THE STANDING SENATE COMMITTEE ON BANKING, COMMERCE AND THE ECONOMY
EVIDENCE
OTTAWA, Thursday, September 25, 2025
The Standing Senate Committee on Banking, Commerce and the Economy met this day at 10:31 a.m. [ET] to study Bill S-1001, An Act to authorize Gore Mutual Insurance Company to apply to be continued as a body corporate under the laws of the Province of Quebec; and in camera for consideration of a draft agenda (future business).
Senator Clément Gignac (Chair) in the chair.
[Translation]
The Chair: Honourable senators, I am Clément Gignac, a senator from Quebec and chair of the Standing Senate Committee on Banking, Commerce and the Economy.
I would like to welcome those who are here in attendance and all those who are watching us today.
Before we begin, I invite you to consult the cards on the table in the committee room for guidelines to prevent audio feedback incidents.
Please keep your earpiece away from all microphones at all times. Do not touch the microphone. Activation and deactivation will be managed by the console operator. Finally, please avoid handling your earpiece while your microphone is on. Earpieces should either remain on the ear or be placed on the designated sticker at each seat.
Thank you for your cooperation.
I would like to ask my colleagues to introduce themselves.
[English]
Senator Varone: Senator Toni Varone, Ontario.
[Translation]
Senator Dalphond: Pierre J. Dalphond from Quebec, De Lorimier division.
[English]
Senator Fridhandler: Senator Daryl Fridhandler, Alberta.
[Translation]
Senator Henkel: Danièle Henkel, Alma, Quebec.
[English]
Senator Yussuff: Senator Yussuff, Ontario.
Senator McBean: Senator McBean, Toronto.
Senator C. Deacon: Lovely to see you. Colin Deacon, Nova Scotia.
Senator Wallin: We’re introducing ourselves to the witness, are we? My name is Pamela Wallin. I’m a senator from Saskatchewan. It’s so nice to meet you, and welcome.
Senator Martin: Yonah Martin, British Columbia.
[Translation]
The Chair: Those who follow our work will see that this new session has brought in a lot of new faces, but also that our friend the Honourable Senator Paul J. Massicotte is notably absent.
I would like to take a moment to acknowledge with gratitude his outstanding contribution as a member of the Standing Senate Committee on Banking, Commerce and the Economy.
Since the fall of 2003, Senator Massicotte has contributed to numerous reports and enriched our work thanks to his rigour, vision and ongoing commitment. His analyses and sense of dialogue have had a lasting impact on this committee.
On behalf of the committee and myself, I would like to thank you, dear friend Paul, for all those years of exemplary service and for your invaluable contribution to our discussions. Thank you, Paul.
We will begin our study of Bill S-1001, An Act to authorize Gore Mutual Insurance Company to apply to be continued as a body corporate under the laws of the Province of Quebec.
I invite the sponsor of the bill, the Honourable Senator Tony Loffreda to present Bill S-1001.
Hon. Tony Loffreda, sponsor of the bill: It is always an honour to work with all of you. This is my seventh year on the committee.
[English]
It is a real privilege and honour to work with you all. I also take my turn to congratulate and thank Senator Massicotte. He will be dearly missed. I thank him on my behalf for his numerous contributions and numerous years at the Canadian Senate.
[Translation]
Mr. Chair, honourable senators, I thank the committee for welcoming us today and allowing us to prioritize Bill S-1001, An Act to authorize Gore Mutual Insurance Company to apply to be continued as a body corporate under the laws of the Province of Quebec, so early in this parliamentary session.
[English]
Time is of the essence. When it comes to mergers, there is uncertainty with policyholders and employees and in the markets, so it is very important that it gets studied in a timely manner. Every bill deserves a deep dive, so thank you for your diligent work.
[Translation]
On behalf of myself and our friends at Beneva and Gore Mutual Insurance, thank you.
[English]
As the sponsor of Bill S-1001, I would like to offer a few brief remarks before turning the floor over to our experts and witnesses, Neil and Andy from Gore Mutual, and Jean-François and Pierre Marc from Beneva.
Senators will recall that I introduced this bill on June 3 and delivered my second reading speech on June 10. The very next day, Senator Carignan, who generously agreed to serve as our designated critic, spoke in support of the bill, and we promptly referred to it to this committee.
As I noted in June, the federal mutual insurance company Gore Mutual is seeking parliamentary approval to merge with Quebec-based Beneva. This is a Senate private bill, distinct from Senate public bills in that it arises from a petition by a specific group or individual requesting legislative authority for a particular action. It is important to make that distinction. In this case, Parliament is being asked to authorize a merger between two well-established and highly respected Canadian mutual insurance companies.
With the cooperation of senators and members of the House Commons, we are hopeful Bill S-1001 can proceed efficiently, without bypassing any necessary scrutiny, and receive Royal Assent in the coming month. This would allow the National Assembly in Quebec to undertake its own legislative process before the holiday recess. This is important because this bill has to go to the National Assembly in Quebec, so this is why timing is so crucial. It is something required to formalize the merger.
I first met Neil, Andy and Pierre Marc in Ottawa in March. We had a thoughtful conversation about the rationale behind the merger, its strategic importance and the benefits it would bring, not just to the companies and their employees but, most importantly, to their members, future customers and the communities they serve. Their passion and clarity convinced me that this is a responsible and forward-looking initiative, and I had no hesitation in agreeing to sponsor this bill. I have every confidence they will be just as persuasive today.
Once again, I thank you for taking a diligent look at this bill on a timely basis. On that note, I will turn the floor over to our experts and the senior executives of Beneva and Gore. As you all know, my office and I are always open for questions and inquiries at all times. I’m very proud of my office — I always say it and say it on record — I have close to a hundred years’ experience in my office. If you take my head of parliamentary affairs, my executive assistant and the few years I have, we have close to a hundred years. We are always open for questions, so feel free. They’re all good questions. Thank you.
The Chair: Thank you, senator. That is very impressive.
Before we turn to questions to you, we will hear from the other witnesses. We are delighted to welcome to the committee, as a panel, from the Gore Mutual Insurance Company, Mr. Neil Parkinson, Chair of the Board; and Mr. Andy Taylor, President and Chief Executive Officer.
[Translation]
We also have with us, from Beneva, Jean-François Chalifoux, Chief Executive Officer, and Pierre Marc Bellavance, Executive Vice-President and Leader, Legal and Corporate Services.
Gentlemen, thank you for accepting our invitation and welcome to the committee. I understand that you have prepared joint opening remarks. We have set aside 15 minutes for your four presentations. After your testimony, senators will be able to ask questions.
[English]
Neil Parkinson, Chair of the Board, Gore Mutual Insurance Company: Honourable senators, before we begin, I would like to thank you for welcoming us here today. I would particularly like to thank the Honourable Senators Clement Gignac and Toni Varone, as well as the Honourable Senator Tony Loffreda for agreeing to sponsor the bill. I would also like to thank the Honourable Senator Claude Carignan, who agreed to be the opposition critic, and all of you who helped move this matter forward so promptly.
Furthermore, let me point out that Connie Cody, the Conservative Member of Parliament for Cambridge, has enthusiastically agreed to sponsor our bill when it moves to the House of Commons.
