House of Commons Hansard #98 of the 42nd Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was immigration.

Topics

Canada Business Corporations ActGovernment Orders

3:50 p.m.

NDP

The Assistant Deputy Speaker NDP Carol Hughes

Does the member have unanimous consent?

Canada Business Corporations ActGovernment Orders

3:50 p.m.

Some hon. members

Agreed.

Canada Business Corporations ActGovernment Orders

3:50 p.m.

Conservative

Diane Finley Conservative Haldimand—Norfolk, ON

Madam Speaker, the Minister of Innovation, Science and Economic Development introduced Bill C-25, which is an act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act.

The proposed amendments by the Liberals in Bill C-25 stem from a House of Commons committee-led statutory review in 2010, which in turn led to further consultation undertaken in 2014 by our previous Conservative government. Stakeholders raised many important and complex points on a number of aspects of corporate governance during those consultations.

After our previous Conservative government concluded the consultations in 2014, we made a proposal to modernize Canada's corporate governance framework in our 2015 budget. For those in the House who may not be aware, let me read an excerpt from page 140 of that 2015 economic action plan:

...the Government will propose amendments to the Canada Business Corporations Act to promote gender diversity among public companies, using the widely recognized “comply or explain” model...Amendments will also be proposed to modernize director election processes and communications... to strengthen corporate transparency through an explicit ban on bearer instruments...Amendments to related statutes governing cooperatives and not-for-profit corporations will also be introduced...

I hate to steal the minister's thunder, but Bill C-25 is the minister's second piece of legislation he has tabled since being in office now for one year. Just like his first piece of legislation, this, Bill C-25, came straight from our previous Conservative government's 2015 budget.

I am really pleased to see that all the hard work that our previous government did is continuing through the Liberals, and their need to produce at least some form of legislation, but I cannot help but wonder if this is what the Liberals meant when they talked to Canadians about real change.

If adopted, Bill C-25 would result in changes to the corporate governance regime for reporting issuers incorporated under the Canada Business Corporations Act. The CBCA is the incorporating statute for nearly 270,000 corporations. Although most of these are small or medium-sized and privately held, a large number of Canada's largest reporting issuers are also governed by CBCA.

The proposed amendments cover several key corporate governance matters, including majority voting, individual voting, annual elections, notice and access, diversity related disclosure, and shareholder proposal filing deadlines.

I am pleased to see that the Liberals moved forward with the comply or explain model that we recommended. It has been proven that more diverse boards lead to better overall decision-making, better corporate performance, better organizations, and, indeed, better economies.

Our Conservative Party has never been on the sidelines when it comes to diversity firsts in Canada. In fact, it was the Conservative Party who had the first female prime minister; who elected the first female MP to the House of Commons; the first Chinese, Muslim, Black, Latino, Hindu, Pakistani, Japanese, and physically disabled MPs; and that list goes on. That is a record of which to be proud.

Our Conservative Party believes in merit not quotas. I am pleased we are not going to be missing out on talent, nor will we be losing out on that talent because of artificial quotas.

Since the Ontario Securities Commission implemented the comply or explain model just two years ago, the number of women on boards there has steadily increased to 20%.

However, looking at Canada as a whole, in larger companies women make up an average of 34% of boards. Implementing the widely used comply or explain model is the first step to seeing those numbers increase too. If enacted, that change would affect about 600 of the approximately 1,500 companies on the TSX.

When it comes to modernizing corporate governance and reducing red tape, our previous government made massive strides. We believe in fostering an environment in which businesses can grow and contribute to Canada's long-term prosperity. In fact, we recognize that businesses play a vital role in creating jobs and generating economic growth, and that strong business strategies are central to a company's success in creating and sustaining a competitive edge.

The changes proposed to the Competition Act, as we are discussing today, will do just that. They would reduce business uncertainty, create a competitive marketplace, and prevent anti-competitive practices. The amendments would also reduce the administrative burden on businesses.

Our previous Conservative government set a precedent, the first of its kind in any country in fact, when we introduced the one-for-one rule, which brought a new level of discipline to how government fosters a more predictable environment for business through the reduction of red tape.

We took a number of steps to reduce red tape facing businesses. Indeed, since 2012, the red tape reduction action plan has proven to be a successful, system-wide control on the growth of regulatory red tape. Our previous government saved Canadian businesses over $22 million in the administrative burden, as well as some 290,000 hours in time spent dealing with the unnecessary regulatory burden.

Further enhancing the changes that we made while in government, Bill C-25 was to be our next step in maximizing corporate governance.

More accountability and transparency are key for any organization in government, and a high performance board is one that is accountable. The right to vote is important for shareholders and for fundamental democracy.

