Bill S-235 explained in plain English
An Act to provide the means to rationalize the governance of Canadian businesses during the period of national emergency resulting from the global financial crisis that is undermining Canada's economic stability
Federal Parliament bill summary, status, timeline, sponsor, votes, and official sources.
At a glance
Official Parliament of Canada snapshot for 40th Parliament, 2nd Session. MP vote breakdowns appear when the House of Commons publishes a recorded division export for that bill. Senate and House stage details include official debate/sitting links when LEGISinfo publishes them.
Our plain-language take, written for civic education.
Source: By PoliticalData.ca
This bill imposes limits on executive compensation and bonuses for Canadian companies receiving federal emergency financial relief during the 2008-2009 financial crisis, and establishes permanent governance rules for publicly traded corporations.
Bill S-235 addresses corporate governance in Canada during the global financial crisis of 2008-2009. It has two main parts: **Part 1: Emergency Rules for Companies Receiving Federal Financial Aid** Companies receiving emergency federal financial assistance (such as loans or investments from the government during the 2008-2009 crisis) face restrictions during their "relief period" (the time they are repaying loans or until they buy back government-held shares): - The highest-paid executives are subject to salary caps and bonus limits based on how much aid the company received (companies receiving $25–$250 million must cap the pay of their 5 highest-paid officers; those receiving $250 million–$1 billion must cap 10 officers; those receiving over $1 billion must cap 20 officers) - Executives cannot earn more than $500,000 in annual salary - Bonuses are limited to one-third of an executive's salary and must be paid as restricted shares that cannot be sold until the relief period ends - Companies cannot pay dividends to shareholders during the relief period **Part 2: Permanent Rules for Publicly Traded Corporations** All Canadian publicly traded corporations must follow these rules: - No individual can sit on the boards of more than 4 public corporations - Directors must be paid fixed annual fees and meeting attendance fees (not share options) - Within one year, each director must invest in the company's common shares an amount equal to three times their annual pay - Corporations cannot grant stock options to directors - Each company must have a remuneration committee that sets pay principles for directors and officers, approved by shareholders - Officer pay (salary plus benefits) cannot exceed 20 times the average Canadian industrial wage - Officer benefits (training, bonuses, etc.) must be reasonable and tied to company performance - Officers cannot cash in benefits for at least 3 years after receiving them - Companies must publicly report all retirement benefits paid to officers and all perks given to directors **Penalties** Individuals who break certain rules can be fined up to $5,000 or imprisoned for up to 6 months. Corporations that break rules can be fined up to $500,000. The law comes into force on a date to be set by the Governor in Council.
- Restricts annual salaries to $500,000 for top executives of companies receiving federal emergency financial assistance
- Limits bonuses to one-third of an executive's salary, payable only as restricted shares during the relief period, for companies receiving federal aid
- Prohibits dividend payments to shareholders by companies receiving federal emergency financial assistance during their relief period
- Limits the number of executives subject to pay caps based on the amount of federal financial assistance received ($25–$250 million = 5 officers; $250 million–$1 billion = 10 officers; over $1 billion = 20 officers)
- Restricts individuals to sitting on the boards of no more than 4 publicly traded corporations
- Requires directors of public corporations to be compensated only by fixed annual fees and meeting attendance fees (no stock options)
- Requires each director of a public corporation to invest in company shares within one year an amount equal to 3 times their annual pay
- Prohibits public corporations from granting stock options or share purchase rights to directors
- Requires public corporations to establish a remuneration committee responsible for setting director and officer pay principles, subject to shareholder approval
- Caps total officer compensation (salary plus benefits) at public corporations to 20 times the average Canadian industrial wage
- Restricts officer benefits to reasonable training, performance bonuses, and perks directly tied to business activities, with no cashout for 3 years
- Requires public corporations to report retirement benefits paid to officers in financial statements
- Requires public corporations to disclose all benefits provided to directors in annual shareholder reports
- Executives (officers) of Canadian companies that receive federal emergency financial assistance during the 2008-2009 global financial crisis and its aftermath
- Shareholders of companies receiving federal emergency financial assistance (due to dividend restrictions and limited compensation payouts)
- Directors of all publicly traded Canadian corporations
- Officers of all publicly traded Canadian corporations
- Investors in publicly traded Canadian corporations (who must approve remuneration plans)