My name is Neil Parkinson. I am Chair of the Board of Gore Mutual. The Board of Directors of Gore Mutual supports the adoption of Bill S-1001, An Act to authorize Gore Mutual Insurance Company to apply to be continued as a body corporate under the laws of the Province of Quebec and the merger proposal and believes it will provide fair and equitable treatment to all Gore Mutual policyholders.
In fact, our members overwhelmingly approved this merger by voting 94.6% at the annual meeting held last April. They will join Beneva members as full members of the merged entity and will have the opportunity to participate fully in its governance.
The future is bright for our members, policyholders and employees as we look forward to joining forces with Beneva and continuing to build Canada’s largest mutual insurance company together.
I would now like to introduce Andy Taylor, President of Gore Mutual.
Andy Taylor, President and Chief Executive Officer, Gore Mutual Insurance Company: Hello, everyone, and thank you again for your time this morning.
Gore Mutual traces its origins to 1839. It was founded in Brantford, Ontario, as the Gore District Mutual Fire Insurance Company. Today, the company is Canada’s oldest P&C, or property and casualty, mutual insurer, with offices in Cambridge, Toronto and Vancouver. We offer competitive insurance products through insurance brokers across the country.
With over 180 years of history, the company has grown and adapted alongside the country, overcoming challenges such as wars, financial crises and the increased frequency of severe weather-related catastrophes, all while maintaining our tradition of caring for and helping people in their greatest time of need.
As of December 31, 2024, the company had close to $700 million in premiums, over $1 billion in assets, $380 million in book value and comprehensive income of $18 million.
Under the Beneva brand, Gore Mutual will be able to continue its legacy while maintaining its important historic ties to Cambridge, Ontario, and its commitment to the community. The amalgamation will enable us to accelerate our growth and foster the long-term future of our organization with combined scale, diversification and access to capital. It will enable us to offer even more insurance products to our customers while remaining competitive in a consolidating property and casualty insurance market.
It is now my pleasure to yield the floor to Jean-Francois Chalifoux, President and CEO of Beneva.
[Translation]
Jean-François Chalifoux, Chief Executive Director, Beneva: Created by the coming together of La Capitale and SSQ Insurance in 2020, Beneva is now the largest insurance mutual in Canada with more than 3.5 million members.
Beneva positions itself as a major player in the insurance and financial services industry, offering a full range of life and health insurance, group insurance, property and casualty insurance, as well as savings and investments products.
As of December 31, 2024, Beneva had $27 billion in assets and $4.2 billion in total equity, and a 2024 consolidated net income of $589 million.
I would like to point out that this is a merger between two mutual companies from different jurisdictions and that, in the context of the call by governments across the country to increase interprovincial trade, our merger is a great example of strengthening such trade.
Joining forces with Gore Mutual will further enhance the ability of both entities to grow, innovate and stay resilient in a highly competitive market and an increasingly complex risk landscape.
The successful execution of the proposed merger between Beneva and Gore Mutual is contingent upon the passing of a federal private bill and of a subsequent provincial private bill.
My colleague Pierre Marc Bellavance, Executive Vice President and Leader, Legal and Corporate Services, will present the content of this non-controversial bill.
[English]
Pierre Marc Bellavance, Executive Vice-President and Leader, Legal and Corporate Services: Bill S-1001, by which Gore Mutual is requesting to change its federally chartered corporate status to that of a provincial insurance company, is crucial to our merger with Gore.
As mentioned in the preamble of Bill S-1001, there is no legislative provision authorizing an insurance company incorporated under the laws of Canada to apply to be continued as a body corporate under the laws of a province. This authorization is part of the first step of a series of four key steps through which the transaction will be effected.
The first step is the continuance of Gore Mutual under Quebec laws.
The second step is the transformation of Gore Mutual in two entities: a mutual holding company to receive Gore’s membership and a mutual-interest insurer that will continue Gore’s insurance activity operations.
The third step is the merger of the Gore Mutual holding company with Beneva Mutual, which is also a mutual holding company.
The last step is the combination of Gore’s insurance activities with those of Unica Insurance, Beneva’s wholly owned subsidiary that offers personal and commercial automobile and property insurance products through independent brokers in Ontario.
For further clarity, we have provided you with a chart that illustrates how these steps will unfold.
I would also like to mention that this bill does not set a precedent. In fact, since 1987, we have identified eight other similar initiatives, all of which required the passage of a private bill. The most recent was in 2016 and involved La Capitale Financial Security Insurance Company, which was continued under the laws of Quebec.
Finally, I wish to add that the announcement of the merger was well received by the insurance industry. It is also important to note that we have received a letter of non-objection from the Office of the Superintendent of Financial Institutions, OSFI, and from the Autorité des marchés financiers, the AMF, in Quebec, which will be the corporation’s new regulator and which supports the merger. Copies of their letters of support have already been provided to the committee chair.
With that, we would like to thank you once again for the time you have devoted to this bill, which is a pivotal step in our merger project, and we are ready to answer your questions, if any. Thank you.
[Translation]
The Chair: Thank you, gentlemen. I remind my colleagues that we scheduled a 90-minute meeting. We still have 70 minutes to ask questions. I will go clockwise for the order of questions, starting with our deputy chair, Senator Varone.
[English]
Senator Varone: I have one question. Hopefully, you can guide me through it. I’ll ask Mr. Chalifoux. The merger between La Capitale and SSQ Insurance that created Beneva was in the domain of Quebec and did not follow the same regulatory process that this particular insurance merger is following. Can you just explain why? Mr. Bellavance, I know you touched on it being that one was a federal incorporation and now it has to go down to a provincial corporation. Can you just explain that?
Mr. Chalifoux: It has to do with the size of the two organizations. Beneva is currently ten times larger than Gore Mutual. It’s preferable to operate under one regulatory regime, and it’s much simpler for us to go to the regime where the most members currently reside. That’s one of the reasons. There are also specifics to the Quebec provincial jurisdiction, which I will let Mr. Bellavance comment on, that justify moving and switching the federal license of Gore Mutual to the jurisdiction of the Province of Quebec.
Mr. Bellavance: There is an important difference between what we did in 2020 and what we’re doing today because, in 2020, that was a merger of two entities from Quebec. That’s different from today. Today, we have to move a federal insurance company, which is a mutual company, to the Quebec laws. That is different than what we did in 2020, but we did almost the same thing in 2016 with a federal company. It wasn’t a mutual at the time. It was an insurance company in 2016, and we had to move it to Quebec City.
The reason we did that was to simplify things, because it’s easier to deal with only one regulator rather than with two. These two regulators, the Office of the Superintendent of Financial Institutions and the Autorité des marchés financiers, are very sophisticated and good regulators. We have good communication with them. They work well with us. The cooperation is great with both of them.
That is the answer to your question. There is a difference between what we did in 2020 and what we are doing today. Today, we’re moving from federal to provincial. In 2020, it was only Quebec, and we had to go to the National Assembly of Quebec to modify our private laws and to merge the two entities at that time in 2020, but it was two Quebec-based mutual companies.
[Translation]
The Chair: Senator Dalphond, do you have any questions? You have about five minutes.
Senator Dalphond: Welcome to the Senate. As I have been involved in insurance company mergers and mutualizations, I will have a few specific questions that are somewhat technical.
Here is my first question: Is Unica Insurance managed under Quebec law or Ontario law?
Mr. Bellavance: It is managed under Quebec law, for the same reason I provided earlier in answering the Honourable Senator Varone. At some point, we decided to have all the same entities under the same regulator, under the same legislation, and Unica Insurance, which was a provincial company, is another example.
