Monday, June 6, 2022

The Standing Senate Committee on Banking, Trade and Commerce has the honour to table its

SECOND REPORT

Your committee, which was authorized to examine the subject matter of those elements contained in Divisions 5, 10, 11, 15, 16, 17 and 30 of Part 5 of Bill C-19, An Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures, has, in obedience to the order of reference of Wednesday, May 4, 2022, examined the said subject-matter and now reports as follows:

On May 4, 2022, the Standing Senate Committee on Banking, Trade and Commerce (the committee) was authorized by the Senate to study Divisions 5, 10, 11, 15, 16, 17 and 30 of Part 5 of Bill C-19, An Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures. In studying these proposed measures, the committee heard from officials from federal departments and organizations, representatives from banks and trust companies, as well as legal experts and non-governmental organizations. The Société des auteurs de radio, télévision et cinéma, the Canadian Bar Association, and Jennifer Quaid, University of Ottawa, provided written briefs to the committee.

1.Division 15

Division 15 proposes several amendments to the Competition Act including amendments that:

•criminally prohibit wage fixing and related agreements;

•increase maximum fines and administrative monetary penalties;

•clarify that incomplete price disclosure is false or misleading;

•expand the scope of business practices that may amount to an abuse of dominance; and

•allow private access to the Competition Tribunal to remedy an abuse of dominance.

The Committee’s Observations on Division 15

The committee believes it is imperative that the Government of Canada follows through on the commitment in Budget 2022 to consult broadly on the role and functioning of the Competition Act and its enforcement regime, and that it do so without delay.

There were concerns raised with the implications of prohibiting wage-fixing and no-poach agreements under the criminal conspiracy offences and these should be carefully examined and improved. The committee strongly urges the government to provide clarity and guidance on the application of this and other provisions under consideration on an expedited basis.

As a result, your committee was left with many unanswered questions on the substance and process surrounding Division 15. Your committee holds reservations and suggests that further study and consultation be undertaken immediately.

2.Division 16

Division 16 amends the Copyright Act to extend the general term of copyright protection from 50 years to 70 years after the life of the author before the end of 2022, as required under the Canada-United States-Mexico Agreement (CUSMA). It also makes corresponding amendments to the terms of protection accorded to works of joint authorship, anonymous and pseudonymous works, and posthumous works.

The Committee’s Observations on Division 16

Your committee held one meeting on Division 16 and heard from several stakeholders and expert academics. Your committee notes that Division 16 was controversial and was the subject of highly conflicting testimony. It also did not reflect the recommendation of the House of Commons Standing Committee on Industry, Science and Technology’s June 2019 report on the statutory review of the Copyright Act.

As a result, your committee was left with many unanswered questions on the substance and process surrounding Division 16. Your committee holds reservations and suggests that further study and consultation be undertaken immediately on the issue of registration.

3.Division 30

Division 30 amends the Canada Business Corporations Act (CBCA) to implement the first series of changes that will be required to meet the government’s commitment to create a publicly accessible corporate beneficial ownership registry by 2023. Specifically, these changes require private federal corporations to proactively send information on their beneficial owners to Corporations Canada on an annual basis or when a change in control occurs and allow Corporations Canada to provide all or part of that information to an investigative body or an authorized entity.

According to Finance Canada’s briefing binder on Bill C-19, the government plans to include a second series of amendments to the CBCA, notably with regards to public dissemination of beneficial ownership information, in the second budget implementation bill that will be tabled in fall 2022.

The Committee’s Observations on Division 30

The committee notes that in Budget 2021, the government proposed to provide $2.1 million over two years to Innovation, Science and Economic Development Canada to support the implementation of a publicly accessible corporate beneficial ownership registry by 2025. In Budget 2022, the government did not announce any additional funding.

The government has committed to accelerating the implementation of a publicly accessible corporate beneficial ownership registry from 2025 to 2023. However, the committee is concerned that the two-phased approach chosen by the government may limit Parliament’s ability to properly scrutinize the overall implementation of the corporate beneficial ownership registry. For example, in Division 30, Parliament is asked to approve the first series of changes without any specific details about the second series of changes that will be proposed in fall 2022 nor any estimate of the overall cost of the registry. For these reasons, the committee will closely monitor the government’s implementation of the corporate beneficial ownership registry and track the overall cost and progress.

Based on the testimony it heard, the committee also strongly encourages the government to take the following complementary actions to ensure the success of the registry in reducing the use of Canadian corporations for illegal activities:

•Following through on the commitment to collaborate with the provinces and territories to ensure their participation in the registry;

•Allocating enough financial and human resources for the enforcement and prosecution of criminal activities uncovered through analysis of the information gathered in the registry; and

•Continuing to examine the potential use of lawyers as nominee shareholders to shield the identity of beneficial owners through solicitor-client privilege.

The committee has no material observations regarding Divisions 5, 10, 11 and 17 of Part 5.

In conclusion, the committee continues to be concerned that the federal government chooses to include substantive changes to Canadian law in a budget implementation bill, such as those seen in Divisions 15 and 16, given that there is not sufficient time for the committee to properly examine the bill and hear stakeholders’ concerns, and that the government consultation process was inadequate.

Respectfully submitted,