Canada Business Corporations Act
Date: 2023_04_28
Chamber: HOUSE OF COMMONS
Mr. Sebastien Lemire: I rise today to speak to a bill that is of crucial importance to the Quebec and Canadian economies, specifically, Bill C-42, an act to amend the Canada Business Corporations Act and to make consequential and related amendments to other acts. Bill C-42 was introduced in the House of Commons to modernize the Canada Business Corporations Act and make it more competitive and adapted to the current needs of businesses. The amendments to the act seek to enhance the transparency, responsibility and sustainability of Canadian businesses while ensuring their competitiveness on the international stage. The bill has several important provisions. First, it introduces an obligation for corporations to declare their real economic interests to enhance transparency and fight money laundering and terrorist financing. This provision will also help prevent corporations from hiding their true ownership behind opaque structures and improve the public's confidence in the integrity of the corporate system. The bill also brings in a new corporate social and environmental responsibility strategy. Corporations will be held accountable for social, environmental and governance factors in their decisions and their trade action. The purpose of this provision is to encourage businesses to adopt a long-term vision and make a positive contribution to society in addition to generating profits. My colleague from Joliette , who is also our finance critic, had questions the last time this bill was introduced. His question was the following: If business A belongs to company B, which belongs to corporation C, can we find out who the beneficial owner is? What happens when a business is in another, less co-operative country where information is not automatically shared, like in a tax haven? Will Bill C-42 allow us to identify the true owner? This question needs to be answered. Countless reports and investigations on multinational corporate activities indicate that organizational charts and operational structures are not always clear. The takeover of national security sensitive sectors or sectors that might jeopardize our supply chains is a real concern for our party. The example we are talking about here of a company that is owned by a chain of other companies can create a situation where it is difficult to identify the real owner, particularly if one or more of the companies are located in countries that do not have automatic information-sharing agreements. For example, I am thinking of two places in particular from a case I was looking at recently, where, at the centre of the company's complex structure were shell companies located in Labuan, a territory of Malaysia, and the British Virgin Islands, two places where strict laws and secrecy prevent the public and foreign courts from accessing information about the real owners of these companies. The two shell corporations were involved in transactions in France, Brazil and the United States. How are those countries managing this issue right now? Does the existing legislation provide tools for better monitoring and more flexibility in dealing with the challenges of the ongoing technological transition? I hope so. Although the new provisions of the bill improve the transparency of Canadian companies, they do not necessarily make it possible for Canadian authorities to identify the real owners of Canadian companies owned by entities located in uncooperative countries or tax havens. In such cases, Canadian authorities may have to rely on other methods to identify beneficial owners, such as requesting information from foreign authorities, using agreements for mutual legal assistance or relying on other sources of information such as media reports or leaked documents. It is therefore important that the teams monitoring and conducting assessments are well equipped. In February 2020, the Quebec government announced its intention to create a registry of beneficial owners of companies. Bill 78, an act to modernize legislative provisions respecting legal auditing, was introduced in the Quebec National Assembly in June 2020 and passed in December of the same year. Bill 78 contains provisions to create a registry of beneficial owners and make it public. We could take a closer look at the challenges of setting up such a registry and determine where the various provinces stand on this issue. How will the registry work? I look forward to hearing from officials on this issue. It is important to note that Canada has a number of information exchange agreements with other countries, including tax information exchange agreements that would allow Canadian authorities to access information from foreign companies operating in Canada. These agreements have made it easier for Canadian authorities to identify beneficial owners, even in cases where companies are owned by entities located in uncooperative jurisdictions or tax havens. I would really like to have a chance to hear the opinions of experts, as well as some recommendations for conditions that could be considered for the next round of negotiations with certain countries. The bill also includes amendments to strengthen shareholders' rights. It gives shareholders the right to vote on executive compensation and management succession plans. This provision will ensure greater transparency and accountability to shareholders, while increasing board members' accountability. We are pleased that some of our recommendations caught the attention of the department and have been included in Bill C-42 . Finally, the bill introduces amendments to facilitate access to capital for Canadian corporations. It simplifies the process for issuing shares and eliminates some existing restrictions, making it easier and more efficient for companies to raise capital. In short, the act to amend the Canada Business Corporations Act and to make consequential and related amendments to other acts is a crucial bill for the future of our economy in Quebec and in Canada. The proposed amendments aim to strengthen the transparency, accountability and sustainability of Canadian companies, while enhancing their ability to compete internationally. As a member of Parliament, I am certain that this legislation is necessary to protect the interests of Quebeckers and Canadians and to ensure long-term economic growth. In conclusion, I would like to draw a comparison related to my duties as critic for sport, a field in which good governance has been raised as an issue. Governance and accountability are key factors in sport. Governance refers to the way sport organizations are managed and led, while accountability refers to the way actors involved in sport are held accountable for their actions. In terms of governance, sport organizations must be managed transparently, effectively and fairly. Decisions must be democratic, and all stakeholders must have a say in the decision-making process. Governance structures must also be accountable to their members and to stakeholders. Accountability in sports has to do with how those involved are held responsible for their actions. That can include the responsibility of athletes when it comes to fair play and following the rules and the responsibility of coaches and the heads of sports organizations when it comes to keeping players safe and promoting a healthy sports environment. In the end, good governance and accountability are essential to ensuring the integrity and durability of sports. Sports organizations must be transparent in how they operate, accountable to their stakeholders and held responsible for their actions in order to maintain the trust and respect of fans and sports communities. It is unfortunate that the funding was established without a full understanding of what sports organizations would have to do to demonstrate real change. Obviously, I am thinking here of the government restoring funding to Hockey Canada. We need to ensure that the intentions of Bill C-42 live up to expectations, particularly those that will be expressed before the Standing Committee on Industry and Technology. I therefore call on all members of the House to support this important bill and to work together to pass it as quickly as possible.