37th Parliament, 1st Session
EDITED HANSARD • NUMBER 011
CONTENTS
Monday, February 12, 2001
| GOVERNMENT ORDERS
|
1100
| FINANCIAL CONSUMER AGENCY OF CANADA ACT
|
| Bill C-8.
|
| Hon. Jim Peterson |
1105
1110
1115
1120
1125
| Mr. Richard Harris |
1130
1135
1140
1145
1150
| Mr. Gary Lunn |
1155
1200
| Mr. Yvan Loubier |
1205
1210
1215
1220
1225
1230
1235
1240
| Mr. Peter Stoffer |
1245
1250
| Mr. Dennis Mills |
1255
| Ms. Judy Wasylycia-Leis |
1300
1305
| Mr. Ken Epp |
1310
| Mr. Inky Mark |
| Mr. Scott Brison |
1315
1320
1325
1330
| Mr. Shawn Murphy |
1335
1340
1345
| Mr. Peter Stoffer |
| Mr. Ken Epp |
1350
1355
| STATEMENTS BY MEMBERS
|
1400
| GREATER TORONTO AIRPORT AUTHORITY
|
| Mr. Derek Lee |
| AGRICULTURE
|
| Mr. Leon Benoit |
| KARL DAVID HOEFEL
|
| Ms. Sarmite Bulte |
| TRANSPORTATION
|
| Ms. Yolande Thibeault |
| DRUGS
|
| Mr. Guy St-Julien |
1405
| PARKS CANADA
|
| Ms. Cheryl Gallant |
| AGRICULTURE
|
| Mr. Peter Adams |
| GALA DES OLIVIER
|
| Ms. Christiane Gagnon |
| HOUSING
|
| Ms. Nancy Karetak-Lindell |
| HEART MONTH
|
| Mrs. Diane Ablonczy |
1410
| INTERNATIONAL CRIMINAL COURT
|
| Mr. Irwin Cotler |
| EAST COAST MUSIC AWARDS
|
| Mr. Peter Stoffer |
| PIERRE-DE-LESTAGE HIGH SCHOOL
|
| Mr. Michel Bellehumeur |
| AGRICULTURE
|
| Ms. Susan Whelan |
| CORRECTIONAL SERVICE CANADA
|
| Mr. Peter MacKay |
1415
| THE ENVIRONMENT
|
| Hon. Charles Caccia |
| ORAL QUESTION PERIOD
|
| ETHICS COUNSELLOR
|
| Mr. Stockwell Day |
| Hon. Herb Gray |
| Mr. Stockwell Day |
| Hon. Herb Gray |
| Mr. Stockwell Day |
| Hon. Herb Gray |
1420
| Miss Deborah Grey |
| Hon. Brian Tobin |
| Miss Deborah Grey |
| Hon. Brian Tobin |
| HEATING OIL REFUNDS
|
| Mr. Gilles Duceppe |
| Hon. Jim Peterson |
| Mr. Gilles Duceppe |
| Hon. Jim Peterson |
| Mr. Michel Gauthier |
1425
| Hon. Jim Peterson |
| Mr. Michel Gauthier |
| Hon. Jim Peterson |
| FOREIGN AFFAIRS
|
| Mr. Svend Robinson |
| Hon. John Manley |
| Mr. Svend Robinson |
| Hon. John Manley |
| BUSINESS DEVELOPMENT BANK OF CANADA
|
| Right Hon. Joe Clark |
| Hon. Brian Tobin |
| Right Hon. Joe Clark |
1430
| Hon. Brian Tobin |
| HUMAN RIGHTS
|
| Mr. James Moore |
| Hon. Herb Gray |
| Mr. James Moore |
| Hon. John Manley |
| COST OF PETROLEUM PRODUCTS
|
| Mr. Pierre Brien |
| Hon. Jim Peterson |
| Mr. Pierre Brien |
| Hon. Jim Peterson |
| EMPLOYMENT INSURANCE
|
| Ms. Val Meredith |
1435
| Hon. Jane Stewart |
| Ms. Val Meredith |
| Hon. Jane Stewart |
| INTERNATIONAL TRADE
|
| Mr. Pierre Paquette |
| Hon. Don Boudria |
| Mr. Pierre Paquette |
| Hon. Herb Gray |
| GUN CONTROL
|
| Mr. Garry Breitkreuz |
| Hon. Anne McLellan |
1440
| Mr. Garry Breitkreuz |
| Hon. Herb Gray |
| AUTOMOBILE INDUSTRY
|
| Mr. Sarkis Assadourian |
| Hon. Brian Tobin |
| FOREIGN AFFAIRS
|
| Mr. Bill Blaikie |
| Hon. John Manley |
| Mr. Bill Blaikie |
| Hon. Maria Minna |
| AGRICULTURE
|
| Mr. Rick Borotsik |
| Hon. Lyle Vanclief |
| Mr. Rick Borotsik |
1445
| Hon. Lyle Vanclief |