Senator Dalphond: It was York.
Mr. Bellavance: York Fire & Casualty Insurance Company, exactly. I see that you are well informed. At that time, we decided to bring it back to Quebec for the same reason I gave to Senator Varone. So, yes, it is a company —
Senator Dalphond: I need to interrupt you, as time is running out. If I understand correctly, Unica operates only in Ontario?
Mr. Bellavance: Yes.
Senator Dalphond: It’s an insurance company that sells insurance products through independent brokers. With the merger between Unica Insurance and Gore Mutual Insurance Company, you are going to operate in Ontario, as Gore Mutual essentially operates in Ontario, but also in Vancouver and in western Canada.
Mr. Bellavance: Yes.
Senator Dalphond: So will all of the operations of the new Unica insurance company be conducted outside Quebec?
Mr. Bellavance: Yes they will, through brokers, as you mentioned. It is different from our insurance company in Quebec, Beneva Insurance, which is involved in what is known as direct selling. The sale is being done within the company itself, Beneva. We have two different distribution networks in this sector.
Senator Dalphond: Unica Insurance does not sell mutual funds; it sells standard insurance.
Mr. Bellavance: Yes.
Senator Dalphond: And the current mutual policyholders that are part of Gore Mutual will become part of the Beneva mutual. Is that right?
Mr. Bellavance: That’s right. They will be located at the top of the pyramid, if I can put it that way, since you don’t have an organizational chart in front of you. At the top of the pyramid is the mutual, of course, which is a mutual management corporation and is unique to Quebec. Mr. Chalifoux mentioned it a few moments ago. In Quebec, we have a special system in that regard. We have three types of mutuals. Things are different at the federal level.
Our type is a mutual holding. A mutual holding is different, and that is what Beneva is.
Senator Dalphond: They will become part of the mutual holding?
Mr. Bellavance: They will become part of the mutual holding, the top one, like all other members insured by companies.
Senator Dalphond: Automatically?
Mr. Bellavance: Yes, they will become members with the merger.
Senator Dalphond: And it will be a mutual insurance company, regardless of its value?
Mr. Bellavance: In other words, they will be members of the mutual management corporation at the head of the group, like other members, including for the appointment of directors and for financial statements. The major issues are debated in the mutual, but now, that mutual does not issue insurance policies. That’s the major difference, senator.
Senator Dalphond: They become shareholders only.
Mr. Bellavance: They become members that could be considered “shareholders.”
Mr. Chalifoux: I prefer the term “co-owners.”
Mr. Bellavance: They are co-owners. That’s actually better.
Senator Dalphond: Yes. They are members, co-owners.
Mr. Bellavance: Yes, members. You have understood.
Senator Dalphond: And why are you leaving the federal system for the provincial system? What are the benefits? I understand that it is easier to manage, but it is not impossible to have a federal subsidiary. What benefits does the Quebec system provide over the federal system that make it more worthwhile?
Mr. Bellavance: First, I can answer your question by saying that I feel that the two systems are very similar, apart from a few unsubstantial differences in terms of potential investments. That’s not something that would have an impact on a final decision.
In terms of governance, as well, the committee membership is a little different. However, beyond the fact that the two bodies are sophisticated and very good, there are not necessarily advantages or disadvantages. The advantage of having a single regulator when it comes to deferral is that it is much simpler for a large group like ours.
However, we have a particularity in Quebec that does not exist in the federal law, which I mentioned earlier — mutual management corporations. Why leave Canada to go to Quebec? Because the Quebec system has its particularity, which means that it was for us the best way forward, of course.
We could not do the opposite as easily because the system is not the same at the federal level when it comes to the type of mutual; that’s the fundamental element that needs to be understood.
Beneva mutual is not a manufacturer of insurance policies. We are a mutual holding company that owns mutual insurance companies, and that enables us, in the Quebec model, to have access to capital, to investments. That is a fundamental part of the equation. That’s why there is no need for us to consider other ways than that to come together, as we are able to look for capital in the way we work with the law in Quebec, which is different than the federal law.
[English]
Senator Fridhandler: I just want to add some clarity to what I believe our role is at present in what is before the committee. Bill S-1001 is very specific in clause 1, and it says that despite a section in the Insurance Companies Act, the company may apply to be continued under the laws of Quebec. We’re not here to evaluate the merger; we’re simply here to decide, “Will we let Gore Mutual Company continue in Quebec?” If we were going to evaluate the merger, we would have days of witnesses here. I think that’s a red herring, but it may impact on your view.
When one evaluates a continuance of a company from one statute or jurisdiction to another, typically what you would do is ask for a comparison of what the rights are under Statute A that you’re leaving and what happens to you when you move to Statute B. That’s common practice. The Gore Mutual Company, in their circular in April, did lay out what they called the Summary of Comparison of Corporate Rights between the Insurance Companies Act of Canada and the post-amalgamation bill, i.e., the provincial legislation that the company will now come under. I think those factors are key, although some of these other issues might come into play when you say, “Yeah, that’s fine; you show me those distinctions, but I still think the merger is a good idea.” I think we have to narrow your inquiry. To be fully transparent, I met with our witnesses last evening to go over things in the circular and raise some of my concerns and have a discussion on it so that I wasn’t sandbagging anyone today.
When one looks at Schedule C to their circular in April, which was provided to me, in the comparative elements that are highlighted here and in items that aren’t here that the policyholders voted on, the first thing I would like to highlight to you is that there is no assurance that I’m aware of — and I stand to be corrected by our witnesses — that the new company, once continued, will be required to circulate to its policyholders in their capacity as shareholders — not as insurance but when they vote on matters relative to the company. There’s no requirement under the Quebec act or under the constitutional documents of the merged company to provide materials in English. The materials could go out only in French, if that was the determination of the company. Practically, they might say that that’s not appropriate, but if you get into a management battle, as in some of these cases, management of the board will do what they need to do to win.
I will highlight a couple of other items of difference between the two statutes. In the current statute, there are no restrictions on residency of directors. When Gore continues and we have the merged entity, a majority of the directors must be resident in Quebec. Currently, nine of Gore’s ten directors are resident in Ontario, and one is in British Columbia. I’m just putting this on the table for your consideration.
In voting at meetings of policyholders, or shareholders, similar, they have a different stream system. Typically, a policyholder in Gore right now has one vote at a meeting, and it doesn’t matter how many policies they have. In this new system that aligns with the Beneva system — although, I’m not an expert on the Quebec statute — there’s a delegated system where policyholders will accept and nominate delegates who then get to participate in the vote. It streams the voting rights of the current policyholders to something less than they have today.
There are some other minor things, but in my view, those are the material elements when you consider, “What am I doing to the Gore policyholders when I allow this continuance into Quebec?” The transaction is not structured. We’re being asked to bring them out of the federal statute and under Quebec. I understand that business proposition. Whether it’s tenable is not something that I am considering.
I just wanted to raise with my colleagues some of the issues that I observed as I reviewed the materials and that I think are important in our consideration on the statute and clause 1, which is the operative —
The Chair: If I may, thank you, senator. I think we realize that we have a lot of expertise around the table. Since you raised at least three topics, I will let the witnesses answer each of the concerns raised by our colleague.