I am pleased to see that shareholder democracy and participation will better align with securities rules and that corporations would be required under the CBCA to hold annual elections, elect directors individually, and use a majority voting standard. This proposal will bring an end to the debate over those circumstances in which an under-supported director may remain on the board.

The proposed amendments in Bill C-25 would further implement many policies and practices that are already addressed under TSX rules and security laws. Modernizing the acts addressed in Bill C-25 is a welcome improvement to the federal corporate statute and a reflection of the need to enhance companies' corporate governance practices.

If the minister wants to continue putting forward legislation that comes straight from Conservative budgets, well, those would be welcome too.

Canada Business Corporations ActGovernment Orders

3:55 p.m.

Winnipeg North Manitoba

Liberal

Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Madam Speaker, I suspect the bill would not have been necessary if the former prime minister and Conservative government had been successful at getting the job done on the file. However, I am glad and grateful that the official opposition appears to be supportive of the legislation.

Part of it is also demonstrating leadership on the file. I think we have seen that leadership demonstrated virtually from day one by this particular government when it appointed a gender neutral cabinet.

Would the member not agree that not only is it important that Canada bring forward this legislation but also that it demonstrates the good will we have seen from the Prime Minister and other jurisdictions in Canada to date?

Canada Business Corporations ActGovernment Orders

4 p.m.

Conservative

Diane Finley Conservative Haldimand—Norfolk, ON

Madam Speaker, in fact, when we formed government our cabinet was extremely diverse. It had more women than ever before in cabinet, and we were very proud of that.

Not only that, but all of the women who were in cabinet were paid according to their responsibilities. It was not just equal pay for equal title, but equal pay for equal work, which I believe is important. It goes back to being a meritocracy.

As a woman, I do not want to think I got the job just because of the way my jacket buttons, if the buttons are to the right or to the left. I want to know that I got that job because of my abilities. We want to make sure that boards do the same thing, which is why we do not believe in quotas. We know, too, that all the records show that as the diversity of boards increase, so does the performance of the company.

Canada Business Corporations ActGovernment Orders

4 p.m.

NDP

Brian Masse NDP Windsor West, ON

Madam Speaker, I appreciate those comments and would follow-up on the comply or explain model to look at what has taken place in Germany. Chancellor Merkel, one of the strongest women leaders we have known in our generation, just passed legislation to have quotas because in Germany they have been stuck for many years at a smaller amount under comply and explain. Therefore, they have moved to a quota system that will take place rather quickly, by 2018, mandating 30% for blue-chip companies and 50% for the public sector, that being hospitals and not-for-profit organizations.

I would ask the member to perhaps reflect on the German experience and what Chancellor Merkel has done in her country.

Canada Business Corporations ActGovernment Orders

4 p.m.

Conservative

Diane Finley Conservative Haldimand—Norfolk, ON

Madam Speaker, it is important to recognize that numerous studies have been done over many years to try to determine what the effect is of having more women on boards and of having people with disabilities on boards, and, indeed in the workplace. In fact, just a few years ago, it was shown that having people with disabilities included in an organization, in particular on the board, increased the morale, productivity, and overall performance of the company.

The question becomes, does the company do better because of hiring those people, or is it a better company because it hires those people? The smart companies do bring on people who have a range of perspectives and talents, and they do not artificially hold anyone back. We want to make sure this happens here, not something that is introduced through artificial quotas.

Canada Business Corporations ActGovernment Orders

4 p.m.

Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

Madam Speaker, I really liked my hon. colleague's comments to the effect that having a seat on a board of directors does not depend on whether the buttons on your jacket are to the right or to the left. Many women are very talented. A large number of women and people of diverse backgrounds have a lot of talent, but they still hesitate to apply for a job and take their place.

Could my hon. colleague suggest some steps that could be taken to help these women take their place—their rightful place?

Canada Business Corporations ActGovernment Orders

4 p.m.

Conservative

Diane Finley Conservative Haldimand—Norfolk, ON

Madam Speaker, one of the best ways of recruiting board members is the word of mouth of those who are in the business. One of the biggest things that can happen to help promote more women to boards is for other board members to recognize the talent and promote those individuals that they know will do a good job, because, frankly, once the board members see what a good job these women are doing, they will go looking for more. I truly believe that.

Canada Business Corporations ActGovernment Orders

4 p.m.

Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

Madam Speaker, I would first like to congratulate my colleague on her speech. She was here back when we started talking about this bill to modernize Canadian companies.

I am very pleased to see this bill because this matter was important to the previous government, our government. It is the product of the work done by my colleagues who were here at the time, along with the other members of that Parliament. It stems from a legislative review that a House of Commons committee conducted in 2010, which led to more in-depth consultations in 2014 and the solutions we saw in budget 2015.

