March 20, 1930

?

John Warwick King

Mr. KING (Kootenay):

No, this bill will

not take care of any case which has the right to go to the Board of Pension Commissioners and get a pension, with the exception of the case that gets a small pension varying from 5 to 15 per cent.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Fourteen per cent.

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?

John Warwick King

Mr. KING (Kootenay):

Fourteen per cent, yes. In that case the bill would supplement the Pension Act.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Up to the maximum.

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?

John Warwick King

Mr. KING (Kootenay):

Up to the maximum, yes.

Motion agreed to and bill read the second time and referred to the special committee on pensions and returned soldiers' problems.

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COMPANIES ACT AMENDMENT


Hon. FERNAND RINFRET (Secretary of State) moved the second reading of Bill No. 9, to amend the Companies Act. He said: This bill, Mr. Speaker, with the exception of a few unimportant changes and clerical corrections, is the bill which was presented last year in the Senate, examined by a special committee of that house, and passed on to the Commons too late for consideration before prorogation. As it is my intention if this bill secures second reading to refer it to a special committee, perhaps I may be permitted to make a brief reference to the provisions of the bill. The main purpose of the bill is to make such improvement in the existing company legislation that it may become a more efficient instrument for the advancement of Canadian enterprises and industries. Conditions in respect to company management are constantly changing, and it is necessary that our legislation also be changed from time to time, in order to adapt it to new conditions. For instance, I might mention that the amending act of 1917 introduced into our legislation what was then a modern method of providing for shares without nominal or par value. This class of security, however, was not at that time developed to the extent that it is to-day, and it is now found necessary to amend our act so that recent developments in that regard may be met. Such methods have been introduced widely in other countries as well as in Canada. I might also mention that in the amalgamation of companies, quite a new thing is to have shares without par value. There is no provision by which the surpluses and unearned profits of the amalgamated companies may be carried forward by the new company as reserve and undivided profit. A recent change in the method financing has been the introduction of redeemable preference shares. It frequently happened that at the outset of the business insufficient profits were earned to pay the bond interest. Now the method is rather to issue common and preference shares with cumulative dividends, and that also requires some changes and modifications in the Companies Act. In the amending act of 1924 provision was made for arrangement between Shareholders and creditors of companies. This provision had its advantages, but difficulties often arose in respect to the approval of the arrangement by the provincial courts. Moreover, in some cases the arrangements under this provision as presented to the department did not come within the terms of the act, and here again it is necessary to provide some new form of control. Other companies have appeared in the Canadian field known as investment trust companies, and these will come up for consideration in this bill. The bill contains a provision under which returns may be called for by the Secretary of State for the purpose of ascertaining whether the company is living up to the limitations which are contained in the chapter. In this connection I may say that inasmuch as the investment trust companies have come in for considerable comment lately in the Companies Act Amendment



Canadian press, the sections concerning such companies should receive special consideration either from the house or from the committee to which the bill is to be submitted. May I also mention that at a recent conference of representatives of the various provinces held in Toronto, certain proposals were made to the federal authorities to amend the Companies Act and introduce a new bill in order to control the sale of shares and in other particulars concerning brokerage firms. The bill is quite extensive, but many of its provisions have to do with matters of a technical or departmental nature. As it may create discussion, however, perhaps somewhat apart from its immediate provisions, I would suggest that the house agree bo the second reading, where the principle involved is merely the desirability of amending the act, and I will immediately have the bill referred to a special committee.


LAB

Herbert Bealey Adshead

Labour

Mr. ADSHEAD:

Is there anything in this bill to provide that the charter granted by the federal government shall be subject to the approval of the public utilities commission of the province? A good many companies secure incorporation under Dominion charter in order to avoid coming undier provincial legislation in connection with the public utilities.