Mr. Parkinson: Thank you, and I would also like to begin just by appreciating the consideration that Senator Fridhandler had to give us a little bit of a heads-up on his questions yesterday. That was very helpful, and we certainly appreciate that and the reasoned discussion we had. I just want to respond to each of the three items, if I might.
First of all, on French language, if you look at my bio, I’ve worked in the insurance industry as a consultant and auditor and adviser to the Superintendent of Financial Institutions for four decades before finally, sort of, retiring — my wife puts air quotes up there. I don’t have an experience of seeing language communication laid out in bylaws of companies. That isn’t to say that it doesn’t exist. I just haven’t seen it.
Importantly, in this case, Beneva, even before this merger, and since its inception, I believe, has provided all member communications and annual reports to its members in both English and French. Even though they have done business principally in Quebec, there’s no expectation that they would change anything. It is possible, I suppose, but it would run against the idea of what a sensible management approach would be to get a lot of new members and customers, who, perhaps, would most likely want to be communicated with in English. Starting to only get something in French is unlikely, I think. Although, I certainly take the point as factually correct.
I’m a shareholder in a couple of companies, such as Banque Nationale. I’ve seen communications from Desjardins. You get it in English, too. To the best of my knowledge, they don’t have it in bylaws. You’re quite right that there’s no bylaw guarantee, but I can’t commit anybody to changing bylaws. That’s typically based on a vote of members, anyway, and I don’t think there’s any intention. I think it’s a factual observation, but I can only say that the clear intention is to continue to communicate with all of our members in the language of their choice.
I should also mention that when we look ahead to how the board of the mutual company will do business, we are going to have simultaneous translation, a bit like this. People will be able to express themselves in both English and French. That will happen from the top of the house down. I won’t rave on any further about that one.
Maybe I could move on to the residency of directors. It would be quite right that there are differences, and I think Canadian federal companies have a residency requirement to be Canadian residents, not surprisingly, and Quebec has its own rule. There was a change in the Quebec legislation over the past few months, which Pierre Marc Bellavance could maybe comment on. We now just have to have a majority of Quebec residents at the top company level.
The Gore Mutual entity that is going to continue with a majority of Gore-appointed directors for a period of five years doesn’t have that requirement. It will be one-third Quebec residents, so we’ll have about five people from the legacy Gore board and four nominated by Beneva. We will continue in the Gore Insurance Company to have a majority of people who are probably outside Quebec, in all likelihood, but we are still settling with five.
Thirdly, the voting and delegate thing is really interesting because, in my experience, every year, with a mutual company, like a lot of membership organizations, it can be difficult to get a lot of engagement and a lot of people to vote. We would have a quorum requirement at our annual meetings in the range of about 400 people, I want to say, round numbers. We got about 1,400, by the way, to vote on this transaction, which is two to three times what we usually get. But it is hard to get a lot of high engagement in a membership organization.
We were very interested in looking at the delegate process that Beneva has in that they seem to be getting better engagement from members by using this process than we were getting from a classical membership-style organization. I think they have the same thing in every mutual company I’ve talked to and probably most cooperatives and so on as well.
I certainly accept Senator Fridhandler’s comments as being quite factual. It is a difference, but in looking at it and in disclosing the difference in governance process in our information circular, we certainly didn’t try to hide it, and we certainly talked about it when we did our town hall meetings and discussions heading into the annual meeting. Our view as a board, and, I think, supported by the overwhelming vote of the members, is that we are still, on balance, in a good place from a governance perspective. But again, I really appreciate Senator Fridhandler’s comments on this, and I’m happy if there’s any follow-up.
Mr. Bellavance: Legislation in Quebec — both the insurance act for insurance mutuals and the act respecting financial services for financial cooperatives like Desjardins Quebec — expressly prohibits the use of proxies. The Beneva government framework is consistent with these statutory restrictions. The prohibition is intended to strengthen democratic participation by encouraging direct engagement of members in governance. It is also in prevention of concentration of control, limiting the ability of a small group or individual to take over a mutual or cooperative through proxy solicitation.
Senator Loffreda: It’s very important to understand that Gore is a private company. On April 24, 2025, with a record participation by members, the members overwhelmingly approved the transaction, with 94.6% voting in favour. The members of Beneva also approved the transaction at its annual and special meeting on April 24, 2025.
[Translation]
The Chair: Thank you, gentlemen, and thank you, Senator Loffreda, for further clarifications. These were important subjects, so I allowed a bit more time, as our colleague has scrutinized these topics and they deserved answers.
Senator Henkel: Welcome. I will ask two questions one after the other. My first question is about small and medium-sized businesses. You know that small and medium-sized businesses account for 98% of the Canadian entrepreneurial fabric. However, they continue to face multiple obstacles that endanger them and complicate their development. A lot of them are counting on their partners such as insurance companies to provide them with solutions focused on real needs. Are small and medium-sized businesses part of your target? What could be the benefits for small and medium-sized businesses in this merger?
Here is my second question. In a world where insurance terms and conditions, as well as the needs of the insured, are constantly evolving, transparency and clarity of information remain essential for continued trust between insurers and their clientele. Can you tell us whether any changes to policy or to financial products are planned in this merger?
Mr. Chalifoux: Small and medium-sized businesses, such as Beneva’s commercial clients — be it in property and casualty insurance or group insurance — are part of our targets, and we believe that they will be better served by a strong and resilient mutual company than by two more vulnerable insurers. We considered the situation, and the backdrop was exactly the same as when La Capitale and SSQ Insurance were merged. We felt that our members would be better served.
This is a similar situation, as we do a lot of business with small and medium-sized businesses, particularly in claim processing for the property and casualty insurance of general contractors, restoration companies and autobody shops, as well as for group insurance of health care companies. We do a great deal of business with those partners. We believe that the more robust and resilient Beneva becomes — and this merger is done in that spirit — the better served such partnerships will be.
Mr. Bellavance: For your second question, I could say that some of Beneva’s priorities — and this could also apply to Gore Mutual — are transparency and simplicity, so that consumers or members understand very well the information included in their insurance policies. It is clear that we are trying, in our work in relation to sound business practices, to ensure that our clients are well informed. We are already working hard to accomplish that. It’s not simple, as insurance policies are often complicated. It is not an easy landscape for consumers to navigate. However, I would like to reassure you that it’s a high priority for Beneva to develop a product that is simple, clear and transparent and to provide consumers with all the information.
Senator Henkel: Thank you. Are you expecting any changes to products to occur in this merger? If so, what would they be, if you know?
Mr. Chalifoux: The current policyholder contracts will be honoured. There won’t be any changes for the current policyholders. The company will continue to evolve, to develop new solutions and new products and to better serve its customers. The insurance policyholders won’t be affected by any changes to their current coverage.
Senator Henkel: For the duration of their contract?
Mr. Chalifoux: For the duration of their contract.
Mr. Bellavance: There aren’t any issues in this area. In the event of a merger, the merged company respects the rights and obligations of the former company. There aren’t any concerns in this area.
[English]
Mr. Parkinson: As a follow up to that, it’s important to realize that just because Gore, for instance, would be changing to Quebec jurisdiction, that doesn’t change the policy supervision and legal framework applicable to insurance policies. If you’re an Alberta policyholder, it is still the Alberta Insurance Commission, I think it is, and Alberta government rules that apply to those policies. That will not change regardless of the domicile of the top company. Nothing changes in provincial requirements for the form of insurance contract, for market conduct, like treating customers fairly requirements, and where applicable, it doesn’t affect rate regulation where there’s rate regulation. All of those insurance contract things remain under the same framework.
