Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue 8 - Minutes of Proceedings
OTTAWA, Wednesday, April 4, 2001
(10)
[English]
The Standing Committee on Banking, Trade and commerce met at 3:45 p.m. this day, in Room 505, Victoria Building, the Chairman, the Honourable Senator Kolber, presiding.
Members of the committee present: The Honourable Senators Angus, Furey, Hervieux-Payette, P.C., Kelleher, P.C., Kirby, Kolber, Kroft, Lynch-Staunton, Meighen, Oliver, Poulin, Setlakwe and Wiebe (13).
Other senator present: The Honourable Senator Tkachuk (1).
In attendance: Mr. Stephen L. Harris, and from the Parliamentary Research Branch, Library of Parliament, Law and Government Division: Mr. Geoff Kieley, Research Officer.
Also in attendance: The official reporters of the Senate.
WITNESSES:
From the Corporate Responsibility Coalition:
Duff Conacher, Coordinator, Democracy Watch.
From Industry Canada:
Rob Sutherland-Brown, Senior Counsel.
Pursuant to the Order of Reference adopted by the Senate on Wednesday, February 21, 2001, the committee continued its examination of Bill S-11, An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other Acts in consequence.
Mr. Conacher of the Corporate Responsibility Coalition made a statement and answered questions.
It was agreed, - That clause-by-clause consideration of Bill S-11 proceed.
Senator Kirby moved, - That the title stand postponed
The question being put on the motion, it was - Resolved in the affirmative.
It was agreed,- That clauses 1 to 41 carry.
Senator Kirby moved, - That clause 42 be amended by replacing on page 23, lines 1 to 6 with the following:
"113. (1) A corporation shall, within fifteen days after
(a) a change is made among its directors, or
(b) it receives a notice of change of address of a director referred to in subsection (1.1),
send to the Director a notice, in the form that the Director fixes, setting out the change, and the Director shall file the notice.(1.1) A director shall, within fifteen days after changing his or her address, send the corporation a notice of that change."
The question being put on the motion in amendment, it was - Resolved in the affirmative.
It was agreed,- That clause 42, as amended, carry.
Senator Poulin moved, - That clauses 43 to 54 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Kirby moved, - That clause 55 on page 38 be amended by
(a) replacing line 20 with the following:"(4) Unless the by-laws otherwise provide, any person"; and
(b) replacing line 27 with the following:"during the meeting, if the corporation makes available such a communication facility. A person participating in".
The question being put on the motion, it was - Resolved in the affirmative.
It was agreed,- That clause 55, as amended, carry.
Senator Poulin moved, - That clauses 56 to 58 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Kirby moved, - That clause 59 be amended by replacing lines 43 and 44 on page 42 and lines 1 to 3 on page 43 with the following:
"may be, notify in writing the person submitting the proposal of its intention to omit the proposal from the management proxy circular and of the reasons for the refusal.".The question being put on the motion, it was - Resolved in the affirmative.
It was agreed,- That clause 59, as amended, carry.
Senator Poulin moved, - That clause 60 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Kirby moved, - That clause 61 be amended on page 44, by replacing lines 3 to 7 with the following:
"(3) Despite subsection (1), unless the by-laws otherwise provide, any vote referred to in subsection (1) may be held, in accordance with the regulations, if any, entirely by means of a telephonic, electronic or other communication facility, if the corporation makes available such a communication facility.
(4) Unless the by-laws otherwise provide, any person participating in a meeting of shareholders under subsection 132(4) or (5) and entitled to vote at that meeting may vote, in accordance with the regulations, if any, by means of the telephonic, electronic or other communication facility that the corporation has made available for that purpose.".The question being put on the motion, it was - Resolved in the affirmative.
It was agreed,- That clause 61, as amended, carry.
Senator Poulin moved, - That clauses 62 to 67 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Kirby moved, - That clause 68 be amended on page 48, by replacing line 10 with the following:
"(b) has fifty or fewer shareholders en-".The question being put on the motion, it was - Resolved in the affirmative.
