House of Commons Hansard #282 of the 42nd Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was money.

Topics

JusticeOral Questions

3 p.m.

GPQ (ex-Bloc)

Rhéal Fortin GPQ (ex-Bloc) Rivière-du-Nord, QC

Mr. Speaker, we can always count on the federal government to stick its nose where it does not belong. This time, it is interfering in the work of members of the National Assembly by funding a challenge to their right to work in French. I am not making this up. The Department of Canadian Heritage is paying the Montreal Bar Association $125,000 to challenge all of Quebec's laws because they were debated in French. That is right, $125,000.

Does the Minister of Heritage really support the challenge she is backing financially?

JusticeOral Questions

3:05 p.m.

Ahuntsic-Cartierville Québec

Liberal

Mélanie Joly LiberalMinister of Canadian Heritage

Mr. Speaker, some organizations decided to launch these proceedings and that is their choice. I will not comment further as this matter is presently before the courts.

JusticeOral Questions

3:05 p.m.

GPQ (ex-Bloc)

Monique Pauzé GPQ (ex-Bloc) Repentigny, QC

Mr. Speaker, we are talking about funding for this file.

The Pay Equity Act, the anti-strikebreaking provisions, the Consumer Protection Act, the Educational Childcare Act, and the Environment Quality Act are all laws that we are proud of and that will be challenged thanks to the support and money of the Minister of Heritage.

How can the Minister of Heritage justify using Quebeckers' money to attack the only parliament that defends their interests?

JusticeOral Questions

3:05 p.m.

Ahuntsic-Cartierville Québec

Liberal

Mélanie Joly LiberalMinister of Canadian Heritage

Mr. Speaker, as I already said, some organizations decided to launch these proceedings and that is their choice. Naturally, as the matter is before the courts, I will not comment further.

The EnvironmentOral Questions

3:05 p.m.

Green

Elizabeth May Green Saanich—Gulf Islands, BC

Mr. Speaker, the warnings of climate scientists are becoming increasingly urgent and worrying. The most recent, days ago, was that the world was watching the weakening of the Gulf Stream ocean currents, with potentially catastrophic impacts. The scientists are warning that we must reduce greenhouse gases far more rapidly than our current commitments. If we fail to do so, if we blow through our carbon budget, we will pay dearly. This is a budget we cannot afford to ignore. It is incompatible with completing Kinder Morgan.

Could the government show us the numbers of how we build a pipeline and meet our climate targets?

The EnvironmentOral Questions

3:05 p.m.

North Vancouver B.C.

Liberal

Jonathan Wilkinson LiberalParliamentary Secretary to the Minister of Environment and Climate Change

Mr. Speaker, this government agrees that climate change is an extremely important issue. We have been working very actively to implement the pan-Canadian framework on clean growth and climate change.

The latest national inventory report from the United Nations shows that carbon pollution declined between 2015 and 2016. In fact, Canada's third biennial report, which was published in 2017, shows that Canada's emissions are projected to be 232 megatonnes lower than was projected just last year.

The Trans Mountain emissions, both upstream and direct, are incorporated into the pan-Canadian framework. When these policies and programs are fully implemented in Canada, we are very confident we will meet the targets under the Paris agreement and set even more ambitious targets as we move forward.

The EnvironmentOral Questions

3:05 p.m.

Liberal

Steven MacKinnon Liberal Gatineau, QC

Mr. Speaker, it is with sadness that I rise in the House today because nothing causes us, on this side of the House, more anguish than a pointless exercise in creative writing.

Consequently, consultations have been held among many of us, and I suspect, Mr. Speaker, if you seek it, you will find unanimous consent to free the book by the member for Beauce.

Free the book, Mr. Speaker.

The EnvironmentOral Questions

3:05 p.m.

Conservative

Maxime Bernier Conservative Beauce, QC

Mr. Speaker, I think the opposition members are desperate. I would ask them to be patient and wait a few years since it was my own decision not to publish the book. One day, they will be able to read my writings.

Business of the HouseOral Questions

3:05 p.m.

Conservative

Candice Bergen Conservative Portage—Lisgar, MB

Mr. Speaker, I have a question for the government. I hope that I will get a better answer than those that were given in question period. We will see.

Can the government House leader tell us what work the government is proposing for the rest of the day and next week?

Business of the HouseOral Questions

3:10 p.m.