Mr. Taylor: Your comments are valid about commercial insurance being a challenge in the industry. Just to reinforce from Gore Mutual’s perspective and Unica, today we actually specialize in SMES. We focus on the smaller end of the market. That’s a strategic area that we will continue to grow in. But as a regional company today that only operates in predominantly Ontario and B.C., we have national broker partners that are looking to expand and grow with us, and we don’t essentially have the capital or the capabilities to do that. The merger with Beneva will actually unlock additional ability for us to support small businesses nationally across the country.
The Chair: Thank you.
Senator Yussuff: I have a couple of questions.
First, consolidation always has effects on the people who are working currently for both companies. It’s an Ontario-based company, to a large extent, and the dominant reality is in Brantford. When there’s a consolidation among the workforce, does it shrink or remain the same, remain as is? I recognize it’s going to be a Quebec-based company. What happens to the employees and how will they be protected? Is there a downsizing in terms of the reality of scope? You’re dealing with a bigger entity.
Mr. Taylor: That is a great question, one near and dear to my heart.
In assessing our strategic options, when we look for partners, it is challenging when you’re a mid-sized player merging up into a larger organization, and sometimes in that situation you can actually see mergers where it’s all about efficiencies and you effectively get tucked into a larger organization. We’re so pleased with the Beneva merger because we’re able to actually access the scale, the diversification and the access to capital, but we will do that while maintaining our sense of identity as a separate, distinct subsidiary.
Core to that is that this is a growth story. This merger is all about bringing two mutuals together to make a stronger mutual to grow across the country, which we think will actually expand the employment opportunities for all of our employees. We are committed to no layoffs, so we will not be laying off employees. It is quite the opposite. We think we will be expanding and growing the workforce, particularly in southern Ontario, which is where our head office is located.
We’ve done a few other things to protect the heritage of our organization. We have a phenomenal campus where our head office is in Cambridge, Ontario. That’s being designated a heritage site. That office will be the headquarters for the platform for the English Canadian growth. We’re committed to the community that we’re in today and will continue to be working there.
Through the combination with Unica, we see opportunities for our employees to not only grow within our smaller group but also to potentially over time access new career opportunities in other areas of the Beneva group, so it’s really a good news story, and we’re really looking forward to how this will have a positive impact. It’s been received really well by our employees, and they are excited about the future as part of this, but your question is absolutely a fair one that we’ve put a lot of thought into.
Senator Yussuff: I have two questions. The first is to follow up on what my colleague Senator Fridhandler raised.
I’m not here to debate Quebec language laws. I agree about the history, the country and what Quebec is doing to protect its heritage and its language. This is now an Ontario company essentially merging with a Quebec company. In the context of the policyholders — and this is a very sensitive matter — why wasn’t there some guarantee to say you will communicate with them in the language of their preference? Because it’s not explicit. I recognize what Quebec law provides for you to do so, given compliance, but the reality is that you are now branching out across the country. SSQ provided me with insurance at one time in my life in Ontario, so I know the history with the Fédération des travailleurs et travailleuses du Québec, or FTQ, and all of that and the promotion of all of it all. However, in the context of now having a lot of members that are going to be policyholders outside of Quebec, even though there’s nothing saying you will do that, and I understand you’re not dumb enough to say “We’re not going to talk to you in your own language,” why isn’t there some guarantee in the application of the merger to say, “Regardless of how the regulatory regime may provide for it, we are committed to ensuring this will continue to happen in the context of taking on English policyholders from outside of Quebec?”
Mr. Parkinson: Maybe I could just start briefly. I will tell you frankly that, at Gore, when coming up with the information circular, not to mention with our legal counsel, it didn’t occur to anyone to suggest that there ought to be some kind of guarantee.
Senator Yussuff: But why would you say that before this committee now? Because this will be evidence for the people who are policyholders. If you say that, it’s on the record.
Mr. Parkinson: But it has been our intention. You may say it was a little naive for us to think nobody was going to raise it. In fact, we had 70 negative votes. We’re not sure what their rationale was, but from the feedback we had before, nobody honestly raised any concern about whether they would be served or communicated with in English because a lot of them have dealt with organizations like Desjardins or some other Quebec domicile companies and know they get served in English. It’s not really a matter of controversy, I think, for most people who have dealt with a similar kind of thing, and so I have to say it didn’t occur to me. It did occur to me that there might be members saying, “Gee, will we be swallowed up? Will the jobs in Cambridge disappear to Quebec City?” That’s why there isn’t anything in there, but I can tell you that the firm intention is to continue to communicate with people in their language of choice.
Mr. Chalifoux: I would add that Beneva was already, prior to the Gore Mutual merger, providing insurance solutions to over half a million Canadians outside of the province of Quebec, in Ontario, Western Canada and Atlantic Canada, and we service them in the language of their choice, as we do for English-speaking members in the province of Quebec.
Senator Yussuff: I have one quick question.
The policyholders are the people that I worry about. Ultimately, the merger is about you guys figuring out what scale and capital you’ll gain, but protection for policyholders is fundamental. The regulatory regime may be similar in scope, but who backstops this at the end of the day? I assume that the policyholders are backstopped by the now-larger entity that is coming into this relationship. Can policyholders be assured that they have the same backstop that they had when they were Gore Mutual?
Mr. Chalifoux: Absolutely, and it’s even better. We are spreading the risks nationally. We are members of one of the largest compensation organizations in Canada.
Senator Yussuff: Thank you.
Senator McBean: Listening to Senator Yussuff’s question made me realize that I should have sat over there because his first and third questions were totally up my alley. I’m a senator from Toronto, and I was concerned about the workers in the communities in Toronto and Kitchener-Waterloo. Thank you for that assurance. My follow-up question, my pivot, was a question about the customers and the policyholders, so thank you for that question. I will move my time along.
The Chair: Next time, I will go around the other side of the table.
Senator C. Deacon: I want to thank Senator Fridhandler for his great insights and Senator McBean for not taking my question.
This has nothing to do with the specifics of this deal. It’s just for my general knowledge, so I want you to be very fast. Demutualization is a significant issue in this country. We’re losing a lot of our mutual insurance companies. What have you learned from this that could be of general interest to our committee as we look at issues around access to capital in the future? You’re protecting the assets of small- and medium-sized enterprises. How will mergers like this help to protect that or perhaps — you probably wouldn’t want to say it — undermine that in the future? It has nothing to do with our approval of this bill or anything, but it is an issue of concern in our country.
Mr. Parkinson: I will comment briefly, and one of my colleagues might want to jump in here.
There, of course, has been some demutualizations, and it depends on your perspective whether that’s been good or bad. If you have significant demutualization benefits, as many policyholders in the old economical insurance did, that’s great.
If you think about the mutuals, there are probably — I don’t know — a hundred or so mutual insurers in Canada for property casualty insurance, and maybe a handful, like 10 or 20 at most, on the life and benefits side of things. There are so many of them you’re probably wondering where they are because mostly they are smaller community organizations that might write in one or two —
Senator C. Deacon: Their size is smaller.
Mr. Parkinson: Yes, fairly small. There are some in the Maritimes still. A couple of them merged with other smaller mutuals.
The access-to-capital issue is difficult for them. If you are going to be small, focused and niche, you pretty much have to make sure you keep your claim to your niche, and it’s going to be an ongoing challenge to make the investments you need to make. We could spend a long time talking about the challenges of maintaining those smaller mutuals.