I had to laugh when I heard the Minister of Economic Development promote diversity on corporate boards and talk about the importance of considering viewpoints from a variety of perspectives, from all kinds of people and cultures, considering that he advocated for a single economic development minister for the whole country. Seriously.

Back in the day, we were lucky because each region of Canada had its own economic development minister. I am sure that brought some diversity and some interesting debate to the table during cabinet meetings. Unfortunately, this government decided to get rid of that diversity in cabinet by not appointing ministers responsible for regional economic development agencies.

Now, let us return to the matter we are debating today. An American president once said that he liked the noise of democracy. Unfortunately, the same cannot be said of corporate boards in Canada, because the democratic process used by many Canadian companies is much more silent. At present, shareholders can vote for directors, but their vote is largely meaningless and has little to no influence on the outcome, as surprising as that may seem.

Some will even say that the election of corporate board members in Canada is more dictatorial than it is democratic. The current process only gives shareholders one option, and that is to vote for a candidate for a board position, or to abstain. In other words, if no one can vote against a board member, it only takes one vote for a candidate to be elected.

For years now, shareholders big and small have expressed frustration with the way corporate boards are voted in. They can clearly see that these boards have no accountability, because shareholders have little to no voice when it comes to electing them. When board members become inflexible or too tied to the opinions of management and they no longer represent shareholders' interests, in a way, shareholders no longer have any flexibility to remove individual board members or the entire board.

About 10 years ago, Canadian shareholders began working with the Canadian Coalition for Good Governance to call on Canadian businesses to voluntarily adopt a majority voting policy, which means that when a board member gets less than the majority of votes, he or she must step down from the board of directors, which must accept the resignation, unless there are exceptional circumstances.

The coalition's efforts are definitely starting to pay off, given that, over the past few years, more and more Canadian firms have adopted such a policy. Nearly everywhere, particularly in the United Kingdom, Europe, and Australia, and in most developed counties and markets, boards are elected by shareholders through a majority vote, that is, they must obtain a majority of the votes cast and not simply a plurality of votes, as is presently the case in Canada.

It is a bit embarrassing to see that Canada is still out of step with the rest of the world on such a fundamental issue as corporate governance. Whatever the historic reasons, the time has come to adopt a majority voting system in Canada to allow shareholders to have a say in how their corporation is run.

Jean-Philippe Décarie said the following in La Presse: “Large pension funds and institutional investors have been calling for this fundamental rule of democracy to be applied for years. They want boards of directors to do more to defend the rights of shareholders.”

The bill before us today is essential and it is what stakeholders have been calling for.

What is more, it requires some corporations to present shareholders with information on the diversity among board members and senior management. The purpose of this requirement is to make boardrooms more diverse.

In June 2014, the minister of labour and status of women at the time tabled a reported entitled “Good for Business: A Plan to Promote the Participation of More Women on Canadian Boards”. This report set out the methods that the public and private sectors could use to increase the representation of women on boards. Even at that time, there was talk of making changes to boards.

In October 2014, women held nearly 20.8% of seats on boards of registered companies. That number is now 30.1%, according to what the minister said today.

The previous government's 2015 budget proposed:

...to modernize Canada’s federal corporate governance framework to increase women’s participation in corporate leadership....

[by] using the...“comply or explain” model....

Amendments will also be proposed to modernize director election processes and communications with shareholders...

Many activities were initiated to promote greater gender parity on Canadian boards. The resulting momentum will help increase the representation of women on boards to over 30% by 2019, as recommended in the report entitled “Good for Business: A Plan to Promote the Participation of More Women on Canadian Boards”, which was tabled in 2014.

Quebec is one province that took a step in that direction by passing a law on crown corporation governance. That law came into effect in 2006, and women now make up 52.4% of those board members.

However, the law does force boards and crown corporations to recruit women and ensure proportional female representation. Those who were listening to what my colleague was saying earlier will know that the idea is for women to become board members because of their skills and what they can contribute, not because corporations are forced to fill a quota. I think that is important.

With respect to diversity on corporate boards, we should also talk about the age of board members. I think we need incentives related to that, too. In 2013, a Quebec organization called Force Jeunesse surveyed board members of 22 large crown corporations in Quebec, and the results were disappointing. Only 0.07% of all board members were under the age of 35. The Régie des rentes du Québec was one of the very few crown corporations with a board member under the age of 35. At the time of the survey, the average age of board members was 51.

If we want boards to be more diverse and more innovative, as the minister mentioned earlier, boards of directors must also take the age of their administrators into account.

The law is no longer up to date if we want to remain competitive in an increasingly globalized world. Good corporate governance is one of the mechanisms that help support economic efficiency and growth. I believe that the proposed legislation will act as a critical foundation upon which Canadian companies can innovate and grow to scale in the modern economy.