It was agreed,- That clause 68, as amended, carry.
Senator Poulin moved, - That clauses 69 to 96 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Kirby moved, - That clause 97 be amended on page 58 by replacing lines 29 to 39 and lines 1 to 8 on page 59 with the following:
"193. A corporation may carry out a going-private transaction. However, if there are any applicable provincial securities laws, a corporation may not carry out a going-private transaction unless the corporation com plies with those laws.".
The question being put on the motion, it was - Resolved in the affirmative.
It was agreed,- That clause 97, as amended, carry.
Senator Poulin moved, - That clauses 98 and 99 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Kirby moved, - That clause 100 be amended on page 63 by replacing lines 27 to 32 with the following:
"shareholder may
(a) within ninety days after the date of termination of the take-over bid, or
(b) if the shareholder did not receive an offer pursuant to the take-over bid, within ninety days after the later of
(i) the date of termination of the take-over bid, and
(ii) the date on which the shareholder learned of the take-over bid,
require the offeror to acquire those shares.".
The question being put on the motion, it was - Resolved in the affirmative.
It was agreed,- That clause 100, as amended, carry.
Senator Poulin moved, - That clause 101 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Kirby moved, - That clause 102 be amended by
(a) by replacing lines 34 to 37 on page 64 with the following:
"including the restoration of any rights and privileges whether";
(b) by replacing lines 12 to 14 on page 65 with the following:
"(c) a person who, although at the time of; and
(c) by replacing line 19 on page 65 with the following:
"(d) a trustee in bankruptcy for the dissolved".
The question being put on the motion, it was - Resolved in the affirmative.
It was agreed,- That clause 102, as amended, carry.
Senator Poulin moved, - That clauses 103 to 147 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Kirby moved, - That clause 148 on page 93 be amended by
(a) replacing line 3 with the following:
"(3) Unless the by-laws provide otherwise, a member or"; and
(b) replacing line 10 with the following:
"ing, if the cooperative makes available such a communication facility.".
The question being put on the motion, it was - Resolved in the affirmative.
It was agreed,- That clause 148, as amended, carry.
Senator Poulin moved, - That clauses 149 to 152 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Kirby moved, - That clause 153 on page 97 be amended by
(a) replacing line 3 with the following:
"section 52, the cooperative must, within the";
(b) replacing line 7 with the following:
"tion 58(2.4), as the case may be, notify in writing"; and
(c) replacing line 10 with the following:
"and of the reasons".
The question being put on the motion, it was - Resolved in the affirmative.
It was agreed,- That clause 153, as amended, carry.
Senator Kirby moved, - That clause 154 be amended by replacing lines 20 to 24 on page 97 with the following:
"(3) Despite subsection (1), unless the by-laws provide otherwise, any vote referred to in subsection (1) may be held, in accordance with the regulations, if any, entirely by means of a telephonic, electronic or other communication facility, if the cooperative makes available such a communication facility.
(4) Unless the by-laws otherwise provide, a member or shareholder participating in a meeting of the cooperative under subsection 48(3) or (3.1) and entitled to vote at that meeting may vote, in accordance with the regulations, if any, by means of the telephonic, electronic or other communication facility that the cooperative has made available for that purpose.".
The question being put on the motion, it was - Resolved in the affirmative.
It was agreed,- That clause 154, as amended, carry.
Senator Poulin moved, - That clauses 155 to 160 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Meighen moved, - That appendix A to Minister Tobin's letter to Senator Kolber describing the amendments be appended to today Minutes of Proceedings.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Kirby moved, - That Bill S-11 be amended by adding after line 47 on page 98 the following:
"160.1 Section 91 of the Act is replaced by the following:
91. (1) A cooperative must, within fifteen days after
(a) a change is made among its directors, or
(b) it receives a notice of change of address of a director referred to in subsection (2),
send to the Director a notice, in the form that the Director fixes, setting out the change.(2) A director must, within fifteen days after changing his or her address, send the cooperative a notice of that change.