Waterloo Ontario

Liberal

Bardish Chagger LiberalLeader of the Government in the House of Commons and Minister of Small Business and Tourism

Mr. Speaker, this afternoon we will debate the Senate amendments on Bill C-25, business frameworks.

Monday, we will continue second reading debate of Bill C-74, on the budget.

Tuesday and Thursday shall be allotted days.

Wednesday, we will resume third reading debate of Bill C-55, on ocean protection.

Canada Business Corporations ActGovernment Orders

April 19th, 2018 / 3:10 p.m.

Liberal

Harjit S. Sajjan Liberal Vancouver South, BC

moved the second reading of, and concurrence in, amendments made by the Senate to 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.

Canada Business Corporations ActGovernment Orders

3:10 p.m.

LaSalle—Émard—Verdun Québec

Liberal

David Lametti LiberalParliamentary Secretary to the Minister of Innovation

Mr. Speaker, I am pleased that this chamber has the opportunity to consider 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 one final time. At this point, I think we are all aware that Bill C-25 would make a number of targeted amendments to our economic framework laws in an effort to bring them up to date for our modern economy.

The bill would modernize the director elections for publicly traded CBCA corporations, requiring individual annual elections and introducing a new majority voting mechanism for uncontested elections. It would also allow these companies to take better advantage of modern technology through the notice and access system.

The part of the bill that has received the most exposure is, of course, on the measures to promote diversity on corporate boards through new informational requirements and a comply-or-explain model for having a diversity policy put in place. The bill, moreover, would require bearer share options and warrants to be in registered form, as the shares themselves must already be, as an effort to promote transparency. It would also update the Competition Act to account for a greater variety of business structures.

The measures in Bill C-25 would allow us to embrace best practices, add clarity to the law, and minimize the regulatory burden.

This bill was sent to us by the other place after careful consideration in committee and debate in the Senate chamber. The other place made a certain number of amendments that clearly improve this bill. A small but important amendment was made in clause 13, specifically to subsections 106(6) and 106(6.1), to prevent a board of directors from being paralyzed after a vote to which the majority voting rule applies fails.

The majority voting requirement introduced by the bill would set out the rules that would apply in an uncontested election. That is, where candidates ran unopposed, they would have to receive a majority of votes cast “for” over all votes cast in order to be elected. Directors who failed to be re-elected because of the operation of this provision would cease acting as directors immediately after the election.

After hearing from stakeholders, it became clear that the strict application of the majority voting rule could lead to unintended consequences. The decision-making structure of a publicly traded corporation could be disrupted, as some or even all the directors could fail to be re-elected. While ensuring shareholders' wishes is a key principle of good corporate governance, this principle should not lead to a corporation being without a decision-making body. This would not only be contrary to good corporate governance but could endanger, albeit for a short period of time, the ability of a corporation to make important decisions affecting market and product strategies and the bottom line.

Our colleagues in the other place have carefully assessed this situation and the potential risks associated with it. Based on suggestions from stakeholders and corporate governance experts, they have adopted a simple but effective solution. It would guarantee corporate boards affected by a director's defeat through majority voting a respite of up to 90 days. The amendment is intended to mitigate the risk that the sudden loss of directors would result in unexpected disruptions in corporate decision-making. It would provide a specific grace period of up to 90 days in which directors could continue acting until replaced. The amendment would be largely consistent with provincial securities law and Canadian corporate practices, and it results from a consensus among stakeholders who have an interest in corporate governance.

Shareholders are entitled to vote out directors who are no longer proposing a vision or direction that is expected from them or who have not delivered according to shareholders' expectations. Bill C-25 would reinforce shareholder democracy through majority voting. This is a positive development. However, within the context of this policy objective, it must also be acknowledged that the immediate effect of voting out directors can pose challenges. For these reasons, this amendment, adopted by the other place, should be carried.

I would note that a similar amendment has been reflected in the provisions on elections to boards of co-operatives. For the same reasons I just explained, that amendment is also an improvement to the bill.

Clause 24 of the bill has also been amended by our hon. colleagues. That is section 171.1 of the CBCA. This amendment addresses a slight oversight and would enable the use of electronic communications in a broader range of circumstances.

Everyone agrees that that, in today's world, we should give people every incentive to communicate electronically. The bill makes it easier to use electronic communications with shareholders through something called notice and access. This allows shareholders to access corporate documents electronically through a link provided to them instead of having to request paper copies from the corporation. Many companies provide this service and those who invest directly in Canadian corporations are already aware of the benefits of using this service.