Given that the last comprehensive amendments to the Canada Business Corporations Act were made in 2001, the act has not kept pace with certain international best practices and the rules governing publicly traded companies.

Improving the director election process and supporting diversity on boards will bring different views to the table and help foster innovation. Modernizing shareholder communications, improving corporate transparency, and clarifying competition rules will help ensure that Canada's marketplace frameworks reflect the new economic realities.

In order to grow and thrive in the global economy, Canada needs a strong corporate governance framework that both reflects and facilitates the best practices of Canadian corporations. I will therefore be voting in favour of this bill, which the previous government worked so hard on, while the current government is reaping the benefits of that work today.

Canada Business Corporations ActGovernment Orders

4:10 p.m.

Winnipeg North Manitoba

Liberal

Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Madam Speaker, I am delighted that the Conservatives are going to be supporting this piece of legislation. It is a good piece of legislation and we are always prepared to share credit. We hope to see it pass second reading relatively quickly, but we will wait and see what takes place.

It is important to recognize that the objective of the bill is to increase shareholder democracy and participation. It would increase women's participation on corporate boards and senior management. Improving corporate transparency is something that is really important, as are reducing the regulatory burden and increasing business certainty. These are all very important attributes of this piece of legislation.

Would the member be inclined to agree that this is the type of legislation that should receive virtually unanimous support in the House, especially given the Conservative Party's response here today?

Canada Business Corporations ActGovernment Orders

4:15 p.m.

Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

Madam Speaker, I believe that a bill that refers to all the good objectives that the member opposite just listed, like diversity, the presence of women, or better communications, should indeed receive broad support in the House.

Any bill that manages to go from one government to another so easily must be built on solid foundations, and I sincerely think that members should support it.

Canada Business Corporations ActGovernment Orders

4:15 p.m.

NDP

Pierre Nantel NDP Longueuil—Saint-Hubert, QC

Madam Speaker, I commend my colleague on his speech. It is nice to see a topic like this one come so close to achieving unanimity. Everyone seems to be working toward the same thing and that is very good.

When we look back over the past 40 years, this is only the second time that Parliament has addressed this type of issue. In my neck of the woods, Longueuil—Saint-Hubert, the museum of women decided it would organize a big meeting to encourage women to step into the boardroom. Alexandre Taillefer, from XPND Capital, even came by to tell the women that their contribution and ideas were needed.

Does my colleague believe that the amendment that the NDP plans to propose calling for a legislative review of the bill every five years is appropriate? I do believe we should not wait another 40 or 20 years to review the measure.

Canada Business Corporations ActGovernment Orders

4:15 p.m.

Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

Madam Speaker, I thank my colleague very much for his question and also for his efforts to achieve equitable representation on the boards of these organizations.

I did the same thing with my municipal council. My greatest fear was to lose the only woman councillor we had. I am very pleased because three women were elected. It does take effort. The issue has to be addressed. There are competent women who can take their rightful place on our corporate boards.

On the specific question of my colleague's amendment, I will look at it once it has been drafted. If the amendment is worthy of our support, it will have it. However, we must first take the time to read it carefully.

Canada Business Corporations ActGovernment Orders

4:15 p.m.

Winnipeg North Manitoba

Liberal

Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Madam Speaker, I recognize that the member was hoping to be able to respond further, so I will allow him to respond to the comment, if he would.

Canada Business Corporations ActGovernment Orders

4:15 p.m.

Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

Madam Speaker, in closing, I would just like to say that we will be supporting the bill. It is worth supporting. I am pleased that the parties all seem to want to support this bill.

However, I would like to remind the Minister of Innovation, Science and Economic Development of the importance of diversity. It is also important at regional economic development agencies. We need diversity, we need ministers responsible for the different agencies to represent Canada's diversity within their departments. I would like to take this opportunity to remind the minister of that.

Canada Business Corporations ActGovernment Orders

4:15 p.m.

NDP

The Assistant Deputy Speaker NDP Carol Hughes

It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Windsor West , Infrastructure; the hon. member for Brantford—Brant, Small Business; the hon. member for Portneuf—Jacques-Cartier, Immigration, Refugees and Citizenship.

Canada Business Corporations ActGovernment Orders

4:20 p.m.

NDP

Brian Masse NDP Windsor West, ON

Madam Speaker, I am here to speak to something that is very important and it is good that this Parliament is bringing this forward. I think Bill C-25 is a positive initiative.

The minister mentioned the Marrakesh Treaty. That was a treaty that Canada signed onto through a bill passed here, which was important for the blind and for other Canadians, for larger print. It is one of the indications that we can actually move things through the House of Commons and we can have things done for Canadians.