For our part, we looked at it — I know you had a general question — and we said Gore is sort of mid-sized. It’s maybe too big to be small, so it’s harder to be niche, and we aren’t big enough. We think that by creating a bigger, stronger mutual nationally, that we’ll have a lot more financial strength and a lot more brand identification. It’s probably going to be better for the mutual insurance movement generally. There will be more credibility for the idea of dealing with a mutual company. I’m just hopeful that that is the case.
Over time, I think that a lot of the smaller mutuals will continue to merge. There are two or three mergers like that every year, and I think that will carry on for a while.
Senator C. Deacon: So you see the merging of the smaller mutuals as a way to actually perhaps maintain the mutual sector for economies of scale?
Mr. Parkinson: Yes, I think it is simply happening. In some cases, people have trouble hiring a new president because they are too small to really be competitive for high-skilled people, so it’s a major issue for smaller ones. It’s like the credit union movement. There used to be probably hundreds in Ontario, and there’s probably about a fifth of that many around still because of the same kind of pressures over the last 25 years.
Mr. Chalifoux: There were a few underlying beliefs behind the creation of Beneva in 2020, and they are still here today.
We wanted to be able to invest massively in technology and digital transformation, and now we are talking about artificial intelligence. We were facing a labour shortage in 2020, and it’s still access to sophisticated and specialized talent that’s a challenge in this country. It is still a challenge in the province of Quebec.
Our members have rising expectations when they do business with us. They are more demanding than they were 20, 30 or 40 years ago, and we see that on a daily basis. Compliance requirements in this country are trending upward, and while this is a good thing, it puts pressure on organizations such as ours to be able to remain competitive and to be capable of investing in their future. We also see on a daily basis that, as a larger, broader organization, we’re capable of attracting specialized talent and investing into them, their development and in their role.
Those reasons that were valid five years ago are still valid today. That is why we believe that mutuals are stronger together than against each other. That’s a belief we shared with Gore Mutual.
Senator Martin: I have a few questions, although many good questions have already been asked.
I went to your websites and, very easily, there is an option of English and French by province. Both sites are very easy to navigate. I found the press release about the pending merger.
Earlier this week, I also heard about the Teck and Anglo American merger and how the headquarters will stay in Canada — but for how long? In your case, you are both Canadian companies and you’re in neighbouring provinces.
I have a question for Mr. Taylor or Mr. Parkinson. You have the oldest company — 1839 — and you have this history, but in the press release, it says, “Beneva and Gore Mutual will merge under the Beneva brand . . .” Were there concerns about the legacy piece? You’re 10 times larger than Gore Mutual, so I was curious about those concerns about legacy and brand.
Mr. Parkinson: Maybe I can start and then hand over to Andy.
With a lot of the mergers done in the mutual space over the past several years, most mutual insurance companies had names that said where they were from or where they were. It would be like North Waterloo Farmers Mutual or something like that. When they merged with another company, they ended up being Heartland Insurance, as a good example. There are a number of mergers like that, such as Commonwell that merged three companies that all had area names for the predecessor.
I have been involved with Gore Mutual for 52-plus years now — I know it’s impossible looking at me — and I feel some of the same sorts of emotional tugs about the change of name. I was surprised more policyholders didn’t raise that as a concern, but the reality is that it’s an opportunity for us to refresh a brand with something we think is very attractive in both languages. Beneva is a very nice brand. The most successful companies in the marketplace have names they didn’t have 10 or 15 years ago.
Senator Martin: I have a second question. As an insurance holder, I have seen the changes, and it is a bit unnerving for the holder. I see your websites, but what will the everyday customer notice? What changes will there be? I’m assuming the prices, coverage and service will be fairly consistent, but I’m curious about the customer experience.
Mr. Taylor: That’s a good question. It’s much easier because of the way we’re working on the merger. We’re remaining a separate subsidiary. If we’re successful in this process, we would post January 1, and the simple answer is that all of the Gore Mutual policyholders would remain on the Gore Mutual policies for next year while we work on integration for a full year. That is the year we’ll be working on the migration of the brand, so there will likely be a transition similar to how SSQ and La Capitale transitioned the brand that would say Gore Mutual and Unica are becoming Beneva. But the reference to your Gore Mutual policy would be the same, as would your pricing. You would still be working with the same people. So there would be very little impact on the policyholder.
Just to close out, building on Neil’s comments, we put a lot of thought into the brand. I’m not at 50 years but I am at 20 years with the company, so I care deeply about it as well. We think we can do both. That is the beauty of this. We can respect our heritage in many ways. The campus in Cambridge is going to be renamed to Gore Mutual Campus, and we have heritage archives that go back literally to the 1800s that we preserve and celebrate. At the same time, we are taking on and becoming Beneva and effectively bringing Beneva to the rest of Canada. That is exciting.
What is really fascinating is that with Beneva being a new brand, it is a word that means people looking out for people. It is very much aligned with our values. It is different than if we were merging with another company where a lot of our customers or employees had a perceived perception on the brand that could be potentially negative. It is quite the opposite: There is an excitement around one brand. If we need to compete at scale, which we do, against the largest competitors in the industry, it is powerful for us to have Beneva as one brand across the nation. We can do that while respecting our heritage and celebrating it in many ways.
Senator Martin: Thank you.
[Translation]
The Chair: We have about 25 minutes left. I’ll use my privilege as committee chair to ask you some questions about the advantages of being a mutual company as opposed to an incorporated company.
As you know, I used to work for one of your competitors, Industrial Alliance, founded in 1892. That company chose to demutualize in 2000. Yet you’re about to become a major player.
What are the advantages and disadvantages for a company such as yours? Do you have the necessary tools to do your job? Obviously, you’ll be a large company now.
For the people tuning in, can you explain the difference between a mutual company and a company for customers and insurance policyholders? I won’t ask you to explain why Industrial Alliance chose to demutualize.
Mr. Chalifoux: Excellent question, Senator Gignac. In 2025, clearly our mutual status provides a competitive advantage. It sets us apart in a competitive environment filled with stock companies. It gives us the opportunity to state unequivocally that people lie at the heart of all our actions. I say this with great conviction, and that will never change.
We aren’t motivated by quarterly returns and shareholder value. We’re motivated by our impact on the people around us, including our partners, members, employees and distribution partners. That’s the real focus of a mutual company.
A mutual company is all about the sharing economy. All insurers started out as mutual companies. They were groups of people who joined forces to pool their risks. Beneva was founded in 2020 with this in mind. In Quebec City in the 1940s, for example, the original entities were founded by public servants. They established La Capitale, which was then known as La Mutuelle des Fonctionnaires. They wanted to ensure that widows would have access to funds to pay for funeral services upon the death of their working spouses. At the time, the men were the ones who worked. Unfortunately, widows and children had to dip into the family inheritance to pay for funeral services.
At SSQ Insurance, labourers in Quebec City’s lower town joined forces in 1940 to obtain access to medical care and medication. At the time, there wasn’t any health insurance plan or social safety net in Quebec.
People couldn’t see a doctor because they lacked the necessary funds. They decided to help each other. These risk-sharing values remain strong at Beneva almost 100 years later. We believe that these values still run deep in our DNA today. These values weren’t written down by 10 executives in a meeting at the time of Beneva’s creation. These core values come from our rich heritage and mutualist DNA. They remain highly significant. We believe that Canadians deserve a strong, solid and mutualist alternative in Canada.