- Financial institutions receiving federal assistance (banks, trust companies, insurance companies)
- Forestry companies receiving federal assistance
- Agriculture and food companies receiving federal assistance
- Shipbuilding companies receiving federal assistance
- Automotive manufacturers receiving federal assistance
- Aerospace companies receiving federal assistance
- All companies incorporated under the Canada Business Corporations Act with publicly traded shares
- Recipient companies must limit executive salaries to $500,000 per year during the relief period
- Recipient companies must prohibit dividend payments to shareholders during the relief period
- Recipient companies must pay bonuses only as restricted shares that cannot be transferred until the relief period ends
- Public corporations must limit the total compensation (salary plus benefits) of each officer to 20 times the average Canadian industrial wage
- Public corporations must establish a remuneration committee to set executive and director pay principles
- Public corporations must require directors to invest in company shares equal to 3 times their annual remuneration within one year
- Public corporations cannot grant stock options to directors
- No individual can serve as a director on more than 4 publicly traded corporations
- Public corporations must disclose all director benefits in annual reports and officer retirement benefits in financial statements
- Officers can only receive benefits (non-salary compensation) in limited forms: professional training, reasonable performance bonuses, or direct business activity-related perks
- Officers cannot liquidate or cash in benefits for at least 3 years after receiving them
- Directors can only receive fixed annual fees and meeting attendance fees, not stock options
- Shareholders of public corporations have the right to vote on director and officer compensation plans
- The bill was introduced at first reading on May 12, 2009
- The bill was at second reading in the Senate at the time this record was created
- Director share investment requirements (section 12(1)) become effective one year after the section comes into force
- The commencement date of the entire Act (or specific provisions) is to be fixed by order of the Governor in Council
- Reduction in executive compensation at companies receiving federal emergency financial assistance (salary cap of $500,000 and bonus restrictions)
- Reduction in dividend payments to shareholders of aided companies during relief periods
- Increased financial investment requirement for directors of public corporations (must invest 3 times their annual pay in company shares)
- Potential reduction in total officer compensation costs at public corporations due to the 20-times-average-wage cap
- Increased disclosure and administrative costs for public corporations to establish remuneration committees and report on compensation and benefits
- Individuals who violate sections on restricted share transfers (section 7(3)), board membership limits (section 10), director share investments (section 12(1)), or officer benefit liquidation rules (section 16(3)) are guilty of an offence and liable on summary conviction to a fine not exceeding $5,000 or imprisonment not exceeding 6 months, or both
- Corporations that violate sections on salary caps (section 6), bonus caps (sections 7(1) or 7(2)), dividend prohibitions (section 8), director share option bans (section 13), officer retirement benefit reporting (section 17), or director benefit reporting (sections 18(2) or 18(3)) are guilty of an offence and liable on summary conviction to a fine not exceeding $500,000
- The bill's commencement date is not specified in the bill text; it will be fixed by order of the Governor in Council, meaning it may never come into force or could come into force at an indefinite future date
- The bill was at second reading in the Senate when this record was created; it is unclear whether it ever received final approval or became law
- The definition of 'relief period' depends on the terms of specific financial assistance agreements, which are not fully detailed in the bill
- The bill does not define what constitutes 'reasonable' performance bonuses, leaving discretion to corporations and potentially the courts
- Statistics Canada's calculation of 'average Canadian industrial wage' is used to set the 20-times cap but the bill does not specify which wage measure or time period is used
- The bill does not clearly define the scope of 'benefits' for officers beyond the examples given (professional training, performance incentives, business-activity-related perks), potentially creating ambiguity
- Enforcement mechanisms and oversight responsibilities are not detailed; it is unclear which agency (Finance Canada, provincial regulators, RCMP, etc.) would enforce these rules
- The bill applies to 'recipient companies' receiving federal aid but does not specify how companies become categorized as recipients or who determines this status
- Part 1 applies during the 'relief period' but does not define when this period begins, only when it may end (loan repayment or share buyback completion)
- The bill does not specify what happens to compensation arrangements made before the bill comes into force
Corporations incorporated under this Act that are public corporations must comply with the permanent governance rules in Part 2, including director and officer pay limits and reporting requirements.