(3) Any interested person, or the Director, may apply to a court for an order to require a cooperative to comply with subsection (1), and the court may so order and make any further order it thinks fit.".
The question being put on the motion, it was - Resolved in the affirmative.
Senator Poulin moved, - That clauses 161 to 184 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Kirby moved, - That Bill S-11 be amended by adding after line 34 on page 108 the following:
"184.1 Paragraph 165(2)(b) of the Act is replaced by the following:(b) it has fifty or fewer shareholders entitled to vote at a meeting, two or more joint holders being counted as one shareholder.".
The question being put on the motion, it was - Resolved in the affirmative.
Senator Poulin moved, - That clauses 185 to 192 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Kirby moved, - That Bill S-11 be amended by adding after line 18 on page 116 the following:
"192.1 Subsection 176(1) of the Act is replaced by the following:176. (1) If a shareholder holding shares of a distributing cooperative does not receive a notice under this Part, the shareholder may
(a) within ninety days after the date of the end of the take-over bid, or
(b) if the shareholder did not receive an offer pursuant to the take-over bid, within ninety days after the later of
(i) the date of the end of the take-over bid, and
(ii) the date on which the shareholder learned of the take-over bid,
require the offeror to acquire those share.".The question being put on the motion, it was - Resolved in the affirmative.
Senator Poulin moved, - That clauses 193 to 205 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Kirby moved, - That clause 206 be amended
(a) by replacing line 37 on page 119 with the following:
"of the Act before paragraph (b) is replaced";
(b) by adding after line 46 on page 119 the following:
"(a) restored to its previous position in law, including the restoration of any rights and privileges whether arising before its dissolution or after its dissolution and before its revival; and"; and
(c) by adding after line 6 on page 120 the following:
"(8) In this section, "interested person" includes(a) a member, a shareholder, a director, an officer, an employee and a creditor of the dissolved cooperative;
(b) a person who has a contractual relationship with the dissolved cooperative; and
(c) a trustee in bankruptcy for the dissolved cooperative.".
The question being put on the motion, it was - Resolved in the affirmative.
It was agreed,- That new clause 206 carry.
Senator Poulin moved, - That clauses 207 to 230 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Kirby moved, - That Bill S-11 be amended by adding after line 24 on page 136 the following:
"Air Canada Public Participation Act
230.1 (1) Subsections 6(4) of the Air Canada Public Participation Act is repealed.2) The portion of subsection 6(5) of the Act before paragraph (a) is replaced by the following:
(5) For the purposes of this section,
(3) Subsection 6(5) of the Act is amended by adding the word "and" at the end of paragraph (a) and by repealing paragraph (b).
Canada Development Corporation Reorganization Act
230.2 (1) Subsections 5(6) of the Canada Development Corporation Reorganization Act is repealed.(2) The portion of subsection 5(7) of the Act before paragraph (a) is replaced by the following:
(7) For the purposes of this section,
(3) Subsection 5(7) of the Act is amended by adding the word "and" at the end of paragraph (a) and by repealing paragraph (b).
CN Commercialization Act
230.3 (1) Subsections 8(4) of the CN Commercialisation Act is repealed.(2) The portion of subsection 8(5) of the Act before paragraph (a) is replaced by the following:
(5) For the purposes of this section,
(3) Subsection 8(5) of the Act is amended by adding the word "and" at the end of paragraph (a) and by repealing paragraph (b).
Nordion and Theratronics Divestiture Authorization Act
230.4 (1) Subsections 6(4) of the Nordion Theratronics Divestiture Authorization Act is repealed.(2) The portion of subsection 6(5) of the Act before paragraph (a) is replaced by the following:
(5) For the purposes of this section,(3) Subsection 6(5) of the Act is amended by adding the word "and" at the end of paragraph (a) and by repealing paragraph (b).".
The question being put on the motion, it was - Resolved in the affirmative.
Senator Poulin moved, - That clauses 231 to 233 carry.