The use of “notice and access” is common, particularly in relation to publicly traded corporations, such as those traded on the Toronto and Montreal stock exchanges. There is no reason not to extend the availability of the notice and access system to every corporate document that is required to be shared with shareholders, with the exception, perhaps, of notices of shareholder meetings, in some circumstances.

Proposed subsection 172.1(1) would require directors of a publicly traded corporation to place before the shareholders, at every annual meeting, a policy on diversity among the directors and members of senior management. This provision, which has drawn large public attention, is a key feature of the bill.

The amendment proposed by the other place would allow corporations to choose the time at which they wished to send the diversity policy, either at the time of sending the notice of meeting or when sending the proxy circular. In the absence of the amendment, the policy would be required to be sent in paper form, in many situations, if sent with the notice of annual meeting. This amendment would be useful and consistent with the trend that has been observed in relation to rules established by Canadian securities commissions.

I have outlined some of the ways Bill C-25 would support our modern economy and the various improvements it has undergone in the other place. I thank the other place for its work in making those amendments.

The amendments made by Bill C-25 would be quite targeted, as they arose from issues with the clearest consensus during consultations. However, modest change should not be mistaken as being unimportant. This bill would help advance the laudable goals of ensuring transparency, clarity, and fairness, empowering shareholders while presenting the opportunity to address important issues such as diversity.

The process has been long, but I look forward to royal assent.

Canada Business Corporations ActGovernment Orders

3:15 p.m.

Conservative

Maxime Bernier Conservative Beauce, QC

Mr. Speaker, I thank my colleague for his speech on Bill C-25 and I would like him to know that the official opposition fully supports it. As we know, the House voted unanimously in favour of the bill a few months ago. The hon. member did a fine job explaining the changes, but could he clarify whether these changes also apply to both the Canada Business Corporations Act and the Canada Not-for-profit Corporations Act?

Canada Business Corporations ActGovernment Orders

3:20 p.m.

Liberal

David Lametti Liberal LaSalle—Émard—Verdun, QC

Mr. Speaker, I thank the hon. member for the question. As far as I know, the changes I just described in my speech apply to the Canada Corporations Act as well as the Canada Cooperatives Act. To my knowledge, they do not apply to other organizations, but I can confirm that for him.

Canada Business Corporations ActGovernment Orders

3:20 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Mr. Speaker, I thank my colleague for his comments and his speech. I also thank the members in the other chamber for contributing to this debate.

My question is about how the bill has been roundly criticized for being weak. There are some very important issues surrounding corporate transparency in Canada. The Standing Committee on Finance is discussing money laundering and proceeds of crime, an issue that is often raised. Another such issue concerns beneficial ownership, or knowing who, exactly, owns a business. Unfortunately, this bill is yet another missed opportunity to address the lack of transparency in Canada's provincial and federal business registries.

Can my colleague explain why they decided to consider these transparency proposals but not to not include them in Bill C-25? If they intend to do so, when?

Canada Business Corporations ActGovernment Orders

3:20 p.m.

Liberal

David Lametti Liberal LaSalle—Émard—Verdun, QC

Mr. Speaker, I thank my hon. colleague for his speech. This issue has been debated in committee. I can tell him that these issues are still being examined, as their complexity far exceeded the scope of the bill. The bill had some fairly specific goals, and the issues that my hon. colleague raised are much broader. It would be better to examine these issues separately and to address them at another time.

Canada Business Corporations ActGovernment Orders

3:20 p.m.

Liberal

Brenda Shanahan Liberal Châteauguay—Lacolle, QC

Mr. Speaker, I have not had the opportunity to follow this debate all the way through, but as a former banker, I am interested in understanding how promoting diversity on a corporate board such as a bank would help the bottom line? Is there any rationale for that?

Canada Business Corporations ActGovernment Orders

3:20 p.m.

Liberal

David Lametti Liberal LaSalle—Émard—Verdun, QC

Mr. Speaker, I thank my hon. colleague for her diligent work on a variety of different dossiers.

The simple answer is that it is a basic economic fact that diversity on boards is not only right, just, equitable, and a good example, but it is also great for the bottom line. Companies that have more diversity do better economically.

Canada Business Corporations ActGovernment Orders

3:20 p.m.

Conservative

Maxime Bernier Conservative Beauce, QC

Mr. Speaker, my colleague has spoken at great length on the amendments that the Senate made to Bill C-25. I would therefore like to talk a bit more about the general content of the bill.

