Today in the BC Legislature we debated, at second reading, the Private Members’ Bill, that I introduced earlier this week, designed to enable BC companies to become benefit companies.

Below I reproduce the speeches I gave when moving second reading and closing the second reading debate. The BC NDP spoke in favour of the legislation. The BC Liberals didn’t bother to put up a single speaker.

Committee stage for the bill is likely to be in the fall to give us time to canvas stakeholder reactions over the coming months.

Videos of Speeches

Second Reading Speech Closing 2nd Reading Debate

Text of 2nd Reading Speech

A. Weaver: It gives me enormous pleasure to rise and speak to Bill M216, Business Corporations Amendment Act, 2018. I’m particularly excited about this bill and the fact that we’re debating it at second reading as it is a bill that my office and I worked on quite extensively to bring to fruition over the past several….

Deputy Speaker: Pardon me, Member. Just kindly move second reading.

A. Weaver: I do apologize, hon. Speaker. I move second reading of Bill M216, Business Corporations Amendment Act, 2018.

Deputy Speaker: Thank you very much. Please continue.

A. Weaver: Let me start again. It gives me great pleasure to rise to speak to Bill M216, Business Corporations Amendment Act, 2018. As I said, I’m particularly excited to be debating this bill, as it’s a bill that my office and I have worked on to bring to fruition for the past number of months.

We took the Attorney General up on his offer of legislative drafting services that all opposition members have been granted. We did this a few months ago. We are very grateful to the Attorney General for bringing in this new approach to politics here in the province of British Columbia. It’s very refreshing, and it allows us to ensure, when we bring legislation or amendments forward, that it’s done in a matter that ensures that it’s legally enforceable and works within existing B.C. laws.

As you will see in going through this legislation, it’s a very, very complex piece that has many, many required changes in other sections in order for it to be enacted here in British Columbia. We could not have done that without the services of the legislative drafter. Again, we are very grateful to government for doing that. I think it bodes very well for this government as we move forward in the years ahead.

I’m glad to see it receiving second reading, and I’m hopeful that all members of this House can debate this bill in an earnest way as they consider the merits of supporting or not supporting it. What this bill does…. This is what I’d like address to begin with. I want to spend a few minutes canvassing this. This bill adds a new part to the Business Corporations Act enabling companies to register as benefit companies.

This legislation is intended to encourage the adoption of business forms that have an expanded social and environmental mission, to provide a legal framework that supports and protects businesses that choose to take on this broadened mandate and to ensure that there is adequate transparency and accountability that benefit companies must adhere to.

This framework would provide greater certainty for companies and their investors as to the mandate of their directors and nature of the company. This bill is intended to be complementary to the existing community contribution company legislation passed by the previous government. The C3 — as it’s called — framework is a model for social enterprise and is particularly useful for non-profits and charities who need a way to raise revenue.

However, we’ve heard loud and clear that it is too limiting for most for-profit companies to consider, so it’s been limited in its adoption here in the province of British Columbia. I’ll speak to the differences between these pieces of the legislation at greater detail in a few minutes.

In the present legislation, there are two key components to it. No. 1: there are requirements that companies must adhere to if they want to become benefit companies. No. 2: protections are in place that we include for these companies. I’ll canvass both of those briefly here.

First, benefit companies must commit to conducting their business in an environmentally, socially responsible and sustainable manner, which takes into account the well-being of persons affected by their conduct and endeavours to use a fair and proportionate share of available environmental, social and economic resources and capacities. They must also pursue one or more specific public benefits. They must set out their purposes in their articles, including specifying the public benefits the company is promoting.

Second, benefit companies must report their performance against a third party standard, which must be developed by a person or entity that is unrelated to the benefit company. The reporting must be done annually and must be made publicly accessible. This is important to ensure transparency for suppliers, purchasers and customers that the company is indeed living up to its stated goals.

Companies incorporating for the first time as benefit companies must have the words “benefit company” or “B.Co.” as part of their name. Companies that alter their articles to become benefit companies do not need to change their name.

This bill also provides continuity and greater certainty for companies established with a broader mission. A company can only become or cease to be a benefit company if shareholders authorize it by a special resolution that requires at least a two-thirds shareholder majority.

The choice to become a benefit corporation is completely voluntary and has no impact on other existing corporations, corporate forms, taxes or government regulation. There are no financial benefits, and benefit companies are taxed at the regular corporate tax rate.

This legislation also includes important requirements and legal protections for directors and officers of benefit companies. It requires that directors and officers of a benefit company act honestly and in good faith with a view to the best interests of the persons materially affected by the company’s conduct. This bill requires that directors balance this broader requirement with the existing duty, already enshrined in corporate law, which specifies they act in good faith with a view to the best interests of the company.

