked I take it to the grocery store till and ask. If they cannot tell me I do not buy the product. If it comes from a country with a poor human rights record I do not buy it.
I am not the only one who does that. A lot of responsible, principled people do that because they genuinely care about the people in their country and those throughout the world. I am proud and happy to say that I believe the majority of people would do that if they knew those violations were taking place.
I do not buy rugs that come from certain countries unless they have a tag that says they are not made by child labour. I do not buy certain running shoes. I and a lot of other people do not wear the hats or the logo of certain companies. Many people want to know where products come from and they will make a point of asking.
I prefer to buy Canadian made items because, at least for the most part we are not as bad as other countries. Bad practices do take place in the workplace in Canada but for the most part we are doing a good job. Canada should not lower its labour standards nor diminish workers' rights or its treatment of children. We need to promote Canada's good practices throughout the world.
I would like to return to the issue of profitability of a company. If shareholders find out that the company they partly own is polluting the environment, today they cannot propose a resolution calling on the corporation to put a stop to it. Bill S-11 would make this shareholder resolution possible, and that is a good move.
Another improvement to shareholders' rights that our party supports is the ease with which shareholders would be able to communicate with each other. Under the current Canada Business Corporations Act, it is illegal today for shareholders to solicit proxy votes from other shareholders unless they go to the great expense of sending out a circular to all shareholders. Bill S-11 would allow shareholders to communicate in other less expensive ways, including websites.
We agree with the changes because they would make it easier for groups of small shareholders to band together at shareholders' meetings. It is sad to say that shareholders have to fight to have a say in a corporation that they invest in.
It is important to note that the Liberal government is hardly breaking new ground with these improvements to shareholders' rights. Canada is just playing catch up with the United States which has some of the most progressive laws in the world regarding shareholders' rights. It shows how Canada, under the Liberal government, has fallen behind on some progressive issues.
There are two specific areas where the bill does not go far enough in expanding and improving shareholders' rights.
First, shareholders should have the right to obtain information about a corporation's compliance with the law. It is hard to believe but today corporations do not have to disclose their non-compliance with the law. It can be very hard for shareholders or other people to find out if a corporation is violating labour laws or laws to protect the environment. It is even harder to find out if these violations occur in other countries. Corporations should have to be completely open and transparent with their shareholders about these issues.
Many people want to be ethical investors. They want to know that when they buy shares in a company they are not contributing to the destruction of the environment or violating human rights. Shareholders should have the right to know these things. We emphasize that Canadians do not want to see their Canada pension plan dollars invested in unethical funds, such as in tobacco companies or in mining companies, that are literally wiping out villages in other countries. I know the issue of Talisman oil has come up in these discussions already today.
Shareholders' rights could also be improved by creating a shareholders' rights watchdog group. Many states in the U.S. have created these sorts of groups and they are working out very well. Corporations get shareholders to sign up to the shareholders' rights group. This costs the government and the corporations nothing. All the corporation is doing is inserting a form in a mailing that it has to send out anyway. A shareholders' rights watchdog group is funded and run by its members. There should be no objection to putting it in.
I would like to speak about the issue of Canadian residency. Bill S-11 reduces the requirement for directors of chartered corporations to be residents of Canada. At the present time a majority of the board of directors of a corporation chartered under the Canada Business Corporations Act must be Canadian residents. The current CBCA also requires that a majority of the members of any committees of the board be Canadian residents. Bill S-11 reduces the Canadian residency requirement to 25% of the board of directors and completely eliminates the Canadian residency requirement for committees of the board. There are good arguments for and against the Canadian residency requirement.
On the one hand the argument in favour of the Canadian residency requirement is that in theory if the directors of Canadian corporations live in Canada, they would be closer to the consequences of the corporations' actions and the corporations would therefore be more socially responsible.
On the other hand the existence of these rules has not done much to turn Canadian corporations into good corporate citizens. Many corporate directors live in places such as Toronto and Calgary while their corporations do business in other parts of the country or even abroad. This has not stopped Canadian corporations based in the financial capitals of countries from closing mines and mills in the hinterlands, breaking labour laws, polluting or even violating human rights.
The Canadian residency requirement is a disincentive for corporations to charter in Canada. Canada is the only G-7 country that imposes residency requirements. There are four provinces that do not impose residency requirements: New Brunswick, Nova Scotia, Prince Edward Island and Quebec. Corporations that want to get around the residency requirement can already do so by chartering at the provincial level.
Since it has not done much good to make corporations into good citizens, reducing the Canadian residency requirement may help make Canadian corporations more internationally competitive at little cost. However the issue does seem to warrant more consideration and discussion. It would be nice to hear, for example, what the Broadbent commission has to say on the issue but unfortunately the Liberal government is rushing headlong into the bill before the commission finishes its work.
In conclusion, there has been much discussion over the last few years about corporate responsibility, ethical corporations and good corporate citizens. For the most part corporations are good business operators and good managers that abide by the rules. However it is the same as with anything. We need legislation to take to task those corporations that do not do so, those corporations that finagle, manipulate, and are not upfront and honest with their shareholders. Those are the ones we are dealing with. We need to give shareholders the right to check things out in the same way that corporations have the right to check things out. Shareholders need to have the same rights.
It is crucially important that the government move forward on the whole issue of corporate criminal liability. Under absolutely no circumstances whatsoever should one more worker in Canada die with a corporate executive or director getting away with it if he or she knowingly put that life in jeopardy.
I will once again mention that as of yesterday over the past nine years there were 26 deaths and no one has been held criminally responsible. What have we done to address that? Nothing. It will not go away this time. We will not let it be put to rest.
Week after week we will continue to remind the government that it made a commitment to the people of Canada prior to the election last year that it would deal with the issue of corporate responsibility and criminal liability. We will make sure that it keeps its promise and, if it does not, we will make sure that Canadians hear over and over again that it has failed to do what it promised.