Speech: C-25 – An Act to Amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act

Honourable senators, I rise today to speak on Bill C-25, An Act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act.

As Senator Wetston pointed out in his second reading speech, Bill C-25 includes a number of provisions to modernize processes in the governance of distributing corporations and cooperatives. However, my remarks will focus on the requirement of distributing corporations to develop a diversity policy and provide shareholders, at annual general meetings, with information about diversity among directors and senior management.

I applaud the government for bringing forward this important legislation. It is long overdue, and I believe we need to pay serious attention to it, for one, because the act is so rarely amended. This is surprising because, notwithstanding our stated commitments to diversity in Canada, we actually lag behind most other developed nations in terms of diversity in senior leadership and on corporate boards.

Our colleagues here in the Senate have already spoken at length about women on boards. Senators Moncion, Wetston, Massicotte and Wallin have all made excellent points, so I’m going to take my time to shine a fuller light on the word “diversity,” which is inclusive of gender equity but also embraces other forms of diversity as we recognize them.

Otherwise, we should simply call it what it is and exchange the word “diversity” in the bill with the phrase “gender equity.” Then, I would not be standing here and speaking to it. But, since the word “diversity” is used, let me unpack it a little.

It is a very big word. It technically includes all of us because we are, after all, different from each other as unique human beings. However, in the context of demographics, I believe that the terminology of diversity currently refers to a fuller spectrum than is stressed in the bill. The Employment Equity Act, for instance, refers to women, racial minorities, the disabled and Canada’s indigenous peoples. I grant that the Employment Equity Act is somewhat out of date, not only in terms of who it covers but the language it uses, its terminology, but I still believe that it still provides us with a foundation or a floor that we can look at for definitions.

This brings me to my quibble with the bill. It talks about diversity without actually defining it, and although there was a lot of discussion in the other place on this point, the version of the bill in front of us still does not define it. The government proposes to define it in regulations and has published draft regulations that give us some insight into their interpretation of how this bill will be implemented.

It requires corporations to disclose the number of women directors on their boards and in senior management, but it is silent on disclosure on other expressions of diversity. The minister bases this decision on his view that definitions evolve over time and that it is easier to update these in regulations than in legislation, and I understand the logic.

But I believe that setting and changing regulations happen in a vacuum, with very little oversight from Parliament. Once we approve legislation and it is given Royal Assent, it leaves our influence. It is open to change, reinterpretation, redefinition, as the government of the day likes.

True, we may get more flexibility, but we may also get a watered down and weakened implementation. By putting the definition in legislation, I believe there is more gravitas, clarity, longevity and accountability. Any subsequent changes to the definition would then have to be debated again in both Houses of Parliament.

Colleagues, there is great concern among employment equity groups about this lack of clarity. They understand perfectly, as do I, that women include racial minority women, disabled women, and indigenous women. Yet, when one looks at the participation of women on corporate boards, one fact sings loud, and it is this: The progress of women on boards is slow, but there is progress.

But, when you disaggregate the data, you begin to understand that it is not visible minority women nor disabled women nor indigenous women who are in these positions.

Let me provide you with some evidence. A study of corporate boards by the Diversity Institute found that the percentage of women on large corporate boards in the last five years has increased from 14.8 per cent to 23.6 per cent. Now, it seems like a big increase, but given the share of the population of women, it’s glacially slow. I accept that.

But look at the rate of participation by visible minorities. It has gone, in the last five years, from a mere 2.8 per cent to 3.3 per cent. The population share of visible minorities in the country is 18 per cent.

The participation of people with disabilities has risen from a mere 1.3 per cent to 1.8 per cent. Their share of the population is close to 13.7 per cent.

The participation of indigenous members has fallen from a high of 1.3 per cent to a negligible 0.6 per cent, and their share of the population is 5 per cent.

So the intersectionality of gender with other demographic factors such as race and ability does constitute a triple glass ceiling. It is no wonder, then, that women from these groups ask whether a rising tide in fact will lift all boats. Based on this evidence and on the past, they are more likely to believe that their boat will be left far behind and maybe will even sink.

I believe that the tent of inclusion must make room for all, especially those who have been traditionally excluded, and this includes women and men who are disabled, visible minorities and indigenous peoples.

We also know from research that if you leave a complex word such as “diversity” undefined, it will be interpreted variably. In 2009, the United States Securities and Exchange Commission adopted a disclosure model very similar to Bill C-25, requiring publicly traded firms to report on the diversity of directors, and, like our legislation, they left the word “diversity” undefined. Now, this legislation was brought into force in 2009, so we have a good eight years of experience to see how it worked. Here is what Osgoode Hall Law School research found. In the U.S., in the absence of regulatory guidance, the dominant corporate discourse is experiential rather than identity based. So I believe that if you leave it undefined, it will be interpreted to include a myriad of diversities — diversity of age, diversity of region, diversity of thought, et cetera. In other words, a bit of a free for all without accountability.

So why should we care? Senator Wallin talked at length yesterday about the economic imperatives of including women on boards. I’m not going to restate those obvious and available indicators, but I think I know — and I’ve heard from lots of people on corporate boards — that their biggest challenge is groupthink. As Einstein famously said, “When all think alike, no one thinks very much.” So let’s think about that when we debate this bill.

I also believe that there is a higher argument than the simple economic one. I know that the world — and, I would hope, Canada — is not just made up of people who are economically prosperous but also countries that are truly inclusive. If we truly want the next decade to be a decade of recollection, then we must hear the voices of the indigenous peoples, not just in universities, courtrooms and, indeed, in the Senate but also in the boardrooms of our country. This is true for the expertise and experience of other excluded groups as well.

I believe that employment equity was a little tiny door in 1993 that opened a steady stream of opportunities for people, and the results are there for us to see. I believe that the time has now come for governance equity, and Bill C-25 gives us the opportunity to put forward this concept.

I also want to raise a question about the requirement to develop a written diversity policy and disclose the presence of such a policy at the annual general meeting of shareholders. I’m not sure what this achieves. I would much prefer to see the results of the application over time. I would like to see the government doing a roll-up of this information in aggregate form and publishing it so we can track, measure and evaluate. As we know, what gets measured gets done.

I rest my argument again on the shoulders of the Employment Equity Act, which has allowed us to study over time the performance for identified groups and measure its impact.

I believe a report came out yesterday, and the study compared public service employment data from 1993 to last year, a good 20-plus years. Women now make up 54.4 per cent of federal government employees. Indigenous people have risen from 2 per cent to 5.2 per cent, and visible minorities have almost quadrupled and now account for 14.5 per cent of the workforce.

I understand that working in the public service is different from leadership in corporate governance, but I’m making the point that you need data and evidence and you need to have objectives and move toward them.

Much has been said about carrots and sticks here. I think there are many miles between a carrot at this end and a stick at another, and we’ve talked about quotas and targets and “comply and explain.” I believe we need to get expert testimony on this matter to help us sort out what will work best for a country as unique as Canada, with such a diverse population that varies dramatically from region to region.

Lastly, I would like to make a small observation about a fact that has not received much attention. The focus of this legislation is clearly on diversity for distributing corporations. But what about not-for-profits? Should they also be subject to the same diversity requirements? If not-for-profits are indeed the leadership training ground for corporate governance of the future, then it may serve us well to take a look at this pipeline of talent as well.

Honourable senators, this is an important piece of legislation. Diversity, I think, is a demographic fact, but inclusion is a deliberate choice. I would urge us to do the latter — make a deliberate choice for inclusion. I will, therefore, vote to send this bill to committee to study these questions.

Thank you.