It also includes key legal protections for directors. It clarifies that only shareholders can bring a challenge against a director. Their broader duties to public benefits do not open them up to broader liabilities, which is very important. It also specifies that shareholders may only seek injunctive relief against a director under this part, not monetary damages.

Why do we need this legislation in B.C.? First of all, I think it’s important, at this stage, to recognize the initiative of the previous government, and particularly the member for Surrey–White Rock at the time, Gordie Hogg, who brought forward and championed the community contribution company legislation in 2012. However, I view benefit company legislation and the C3 legislation as being complementary ways for government to support social enterprise and mission-driven companies.

The C3 structure provides a useful tool for non-profits and charities that need a way to raise revenue, but we’ve heard that it is far too limiting for most for-profit companies to consider. To become a C3, companies would have to fundamentally change their corporate structure and reduce their ability to attract investment. For example, the so called asset lock for C3s limits the dividends a C3 can be pay to shareholders, and this cap is 40 percent of annual profits. Moreover, in cases of C3 dissolution, the majority of assets remaining after debts are settled must flow to a qualified entity, such as a charity or a cooperative.

I would fully support efforts of this government to build upon the work started by the previous administration to support C3s, including promoting the C3 brand, enhancing public knowledge of these types of companies and providing tax incentives and benefits for investments in C3s. But the restrictions on C3s mean that the majority of mainstream businesses, even those that have a social and environmental mission at their core, wouldn’t consider this structure.

We should provide another option for sustainable and responsible businesses in B.C. We’ve heard from many in the social impact space, including a number of businesses that chose to prioritize social and environmental benefits in addition to profit, about the important role that a benefit company legislation would play in growing this movement and supporting the work already underway across B.C.

It’s true that directors of companies in Canada already have more discretion to pursue a broader mandate beyond maximizing shareholder profits than they do in the United States. However, a number of issues arise for companies that try to embed this broader mandate in practice, since we lack a legal framework that explicitly supports these types of businesses.

For example, this legislation would provide clarity for directors and for shareholders about the mandate of the company. It would help directors avoid the risk of a shareholder challenge regarding the director’s duties to the company. And it would take the uncertainty out of the process of embedding a broader mandate within your articles.

It would provide certainty for impact investors looking to invest in mission-aligned companies of the nature and the mandate of the company. It would enable companies to attract capital while enabling them to stay true to their mission and protect the vision of the company’s founders as their company grows.

One concern we’ve heard over and over again is that as companies grow and new investors come on board or as founders consider secession planning, they are worried about losing their company’s initial mission. This legislation would provide greater protections for the original mission of a business. Moreover, this legislation would provide a simple framework for companies to adhere to that is legally and commercially recognized.

If B.C. had this legislation on the books, if companies were able to incorporate as benefit companies with an explicit social or environmental benefit baked right into their articles, it would send a strong signal that government supports this approach to business. We would encourage more companies to pursue a socially responsible and environmentally sustainable approach, creating beneficial outcomes for society as a whole. We can better leverage the power of the private sector to help us tackle the significant social and environmental challenges we face.

To conclude, this legislation is an opportunity for British Columbia to lead the nation in supporting businesses that want to be a bigger part of developing innovative solutions to the challenges facing the 21st century.

This legislation is common elsewhere in the world. In the United States, for example, over 30 states have passed this type of legislation. Countries in Europe and South America already have it on the books or are actively considering it. Successful companies of all sizes have signed on, both here voluntarily and elsewhere through the legal approach that’s been provided to them.

I believe that becoming the first jurisdiction in Canada to champion benefit companies is an enormous opportunity to position the province as a leader in the new economy. B.C. is home to many socially responsible companies. It’s part of our stellar brand as one of the greenest and greatest places in the world to live.

But we are struggling to adjust and respond to massive technological, social and environmental shifts that the world is facing, from climate change to automation. We need to think differently in order to turn these challenges into opportunities that we lead in the development of solutions for.

Government and the non-profit sector cannot respond to these changes alone, nor should they have to. For-profit businesses have a huge role to play in our society. They are part of the solution and will continue to be so moving forward.

The companies that pursue a triple-bottom-line approach are on the cutting edge of rethinking the role of businesses in the 21st century. They know that acting in the best interests of people and the planet is the best way to build a thriving economy for not only this generation but also the next and the subsequent generations thereafter.

Our hope is that if other members in this House support this bill, we can play our part in supporting this growing movement internationally. We can encourage more B.C. companies to incorporate social and environmental values into their own business articles, empowering them to promote change in our province and helping us, collectively, solve the challenge that we all face.

Text of Closing Speech

A. Weaver: I rise to close debate on Bill M216, Business Corporations Amendment Act, which is being debated at second reading. First off, I’d like to thank — the comments from the previous speakers — in particular, the minister who spoke extensively about the values encapsulated within B corporations and how those values actually resonate with the values of the present government and, clearly, the values that we have in the Third Party as well.

