James Rajotte

[The Economy, June 11th, 2001]

Mr. Speaker, last week the industry, science and technology committee heard from members of the Canadian e-business opportunities round table. One of the strongest messages coming from the group was that in today's globally competitive environment those who stand still will fall behind and that we in Canada need to react to this by moving further and faster in reducing taxes.

Mr. John Eckert, the e-team captain and managing partner of McLean Watson Capital, expressed this very well when he stated:

There's much work that still remains to be done. We don't think that the changes that have been enacted or proposed with regard to tax reductions at the personal, corporate or capital gains rate are sufficient; that we've seen the U.S. move further ahead now with recent tax drop initiatives; and that for Canada to really get its share of the e-business and economic slice of the pie, that we have to work harder and be more aggressive to close that gap and make it more advantageous to invest in Canada.

I call upon the government to listen to Mr. Eckert and the Canadian e-business opportunities round table and move immediately to further reduce personal—

[Science And Technology, June 8th, 2001]

Mr. Speaker, if the parliamentary secretary wants critiques of CFI funding, he should talk to Liberal members on the committee. The CFI operates outside of normal government accounting procedures and thus is restricted in funding big science projects such as the neutron facility and the long range plan for astronomy.

Will the minister consider altering the structure and regulations of the CFI so its funds can be used by the National Research Council for projects such as the long range plan for astronomy?

[Science And Technology, June 8th, 2001]

Mr. Speaker, the Coalition for Canadian Astronomy has developed a long range plan to maintain Canada's position as a world leader in this field. To remain viable the plan requires further funding from the federal government of $164 million over 10 years. However rather than fund the plan, the government has decided to spend money in other areas such as $750 million to the Canada Foundation for Innovation.

Would the Minister of Industry explain why he has decided to fund the CFI and other programs instead of the long range plan for astronomy?

[Parliament Of Canada Act, June 7th, 2001]

Mr. Speaker, I would love to say it is a pleasure to rise today to address the bill, but it is not a pleasure because it is a very difficult issue for MPs.

I rise today to speak to Bill C-28, an act to amend the Parliament of Canada Act, the Members of Parliament Retiring Allowances Act and the Salaries Act. I want to address the general issue of the worth and value of MPs. I recognize that this issue is a controversial one. It is truly a political hot potato. That is why I want to address it as reasonably and as sensitively as I can.

I thank the commissioners for their report. I think they did a good job. They held as many hearings as possible with Canadians. They tried to make their report as fair as possible. I thank Ed Lumley, Jake Epp and Huguette Labelle for their service and for their good recommendations.

The first good recommendation they made was to make our salary completely transparent by rolling the tax free expense allowance into a salary and thus calling it what it is. Basically it has become a de facto salary over time. It also makes MPs and lawmakers subject to the same tax laws as Canadians, a fundamental principle that should be followed in every democracy.

They recommended that the pension contribution rates be lowered to 2.5%. This was a step in the right direction because it would move us closer to private sector standards. They also recommended a 20% pay raise, obviously the most controversial issue in the House.

This raises the question of what MPs are worth. I welcome this discussion as should all members in the House. However the question is very difficult because of the uniqueness of our role. What is an MP worth? Should we in the House be deciding what we are worth?

I will be the first to recognize that MPs from all parties do work hard and deserve fair compensation. Many who serve on committees do their homework. They come prepared and they do background research. They also serve their constituents well and are motivated by genuine interest. However that is not the point because many Canadians work hard. Many Canadians can point to putting in long hours, spending time away from their families, et cetera.

It is the responsibility of the position that basically determines what an MP is worth and the salary should be based on this. It should not be MPs in this House who determine what their salaries should be.

The other aspect is the opt in provision, which was not included in the report but which is included in the bill. This to me is not good public policy and not good lawmaking. It puts lawmakers in such a box that people who disagree with the process cannot stand up and voice their concern and displeasure with the process. They are forced to make a choice as to whether they want to opt in or not. We are boxed in. It separates us into two categories and that is just not fair.