The Chair: I just want to make sure that my question doesn’t give the wrong impression. I started my career at Desjardins. I was the minister of economic development responsible for mutuals and cooperatives, which play a key role in economic and social development. Thank you for clarifying this aspect. People don’t always understand the difference between the two.
Senator Dalphond: I would like to continue so that my colleagues understand this clearly.
[English]
What is the difference from an insurance company with shareholders? The fact is, despite your organizations, those who are now the owners at Gore will become owners of the mutual group called Beneva, and they will be deciding what types of products, orientation and policies this insurance company would like to put forward. In order to qualify as a member, they will have to hold a policy within the company. Am I wrong or right? That reflects a different perspective.
I look at your board of directors, and many members of the board have backgrounds of being past union leaders, past presidents of unions in the civil service in Quebec City, which reflects a different perspective to the board of directors.
I also noticed that Gore in April of this year sponsored a poll and you published it. You made it public because it is also part of the risk assessment. Political differences aside, Canadians’ views align on climate and DEI, diversity, equity and inclusion. You said the poll reveals that 90% of respondents, regardless of political affiliation, support or are neutral about DEI initiatives and climate policies. Is that the type of engagement that Beneva will continue, or is that something which is particular to Gore and will disappear? These are contributions I’m not so sure insurance companies are making.
Mr. Chalifoux: We have similar if not stronger engagements toward climate resiliency and DEI in Beneva, so I think it will definitely continue.
Senator Varone: I wish to tell a brief story about a lived experience in 1995 with a financial institution, not an insurance entity. Living through the TD-Canada Trust merger and then, a few years later, the Royal Bank-Royal Trust merger, it left me, as a client, wanting better customer service. On both fronts, they failed. What steps are you taking to ensure your customer service stays at par or at the same level that your clients are currently enjoying in separate entities? Can you tell us what will change if anything?
Mr. Taylor: That is a terrific question. I’ll approach it from the lens of Gore.
We had just recently gone through a dramatic transformation before the merger. In 2020, we started this journey to look out ten years and modernize our business. We put ten years of capital investment into three years, something that stock companies would not do because they wouldn’t take that long‑term view. We did push a lot of change and disruption on our customers and brokers through that transformation from early 2020 to 2023. We learned a lot from that.
The first principle for our integration program we’re running right now is to protect the customer and broker experience. We are working extremely hard to ensure that we retain all our customers and grow the business during that period of time versus sometimes you are internally focused and lose that lens. We will take those learnings from the transformation into this merger.
The way the merger is working, it is much less complex than the Beneva merger previously. Remaining a separate and distinct subsidiary, there will be less change on our policyholders. We feel passionate about that. I appreciate your comments, but the first principle in our merger is to ensure that our customers are put first in this process.
Mr. Chalifoux: At Beneva, we are measuring member satisfaction on an ongoing basis. One thing that differentiates Beneva from the rest of the pack is I am personally making follow-up calls with individual members after they follow a survey. My executive leadership team is also making those calls. It is part of our bonus within Beneva, to make those systematic phone calls so we stay in touch and understand what members are expecting from us. We strive to make every improvement we can so that they are more satisfied following transactions with us.
Senator Fridhandler: I am more familiar with the conventional — not mutual — insurance business. You can tell me if I do not need to go there. One of the issues is that insurance companies operate on the float. For my colleagues, if you don’t know, it means you collect the premiums and then invest them and make money on them until you have to pay them out. Are there any changes from the Canadian regulatory regime to the now Quebec regulatory regime on what you can do with your float and your investment? I’m concerned there might be restrictions that more of the float needs to be invested in Quebec as opposed to elsewhere in the country.
Mr. Parkinson: The short answer to your question is no. The solvency regime, and pretty much all of the investment restrictions that are there at the federal level, are there at the Quebec level too.
It is not just a question of what the rules are. I can’t understate one thing, which is the supervisory and regulatory quality at AMF and OSFI I regard — as somebody who worked in that area for a long time — as equivalent. I wouldn’t differentiate between the quality of the supervision and regulation between the two. The rules are the same. You would have to search hard to find any substantive change in the investment rules and restrictions.
Mr. Chalifoux: I would say there are significant gains for Gore Mutual’s policyholders in blending their investment portfolio in a larger pool and being able to cope with more fluctuations. There are significant gains there by blending the two together.
Mr. Bellavance: I can add that federal law has more strict rules. On the Quebec side, they have more of a prudential approach, but it is quite the same at the end of the day.
[Translation]
Senator Henkel: First, I would like to make a statement. As a Quebecker and a businesswoman, I must admit that I consider Bill S-1001 a study in itself. Thank you for supporting it. It’s a first step, because our government wants the free exchange of goods and services at competitive prices across this great country in order to boost and revive the economy.
I see this bill as a good example. We mustn’t underestimate the legal issues and issues surrounding consumer and policyholder protection. I’m simply saying that, in my opinion, this first step shows leadership and demonstrates the potential of this new merger between two companies, one from Ontario and the other from Quebec. That’s my opinion.
I would perhaps like to reassure the people tuning in and the people who may ask a question at some point about the issue of demutualization. I find it remarkable that you’re mutuals and that you want to grow as mutuals. I know that I can’t receive full assurance right now, but I would like to discuss my concerns. Demutualization can happen, not necessarily by choice, but as a result of pressure.
Have you ever faced pressure and managed to overcome it? Do you expect to face further pressure, and how are you preparing to handle it? Thank you.
[English]
Mr. Parkinson: Maybe I can start from the Gore perspective.
Nine years ago, there was a lot in the news about Economical Insurance, one of the larger mutuals, considering demutualization, and so the board of Gore had an extensive project of review by the board, with legal investment counsel, on whether it was appropriate. The conclusion was — as was communicated to the members at that time — that it was not in the best interests of the company. We did a reset on that in the course of our own strategic review over the past two to three years, and we concluded that the landscape had not really changed. We were not receiving pressure, but we anticipated people would say, quite properly, “Well, if that company is doing it, why aren’t you?” We felt we needed to be in front on that, and we did so. I can’t really speak to the benefits, and I’ll let them refer to that, but I can assure you that, yes, we did give it considerable consideration, but we are not under pressure. We did not have activist members or others pressing us, a little bit unlike Economical that had a bit of drama. We did not have any pressure and are not currently having any pressure, and the subject, frankly, again, did not come up in the course of us putting this transaction to our members last spring.
[Translation]
Mr. Chalifoux: Beneva’s position is quite unique. La Capitale came out of the public administration sector and SSQ Insurance arose from and has been supported for decades by Quebec’s labour unions. We clearly see the pressure issue as more about protecting and developing mutualism in Quebec and across the country than the other way around.
That’s why we each took time to reflect in 2017, 2018 and 2019. We chose to join forces because we believed that a stronger mutual insurance company would be more sustainable. With this in mind, we’re also now partnering with Gore Mutual Insurance Company because they share our belief that mutualism can play a role in the country and that we can continue working in this direction.
We can’t predict every scenario. Will a financial crisis one day force us to take different measures? I can’t predict that, but as long as we can invest and provide quality services and products to our members, we’re committed to the growth of mutualism.
