I shall give an explanation as to the nature of the amendment made by the Senate. They have added a new section, namely, section 43. Previously the bill contained 42 sections. This section is to enable the companies, through the legislative authority of the parliament of Canada, to establish and support or aid in the establishment and support of associations, institutions, funds, trusts and conveniences intended or calculated to benefit employees or exemployees of the corporations, either by way of pensions, allowances, by making payments towards insurance or for any object similar to the foregoing. I believe the amendment should be accepted because it is of a benevolent nature.
I understand there is a further amendment; we have not seen it.
I shall read the whole section:
Notwithstanding anything in sections 2 and 153 of this act, every corporate body created otherwise than by letters patent for any of the purposes or objects to which the legislative authority of the parliament of Canada extends, is hereby declared to possess, as incidental and ancillary to the powers conferred by the special act or charter creating it, power to establish and support or aid in the establishment and support of associations, institutions, funds,
trusts and conveniences intended or calculated to benefit employees or ex-employees of the corporation, or of its predecessors in business, or the dependents or connections of such persons, and to grant pensions and allowances, and to make payments towards insurance, or for any object like or similar to these foregoing, and to subscribe or guarantee money for charitable or benevolent objects or for any public, general or useful object.
(2) After the coming into force of this section the amount expended or to be expended for any of the purposes mentioned in subsection (1) of this section shall be determined once for all. each financial year, by one resolution only of the board of directors or other governing or administrative body of the corporation; or if preferred and so declared in the first resolution to be passed for each year, by several resolutions of the same authority each year.
That is a mere question of procedure.
That is a very broad clause. W ould these activities or organizations be brought under the supervision of the Superintendent of Insurance?
I do not think so.
I think the change would be very dangerous. I am entirely in favour of the principle, but it allows all sorts of companies and all sorts of enterprises to carry on insurance operations.
No, just for their own employees.
It allows them to assist.
It is merely for the purpose of aiding employees.
They could not, under this section, organize insurance companies, so to speak, in connection with their own enterprises ?
They have power to establish and support associations, institutions, funds, trusts and conveniences intended to benefit their own employees.
Quite so; it is for the protection of the employees and their families. What guarantee is there that the investment of funds gathered from premiums paid by employees will be regulated according to the principles of the Insurance Act? We know of the troubles that existed before the amendment to that act. There was difficulty experienced with the old benevolent societies, including such organizations as the Independent Order of Foresters, and we know that that institution practically went bankrupt. Finally parliament decided, quite rightly I think, after the investigation in the United States, to remodel the Insurance Act and to bring practically all benevolent institutions, or at least
those governed by federal legislation, under the supervision of the Department of Insurance. Since that time, due largely to the intelligence and competence of Mr. Finlayson, these institutions have been put on a solid basis. Now, if we are to open the door to all sorts of private benevolent insurance companies connected with banks or manufacturing concerns and let them organize themselves as they wish, we run the risk of finding ourselves, five or ten years hence, in the same position as we were when these so-called mutual societies were on the verge of bankruptcy and had to be saved by special legislation of this parliament.
I am merely indicating the possible results, because I took some active interest at the time in the preparation of those amendments to the Insurance Act. I made a special inquiry in the United States; I was put in communication with the board of inquiry there which had been instituted by the government of the state of New Aork, and I would not like to see a similar condition occur again to the great detriment of the employees of the various companies contributing to these so-called benevolent associations.
I am sorry I have no
knowledge at all of this bill. It comes under the Secretary of State, but it has been accepted by his department and also by the Superintendent of Insurance, who was interested in it.
Has Mr. Finlayson expressed his approval, before the committee of the Senate?
I understand this was
submitted to him.
I should like to find out at
whose instance this is put in. It is very difficult to appreciate the full effect of this amendment without having the Companies Act here to assist one. Is this a power to be given the directors with the approval of the shareholders, or is it for the directors alone? Then there is one other feature which it seems to me is a little extraordinary. In the third line of subsection 2 occur the words "shall be determined once for all each financial year. ' How can you determine something once for all each year? Is it the intention that the board shall deal with it say at the first meeting, and that their decision shall apply for that year, and that the following year they shall deal with it again?
They will deal with it
each year, but once for all for that year.
Of course that is only a minor matter, but I would like to know at whose instance this is being done, and whether this is a power given to directors without the consent of shareholders or whether their action has to be approved by the shareholders.
I 'will have to ask to
have the bill stand, since I have no information.