EDC

Minority observations on Bill C-31

(November 27, 2001) Certain members of the Standing Senate Committee on Banking, Trade and Commerce have concerns with some clauses of Bill C-31, which are as follows.

CLAUSE 3

The most controversial aspects of this Bill revolve around environmental issues, in light of projects that have received Export Development Corporation (EDC) financing in the past. In Bill C-31, the EDC establishes its own environmental review framework. Although the Committee is satisfied with the EDC self-regulating its projects for their environmental soundness as long as there are clear definitions to follow and as long as there is proper oversight. However, a minority of members note that nowhere in this bill is the word “environment” defined. The minority’s concerns would be alleviated if “environment” were defined in the Bill in a manner similar to that found in the Canadian Environmental Assessment Act.

Therefore, a minority of the Committee strongly urges the government to add the definition of environment to the bill.

CLAUSE 9

In the opinion of some members, Clause 9 sets out a non-binding environmental assessment process for the EDC to follow. Although the Senate Banking Committee agreed to this rather than making the EDC subject to the CEAA, it was with the understanding that there would be an accompanying framework of accountability established. This could easily be achieved by ensuring that environmental directives of the Board are statutory instruments for the purposes of the Statutory Instruments Act. This would allow for a review of those directives by Parliament.

Therefore, a minority of the Committee strongly urges the government to reconsider the applicability of the Statutory Instruments Act by amending Clause 9(3). This would alleviate its concern that there is a lack of accountability, while still maintaining a relatively self-regulating structure that is to the benefit of EDC’s commercial objectives.

CLAUSE 12

The first part of clause 12 creates a new section, 24.1, in the Act. This section exempts the EDC from the Canadian Environmental Assessment Act. While the Committee agreed with this proposal when it conducted its review of the EDC, the addition of section 24.2, which would make it a criminal offence to use the name of the corporation or its initials without the consent of the corporation, concerns some members of the Committee.

We are told that the intent of section 24.2 is to prevent fraud. This, however, is far from explicit in the text of the bill. Indeed the bill is drafted in such a way that it criminalizes the use of the corporation’s name or acronym for any purpose without the explicit permission of the EDC. This would interfere both in compliance with provincial securities regulations, which require a business to disclose its liabilities to the EDC when issuing a prospectus, and with the ability of third parties to comment on activities carried out by the EDC. Furthermore, testimony by witnesses drew the Committee’s attention to the fact that EDC has already written a letter directing a particular organization to stop using their initials on a website that is critical of the EDC’s environmental record. Finally, there are many corporations and businesses that currently have the initials “EDC” in their professional names, for example, EDC Facilities, Management and Consulting of Windsor Ontario.

Adequate civil remedies already exist in law for instances where a name or acronym is fraudulently used. There is no justification for the criminal sanctions outlined in this bill.

A minority of the Committee therefore recommends that the government clarify this clause so that the wording clearly reflects the stated intent of preventing fraudulent use of the corporations name or initials. The minority would appreciate a letter stating that the sole intent is to prevent fraudulent use of the EDC name, and that section 24.2 would not be used to achieve any other objective.

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