The Chair: Thank you, Senator Henkel, for your questions and for your comments leading up to your questions. As a former minister of economic development, I worked with our colleague, Senator Pupatello, during her time as minister of economic development and trade, to eliminate barriers among provinces along with regulations and red tape. Seeing two mutuals work together and become a major institution matters to me and fits in well with the whole picture. I agree with your comments, Senator Henkel.
[English]
Senator Yussuff: Very briefly, Senator Henkel raised an issue about interprovincial trade. Quite often, we get a lot of whining about all the barriers to interprovincial trade in the country and the regulatory challenges we face, but in the context of growth for the mutual and the insurance companies, this is a good news story because there is not a huge dispute about the regulatory regime — whether it would federal or provincial — that needs to be adopted to bring two companies together.
The second point is that these are two Canadian companies merging with each other as opposed to one down south and we have been fearful of capital flying the other direction and not staying in the country.
Thank you for being here, thank you for your hard work, and, more importantly, I appreciate the candidness of our conversation.
Senator McBean: You have mentioned climate resiliency on a few occasions today, and I would like to just take advantage of this moment to ask how that bullet point transfers to the policyholders and how not your members but your clients are protected from climate change.
Mr. Parkinson: Let me start, but Andy will have a better answer for you.
One of the serious considerations when you’re smaller and more localized and less diversified is that you can be unlucky. There is a story about a smaller company somewhere in the Maritimes — I won’t narrow it down any more than that — but when one of those tail ends of a hurricane went through, every single property policy they had had a claim of one size or another. You look at that and say, “That doesn’t work out too well if you are doing insurance,” as you can imagine. You can protect yourself a little bit by buying reinsurance from big reinsurance groups, but the thing is that we have a hundred-year storm seemingly about three times in ten years these days, so it’s a concern.
Larger entities that are very well diversified, like Intact Insurance as a case in point, which is the largest property and casualty insurance company. They are very diversified. They get the same storms and fires and so on that we do. The difference is that they’re everywhere, and there’s some part of the country where they are not having a problem this year so they have much steadier results.
One of the fundamental strengths of this transaction is that we’re a lot better diversified at Gore. I think we will be a lot better diversified at Beneva in the combined group. That is one of the big risk factors that we identified in looking at our long‑term strategic risk. We’d be foolish not to address that, and so I think we are.
Senator McBean: Thank you.
Mr. Taylor: If I could just add to that, that provides stability for the policyholders, so the markets are not in and out, raising prices dramatically, and I think that is key.
The other shift in the industry — and I am on a few industry boards, such as the Institute for Catastrophic Loss Reduction and the Property and Casualty Insurance Compensation Corporation, or PACICC, and we’re working with the Insurance Bureau of Canada, or IBC, on broader initiatives. Really, the focus now is on resiliency and how, as an insurance industry, we can actually enable resiliency in the Canadian economy. How can we build homes to begin with to have resilient building practices? Simple things like wind resistance of shingles and better siding. These are very simple tasks that we can take to make our nation much more resilient. How can we build back better after a loss? We are looking at, when there is a loss, we actually have an endorsement where if you put resilient initiatives into the home, we will actually pay more for that.
There are ways for us to try to improve the resiliency of the nation while being a more stable partner as a mutual insurer, but it is a very tough and long battle ahead of all of us, I think, and it is a really significant challenge for the industry. Mutuals will, I think, play a key role because we take that long-term view. Because we’re here in Canada and we’re getting back in other communities, I think we will be a big part of that solution going forward.
Mr. Chalifoux: I would like to add here that Beneva, as we mentioned here today, is quite concentrated in the province of Quebec, so 80% of our risks are in the province of Quebec. Merging with Gore Mutual allows us to spread the risks across the country, and insurance, in a sense, is all about risk sharing and risk mitigation. Being present in more provinces and increasing the proportion of the business in Ontario and Western Canada and having a better balance between our property and casualty operations and our life and health operations will protect our members better.
[Translation]
The Chair: Thank you. Your last answer touched on the most important factor for Beneva’s long-term viability, which is the ability to operate across Canada, especially with climate change and everything going on right now. That’s reassuring.
[English]
Thank you, witnesses. As you know, the Senate is usually a chamber of sober second thought, but this time we began with your study here at the Senate.
[Translation]
Your input will be taken into consideration when this committee reports on this bill. Thank you for your time with the senators who had important questions to ask. I would also like to thank the sponsor of the bill, Senator Loffreda.
Honourable senators, we’ll now begin the clause-by-clause consideration of Bill S-1001, An Act to authorize Gore Mutual Insurance Company to apply to be continued as a body corporate under the laws of the Province of Quebec.
Before we begin, I would like to remind you of a few things. If at any point you aren’t clear where we are in the process, don’t hesitate to interrupt me. In terms of the mechanics of the process, I want to remind the senators that, when more than one amendment is proposed to be moved in a clause, amendments should be proposed in the order of the lines of a clause.
[English]
If a senator is opposed to an entire clause, the proper process is not to move a motion to delete the entire clause but rather to vote against the clause standing as part of the bill.
Some amendments that are moved may have a consequential effect on other parts of the bill. It is, therefore, useful in this process if a senator is moving an amendment to identify to the committee other clauses in the bill where this amendment could have an effect. Otherwise, it would be very difficult for members of the committee to remain consistent in their decision making.
[Translation]
Since no notice is required to move amendments, there can, of course, have been no preliminary analysis of the amendments to establish which ones may be of consequence to other clauses. If committee members have any questions about the process or about the propriety of anything occurring, they can raise a point of order. The committee is the master of its business within the bounds established by the Senate. A senator can appeal a chair’s ruling to the committee by asking whether the ruling shall be sustained.
Lastly, I wish to remind the senators that if there’s ever any uncertainty as to the results of a voice vote or a show of hands, the most effective route is to request a roll call vote, which provides unambiguous results. Finally, the senators are aware that any tied vote negates the motion in question.
Do you have any questions? If not, we can begin.
[English]
I see there are no questions.
Is it agreed that the committee proceed to clause-by-clause consideration of Bill S-1001, An Act to authorize Gore Mutual Insurance Company to apply to be continued as a body corporate under the laws of the Province of Quebec?
Hon. Senators: Agreed.
The Chair: Shall the title stand postponed?
Hon. Senators: Agreed.
[Translation]
The Chair: Shall the preamble stand postponed?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 1 carry?
Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 2 carry?
Hon. Senators: Agreed.
[English]
The Chair: Shall clause 3 carry?
Hon. Senators: Agreed.
[Translation]
The Chair: Shall the preamble carry?
Hon. Senators: Agreed.
The Chair: Shall the title carry?
Hon. Senators: Agreed.
The Chair: Carried.
Would the committee like to append observations to the report?
[English]
I’m sorry. I skipped the most important one. I think the people from Beneva and Gore got a bit nervous about that.
Shall the bill carry?
Hon. Senators: Agreed.
The Chair: Okay. That’s a relief.
[Translation]
I gather that there aren’t any observations on the bill? Okay.
I should now point out that I’m also a fairly new chair.
Is it agreed, colleagues, that I report this bill to the Senate in both official languages?
Hon. Senators: Agreed.
The Chair: Carried.
Thank you, honourable senators, for your patience and indulgence toward the chair, who is still learning the ropes. The bar was set high by the previous chair.
We’ll briefly suspend the meeting and then continue in camera to discuss the committee’s future business.
(The committee continued in camera.)