We all vote on bills in this House that we disagree with, for example, the gun registry bill and tax cuts, but the fact is that when the majority votes yea, both in this House and in the other chamber, the bill becomes law and we are all subject to the same law. That is the way bills should be made and passed.

My real worry with the bill is the perception by Canadians of politicians and the institutions. It is fair to say, and this is truly sad, that Canadians as a whole, certainly since the 1950s, have had a declining respect for politicians and parliamentary institutions. I am not gladdened by this at all. We should all be sad and think about what we can do to change this.

What can we do to change that? We should not implement a process such as this to implement pay increases for ourselves. My main concern with this whole issue is the process. We took a report that was tabled just recently, introduced a bill shortly thereafter, debated the bill for less than three days and will soon be voting on it and passing it into law. Most Canadians must be wondering how we can possibly do this.

In my view, even with respect to our party policy, why not let the report come out in the spring, let the commissioners go across the country during the summer to explain what MPs do and the value of their work, introduce a bill in normal time in the fall, have a full House debate on that bill and then implement it if it is fair? That seems to me to be the more reasonable and rational way to do this, not to pass it just before the summer recess.

The optics of this are terrible. Most Canadians are upset about the fact that we are voting on our own pay raise just before the summer recess. We are adjourning after a very controversial period because of a lot of statements made by certain MPs from all sides of the House. I am not trying to highlight that because it is unfortunate. It is unfortunate that we are constantly highlighting MPs who make an offhand remark or an off colour remark. We do not recognize the value of MPs from all parties who do work hard. We should have used the opportunity to highlight those things but we did not.

One other aspect that I am really displeased with is the fact that the bill took the commission's report and changed it.

I recently met the former premier of Alberta, Peter Lougheed. I asked him how he dealt with this issue in Alberta. He said that he had set up a commission telling the people beforehand that whatever they recommended would be implemented, that the lawmakers would not have a chance to amend it, and that it would simply be implemented as is.

Bill C-28 would change the accrual rate for pensions from 2.5% to 3%. It would change the retroactive pay from April 1 to January 1. It would implement a 20% pay raise and has an opt in provision that was not in the report at all, which to me is the true travesty of the bill.

How do we deal with MP salaries? How should we deal with them?

First, similar to what former Premier Lougheed recommended to me, we should do what the Canadian Alliance suggests which is parliamentary compensation should be recommended by an independent commission according to private sector standards. Second, the decision of parliament would be implemented after a subsequent election. That would take the conflict of interest completely out of the issue and mean that I, as a parliamentarian, would not have to sit here and wonder whether I could stand up and vote against the bill or whether I could opt in or not opt in, and go through these decisions.

I knew before I ran what the compensation for an MP would be. Why should I be voting on a pay raise six months after being elected for the first time?

We should really link the whole issue to trying to raise the esteem of parliament and parliamentarians in the minds of Canadians. We could have used this as an opportunity to do so, but sadly I do not think we have. I know when I go back, I am going to see more disappointment on the faces of Canadians. It will not increase the esteem of Canadians for their parliamentary institutions and that is a true tragedy of the bill.

The last thing I want to recommend, in terms of any pay raises for ourselves, is that we should always tie it to recognizing our worth as MPs, but moreover tie it to reforming parliament itself so that we truly empower MPs and send a signal to Canadians that their MPs are working very much on their behalf, before any pay increases are implemented.

[Nuclear Industry, May 30th, 2001]

Mr. Speaker, the Canadian neutron facility is required to give the country an advance materials testing capability, safer materials, better foods and medicines, and better science essential to the knowledge economy.

The Minister of Finance has spoken often about the knowledge economy and the innovation that is needed. This project needs a champion at the cabinet table and the Minister of Finance can be that champion. Will the finance minister champion this facility when it is considered by cabinet next week?

