February 27, 2001

Lee Gill
Director
Corporate Law Policy
Industry Canada
235 Queen St., Room 561-F
Ottawa ON K1A 0H5

Dear Mr. Gill:

Re:       Bill S-11

On behalf of the Social Investment Organization, let me take this opportunity to commend the government on the improvements made to the Canada Business Corporations Act (CBCA) with introduction of Bill S-11.

As you may know, SIO is a national non-profit organization with a mandate to promote socially responsible investment. Our members include screened mutual funds, financial institutions providing socially responsible investment services, as well as financial advisors and investors with an interest in social investment. We have 450 members across Canada. Our members manage money on behalf of more than 200,000 Canadians.

As you may know, I appeared last May at the Senate Standing Committee on Banking, Trade and Commerce to offer our views on Bill S-19.

We are very pleased to see elimination of the clause permitting management to exclude shareholder proposals filed “primarily for the purpose of promoting general economic, political, racial, religious, social or similar causes.”

It is our view that this clause presented an unnecessary impediment to the ability of shareholders to raise legitimate and prudent matters for discussion with management. The elimination of this clause brings Canadian law much more into alignment with US law on this matter.

However, that said, let me express some concern about the fact that the temporal and quantitative values in the legislation are set down in regulation. We believe that issues such as the appropriate minimum value or percentage of voting shares, and the filing deadlines should be prescribed in the law to prevent any erosion of shareholder rights by regulation.

In addition, SIO also asks that you consider establishment of an independent arbitrator to adjudicate disputes over shareholder proposals between management and shareholders. Such an arbitrator would provide for low-cost and timely resolution of disputes. This proposal is contained in a forthcoming private member’s bill on the CBCA sponsored by MP Stephan Tremblay as well as submissions by other interested parties.

There are other issues we would like to bring to your attention by way of a fuller brief, and we would be pleased to meet with the Senate Standing Committee to discuss the legislation further.

Sincerely,

Eugene Ellmen
Executive Director

CC       Veronica Wessels
            Wayne Lennon
            Bob Weist

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