It is important to state why the official opposition voted for the bill or why it has the unanimous support of the House. It is because it is intended to modernize the acts governing Canadian corporations, namely the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act.

The bill seeks to reform some aspects of these acts to make the process for electing directors of certain corporations more modern and efficient. It also seeks to modernize communications between corporations and their shareholders and clarify that corporations and co-operatives are prohibited from issuing share certificates and warrants in bearer form. However, the most important part for those tuning in is that the bill will affect over 270,000 federally regulated companies, many of them small and medium-sized businesses across Canada. They will be positively affected by these changes.

As my colleague said, the amendments made to these acts stem from a study conducted by a House of Commons committee in 2010 and extensive consultations held by Industry Canada in 2014. Consequently, it was high time that the House modernized this bill.

Furthermore, financial regulators have already adapted to these amendments, and some have adopted regulations in order to comply with the future legislation.

I would like to remind my colleagues that we in the House are responsible for modernizing the legal environment that corporations operate in. That is a good thing. It is a noble and meaningful goal. However, we also need to think about the economic environment that these small and medium-sized businesses operate in. There are more than 200,000 SMEs across Canada.

That concerns me a bit more. The current economic environment is not conducive to investments. Let us be honest. The investments made by these small and medium-sized enterprises, as well as the larger companies, are what create wealth and drive the economy. More investment means more jobs. Today, because of the Liberal government's policies, investments are on the decline.

My colleague, the finance critic, said during question period that capital is leaving Canada. It is a disaster. Where is it going? It is going across the border to the United States where President Trump lowered the corporate interest rate from 35% to 21%. The U.S. is attracting capital because the Government of Canada is raising taxes and adding more regulations, which is another way of telling foreign investors not to invest in our energy economy.

The fact is that government red tape and slow moving processes have caused investments in Canada's energy industry to drop by more than $84 billion over the past two years. Indeed, $84 billion in investments in the Canadian energy sector were simply cancelled. Imagine the impact that has on job creation in the country.

That is not all. As everyone knows, Canada has been open to foreign investment ever since Brian Mulroney's first government in 1984. The Liberal government of the day had set up an agency to select foreign investors. When Mr. Mulroney's government took over in 1984, one of the first things it did was get rid of that agency and welcome foreign investment because it knew that investment creates wealth. Since then, Canada has made much progress thanks to foreign and domestic investment.

Now, however, foreign investors are stampeding for the exit. They are leaving Canada. Direct foreign investment in Canada plunged from 42% in 2016 to 27% in 2017 under a Liberal government. Why? Because the economic environment is not conducive to investment and wealth creation. Today we are glad the legal environment is good because Bill C-25 will modernize the Canada Cooperatives Act and the Canada Business Corporations Act. We agree with that.

However, we need to change the economic environment. We need to attract foreign investment. To do that, as the official opposition has been saying for months, we need less regulation and lower taxes. Crucially, the government has to stop taxing Canadians and funnelling the proceeds to big corporations in the form of subsidies and non-repayable loans.

I would add that businesses have lost confidence in Canada. Canadian business investment has declined by 5%, or $12.7 billion, since 2015. What happened in 2015? Oh right, the Liberal government took office and proceeded to scare off foreign investment. Our business people are now reluctant to invest because of this government. This spells disaster for our country's economic future.

We will understand the impact of this drop in investments in the months and years ahead. Fewer investments mean fewer jobs. That is the sad part of all this.

I fully agree with the government on the need to modernize the legislative framework surrounding business corporations. That is a good thing and we support it. However, we do take issue with the economic environment the Liberal government has created for our country. It will spell disaster for future generations.

That being said, I have to say that we fully support all the amendments to this bill brought forward by our colleagues in the Senate. I hope the House passes this bill as soon as possible. I also hope the Minister of Finance understands the situation in which Canadian entrepreneurs are being forced to operate and can assure them of a brighter future.

Canada Business Corporations ActGovernment Orders

3:30 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Mr. Speaker, I just have a quick question for my colleague, and I thank him for his work on this file.

My colleague said that his party supports the provisions in Bill C-25. With respect to strengthening diversity and gender parity on corporate boards, I am wondering if his party's position has changed. In the previous Parliament, when his party was in power, my colleague took issue with a bill aimed at improving diversity and gender parity on the boards of federal crown corporations. I am wondering whether his view or position on this matter has changed, given that he supports this bill today.

