Mr. Speaker, I am pleased to see the member for Windsor West put forth this motion today regarding a timeline for a comprehensive review of the diversity aspect that will be added to the Canada Business Corporations Act after Bill C-25 is passed. As the member is aware, our party members on the industry committee put forth a similar amendment, which would call upon the government of the day to do a review of the diversity policy after three years to determine how effective it has been. Initially, the member for Windsor West had suggested a timeline of two years. Obviously, I am happy to see that he listened to the arguments made by the member for Red Deer—Mountain View, who put forth the three-year amendment, and is now agreeing with him.
I would like to talk a bit about diversity, and then I will elaborate on why this review and this specific timeline are so important.
I have mentioned in the past that our Conservative Party has never been on the sidelines when it comes to diversity firsts in Canada. In fact, it was the Conservative Party that had the first Canadian female prime minister, that elected the first female MP to the House of Commons, and the first Chinese, Muslim, black, Latino, Hindu, Pakistani, and Japanese MPs. We had the first Mennonite cabinet minister, the first female engineer MP, and even the first quadriplegic MP and later cabinet minister, my dear friend Steven Fletcher. We had the first married couple to sit in this House at the same time. We even had the first husband and wife team to sit in both Houses at the same time anywhere in the Westminster parliamentary system.
None of those MPs was nominated or elected to meet or fill some regulatory quota. They themselves chose to run for us because they knew that we, on this side of the House, believe in merit and not quotas. I think the list that I just read makes it clear that talent and skills know no boundaries, be they racial, religious, or gender. In fact, talent and skills are only enhanced when discussions around boardroom tables, and even debates in this chamber, are between people of different backgrounds and different perspectives. Because each of us has had unique experiences that have shaped our view of the world and how we respond to the challenges that we encounter, each of us brings something unique to the table, and I would like to think that we are all the richer for that.
To help see more diversity on boards, Bill C-25 suggests the comply or explain model. This was proposed by the previous Conservative government after extensive consultation in 2014 in order to modernize Canada's corporate framework. Through consultation, we have seen across the world, and even within our own borders, the positive effects that this model produces. For example, countries like the U.K. and Australia have implemented comply or explain models similar to the one that we are discussing today that focus particularly on increasing gender diversity on corporate boards, and they have seen significant results. In fact, one of the witnesses who appeared before committee said that in Australia, “women's representation shot up from 10.7% in 2010 to 22.7% in 2016”, and in the U.K., “women's representation on FTSE 100 boards has more than doubled from 12.5% in 2011 to 26.1% in 2015.” Both cases were a result of implementing this policy.
Here at home in Ontario, we have seen rises in the number of women who sit on boards as well. Just over two years ago, the Ontario Securities Commission implemented the comply or explain model, and since then the number of women on boards has steadily increased to 20%. However, looking at Canada as a whole, in larger companies women make up an average of 34% of corporate boards. Implementing the widely used comply or explain model is the first step to seeing these numbers improve.
Most successful companies know that in today's society they must diversify to prosper and to be effective. Good companies diversify their product lines, their target customers, and their geographic markets, because they do not want to put all of their eggs in one basket. When they are smart, they diversify their workforce and their corporate boards, too. I say when they are smart, because numerous studies have shown that companies that employ people with disabilities almost invariably see their workplace morale, attendance, and productivity go up. Corporate boards with higher percentages of women almost invariably have higher growth and profitability rates than those that do not.
Our party is not here today to tell private companies how to run their businesses, but we do need to make sure that people of diverse backgrounds, genders, and ethnicity are considered at the table for the reasons I just mentioned. I think the comply or explain model provides the right balance to do this, but a review is a crucial part of determining the right balance. That is what we are discussing here today, the need for a comprehensive review of the diversity disclosure section.
Like many pieces of legislation created and presented in the House, it is important to look back on what was implemented to see if results have actually been achieved. In fact, most pieces of legislation do have a built-in review process. As we used to say when I was in the corporate world, “what gets measured gets managed”.
During committee, it was unanimously agreed upon by the members and by the witnesses who appeared that a review of the diversity and the comply or explain model should be done, but the opinion on timing was varied. While only a few people, and I stress only a few people, suggested five years, most agreed that five years would be too long to analyze the effects of this policy and said a two-year or three-year window would be more appropriate.
Members on this side of the House listened to those suggestions. In fact, the member for Red Deer—Mountain View put forth an amendment in committee with the hopes of seeing a three-year review take place. Unfortunately, the Liberals must have been experiencing a bit of selective hearing at that time. While the Liberals originally amended the bill to include a five-year review of the Canada Business Corporations Act, most witnesses expressed concern that this was in fact too long.
Our party believes that three years is an optimal time frame for review. First, it is important to provide enough time to see results. Witnesses stated that good, solid results would be seen within this time frame. While we need to make sure that we can actually get enough data to see the effects, we also need to make sure that a review is done in a timely manner. If changes need to be made, it is better to do them sooner rather than later.
One other thing we need to consider is we need to be mindful of the scheduled 2019 election. The member for Windsor West originally suggested that the review be done in two years, but that review process has the potential to conflict with an election that is scheduled for two years from now. This means the review could be interrupted or even swept under the rug until an election is over.
For those reasons, we believe that a three-year period would get us past an election so that a new Parliament could take a look at it.
Unfortunately, the amendment was shot down by the Liberals. As the member for Windsor West has suggested, this review process will occur before October 19, 2020, which brings us to about three and a half years from now.
I am happy to see that he took our suggestions and that he listened to the points that were made, especially by so many witnesses. It is for these reasons that I will be supporting the motion, and I encourage my colleagues to do the same.