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LIB

Louis Édouard Fernand Rinfret (Secretary of State of Canada)

Liberal

Mr. RINFRET:

That point was raised in the interprovincial conference held in Ottawa some three or four years ago, and there was considerable difference of opinion as to the desirability of the very thing my bon. friend suggests, namely, to make our companies subordinate to provincial law. The matter has been referred to the Department of Justice for consideration, but as far as I can see it has not, at least recently, been submitted to parliament. This, however, is one of the questions that may well be examined by the Special committee to which the bill will be referred.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Hon. R. B. BENNETT (Leader of the Opposition) :

Mr. Speaker, there are some provisions in this bill to which I for one would hesitate to agree. Inasmuch as the proposal of the minister is that the second reading shall be proceeded with on the assumption that it merely approves of the principle of amending a statute, without in any sense prejudicing the right of members of the 'house to disagree with any report that may be made or to express approval or otherwise of the various sections of the bill, I agree to the course suggested by the minister.

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CON

Thomas Erlin Kaiser

Conservative (1867-1942)

Mr. KAISER:

May I ask the minister whether it will be possible to introduce amendments to sections of the act other than those referred to in the bill now before us?

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LIB

Louis Édouard Fernand Rinfret (Secretary of State of Canada)

Liberal

Mr. RINFRET:

I shall make the reference to the committee as wide as possible, and certainly it will be proper for any member of the committee to submit amendments other than those contained in the bill.

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UFA

Henry Elvins Spencer

United Farmers of Alberta

Mr. SPENCER:

Do I understand the minister to say this bill is to go to a special committee yet to be formed? Can he tell the house how large that committee will be, or when it will be appointed?

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LIB

Louis Édouard Fernand Rinfret (Secretary of State of Canada)

Liberal

Mr. RINFRET:

I will be quite frank with my hon. friend on that point. The Liberal whip has been away for a few days; I am afraid he has not been in the very best of health, and that question has not as yet been decided, but if the house agrees to the appointment of a committee then it will be for the three groups in the house to decide among themselves as to the membership.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Why not refer it to the committee on banking and commerce?

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LIB

Louis Édouard Fernand Rinfret (Secretary of State of Canada)

Liberal

Mr. RINFRET:

I was willing to let it go to any committee, but the bill is very extensive and it would take some time to consider it there.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

They might appoint a subcommittee to consider it, the subcommittee consisting perhaps largely of members interested in commercial matters, and then the whole committee could deal with it on a certain day. The banking and commerce committee is large, and would afford a greater opportunity for members who may desire to make suggestions as to amendments to other sections of the Companies Act. Perhaps in view of that it might be desirable to refer it to the banking and commerce committee.

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UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

I entirely agree with the observations of the leader of the opposition. I think the banking and commerce committee the proper place to send this bill, and I sincerely hope that when it comes up for consideration full attention will be given the question of dummy directorships, the formation of companies with the office boy, the stenographer and other individuals, sometimes including the janitor and elevator man, as directors. There 'have been some rather questionable cases of companies operating under an incorporation of that character. Perhaps this is not the time to go into details, but I hope that will be a part of the discussion in committee.

Timber Marking Act

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PRO

Milton Neil Campbell

Progressive

Mr. CAMPBELL:

I trust the minister will see that a provision is included in this bill by which companies with a Dominion charter will be subject to provincial laws. I may say this is a very important question in Saskatchewan at present. The government of Saskatchewan has decided that, as far as they are able, they will not allow any further power companies to operate in that province, or the present companies to acquire further power plants. They have decided to make power a provincial monopoly as far as they can do so, but they are up against the difficulty that some of the companies now operating in that province have Dominion charters, and the provincial government finds itself balked at the outset by not being able to prevent these companies from extending their plants. Many of these companies have been able to secure plants at certain strategic points, and it has been made almost impossible to build up a proper provincial power unit. I think it most important that the minister should insert some provision in the act by which these companies will be subject to provincial laws.

Motion agreed to and bill read the second time.

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March 20, 1930