The bill is movement in the right direction. As New Democrats, we are going to support it, for sure. There is no way that we would not support the initiatives of the bill, but there are some shortcomings with the current proposal. We will point out a couple of those, but we want to hear testimony from witnesses as well.

Bill C-25 is an act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act. Essentially what we are talking about is boards of governance in general, when we put the three core elements together. It is an opportunity to update and to include modern changes that are reflective. On the private sector model with the private corporations, blue chip corporations, and others, they have been very derelict, quite frankly, across the world in not having more of an inclusive nature. This is why it has come to the forefront, not just in Canada but across the world.

When we look at Europe and even at the United States, Canada has become known as a laggard with regard to this and there is no doubt about it. When the Conservatives talk about this getting through, after the 10 years it took them to bring something forward, right now we are happy to do so. Unfortunately, we are getting into a bragging competition between the Liberals and the Conservatives about this. However, I wonder why the bill is being launched again, another year and a bit later, basically the same as what it was before, especially given what we have seen with the more fundamental changes that are taking place in Germany and other places, which I will get into later, that are very important.

We are here today to at least take that first step forward in this process. To be clear, the most recent change to the measures in the bill was in 2001. That was just prior to my time here. It was under Jean Chrétien's government at that time, and prior to that it was decades before. We are really looking at nearly 40 years of letting them have the whole show so to speak. Right now, and this is how far things have come along and how difficult it still is, we require a legislative arm on this because still the right thing is not being done. Our corporate boards and tables across this country, where decisions are made about employees and about Canadians, do not even reflect anywhere near the diversity they should, and that is a shame. It is a shame that we have had to come this far.

Hence, one of the amendments that the New Democrats will be bringing forth is to have some type of a review of this process in the legislation. There will be a good debate. I know some civil society organizations and some governance organizations, especially related to the advocacy of women, have questioned the voluntary element in this initiative and said that there should be some monitoring of that.

The one way we can do it, and it is a very respectful way, is to make sure we have this coming back to Parliament so that we and Canadians have a voice to ask why a company is not complying and being reflective to some degree of the Canadian people, or at least coming to the benchmarks, generally speaking, that reflect our society. There are those people historically who have popped through the different barriers that take place. However, I have a concern because of the thoughts we have had in the past related to boards. They were referred to as the “old boys' club”, and that is very real.

It is also an indication that not only is this an issue of gender, ethnicity, and diversity, but also of social class. We have people who are basically disavowed and ruled unable, unequal, or unworthy of rising through the ranks. They have to go through exceptional circumstances to break those barriers, and they have been some of the most ingenuous people we have had. However, the time and day has come when everyone should count on who they are, what they think, what they do, and how hard they work, versus whom they know or who their family are, or at the very least, what their gender is.

We need to make sure that a number of things will be looked at here. These are very important.

The bill would have annual elections for directors. Right now, it can take up to three years for a director to be looked at. An annual director position can set the course on how a corporation responds to its shareholders.

If we believe in the essence of capitalism at face value, the argument there is that the shareholder is a voter and that in a democracy there are voting rights as a shareholder for the board and the CEO who controls it at that time. However, the current situation is that those meetings are not held, and if there is not that connection between the board and the shareholders, accountability can be avoided. Accountability can also be avoided by not publicizing meetings, or by not making sure that there is enough time in advance so that people can attend the meetings. Therefore, barriers can be created, similar to what I would call “non-tariff barriers”. When we are trying to sell products in another country, we cannot do so, because the non-tariff barriers or rules are so bad. It is the same with shareholders.

When we talk about shareholders, we are talking about ourselves. They are people who have invested their pensions or earnings. They buy those shares and the company gives them that equity in it, but if they cannot have any direct control whatsoever in terms of voting, because the CEO does not have the proper rules in place or has not been following them for up to three years. Then it becomes a problem. Therefore, the bill would require an annual meeting, which we are very supportive of.

Also, there is the structure of the old boy's club that was there regarding the election of directors as individuals. They used to run slates in the old boy's club, so to speak, making it more difficult for some other individuals who were trying to advance because the old boy's club was grouped against them. We would call that bullying today, but the reality is that we had a number of people who could not get through because the fix was in, so to speak, and the slate was developed. Now, with individual votes for those board members, at least there will be an individual case to made for each person.

I think that is the right way to do it, because, for example, some slates carried baggage where one could basically say, “I like three of the four, and I can live with them”. They would come out with a number of different things, as opposed to giving the right and basically saying that a single selection should be the way to go. I think that is going to be a good advancement.

On the issue of comply or explain, I noted that different countries have done different things. However, comply or explain is a way to bring the numbers up, and the current 18% or less share of women on boards is obviously not reflective of our society. With women making up over 50% of the population, but occupying less than 18% of board positions, it is an obvious problem that has to be fixed.