The question being put on the motion, it was - Resolved in the affirmative.
It was agreed,- That the schedule carry.
It was agreed,- That the title carry.
It was agreed, - That Bill S-11, as amended, carry on division.
It was agreed, - That Bill S-11 be reported to the Senate with amendments.
It was agreed, - That the Law Clerk and Parliamentary Counsel be authorized to re-number the clauses and cross references thereto accordingly, as a consequence to the amendments adopted today.
Pursuant to the Order of Reference adopted by the Senate on Monday, March 12, 2001, the committee continued its examination of Bill S-17, to amend the Patent Act.
It was agreed, - That clause-by-clause consideration of Bill S-17 proceed.
It was agreed, - That the title stand postponed.
Senator Hervieux-Payette, P.C., moved, - That clause 1 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Hervieux-Payette, P.C., moved, - That clause 2 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Hervieux-Payette, P.C., moved, - That clause 3 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Hervieux-Payette, P.C., moved, - That clause 4 carry.
The question being put on the motion, it was - Resolved in the affirmative.
Senator Hervieux-Payette, P.C., moved, - That clause 5 carry.
The question being put on the motion, it was - Resolved in the affirmative.
It was agreed,- That the title carry.
Mr. Sutherland-Brown from Industry Canada answered questions.
After debate,
At 4:45 p.m., the committee recessed.
At 4:50 p.m., the committee resumed its proceedings.
It was agreed, - That the following observations be appended to the report on Bill S-17.
"The committee recognizes that these observations are outside the purview of S-17. However, the Minister, in his appearance before the committee, indicated his intention to review the Patent Act at a future date in this Parliament. Any future review should consider the issues that follow.
The committee recognizes that framework laws, such as intellectual property, must remain modern and progressive, and play an important role in the promotion of an innovative economy.
The committee heard testimony suggesting that aspects of the present regulations may not be working in the way that Parliament originally anticipated. This may be leading to an increase in costly litigation. Such costs are normally passed on to the consumer through higher prices.
These regulations essentially superimpose special rules on court procedures. Testimony by government officials indicated that the regulations in question were a trade-off in exchange for the "early working" exception, which permits the generic manufacturers to begin work on the product before the expiry of a patent. The Patent Act created this legislative exception, which would otherwise be a violation of the patent holder's rights.
The case that witnesses raised is one in which an existing patent on a drug is coming to an end and a manufacturer is planning to create a generic edition. If one or more other patents related to the same drug have been issued, a claim by the original patent holder that the generic copy will infringe these other patents automatically prevents the Minister of Health from issuing a notice of Compliance for up to two years.
The committee was told the result is that the generic product cannot be marketed for a longer period of time than would otherwise be the case, and that this use of the regulations is tantamount to an abuse of process.
In general, it is the committee's view that the courts are fully capable of determining appropriate procedures, which should not differ substantially from one industry to another. Regulatory interference carries a risk that an unfair advantage may inadvertently be provided to one side or the other.
Given the testimony suggesting that the cost and volume of related litigation was high, that a significant majority of the cases were ultimately lost by the patent holders, and that the patent holders gain an unintended benefit from the delay created, modifications of the regulations could be in order.
Indeed, the Minister of Industry agreed that "the intention should be to avoid things which would allow abuse to unnecessarily and, in an unearned way, extend that period of patent protection."
The committee, therefore, strongly urges that the Minister, in a future review of the legislation and regulations in question, ensure that they do not provide any of the parties implicated in patent protection with an advantage unintended by Parliament.
In addition, the committee strongly urges any future proposed changes to regulations made under the Patent Act be tabled in both Houses of Parliament and automatically referred to appropriate committees for study and report within 30 sitting days of their being referred to committee."It was agreed, - That Bill S-17 carry.
It was agreed, - That Bill S-17 be reported to the Senate with observations.
At 5:00 p.m., the committee adjourned to the call of the Chair.
ATTEST:
Denis Robert
Clerk of the Committee