INST Committee Meeting

Meeting No. 32

Tuesday, June 5, 2001

The Standing Committee on Industry, Science and Technology met at 9:10 a.m. this day, in Room 701, La Promenade Building, the Chair, Susan Whelan, presiding.

Members of the Committee present: Reg Alcock, Mauril Bélanger, Pierre Brien, John Cannis, Marlene Jennings, Walt Lastewka, Dan McTeague, Charlie Penson, Paddy Torsney and Susan Whelan.

Acting Members present: Marcel Proulx for Andy Savoy; Larry Bagnell for Marlene Jennings and Tony Tirabassi for Dan McTeague.

In attendance: From the Library of Parliament: Geoffrey P. Kieley, Research Officer.

Witnesses: From the «Groupe Investissement Responsable»: Eric Steedman. From the "Fédération des travailleurs et travailleuses du Québec (FTQ)": Réjean Bellemare, Union Advisor. From Democracy Watch: Duff Conacher, Coordinator. From the Department of Industry: Lee Gill, Director, Corporate Law Policy; Veronica Wessels, Senior Project Leader, SBCA Reform; Irving Miller, Legal Counsel, Department of Justice; Wayne Lennon, Senior Policy Analyst, CBCA Reform; Bob Weist, Director of Compliance, Corporations Directorate; Daniel Picotte, Legal Counsel.

Pursuant to its Order of Reference of Thursday, May 10, 2001, the Committee resumed consideration of Bill S-11, An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other Acts (See Minutes of Proceedings, Thursday, May 31, 2001, Meeting No. 30).

Réjean Bellemare, Duff Conacher and Eric Steedman each made opening statements and answered questions.

At 9:55 a.m., the sitting was suspended.

At 10:07 a.m., the sitting resumed.

Lee Gill, Veronica Wessels, Irving Miller, Wayne Lennon, Bob Weist and Daniel Picotte answered questions.

At 10:40 a.m., the sitting was suspended.

At 10:50 a.m., the sitting resumed.

The Committee proceeded to Clause-by-Clause consideration of the Bill.

Clause 1 to 59 carried, severally.

Pierre Brien moved, -- That Bill S-11, in Clause 59, be amended by replacing lines 33 to 44 on page 40 with the following:

"person must be, for at least six months, the registered holder or the beneficial owner of at least one of the outstanding shares of the corporation."

The question being put on the amendment, it was negatived.

Pierre Brien moved, -- That Bill S-11, in Clause 59, be amended by replacing lines 4 to 10 on page 41 with the following:

"(a) the name and address of the person; and
(b) the date on which the share or shares referred to in subsection (1.1) were acquired."

The question being put on the amendment, it was negatived.

Pierre Brien moved, -- That Bill S-11, in Clause 59, be amended by replacing lines 15 and 16 on page 41 with the following:

"purposes of the maximum number of words prescribed in subsection (3)."

The question being put on the amendment, it was negatived.

Pierre Brien moved, -- That Bill S-11, in Clause 59, be amended by replacing lines 17 to 21 on page 41 with the following:

"(1.4) If requested by the corporation within ten days after the day on which a proposal is submitted under paragraph (1)(a), the person who submits the proposal must provide proof, within ten days after the day on which the request is made, that the person meets the requirement of subsection (1.1)."

The question being put on the amendment, it was negatived.

Pierre Brien moved, -- That Bill S-11, in Clause 59, be amended by replacing lines 30 and 31 on page 41 with the following:

"proposal must together not exceed five hundred words."

The question being put on the amendment, it was negatived.

Pierre Brien moved, -- That Bill S-11, in Clause 59, be amended by replacing lines 37 and 38 on page 41 with the following:

"corporation at least ninety days before the anniversary date of the"

The question being put on the amendment, it was negatived.

Pierre Brien moved, -- That Bill S-11, in Clause 59, be amended by replacing line 4 on page 42 with the following:

"(c) not more than two years"

The question being put on the amendment, it was negatived.

Pierre Brien moved, -- That Bill S-11, in Clause 59, be amended by replacing lines 15 to 18 on page 42 with the following:

"held not more than three years before the receipt of the proposal, and did not receive the support of at least three per cent of the votes cast at the meeting;
(d.1) two substantially similar proposals were submitted to shareholders in management proxy circulars or dissidents' proxy circulars relating to meetings of shareholders held not more than three years before the receipt of the proposal, and the most recent of those proposals did not receive the support of at least six per cent of the votes cast at the meeting;
(d.2) three substantially similar proposals or more were submitted to shareholders in management proxy circulars or dissidents' proxy circulars relating to meetings of shareholders held not more than three years before the receipt of the proposal, and the most recent of those proposals did not receive the support of at least ten per cent of the votes cast at the meeting; or"

The question being put on the amendment, it was negatived.

Pierre Brien moved, -- That Bill S-11, in Clause 59, be amended by replacing line 34 on page 42 with the following:

"corporation shall, within ten days"

The question being put on the amendment, it was negatived.