In surveys we have found that when comply or explain was used in the past in other countries and there have not been improvements in these numbers as a result, they have argued that not enough qualified people applied. That is the ceiling that is created. It is hard to challenge that, because we cannot have access to the confidential documents and information about who applied, who got left behind, and a number of different personal things that are very complicated, and so the target does not move at all. That is one of the reasons Chancellor Merkel in Germany moved legislation on this and now has a target of 30%.

Germany was simply fed up and said that for CEOs and blue-chip corporations the rate would be 30% and that they would have some time to bring that in. The time was shortened because they would need some time to comply or explain. For German not-for-profit boards and others, the rate is going to be 50%. There is a difference between 30% and 50%.

I was not privy to the debate and have not looked at what has taken place in the German legislation, but I am sure it will come out in testimony. Not-for-profit boards are found in hospitals, public institutions, and so forth. On those boards, of course, the rate should be 50% because taxpayers pay for those boards, and with 50% of our population being women they are directly paying 50%. We know that to be a fact. They need to have the same representation. In fact, they deserve to have the same representation. It is an absolute shame if they do not. This can be easily corrected. If women are supposed to be equal, then they deserve an equal voice in running those boards. We New Democrats are arguing for at least a review of this.

This goes back to what we are proposing in terms of an amendment, so that people at the very least are made aware of this. There might be others who do more on comply or explain. There could be a better amendment, and New Democrats are open to that. However, we are not going to give a blank cheque to this piece of legislation. There is no way we are going to let this legislation go through without fighting tooth and nail to the end, without adding accountability to change the current situation. We will not let that happen. We have not come this far on so many other measures, and we still have much further to go, that we would basically put up our hands on the bill and say good luck, we will leave it to the other guys, and we will see everyone later. We are not going to do that. We have done that enough. I have seen that happen too often here in the chamber, most recently with another bill that looked at gender parity with respect to electoral reform, and it was turned down in the House. Sadly, it was another lost opportunity.

This cannot be another lost opportunity. This cannot go back in the record books for another 40 years without any action taking place. That is why I am particularly interested in the German case. Germany has gone through it and has changed.

We do know that the provinces have moved on this as well, and it will be interesting to hear the testimony at committee. They have moved on comply or explain and a few other things. We will be getting some of the results from them as well. I will be interested in hearing what is going on out there in committee. That will also give us a better sense of things.

Maybe we are wrong in the sense that corporations and not-for-profits will act quickly on this. I worked in a not-for-profit industry for a number of years and was successful in bringing in this model. Not-for-profits will comply and move toward that. This is our opportunity to bring it to Parliament and to Canada as a whole. We can find out if those who are laggards have a problem with it and how they are going to fix the problem. That is what we are going to see with this legislation. Hopefully we will see amendments that would make this happen, because we are just not going to leave it alone.

Another missed opportunity with respect to this issue is corporate CEO compensation. We are calling for more shareholders and investors to have a say on CEO pay. We are interested in looking at executive compensation as it is a part of the package. We have seen in Canada and around the world CEOs getting big bonuses while companies tank, and fire their workers left, right, and centre at the same time. We have to look no further than the CEOs at our banks. Their compensation was increasing at a time when banks were having some problems and we had to backstop some of them. The banks had record profits and their CEOs received increased compensation. During the last financial crisis, the average increase in their compensation was about 19%.

How is it that so many Canadians and so many small businesses are going through this problem that we have had. The challenges and the insecurity and the services they are supposed to get are challenged; government, which is funding this, is going into massive debt; and CEOs get almost 20%. Those banks have some the highest credit card costs not only in Canada but across the world. When it comes to credit card service fees, just talk to small merchants. Look at what is happening in Australia. Australia has a 0.5% cap and it is reviewing this and lowering it because banks are still making lots of money. It is bad for small business.

Here our small business people struggle when they go to the banks to get loans, and if they can get them, they are at high interest rates. Or public institutions like the BDC, or credit unions, have stepped in on riskier loans. What do the banks do in response? They fire more workers, close more branches, and they increase service fees. They do all of those things and the Conservatives set up what is basically a voluntary system for credit cards. It is like playing hockey and getting a penalty for cross-checking someone, but it is a voluntary penalty and if players want to go in the penalty box they can time themselves out if they want to. If they do not, that is okay, play on, play on.

Meanwhile CEOs are making 20% profit. This sends a message that bad behaviour is rewarded. What person does that? We do not do that in our home life. We do not reward bad behaviour, and if we do, it will probably not lead to a good solution in the end. No one does that kind of stuff and that is what we have done with CEO compensation.