| CORRECTIONAL SERVICE CANADA
|
| Mr. Larry Spencer |
| Hon. Lawrence MacAulay |
| Mr. Larry Spencer |
| Hon. Lawrence MacAulay |
| REPRODUCTIVE TECHNOLOGIES
|
| Ms. Pauline Picard |
| Hon. Herb Gray |
| Ms. Pauline Picard |
| Hon. Brian Tobin |
| FISHERIES
|
| Mr. John Cummins |
1450
| Hon. Herb Dhaliwal |
| Mr. John Cummins |
| Hon. Herb Dhaliwal |
| ATLANTIC CANADA OPPORTUNITIES AGENCY
|
| Mr. Rodger Cuzner |
| Hon. Robert Thibault |
| FOREIGN AFFAIRS
|
| Mr. Myron Thompson |
| Hon. Lawrence MacAulay |
| Mr. Myron Thompson |
1455
| Hon. Elinor Caplan |
| INDIAN AFFAIRS
|
| Mr. Richard Marceau |
| Hon. Robert Nault |
| FOREIGN AFFAIRS
|
| Ms. Jean Augustine |
| Hon. David Kilgour |
| TRADE
|
| Mr. Gary Lunn |
| Hon. Herb Gray |
| PETROLEUM PRODUCT PRICES
|
| Mr. Pierre Brien |
| Hon. Brian Tobin |
| HEALTH
|
| Ms. Judy Wasylycia-Leis |
1500
| Hon. Herb Gray |
| PRESENCE IN GALLERY
|
| The Speaker |
| ROUTINE PROCEEDINGS
|
| NATIONAL DEFENCE ACT
|
| Bill C-259. Introduction and first reading
|
| Mr. Inky Mark |
| HOLIDAYS ACT
|
| Bill C-260. Introduction and first reading
|
| Mr. Inky Mark |
1505
| PATIENTS' BILL OF RIGHTS
|
| Bill C-261. Introduction and first reading
|
| Mr. Greg Thompson |
| FISHERS' BILL OF RIGHTS
|
| Bill C-262. Introduction and first reading
|
| Mr. Greg Thompson |
| NATIONAL AGRICULTURE INDUSTRY RELIEF COORDINATION ACT
|
| Bill C-263. Introduction and first reading
|
| Mr. Rick Borotsik |
1510
| PARLIAMENT OF CANADA ACT
|
| Bill S-10. First reading
|
| Mrs. Marlene Jennings |
| PETITIONS
|
| Mr. Arthur Kabunda
|
| Mr. Yvon Godin |
| Criminal Code
|
| Mr. Jim Gouk |
| Health Care
|
| Mr. Jim Gouk |
| Palliative Care
|
| Mr. Jim Gouk |
| Employment Insurance
|
| Mr. Greg Thompson |
1515
| QUESTIONS ON THE ORDER PAPER
|
| Mr. Derek Lee |
| REQUEST FOR EMERGENCY DEBATE
|
| Agriculture
|
| Mr. Rick Borotsik |
| Speaker's Ruling
|
| The Speaker |
| GOVERNMENT ORDERS
|
| FINANCIAL CONSUMER AGENCY OF CANADA ACT
|
| Bill C-8. Second reading
|
| Mr. Ken Epp |
1520
1525
| Mr. Peter Stoffer |
1530
| Mr. Peter Stoffer |
| Ms. Pauline Picard |
1535
1540
1545
1550
1555
| Mr. Gurmant Grewal |
1600
1605
| Mr. Joe Peschisolido |
1610
| Mr. Dennis Mills |
1615
| Mr. Pat Martin |
1620
1625
1630
1635
| Mr. Sarkis Assadourian |
1640
| Ms. Judy Wasylycia-Leis |
1645
| Mrs. Suzanne Tremblay |
1650
1655
1700
| Mr. Yves Rocheleau |
1705
| Mr. Bill Blaikie |
1710
1715
1720
1725
| Mr. Leon Benoit |
| Mr. John McKay |
1730
| Mr. Richard Marceau |
1735
1740
| Division on motion deferred
|
| EMPLOYMENT INSURANCE ACT
|
| Bill C-2. Second reading
|
| Mr. Peter Stoffer |
1745
1750
| Bill C-2—Notice of time allocation
|
| Hon. Don Boudria |
| Mr. Chuck Strahl |
1755
| Second reading
|
| Mr. Odina Desrochers |
1800
1805
| Mr. Robert Lanctôt |
1810
| Mr. Larry Bagnell |
| Mr. Benoît Sauvageau |
1815
1820
| Mr. Peter MacKay |
1825
(Official Version)
EDITED HANSARD • NUMBER 011
HOUSE OF COMMONS
Monday, February 12, 2001
