Monday, March 27, 2000

OTTAWA - Democracy Watch criticized the federal government's proposed changes to the Canada Business Corporations Act (CBCA) today because they shut out citizens from participating in corporate decision-making, and do little to hold corporations accountable for wrongdoings. Bill S-19, which amends the CBCA, was introduced in the Senate last week and is scheduled for debate this week.

More than 155,000 corporations are incorporated under the CBCA, including half of the 1999 Financial Post Top 500 corporations in Canada. The law is essentially the federal "corporate citizenship" law, and it has not been changed significantly in 25 years. Since 1995, Democracy Watch and other citizen groups, and many corporations, have participated in Industry Canada consultations on changes to the CBCA. However, the much-delayed bill only contains two small changes proposed by citizen groups, while ignoring other key measures that were opposed by corporate lobbyists.

"The government has ignored the public interest and bowed to a powerful corporate lobby coalition including Alcan, BCE, Imperial Oil, Nova Corporation, Northern Telecom, TransAlta Corporation and large corporate law firms," said Duff Conacher, Coordinator of Democracy Watch.

Democracy Watch called on the government to amend Bill S-19 to include the following broadly supported measures (among other related proposals) to empower corporate shareholders and stakeholders and to ensure corporations are held accountable for wrongdoings:

1. As in the U.S., require corporate managers to circulate a shareholder's proposal to other shareholders even if the proposal addresses general economic, political, racial, religious, or social causes, unless the proposal has no connection to the corporation's activities.
2. Require that a corporation justify why a shareholder proposal is excluded to a review agency in a low-cost, quick procedure with the corporation paying the costs of the review.
3. Require directors to consider non-shareholder stakeholder interests in making decisions, and to account publicly for the extent to which they do.
4. Require corporations to disclose their records of compliance with environmental, criminal, competition, human rights, labour, health and safety laws, and protect whistleblowers.
5. Prohibit corporations that violate laws from receiving grants or contracts from government for a specific period of time (e.g. 5-10 years), as proposed by the U.S. government.
6. Lower the barriers to holding corporations liable for crimes by employees at work.
7. Allow stakeholders to apply for dissolution of a corporation that repeatedly violates laws.
8. Require corporations to send a flyer to individual shareholders inviting them to join a nation-wide corporate watchdog group (some U.S. states have required utilities to do this).

"Surveys show that Canadians strongly support greater corporate responsibility and accountability" said Craig Forcese, a Board member of Democracy Watch and Visiting Professor at the University of Ottawa's Faculty of Law. "It is about time that Canadian governments required corporations to meet these higher standards, and required corporate managers to be more responsive to shareholder values."