Question Period Note: CORPORATIONS CANADA AND PALESIGN

How can the federal government accept to incorporate an organization against which there are unverified accusations that it spreads misinformation/controversial information?

• Innovation, Science and Economic Development Canada (ISED) rigorously follows all the requirements under the Canada Not-for-profit Corporations Act.

• By design, the Government of Canada does not have the authority to deny an application for incorporation if the requirements are met.

• However, the government can take action, including dissolution, if the filing requirements are not met or if the filing is unauthorized.

• Innovation, Science and Economic Development Canada’s (ISED) compliance activities include regular verifications of a corporation’s filing obligations.

• PaleSign is currently compliant with its filing obligations.

• The government is following this file closely.

PaleSign incorporated under the Canada Not-for-profit Corporations Act on November 1, 2023. Its stated purpose in its articles is “public awareness.” According to its website, its mission is “Advocating for Palestine, One Billboard, Poster, Ad, and Sticker at a Time.”

On June 3, 2024, Warren Kinsella posted a message on X (formerly Twitter) directed to the Minister of Innovation, Science and Industry asking how “these haters,” referring to PaleSign, have been allowed to incorporate. He provided a link to the corporation’s profile from Corporations Canada’s online search.

If pressed on remedies

• Interested parties can directly seek remedies through the courts.
o This includes dissolution, a compliance order or an investigation order.

• Complaints regarding illegal activities are referred to the RCMP.

If pressed on design

• The Canadian regime is open, accessible and transparent, which is a strength of our regulatory framework.
• This is a strength relative to other jurisdictions.
• The Government of Canada balances this by allowing interested parties such as members or creditors to directly seek corporate governance remedies through the court rather than relying on the discretion of a government official.

If pressed on why the government has not sought dissolution through the courts.

• The grounds to seek a dissolution are primarily for corporate governance breaches, for example:
o Not holding an annual meeting of members; engaging in activities that are contrary to the corporation’s articles; and, denying members access to corporate records and financial statements.
• The only grounds to dissolve based on illegality is if the corporation made any misrepresentation in applying for a certificate under the Canada Not-for-profit Corporations Act (NFP Act).
• Where it is in the public interest, the NFP Director, a government official who is arm’s length from the government, can make the application to the court.