[Nuclear Industry, May 30th, 2001]

Mr. Speaker, the proposed Canadian neutron facility at Chalk River is an essential part of Canada's scientific infrastructure for the 21st century, yet the government continues to delay its approval month after month.

Will the minister responsible assure the House that a positive decision will be made on the project before the end of June?

[Youth Criminal Justice Act, May 18th, 2001]

Mr. Speaker, the attorney general of Ontario came to Parliament Hill today to call on the Liberal government to put justice into the youth criminal justice act.

Through three red books and eight years in power the Liberal government has done little to improve the Young Offenders Act despite the outcry of Canadians. With the youth criminal justice act the Liberals have presented Canadians with an old car with a new paint job. There is little new in the act and little that brings justice to the system.

Like so many other provinces, as well as victims rights organizations and concerned citizens, Ontario called for stronger provisions to ensure that young offenders who commit adult crimes serve adult time and that there is mandatory jail time for weapons offences.

These are common sense solutions that regrettably the government has too little time for. For the sake of Canadians and for the sake of victims of crime, I urge the government to bring real justice to the youth criminal justice act.

[Science And Technology, May 10th, 2001]

Mr. Speaker, in his December 2000 report, the former auditor general recommended that the government establish a single federal authority for accountability purposes for big science projects that would report annually to parliament.

Canadians want to remain world leaders in science and technology but they want to ensure their taxpayer dollars are well spent.

Will the Liberal government let these opportunities slip away, or will the secretary of state or any of the ministers commit today to introducing such a single federal authority?

[Science And Technology, May 10th, 2001]

Mr. Speaker, Canadians are world leaders in materials research, astronomy and astrophysics.

The decisions on two large scale scientific projects, the long range plan for astronomy and astrophysics, and the Canadian neutron facility, are long overdue from the government. Delaying these decisions further endangers Canada's leadership role and will cause top quality researchers to look elsewhere for opportunities.

Will the secretary of state for science and technology demonstrate leadership and introduce a general fiscal framework for large scale science and technology projects?

[Canada Business Corporations Act, May 10th, 2001]

Mr. Speaker, I love it when the House gives unanimous consent. It gives me a warm feeling inside. I rise today to speak on Bill S-11, an act to amend the Canada Business Corporations Act and the Canada Cooperatives Act. This is the first time since 1975 that the Canada Business Corporations Act, otherwise known as CBCA, has been amended. Many of these changes are long overdue.

Bill S-11 also contains amendments to the Canada Cooperatives Act. It continues the reform process that recently led to a new statute governing co-operatives, which came into force on December 31, 1999.

At that time, however, some issues required further consultation and are now addressed in Bill S-11. For the most part the changes to the CCA closely follow the amendments to the CBCA and harmonize the rules governing co-operatives with key elements of corporate law.

The CBCA is the main federal law governing corporations in Canada, including large, medium and small enterprises. This act sets out the legal and regulatory framework for more than 155,000 federally incorporated businesses. In Canada corporations have the option of incorporating at the federal or the provincial level. Almost half of the largest companies in Canada are incorporated under the CBCA.

The previous act to amend the CBCA was tabled in the Senate during the last session of parliament and was known as Bill S-19. The bill was before the Senate committee on banking, trade and commerce when it died on the order paper due to the federal election. Nonetheless, the members of the Senate committee heard from 35 witnesses between April and the end of June 2000 and they should be commended for their work.

Bill S-11 is substantially the same as Bill S-19 but incorporates recommendations suggested by stakeholders such as the Canadian Bar Association, the coalition for CBCA reform, the Canadian Co-operative Association and the task force of the churches on corporate responsibility.

The amendments seek to modernize the Canada Business Corporations Act in four areas by: first, recognizing the global nature of the marketplace; second, clarifying the responsibility of corporate directors and officers; third, reducing federal-provincial duplication; and fourth, expanding shareholder rights.

