Mr. Speaker, I am very pleased today to have this opportunity to begin second reading debate on Bill S-11, the Canada Business Corporations Act and the Canada Cooperatives Act, and to say a few words about this piece of legislation. I am sure all members of the House will agree this is a fundamental issue to the continued success of Canadian federally incorporated companies.
The amendments and improvements found in Bill S-11 would further the ability of businesses, investors, shareholders and co-operative members to be in a position to respond quickly and creatively to rapid developments in the global marketplace. They would be better positioned, if parliament provided them with the legal rules of the game that are sound, fair, efficient, consistent and, just as important, flexible.
Each Canadian business, no matter how small, should be given the right legal tools and legal framework to fully develop its marketplace opportunities. Bill S-11 intends to provide for federally incorporated businesses.
In a ranking of just the top 500 companies in Canada, federally incorporated companies account for revenues in excess of half a trillion dollars. The stakes, as we can see, are high, high for these companies and indeed high for our country.
It is important that hon. members be aware of the lengths to which the government has gone over the past seven years to make sure that Bill S-11 is the result of the widest possible consultation and scrutiny. As a result of this, we have before us legislation that will meet the current and evolving needs of business for many years to come.
Let me point out that in 1994 Industry Canada held initial consultations on corporate law reform and subsequently issued nine discussion papers. This was followed by cross country consultations to discuss the policy recommendations contained in those discussion papers. At the same time, the Senate banking, trade and commerce committee held its own hearings in cities right across Canada.
Bill S-11 was originally introduced in the other place as Bill S-19. During the last parliament its banking, trade and commerce committee heard from numerous witnesses. When the bill was reintroduced as Bill S-11, the committee held further meetings and heard from additional witnesses. More recently in its studies of Bill S-19 and Bill S-11, the Senate committee held two rounds of hearings as well, one in the year 2000 and one this year. The testimony of the expert witnesses resulted in a number of amendments that have significantly improved the legislation. The Senate study stage was taken into account and, based on this, a number of amendments to the original draft legislation were adopted.
I want to take this opportunity right now to thank all the interveners who have assisted the government over the years and the members of the committee, particularly Senator Kirby, who was the former chair of the committee and Senator Kolber, the current chair of the committee.
The Canada Business Corporations Act is the principal federal corporate law in Canada. It and the Canada Cooperatives Act are framework laws that establish basic rules for corporate governance, setting out the rights and obligations of directors, officers, shareholders and co-operative members.
These acts are not overly regulatory. They allow business corporations and co-operatives the flexibility to organize their affairs within a sound legislative structure. They establish the recourse available to parties in the event of unlawful conduct. They are also self-enforcing, since disputes are largely settled through civil action rather than through regulatory enforcement.
At this point I would also like to emphasize that although most of my remarks today will refer specifically to the CBCA, many of the provisions in the bill would also apply to the Canada Cooperatives Act, which governs federally incorporated co-operatives.
Hon. members may recall that a new Canada Cooperatives Act was passed by parliament in 1998 and came into force on December 31, 1999. The bill would ensure that modifications to the CBCA, where they were equally valid for co-operatives, would be reflected in the Canada Cooperatives Act.
The Canada Business Corporations Act, which is the main focus of Bill S-11, has not been amended for the last 26 years. The amendments in Bill S-11 would update and modernize four core elements of the existing legislation.
First, the bill would expand the rights of shareholders to communicate with one another and would encourage more shareholder participation in corporate decisions.
Second, the bill would help eliminate barriers to competitiveness, so that Canadian corporations could become more effective global players. At the same time, it would help to attract international companies to establish a base in Canada for their international operations.
Third, Bill S-11 would more reasonably define corporate responsibilities for the liabilities of directors, officers and shareholders. This would promote fairness and reasonable risk taking, which is a necessity for growth and productivity in the global economic environment that we have today.
Finally, the bill would eliminate duplication of regulation. We have reason to be proud of the Canada Business Corporations Act. It is not just that it serves the country well. Canada is already recognized by countries around the world as having a leading edge corporate statute, one that links prosperity with sound, balanced rules for corporate governance.
It also helps set standards of legal, predictable, fair and accountable business practices in other countries that have come here for advice on setting up their own corporate governance frameworks.
The Canada Business Corporations Act is very sound legislation that has provided the legal framework for conducting business over the last quarter century. The reforms to the existing act would modernize and strengthen this legal framework.
The opportunities out there are great for our country. However one thing we have to do is equip our fellow Canadians with the ground rules that only government can provide. The Canadian entrepreneurs will provide the tools, the savvy and the entrepreneurial spirit and skills to reach out for it.
In my closing remarks, the provisions in the bill are once again representative of the fulfilment of many commitments we have made in our red book. They go beyond the pledges of the red book, in the economic statement last fall and in the Speech from the Throne. In each of these government initiatives a commitment was made to foster innovation and enhance the competitive advantages of Canadian enterprises.
I urge all the members of the House to give speedy assent and passage to this most important piece of legislation, this marketplace framework legislation which, as I said earlier in my remarks, will help position Canadian companies to compete strongly internationally.