Canada Business Corporations ActGovernment Orders

3:30 p.m.

Conservative

Maxime Bernier Conservative Beauce, QC

Mr. Speaker, I am very pleased, as are all my colleagues in the official opposition, to support this bill. As my colleague just mentioned, the bill contains provisions to foster diversity on boards of directors. It is a sound move for corporations and it is a good decision. We are quite pleased to support this bill.

Canada Business Corporations ActGovernment Orders

3:30 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Mr. Speaker, I am pleased to also rise in the House to briefly speak to Bill C-25 and the Senate amendments that were returned and on which we are called upon to comment. My colleagues have already done so, and I will not repeat what has been said.

I would like to start by mentioning that the bill has several flaws. Above all, it does not go far enough on certain issues. We are currently discussing similar issues at the Standing Committee on Finance as some of my colleagues know. We have even heard from witnesses on the transparency of Canadian businesses and corporate registries, which make it possible to identify the owners. One of the shortcomings pointed out by several reputable international organizations is Canada's lack of transparency with respect to corporate registries and corporate regulations. This was pointed out many times. We are ranked near the bottom on corporate transparency.

There is a new term in Canada known as snow washing. Some wealthy individuals use Canada to hide the real identities of their businesses' owners. Canada's corporate laws are not often revised. In fact, the last time they were was 40 years ago. Bill C-25 was the perfect opportunity to address these international recriminations about the lack of transparency around our businesses, but unfortunately the government chose not to do so. This is one of the reasons why we proposed amendments to try to rectify the situation. Our attempts were in vain, and I disagree with the government's position on this.

This bill was also an opportunity to fix a problem that comes up all the time at the Standing Committee on Finance. I could even talk about my colleague from Hull—Aylmer, who questioned a tax expert, André Lareau. This expert testified in committee as part of our review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, which touches on what we are debating today. Prof. Lareau told the committee that Bill C-25 was a step in the right direction because it would prohibit bearer shares, which make it pretty easy to conceal shareholders' real identities. Unfortunately, Prof. Lareau said that this would not stop the existing shares from being converted into registered instruments.

My colleague even confirmed the existence of this loophole, saying that we had to look at all of the shares that are out there, not just those that will be issued after the bill receives royal assent. Unfortunately, to date, we have rarely had the opportunity to review our laws on corporations, co-operatives, and non-profit organizations. Nevertheless, we hope that the government made note of that loophole and will consider doing something about it in the near future.

In short, corporate transparency around the identity of beneficial owners remains an important issue that has not been sufficiently addressed in this bill. The government should examine that issue soon since Canada will continue to draw criticism regarding corporate transparency.

The government has already taken some action in that regard. It reached an agreement with the provincial ministers under which every company must enter the name of its beneficial owner in the provincial registries. That is a step forward and even though there are dissenting voices that say that this is not the way to go, there is still an apparent willingness to have a registry of beneficial owners, which our party believes is extremely important. I hope that the government intends to consider this issue soon in order to resolve the major problem of corporate transparency.

I hope that I have done the member for Windsor West proud. He has done remarkable work on this file. I hope that the rest of the debate on the transparency of corporations, co-operatives, non-profit organizations, and their boards of directors will be productive.

Canada Business Corporations ActGovernment Orders

3:40 p.m.

Green

Elizabeth May Green Saanich—Gulf Islands, BC

Mr. Speaker, I had presented amendments during clause-by-clause consideration in an attempt to follow up on the issue of bearer bonds which the member has raised. We had very good evidence at committee from Publish What You Pay Canada on the misuse of bearer shares, that bearer shares are difficult to track, and that there is no transparency around ownership.

I invite my friend from Sherbrooke to expand on the point.

Canada Business Corporations ActGovernment Orders

3:40 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Mr. Speaker, I thank my colleague for her comments. Bearer shares are indeed an important issue, and Canada is still doing quite poorly compared to the rest of the world, since the bill has not yet received royal assent. Canada's system makes it possible to easily hide the identity of who owns shares or a business. Canada must absolutely examine this issue.

A number of other countries have already taken action to prevent companies from concealing their owners' identities. Companies generally do not do this for good reasons, so we must address this issue in order to combat money laundering and organized crime. This is certainly a step in the right direction, but once again, something important is missing; this bill should be targeting existing shares, and not just shares that will be issued in the future.