Pierre Brien moved, -- That Bill S-11, in Clause 59, be amended by replacing lines 1 to 6 on page 43 with the following:

"(8) On application in writing to the corporation, within the period provided for in subsection (8.1), by a person submitting a proposal who claims to be aggrieved by the corporation's refusal under subsection (7) to include a proposal in a management proxy circular, an arbitration committee shall be established in accordance with section 137.1 to determine whether the corporation had the right to refuse to include the proposal in the management proxy circular, and the arbitration committee may restrain the holding of the meeting to which the proposal is sought to be presented and make any further order it thinks fit.

(8.1) The application referred to in subsection (8) shall be submitted within fifteen days after the day on which the person submitting the proposal received the notice sent by the corporation under subsection (7).

(8.2) The arbitration committee shall meet and hear the person submitting the proposal, the corporation and all other witnesses that it thinks fit, and shall accept all relevant documents, at the times and places that it fixes having regard to the availability of the parties.

(8.3) During the meeting held under subsection (8.2), the corporation must establish to the satisfaction of the arbitration committee that it had the right to refuse to include the proposal in the management proxy circular.

(8.4) The decisions of the arbitration committee shall be determined by a majority of votes.

(8.5) Any order made by the arbitration committee further to an application made under subsection (8) shall be communicated clearly and concisely in writing, together with the reasons, to the person submitting the proposal and to the corporation.

(8.6) The Minister may make regulations and any order that the Minister considers necessary for the establishment of the arbitration committee and the conduct of its proceedings.

137.1 (1) Further to the presentation of an application under subsection 137(8), the person submitting the proposal and the corporation shall each appoint an arbitrator, and the two arbitrators thus appointed shall appoint a third arbitrator.

(2) If the person submitting the application or the corporation fails to appoint an arbitrator within ten days after the presentation of an application under subsection 137(8), or if the two arbitrators appointed by them fail to agree on the third arbitrator within ten days after their appointment, the appointment shall be made by the Minister within five days after the request of a party.

(3) In appointing an arbitrator under subsection (2), the Minister shall have due regard to such considerations as are likely to secure the appointment of an impartial and independent arbitrator.

(4) When a person is appointed arbitrator, the person shall disclose any circumstances likely to give rise to justifiable doubts concerning that person's impartiality or independence.

(5) An arbitrator may be removed if circumstances exist that give rise to justifiable doubts concerning the arbitrator's impartiality or independence.

(6) The person submitting the proposal or the corporation may present to the Minister, within ten days after becoming aware of the appointment of an arbitrator, a request to remove the arbitrator that includes a written statement of the reasons for the request. The decision of the Minister with respect to the request shall be made within five days after the request and is final.

(7) A substitute arbitrator shall be appointed in accordance with the rules governing the appointment of the replaced arbitrator

1. when the mandate of an arbitrator is terminated under subsection (6);
2. when an arbitrator withdraws from the office for any reason;
3. when the parties agree to terminate the mandate of an arbitrator; or
4. in any other case where the mandate of an arbitrator is terminated.

(8) The Minister shall establish a list of twenty persons available to serve as arbitrators, which list may be consulted as required by the person submitting the proposal, the corporation and the two arbitrators appointed by them.

137.2 On the application in writing of the person submitting the proposal or the corporation within fifteen days after the person or the corporation receives the written communication referred to in subsection 137(8.5), a court may revoke any order made by the arbitration committee or make any other order it thinks fit, or both, and in particular restrain the holding of the meeting to which the proposal is sought to be presented, if the court is satisfied that the arbitration committee

1. acted without jurisdiction, acted beyond its jurisdiction or refused to exercise its jurisdiction;
2. failed to observe a principle of natural justice, procedural fairness or other procedure that it was required by law to observe;
3. erred in law in making a decision, whether or not the error appears on the face of the record;
4. based its decision on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it;
5. acted, or failed to act, by reason of fraud or perjured evidence; or
6. acted in any other way that was contrary to law."

The question being put on the amendment, it was negatived.

Clauses 60 to 114 carried, severally.

Clauses 115 carried, on division.

Clause 116 to 234 carried, severally.

Clause 235 was negatived.

Clause 236 was negatived.

Clause 237 was negatived.

Clause 238 was negatived.

Clauses 239 to 241 carried, severally.

Schedule I carried.

On the Title,

It was agreed, -- That Bill S-11 be amended by replacing the long title with the following:

An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other Acts in consequence.

The question being put on the amendment, it was adopted.

The Bill, as amended, carried.

ORDERED, -- That Bill S-11, An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other Acts, as amended, be reprinted for the use of the House of Commons at Report Stage.

It was agreed, -- That the Chair report Bill S-11 with amendments to the House as the Third Report of the Committee.

At 11:05 a.m., the sitting was suspended.

At 11:55 a.m., the sitting resumed in camera.

Pursuant to Standing Order 108(2), consideration of the Science and Technology Policies.

At 11:55 a.m., the Committee proceeded to consider its draft report.

At 1:27 p.m., the Committee adjourned to the call of the Chair.

Normand Radford

Clerk of the Committee