Minister of Industry launches consultation on Canada Business Corporation Act

Consultation aimed at strengthening Canada's corporate governance

The Canadian government has launched a public consultation on the Canada Business Corporations Act (CBCA) to help identify ways in which the CBCA can better promote policy objectives, such as combating bribery and corruption, increasing diversity on corporate boards, and enhancing the ability of authorities to access information on corporate beneficial ownership.

“Our government is committed to engaging in meaningful conversations on issues around corporate governance,” said the Minister of Industry, James Moore, in a press release. “That means having greater access to information on corporations in a timely and transparent manner and being in a stronger position to support law enforcement and other government agencies in the fight against money laundering, terrorist financing and tax evasion by improving the ability to trace and detect criminal funds in the Canadian financial sector.”

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According to an Industry Canada release, the 90-day consultation will deliver on the federal government’s 2013 commitment to engage Canadians on the issue of strengthening Canada’s corporate governance.

“The Canadian Coalition for Good Governance believes that there are many changes that can be made to the CBCA in order to improve the corporate governance of companies governed thereunder, including the adoption of a majority voting standard for uncontested director elections,” said Stephen Erlichman, the Coalition’s executive director. “The Coalition commends the Government of Canada for beginning the CBCA public consultation process, and we look forward to having the opportunity to provide our comments.”

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Issues that have been identified for review as part of the consultation process include:

— greater transparency of the ownership of corporations to help ensure that they are not used for tax evasion, money laundering or terrorist financing

— the adequacy of corporate governance legislation in preventing bribery and corruption

— the diversity of corporate board members and management teams

— the rules for takeover bids

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— the use of the CBCA’s arrangement provisions to restructure insolvent businesses

— the role of corporate social responsibility

The Canada Business Corporations Act provides the legal and regulatory corporate governance framework for nearly 235,000 federally incorporated businesses.

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