It is an immense understatement to say that business has changed fundamentally since the mid-1970s and it is high time that the Canada Business Corporations Act reflected the transformation to the global economy. We support these changes in principle.

The CBCA currently requires that a majority of directors on a federally incorporated board and on each committee be resident Canadians. Canada is the only G-7 country that imposes such antiquated residency requirements on its businesses.

Bill S-11 would reduce the residency requirement to 25% for boards and entirely eliminate the requirement for board committees. This change is long overdue and should help Canadian companies compete as global players. However, I must say it is characteristic of the Liberal government that sacred cow sectors such as book publishing, telecommunications, transportation and Petro-Canada would be exempt from this reduction. We question the rationale as to why these businesses are not permitted to enjoy the flexibility to appoint directors based on their qualifications and not on where they live.

Another welcome change is the amendment that would allow foreign subsidiaries of Canadian corporations to acquire shares in their parent corporations under limited and clearly defined circumstances. This is mainly for the purpose of acquiring or merging with foreign corporations. These amendments will allow Canadian federally incorporated companies to compete with foreign multinationals while expanding globally.

With an eye to allowing directors to take appropriate risks in their decision making, Bill S-11 would replace the good faith reliance defence for directors with a due diligence one and would allow corporations to pay for defence investigation costs.

To clarify responsibilities of corporate officers and directors, Bill S-11 replaces the current joint and several liability regime with one of modified proportionate liability. This change would mean that every defendant found responsible for a financial loss stemming from an error, omission or misstatement in financial information would be liable only for the portion of the damages that corresponds with his or her degree of responsibility. However, joint and several liability would continue to apply in cases of fraud and to designated categories of plaintiffs such as the crown, charitable organizations, unsecured creditors and small investors.

Bill S-11 also clarifies that when the directors' powers are transferred to shareholders under a unanimous shareholders' agreement, the associated liability and defences are also transferred to shareholders. New shareholders who are not informed that a unanimous shareholders' agreement was in place at the time of their acquisition would be allowed to cancel the transaction.

Bill S-11 seeks to end costly time consuming administrative and legal burdens on federally incorporated businesses by limiting conflicts between federal and provincial statutes and regulations. Amendments would also modernize the wording of the legislation to bring the CBCA up to date with technological and other developments.

With respect to insider trading, Bill S-11 would repeal the federal duplication of provincial insider filing requirements, impose civil liability on persons who disclose insider information, even if those persons did not participate in the transaction, and increase the maximum fine from the current $5,000 to $1 million.

Bill S-11 would repeal the CBCA provisions for takeover bids and would allow the comprehensive codes for the takeover bid regulations under provincial securities laws to prevail.

The provisions restricting financial assistance to directors, officers, employees and shareholders would be eliminated because they have proven to be difficult to apply in practice. Since directors approving financial assistance transactions are already required to act in the best interests of the corporation, they can be sued for failing to do so. This is safeguard enough.

Bill S-11 would allow for greater participation by small shareholders in corporate decision making. It would do so by relaxing the rules under which shareholders communicate among themselves and allowing proxy solicitation to be done through public broadcast or newspaper advertisement instead of by direct mailings. The amendments would encourage corporations to employ new technologies such as e-mail when communicating with shareholders and when conducting shareholder meetings.

The legislation would also liberalize mechanisms for individual shareholders to submit proposals as well as set minimum share ownership and length of ownership thresholds required to submit a proposal. The bill also aims to restrain management's ability to block or refuse proposals from being considered.

Bill S-11 reflects the transformation of business since 1975 with respect to the global marketplace, the electronic revolution and the rise of shareholder rights, as well as the necessity of reducing federal-provincial regulatory redundancies.

The Canadian Alliance therefore supports in principle this legislation. However we will be consulting with interested parties to ensure that the changes in the bill are indeed beneficial to Canadian business.