Source: Part 2, definition of 'corporation' (section 9)
Banks governed by this Act that are public corporations must comply with the permanent governance rules in Part 2, including restrictions on director and officer compensation.
Source: Part 2, definition of 'corporation' (section 9)
Trust and loan companies governed by this Act that are public corporations must comply with the permanent governance rules in Part 2.
Source: Part 2, definition of 'corporation' (section 9)
Cooperatives and credit associations governed by this Act that are public corporations must comply with the permanent governance rules in Part 2.
Source: Part 2, definition of 'corporation' (section 9)
Insurance companies and fraternal benefit societies governed by this Act that are public corporations must comply with the permanent governance rules in Part 2.
Source: Part 2, definition of 'corporation' (section 9)
This bill defines 'financial assistance' to include relief granted under the 2009 Budget Implementation Act in response to the financial crisis.
Source: Part 1, definition of 'financial assistance' (section 3)
Generated using AI from official bill text. Not legal advice. It is written by PoliticalData.ca for civic education, automatically checked and spot-reviewed before publishing.
Official textParliamentary Process
Bill S-235, concerning rationalizing Canadian business governance during a financial crisis, completed its first reading in the Senate on May 12, 2009, and moved to second reading with debates occurring in May, September, and November 2009.
This record details the initial procedural steps for Bill S-235 in the Senate. The bill was introduced and received its first reading on May 12, 2009. It then proceeded to second reading, with a sponsor's speech occurring on May 14, 2009, and further debate on September 29 and November 18, 2009. The bill's purpose is to provide means to rationalize the governance of Canadian businesses during a national emergency caused by a global financial crisis that is undermining Canada's economic stability. The record shows the procedural progression of the bill, not its final passage or enactment.
On May 12, 2009, the Senate held its first reading of Bill S-235, concerning business governance during a financial crisis, alongside debates on other legislative matters and topical issues.
This document is a record of the Senate proceedings on May 12, 2009. During this sitting, senators engaged in various procedural activities. Key among these was the introduction and first reading of Bill S-235, An Act to provide the means to rationalize the governance of Canadian businesses during the period of national emergency resulting from the global financial crisis that is undermining Canada's economic stability. The Senate also debated other bills, presented committee reports, and discussed various issues including job creation, climate change, access to information, and the shortage of health professionals. The proceedings included statements on Air Force Appreciation Day, Electronic Commerce Protection, and other topics, as well as a point of order ruling by the Speaker.
Bill S-235 was under debate during its second reading in the Senate on November 18, 2009, with the debate not yet concluded.
This record shows that Bill S-235 was being debated at the second reading stage in the Senate on November 18, 2009. The debate at this stage had not yet been completed. The bill was first introduced in the Senate on May 12, 2009, and had its first second reading debate on May 14, 2009. A sponsor's speech was given on May 14, 2009.
On May 14, 2009, the Senate debated Bill S-235, considered various committee reports and other legislation, heard statements and questions, and granted Royal Assent to three bills.