The House met at 11 a.m.
Prayers
GOVERNMENT ORDERS
1100
[Translation]
FINANCIAL CONSUMER AGENCY OF CANADA ACT
Hon. Jim Peterson (for the Minister of Finance) moved that Bill
C-8, an act to establish the Financial Consumer Agency of Canada
and to amend certain acts in relation to financial institutions.
be read the second time and referred to a committee.
He said: Mr. Speaker, as everyone knows, Bill C-8 is a major bill,
over 900 pages in length. It is, I believe, the biggest ever
placed before the House. It is the outcome of a great deal of
work and consultation in all sectors, including consumers and
the members of the House of Commons.
In fact, the latter had already seen this bill during the last
parliament. At that time it was called Bill C-38.
With it, we aim to reform the strategic framework of the
Canadian financial services sector, which comprises Canadian and
foreign banks, trust companies, insurance companies, co-operative
credit associations and other financial institutions. We have
proposed a few minor changes to Bill C-38.
1105
[English]
In essence this is the very same bill but with technical,
grammatical and editorial improvements, as well as some
clarifications where stakeholders identified points of confusion
about the intent or application of the policies.
For example, the Canadian Bankers Association pointed out that
under Bill C-38 it was unclear whether new financial sector
holding companies could hold portfolio investments. The fact is
that this is allowed and is now clearly stated. I thank the
Canadian Bankers Association for its incredibly valuable input in
the new bill, as well as that of all other industry and consumer
driven stakeholder associations.
There can be no doubt that Canada's financial services sector is
critical to us. It is critical as an industry, one of the truly
great industries of the country, employing over 500,000 Canadians
directly. It is highly export oriented, with more than 50% of
the revenue from the insurers and the banks coming in from
abroad. Most of the global taxes are paid in Canada, over 80%,
and close to 90% of their global employees are in Canada. If we
set out to devise through an industrial policy an industry that
would be ideal for Canada, we could probably find none better
than our financial services sector.
It is also important to us for the role it plays in our society
and in our economy. After all, without financial intermediation,
the capacity to deposit and withdraw funds, and to send funds
around the world, where would we as individuals and our
businesses be?
When we go abroad we find in many parts of the world that
Canadian financial institutions are predominant in those foreign
markets, giving a role of leadership not only to foreigners but
also Canadians who want to do business in particular foreign
jurisdictions. We have an important responsibility, therefore,
to maintain the health and the vigour of this great industry.
