Government Orders: Canada Business Corporations Act

Canada Business Corporations Act

June 20th 2017

“Mr. Speaker, I am pleased to speak at report stage 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. I will tell members that we will be supporting the bill. It is a bill that essentially came from the Conservative Party in the last Parliament. Bill C-25 would aim to make 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 reporting issuers are also governed by the CBCA. The proposed amendments in Bill C-25 cover several key corporate governance matters: majority voting, individual voting, annual elections, notice and access, diversity-related disclosures, and shareholder proposal filing deadlines. If enacted, these changes will affect about 600 of the approximate 1,500 companies on the TSX. Bill C-25 is also the minister’s second piece of legislation that has come straight from our previous Conservative government’s 2015 budget. For those in the House not aware, I will read an excerpt from page 140 of our previous Conservative government’s economic action plan 2015: The Government will propose amendments to the CBCA 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…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. When it comes to modernizing corporate governance and reducing red tape, the previous Conservative government made massive strides. We believe in fostering an environment in which businesses could grow and contribute to Canada’s long-term prosperity. I am pleased to see that the Liberals have moved forward with the comply or explain model. It has been proven that more diverse boards lead to better overall decision-making, better boards, better organization, and better economics. However, with all the hard work our previous Conservative government did on the bill, which is still being continued by the Liberals, the Liberals want to use our past legislation and call it their own. I suppose this does free up some time, which the Prime Minister has made clear is a priority for him. Hopefully, this will allow the Liberal Party to focus on what it feels is more important to Canadians, photo ops and selfies. Back in 2015, the Conservative Party knew that this bill needed a couple of amendments. The motion put forward by the NDP and the proposed amendments to Bill C-25 are similar to the amendments we proposed in committee, and we the Conservative Party are in support of that motion. In 2010, a House of Commons committee led a statutory review of Canada’s federal corporate governance framework, which led to further consultation in 2014 by Industry Canada. After hearing from witnesses, the Conservative Party put forward two amendments to make the bill stronger, and like the motion put forward by the NDP, these amendments included defining the term diversity, and requested a review to take place on the diversity section after three years. Even back in 2015, these amendments were voted down by the Liberal Party. We, the official opposition, will stand with the NDP and many witnesses to the committee on the importance to define diversity in the bill. The NDP amendment defines diversity as: information respecting gender representation and diversity—including in regard to colour, race, religion, national or ethnic origin, age, sex, sexual orientation, gender identity or expression, or mental or physical disability— among the directors and among members of senior management as defined by regulation as well as any prescribed information respecting diversity. For a party that claims to fight for diversity, the Liberals are not even willing to tell Canadians what they mean by the word diversity. Does this sound familiar to anyone else? Well, it should. The second amendment, suggested by almost all witnesses, was to ensure that a review of the diversity policy would happen. The timelines varied from one to five years. As a result, the opposition agrees that a three-year review would be best. We chose this time frame, because it would allow for results to come in, and if changes were necessary, they could be made promptly. Furthermore, we took into consideration the federal election, which could cut into the review if a two-year timeline was suggested. A three-year review would occur after any upcoming election. 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. Changes proposed to the Competition Act would do just that. They would reduce business uncertainty and create a competitive marketplace, and prevent anti-competitive practices. The amendments would also reduce the administrative burden on businesses. 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 the corporate governance practices in companies. With these amendments, suggested by the NDP, Bill C-25 will be Canada’s next step in modernizing corporate governance. The official opposition will stand with the NDP and the committee witnesses to have these amendments made to Bill C-25.”