Look at Target, for example. It came in and took over a Canadian company, Zellers, which was making a profit. That is key. Zellers was making a profit. It also had a unionized workforce and a wage just over the minimum. It had some benefits and it was making a profit. It was a company that was fulfilling its mandate for people, being a place to work, a place with benefits, a place that respected Canadian laws, but Target came in and what did it do? It ended up going bankrupt and shutting Zellers down, and the CEO of Target, Gregg Steinhafel, received a severance package of $61 million, just $10 million shy of the total severance package for the entire Target workforce. Great, that is capitalism at its best. That is a wonderful example of the Canadian dream being fulfilled.

I recently reviewed the Investment Canada Act, which has had so many changes made to it by previous Liberal and Conservative governments, it is in shambles with regard to this type of behaviour. There was nothing wrong with forcing Target to have some type of mandate or guarantees when it came into this country, so that we could preserve these workers' jobs and stop a bunch of black holes in shopping malls in communities across this country just because of corporate greed.

At the end of the day, with $61 million I am sure that the former CEO is not in our country. The people with the compensation are here and wondering what to do. Guess what we do as taxpayers? We have to fill in the pensions, the employment insurance, and we have make sure that employees get retrained or find other jobs. So CEO compensation is significant and it goes on. The CEO with the highest pay, but worst stock return, is Donald Lindsay. His compensation right now is $9.6 million and there is no remorse on his part. Encana Corporation compensation is $10.8 million. Scott Saxberg of Crescent Point Energy Corporation gets $8.8 million in compensation, despite the company's shareholder falling by 34.5%.

All of these things are taking place that detract from what could be in the bill and what could be greater accountability for Canadians. When we review the bill, let us make sure we crack open the elements that are necessary for full accountability. The big difference and why Canadians need to care more than ever before is that many Canadians are now investing in their own funds for their future. They go online and make purchases and that is why we need to make sure they have their rights protected.

Canada Business Corporations ActGovernment Orders

4:40 p.m.

Hull—Aylmer Québec

Liberal

Greg Fergus LiberalParliamentary Secretary to the Minister of Innovation

Madam Speaker, I would like to thank the hon. member for Windsor West for giving a very passionate speech. He brought forward perhaps two initiatives.

Could he could talk a little further about the first initiative on having this bill up for review? Could he just expand on that a little more as to what he is looking at and what type of time frame?

Canada Business Corporations ActGovernment Orders

4:40 p.m.

NDP

Brian Masse NDP Windsor West, ON

Madam Speaker, I and the parliamentary secretary are missing committee right now, though I am sure we will be updated.

It is important to note that all parties have been working on an excellent manufacturing report, which hopefully will be tabled in a collegial way at the industry committee. I look forward to working to see that to conclusion.

We are open to having a review process, and it has been done in different ways. We are proposing, at a very minimum, a five-year review. However, I have seen a three-year review done for the initial stages of a bill, just to see whether they are venturing into it. There are pros and cons to a three and a five-year review for that, but we would want, at a very minimum, a five-year review.

That would ensure that once the act were completed and implemented, it would have to be looked at by Parliament. Those under the review process, being the affected boards, the not-for-profit sector, and whatever, would know that the clock would be ticking for them to have to explain where they were at.

That process could be quite quick. If we find things are really good out there, then there can be a quick review and be done, basically, in a day. If we have a systemic problem, that could be further commentary for Parliament in hearings. It lends itself to be available and quite successful for those who are under it.

Canada Business Corporations ActGovernment Orders

4:40 p.m.

NDP

Pierre Nantel NDP Longueuil—Saint-Hubert, QC

Madam Speaker, I would like to acknowledge how much my colleague from Windsor West knows about this issue.

I think that he clearly established how big of a joke self-regulation is. We need to come up with good legislation in this regard. Capitalism can certainly be beneficial and it can certainly create wealth for everyone if it is administered properly. However, this huge gap between the salaries of senior management and regular employees is unacceptable. I can relate to the example that the member gave of black holes in shopping malls. I have seen it in Longueuil. It is affecting the people there. We had a Zellers. In fact, there was also a Zellers not far from here on Sparks Street. Employees with over 25 years of service lost their jobs while some joker draws a multimillion-dollar pension in the Bahamas. That is shameful.

I would like my colleague to expand on this subject because I imagine his region also had a Target that shut its doors.

Canada Business Corporations ActGovernment Orders

4:40 p.m.

NDP

Brian Masse NDP Windsor West, ON

Madam Speaker, that is an important question and I would like to build on it. What is taking place is kind of unique and connects to what my colleague is saying.

People now have a little more control over their finances and how they make decisions about them. That is becoming the way of the future. We should all have an interest in ensuring it is democratized.

If people are participating and deciding where to move their money in a stock market system, they are protected in having a say. Decisions are not being made behind some curtain somewhere without their input, but there is a set of rules and accountability because they are having a say-to-pay. People get a chance to vote with their money in these corporations. If they are a true democracy, then they should have no problem complying with those who are funding them having a say in their matters.

