Madam Speaker, I am thankful for the opportunity to speak to Bill C-57 at third reading.
In budget 2005 the government committed to introduce the proposals in this bill, which now fulfill our government's commitment to bring the governance standards for financial institutions up to the levels adopted in 2001 for other federally incorporated companies. Bill C-57 also proposes to update certain governance standards that are unique to financial institutions.
I am told by my colleague, the Parliamentary Secretary to the Minister of Finance, that the members on the House of Commons Standing Committee on Finance worked very constructively and collaboratively on this initiative. We want to thank them for doing that.
There is little doubt of the important role that financial institutions play in the lives of Canadians. They provide services above and beyond what we most often think of as banking services, services such as chequing and savings accounts, and mortgages.
Financial institutions, though, are much more than that. For example, they provide the capital necessary for new or existing businesses. They sell insurance and can administer estates, trusts and agency contracts. In addition, they play a key role in helping governments and corporations to raise capital, as well as offering individuals an opportunity to invest in stocks, bonds and other securities.
The financial services sector is more than a provider of services. It is a critical part of the infrastructure of our economy, employing over 600,000 Canadians with a yearly payroll of over $35 billion. I can say that where I come from in Toronto, the financial services sector is a hugely critical employer in the business activity in the area. Let us not forget also that the financial services sector contributes approximately $13 billion in taxes to all orders of government.
I think everyone would agree that for Canada to continue its economic success, we must think beyond our borders. The same is true of Canadian businesses such as financial institutions. Let us face it, the reality is that we are operating in a global context and in global capital markets, but in order to compete in such an increasingly competitive global marketplace, the financial services sector needs to have a modern and up to date regulatory framework.
It is in this spirit that the government has taken action in recent years to ensure that financial institutions have the up to date regulatory framework they need to compete in today's global economy. In fact, this framework is reviewed every five years. Bill C-57 builds on those initiatives. It equips financial institutions with the modern governance tools that they need to compete in a global economy.
I would like now to quickly outline the five main elements contained in this bill. First, the financial institutions statutes recognize the importance of an effective board of directors. Bill C-57 contains proposals to clarify the role of directors in carrying out their important functions, for example, by explicitly allowing for a due diligence defence and clarifying the conflict of interest rules. I am particularly proud to see that. My first private member's bill called for the defence of due diligence for directors of corporations in Canada incorporated under the Canada Business Corporations Act.
Second, shareholders have certain rights, such as the right to participate in the major decisions of a financial institution in which they have an interest. The proposed legislation enhances those rights. For example, once this bill is passed, shareholders would be permitted electronic participation in meetings using technology such as video conferencing.
Third, Bill C-57 recognizes the importance of good governance in the well-being of a financial institution. As such, the government's framework needs to be kept up to date with best practices in this area.
Fourth, the legislation proposes to strengthen a number of governance elements in the regulatory framework, including improving the flow of information to the regulator. It also harmonizes various governance standards within and across the financial institution statutes.
The fifth element relates to changes in the policy holder governance framework for insurance companies. These changes would work to increase disclosure in respect of participating in adjustable life insurance policies.
We do not have time to go into any more detail on this particular piece of legislation, but it is an important piece of legislation that would affirm the importance of our financial institutions in Canada and would give them the tools necessary to compete in this global economy.