On May 14, 2009, the Senate sat and considered various matters. During the sitting, the Senate concurred in amendments to Bill C-9. Senators made statements on topics including St. Peter's College, the Kelowna Accord, the commercial seal hunt, and the passing of Renée Morisset-Bouchard. Routine proceedings included the tabling of Supplementary Estimates (A) and the presentation of committee reports on Bill S-217 (National Philanthropy Day) and Bill S-210 (World Autism Awareness Day). Various bills were introduced at first reading. Question period addressed topics such as the National Pharmaceuticals Strategy, softwood lumber subsidies, and the case of Omar Khadr. The main business of the day included debate on Bill S-235, An Act to provide the means to rationalize the governance of Canadian businesses during the period of national emergency resulting from the global financial crisis that is undermining Canada's economic stability, which was adjourned. Other debates continued on Bills S-224, S-232, and S-206. A budget for the Standing Senate Committee on National Security and Defence was considered, and a motion in amendment was proposed. Royal Assent was given to three bills on May 14, 2009. The Senate also discussed a motion to amend Rule 28(3.1) of the Rules of the Senate, and debated inquiries and motions on various topics, including water management and combating anti-Semitism. A motion to allot time for debate on Bill S-224 was debated and ultimately adjourned. The sitting concluded with a motion for adjournment.
During a Senate debate on Bill S-235, Senator Hervieux-Payette introduced legislation to rationalize Canadian business governance during a financial crisis, proposing dividend restrictions and executive salary caps for companies receiving government aid, before the debate was adjourned.
This artifact details a debate in the Senate on May 14, 2009, concerning Bill S-235, titled the "Governance of Canadian Businesses Emergency Act, 2009." The bill aims to regulate Canadian businesses during a national emergency caused by a global financial crisis. Senator Céline Hervieux-Payette introduced the bill, explaining that it aligns with G20 commitments to strengthen financial regulation and supervision. Key provisions include prohibiting companies receiving government financial relief from paying dividends and capping executive salaries at $500,000, with bonuses limited to one-third of the salary. The bill would apply to key industries such as financial services, forestry, agri-food, shipyards, automotive parts, manufacturing, and aerospace. Senator Hervieux-Payette drew parallels to measures taken in the United States and Germany and highlighted the perceived robustness of Canada's banking system. The debate was adjourned by Senator Gerald J. Comeau.
The Senate began the second reading debate for Bill S-235, which aims to rationalize Canadian business governance during a financial crisis, but the debate was adjourned.
On September 29, 2009, the Senate continued its second reading debate on Bill S-235, an act concerning the governance of Canadian businesses during a national emergency. The debate for this specific bill was adjourned to allow the government to prepare its notes. The sitting also included tributes, tabling of reports, question period, and debates on other bills.
On November 18, 2009, the Senate continued its debate on Bill S-235 concerning the governance of Canadian businesses during a financial crisis and also debated a motion on water management, following other routine proceedings and question period exchanges.
This artifact is a record of a Senate sitting on November 18, 2009. The sitting included Senators' Statements on various topics, Routine Proceedings where government responses and bills were tabled, and Question Period where senators asked questions on topics including National Defence, FINTRAC information collection, and economic stimulus funding. The main procedural event was the continuation of the debate on the second reading of Bill S-235, An Act to provide the means to rationalize the governance of Canadian businesses during the period of national emergency resulting from the global financial crisis that is undermining Canada's economic stability. The debate on Bill S-235 was adjourned by Senator Gerald J. Comeau. Additionally, there was a continued debate on a motion regarding water management in the OSCE area, with a motion in amendment proposed and subsequently adjourned.
We don't have a plain-language summary for Third reading yet. The official source linked below is the full record.
We don't have a plain-language summary for First reading yet. The official source linked below is the full record.
We don't have a plain-language summary for Second reading yet. The official source linked below is the full record.
We don't have a plain-language summary for Consideration in committee yet. The official source linked below is the full record.
We don't have a plain-language summary for Report stage yet. The official source linked below is the full record.
We don't have a plain-language summary for Third reading yet. The official source linked below is the full record.
Debate and sitting links point to official parliamentary sources when LEGISinfo publishes them. Any plain-language discussion summaries should be generated from those official texts and reviewed before public display.
Vote Summary
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No published representative vote breakdown
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Official sources
Status, sponsor, votes, and timeline on this page are drawn from these official legislative sources and public records. Each summary above is attributed to its own source.
How this data is sourced