Canada Business Corporations ActGovernment Orders

4:40 p.m.

Hull—Aylmer Québec

Liberal

Greg Fergus LiberalParliamentary Secretary to the Minister of Innovation

Madam Speaker, I appreciate this opportunity to rise in support of Bill C-25, an Act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act.

Our government is committed to growing the economy, creating jobs, and strengthening the middle class. As such, we are building the right foundation for an inclusive and innovative Canada. We want to foster new thinking by harnessing the full talents and experience of all Canadians.

We recognize diversity as a strength. Bill C-25 ensures that we create the right conditions to keep Canada at the forefront of a global economy.

Madam Speaker, I apologize for forgetting to ask for your permission and the approval of the House to share my time with the Minister of Status of Women, the member for Thunder Bay—Superior North. I hope to get your approval.

Canada Business Corporations ActGovernment Orders

4:45 p.m.

NDP

The Assistant Deputy Speaker NDP Carol Hughes

The hon. member does not need permission to share his speaking time for a 20-minute speech. He must only seek permission at the beginning of the debate, when it is being debated for the first time.

Canada Business Corporations ActGovernment Orders

4:45 p.m.

Liberal

Greg Fergus Liberal Hull—Aylmer, QC

Madam Speaker, my mistake. Thank you for the clarification.

Bill C-25 ensures that we create the right conditions to keep Canada at the forefront of a global economy. It will provide a transparent and predictable business environment for firms to innovate and grow.

Bill C-25 makes a number of modernizing adjustments. First, it will require publicly traded corporations to disclose to their shareholders the composition of their boards and senior-management ranks.

The measures in Bill C-25 call on corporations to tell their shareholders how they are promoting diversity at the senior-leadership level. Under representation of certain groups in society is not only a question of fairness. It can also affect the bottom line. This disclosure facilitates a frank conversation between corporations and their shareholders.

I am particularly proud to be speaking about this bill during Women’s History Month. It is a time when we celebrate the women who have shaped Canada’s history. We honour their courage, sacrifice and leadership in all spheres of life.

With this bill, our government is committed to addressing the under-representation of women and other groups in the highest levels of corporate leadership. This bill encourages corporations to reflect on whether they are drawing from the largest talent pool available to improve their performance.

This government is committed to inclusive growth. We have made our views on diversity very clear. We have already achieved gender parity in cabinet.

We also announced changes to the process for Governor in Council appointments. These changes ensure that diversity is a critical factor in selecting those who lead our public sector corporations and boards.

Bill C-25 builds on those initiatives. The bill recognizes that embracing diversity should be adopted as a good practice in corporate governance. We are not alone. We have already seen a similar commitment by other governments. Securities regulators and the private sector have also worked to increase diversity on corporate boards and within executive ranks.

Most securities regulators have adopted “comply or explain” rules that require publicly traded corporations to disclose gender composition and diversity policies for their executive ranks. Some private sector and non-profit organizations have adopted diversity policies or voluntary targets to increase women’s participation on corporate boards. We commend their efforts.

To improve shareholder democracy, Bill C-25 will also reform the process of electing corporate directors. It will introduce a majority-voting model when elections are uncontested. In our current system, a candidate can be elected even when there is only a single vote in favour, and all others were withheld.

If the proposed amendments are passed by the House, in an uncontested election, a candidate can only be elected if they have the majority of votes cast in their favour. This practice gives shareholders the right to vote against a candidate instead of simply withholding their vote.

Bill C-25 will also require publicly traded corporations to hold annual elections for corporate directors. It will also ensure that shareholders can vote for individual candidates rather than a group of candidates.

These reforms support diversity, shareholder democracy, and corporate performance. They allow shareholders to consider individual candidates on a more frequent basis. As a result, there are opportunities for deeper reflection on what diverse skill sets and experiences are best suited to govern a corporation.

Bill C-25 will also permit shareholders to access corporate materials online. This amendment will bring market framework laws into the digital age. It will increase business efficiency and reduce operational costs, while aligning with provincial securities rules. This amendment will also increase transparency and shareholder democracy.

Another amendment contained in the bill is an update to the Competition Act. This amendment ensures that our laws keep pace with contemporary ways that corporations structure themselves. Specifically, the bill takes into account how corporate affiliates are recognized under the act. The amendments do away with the risk that affiliates would be mistaken as competitors in the eyes of the law.

Making the law clear and neutral on this point eliminates business uncertainty. It also avoids the unnecessary time and resources that are currently spent on ensuring that companies comply with the law.

Madam Speaker, I would just like to clarify something. May I speak longer than my 10 minutes when I am sharing my time?