Mr. Speaker, given his expertise, I would rather the hon. member for Glengarry—Prescott—Russell had shared his views on the relevance of Bill C-21. Since he preferred using his time to criticize members who spoke before him, I will have to rely on my own wisdom in considering this bill.
Allow me to voice my opinion on the part of this bill proposing a new Canada not for profit corporations act designed to place corporations within a more modern and more centralizing governance framework. This bill would amend parts II and III of the Canada Corporations Act and rely more on the Canada Business Corporations Act.
The point I wish to raise today is very similar to the one my colleague opposite just raised. It concerns fairness to the directors and officers of not for profit corporations.
Before coming to this place, I sat for years on the boards of many non-profit organizations. I did so because it had become increasingly difficult to recruit competent volunteer directors because of the load of responsibilities put on them.
These may include responsibility under the provisions of certain pieces of legislation with respect to environmental damages, responsibility for salaries or unpaid source deductions, civil liability for breach of fiduciary duty, and even responsibility for their own negligent acts. Being a volunteer director demands a great deal more than the recognition and support you get in return.
But the new not for profit corporations legislation provides for several levels of limitations on the liability of directors and officers. For example, incorporation limits liability by establishing a body corporate that can be held responsible; clearly defined standards of care do not hold responsible directors who act honestly and in good faith; directors may use the defence of reasonable diligence. They are provided with a remedy against unfounded complaints.
There are new provisions to indemnify directors against costs, charges and expenses incurred in respect of an unfounded proceeding or of incidents which the corporation believes to warrant indemnification.
One should be careful before enacting such a provision. Highly qualified officers who know the system well might exonerate themselves by invoking the due diligence defence and thus make the members of the organization pay collectively for their errors.
On the one hand, the Canada Corporations Act does not list the fiduciary responsibilities of directors and officers of not for profit organizations and contains no other provision on standards of diligence governing their behaviour and management. On the other, the Canada Business Corporations Act provides that every director and officer of a corporation in exercising their powers and discharging their duties shall act honestly and in good faith with a view to the best interests of the corporation and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
The new Canada not for profit Corporations Act provides that standards of care will be modeled on those in the Canada Business Corporations Act. A clear statement of the duties and responsibilities of the directors will facilitate the hiring and retention of qualified board members.
The proposed standards of diligence, which have been well defined by the courts, provide an extra tool to the not for profit organizations that have more objective standards and remedies. These objectives criteria streamline standards of diligence for directors of not for profit organizations incorporated under federal law across Canada.
When the bill was drafted harmonization with other Canadian acts was taken into account, but the acts that may differ, such as the Quebec Civil Code, and other provincial acts, should also be taken into account. The objective criteria of the standards of diligence afford protection to directors as well, by allowing them to cite due diligence as a defence. This provision was not in the Canada Corporations Act. It protects directors who have acted properly, but not those who might have acted improperly.
Obviously, any bill seeking to increase efficiency by allowing organizations to incorporate according to an as of right system and abolishing the letters patent system of incorporation is worth considering especially if it also abolishes ministerial discretion regarding the incorporation of an organization and, on top of that, makes it possible to hire competent directors and officers who will no longer be afraid of being unduly prosecuted.
Following the brief examination that we were able to do, the Bloc Québécois will vote in favour of the principle underlying Bill C-21. However, we must be diligent ourselves to ensure, first, that there will be no interference in Quebec's areas of jurisdiction and, second, that this legislation will be harmonized with the Civil Code of Quebec.
A standardization of the management of not for profit organizations is beneficial, respecting Quebec's jurisdictions, of course, especially since the new act would take into account, in the establishment of management mechanisms, the financial means and the size of the organization. Thus, it still offers a flexible framework to make these regulations.
However, referring the bill to committee for further study seems justified to us, because it will be possible to hear certain witnesses, namely stakeholders from the field and experts who will be able to enlighten us on certain controversial points or on questions.
Some provisions of the bill remain to be clarified, among other things, the issue of possible interference in Quebec's areas of jurisdiction in terms of the establishment of not for profit organizations whose activities come under Quebec's jurisdictions, for example, day care centres, as well as the harmonization with the Civil Code of Quebec, if such a bill is passed.
Also, even though the rules and responsibilities of directors are tightened, there is no real code of ethics with respect to the financial management of the organizations. This is a very important point. Organizations that do not establish a code of ethics do not understand the importance of being accountable to their members and of having a strict code of ethics that defines how they should conduct themselves vis-à-vis their members and their mandate. This is very important.
I hope that members of the House will vote to refer the bill to committee.