For those that may not know what B Corps are…. Some might think that they’re not big companies and only small companies. There are small companies who are B Corps, but there are also multinationals like Unilever, which is a transnational consumer goods company dealing with foods, beverages, cleaning agents and personal care.

Unilever is a B corp, and they’re proud of their branding. A European bank, called Triodos Bank brands themselves as the world’s most sustainable bank. They are a B corporation, and they’re a very successful one. Many people in this Legislature will know about the Natura products — the Brazilian company that builds beauty products, household care, personal care, skin creams. They are another example, a Brazilian B corporation.

In B.C., one of our more celebrated ones is Hootsuite. It’s a local start-up, B.C. grown, that grew dramatically to become a big player in the tech sector. Many have probably actually participated in Kickstarter campaigns. Well, indeed, Kickstarter is a B corporation.

They’re proud of their branding, and they’re protected because of the fact that they’re certified and incorporated as B corporations. They’re protected to allow that their mandate extend beyond the traditional of only for-profit and to actually have broader societal goals as well.

Ben and Jerry’s. We all love their Ben and Jerry’s ice cream. Ben and Jerry’s is a B corporation — again, a company that’s proud.

Why this is particularly important — you heard this from the discussion from the minister — is that we know that there’s a new generation of young people, the so-called millennials, who are emerging into our society and have a different set of values than we may have had when we came out. We came out at a different time, my grey-haired generation.

The millennials of today — I’m pointing to my colleague here, too — are looking for more than just a job. They’re looking for the quality of life associated with that job. They’re one of the reasons why in British Columbia, for example, we’re struggling to meet with health care practitioners — doctors, for example. We’re graduating a lot, but for doctors, when they come out, this millennial generation, it’s not only about the profession. It’s about the quality of life associated with that profession.

B corporations are critical because they recognize that in today’s new economy — with triple-bottom-line reporting, providing a workplace where you actually create an environment that is conducive to attracting and retaining employees in a very progressive manner — these are the types of companies that are attracting the millennial generation.

I’m absolutely delighted that here in British Columbia we’re moving this forward. I’m actually very pleased that this legislation will shortly be voted on at second reading. Over the course of the summer, I’m hoping that we will hear more from companies — we’ve been approached by a number — and that more and more companies will actually approach us and ask for further information. So as we move into the fall session, we can actually have a good public discussion about the benefits or any potential unforeseen consequences associated with B corporations.

I will say that since bringing in this legislation, a very, very big, multinational B.C.-based company has approached us and asked for details about how they might move on this process. I know there are companies out there that are looking for this. We know that. We met with stakeholders in Vancouver, with business leaders there, a couple of weeks ago. There’s actually a very integrated group of senior professionals in Vancouver. Many of these are engineering firms or consultant firms, but there are bigger firms — construction firms, a number of firms — that are moving toward a B corporation because they want to be good corporate citizens.

We recognize — and it’s good to see that government does; it’s a shame we have no speakers from the official opposition — that it’s actually critical. As we move forward in the 21st-century economy, it’s critical that we ensure that we work with business to provide solutions and move us forward to dealing with some of the challenges of our times.

With that, hon. Speaker, I move second reading.

Motion approved.

A. Weaver: I move the bill be referred to a Committee of the Whole at the next sitting of the House after today.

Bill M 216, Business Corporations Amendment Act, 2018, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Media Release

Weaver’s bill to support businesses with environmental and social missions takes next step towards being passed into law

For immediate release

May 17, 2018

VICTORIA, B.C. – A private member’s bill introduced by Andrew Weaver passed second reading, taking the next step towards becoming the first opposition Party bill to become law in B.C. The bill would amend the Business Corporations Act to allow companies to incorporate as benefit companies. Benefit companies would choose to pursue social and environmental goals, rather than just profit.

“I am delighted that this legislation to support businesses with a social and environmental mission passed second reading,” said Weaver.

“A minority government is an opportunity to do things differently by putting partisan politics aside and focusing on issues and ideas that will move our province forward. This legislation is an opportunity for B.C. to lead the country in supporting businesses that want to be a bigger part of developing innovative solutions to the challenges of the 21st century.”

If passed into law, this legislation would make B.C. the first jurisdiction in Canada to extend legal recognition to benefit companies. Weaver says the bill will encourage businesses to take on an expanded social and environmental mission, provide a legal framework that supports and protects businesses that choose to take on this broadened mandate, and ensure that there is adequate transparency and accountability.

For more information about how a Bill becomes law in the BC Legislature:https://www.leg.bc.ca/content-peo/Learning-Resources/How-a-Bill-Becomes-Law-English-print.pdf

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Media contact

Jillian Oliver, Press Secretary

+1 778-650-0597 | jillian.oliver@leg.bc.ca