Because they operate within a legislative framework determined
by parliament it is essential that we have ongoing reviews of
financial services legislation. This is probably the most
extensive review that has ever been undertaken.
As a result of an extensive consultation going back to the
MacKay task force which reported to parliament, the finance
committee of the House and the Senate banking committee held
extensive public hearings and reported back to us.
The minister then tabled before the House a white paper in June
1999, which again allowed for extensive consultation and input
from all stakeholders. The bill was finally tabled last June as
Bill C-38 and but for the election I am sure would have been law
today. We are back to do the job, which is the culmination of
all this great input.
There are four major themes in the bill. The first is
encouraging the flexibility of our financial services both
domestically and globally. To do so we have put in place a
number of options and facilitating devices.
1110
The first and probably most important is the holding company
option. This means that our institutions will be able to compete
in Canada with the foreign monolines such as credit card and
lending companies that are coming here in an unregulated manner.
We will give them that level playing field. It will also give
them flexibility in the way they structure their Canadian and
global operations.
The second point in terms of flexibility is that we are
allowing a change in the ownership rules. This means that any
shareholder, which under the current law would be limited to 10%,
could go up to 20% of equity or 30% of non-voting shares. This
is to give our institutions the flexibility to enter into
strategic alliances and joint ventures with other institutions
here and around the world.
The third area where we are helping them compete better is with
respect to the merger review process. We have set out in the
guidelines a process which must be followed for the major banks
to enter into a merger.
This will offer certainty of process. At the same time it
envisages hearings before both the Senate banking committee and
the House of Commons finance committee. There is a great
opportunity for public input because the final decision on
mergers rests with the minister. He and Canadians must be
convinced that any merger which takes place is in the best
interest of all Canadians.
The second major thrust of the legislation is to encourage
domestic competition in Canada. The reason for this is that we
believe our customers are best served where there is vigorous
competition in the marketplace.
How are we doing this? We want it to be easier for people to
set up smaller banks or community based banks. This is why we
are lowering the minimum capital that a bank must have or an
institution must have from $10 million to $5 million. We think
this will lead to new types of community banks.
We are also seeing under the evolution of this sector new banks
associated with retailing institutions such as President's Choice
Financial, a relationship between the Loblaws companies and CIBC
which does their backroom work on a contract basis. This is a
bank which now has over 400,000 customers and over $2 billion in
assets.
Another way we are facilitating competition is with the new
three tier size based ownership regime. If the equity is under
$1 billion it can be wholly owned. Again this will help new
banks to get established.
If the new size based ownership regime is between $1 billion and
$5 billion, up to 65% of the shares can be owned or controlled by
one shareholder and the rest must be the subject of a public
float on the market. If the equity is over $5 billion, such as
with our major banks and demutualized insurance companies, the
rule is that these institutions should be widely held.
We are seeing new measures to encourage domestic competition
with respect to credit unions, particularly those outside Quebec
which do not have significant size and therefore economies of
scale and are thus facing higher costs of operating and serving
their customers who are also the owners of these unique community
based institutions.
1115
We have worked very closely with the credit union movement to
help give them greater competitiveness. This is why, working
with them, we have come up with an entity called a national
service entity. This would allow them to combine to get
economies of scale. It would enable them, for example, to issue
a common credit card, and they could roll out new service
offerings across provincial borders. This is a major step
forward.
I will say a brief word about co-operative banks. This was a
very important consideration brought forward by the MacKay
committee and endorsed by the committees of the House and the
other place. We have been working with the credit union movement
to find out exactly what type of co-operative bank legislation
should be brought forward. Unfortunately, the big group with
whom we were working fell away from this project, but we have
continued to study it and we will continue to study it, running
on a parallel basis to Bill C-8. When the model is in place we
will issue it and we will have extensive consultations, because
we know there are provincial concerns and there are concerns
within the credit union movement. We will subject that new
measure to the same type of extensive input from the communities,
the industries and the consumer groups, so that when we do come
forward with the legislation it will meet the needs as expected.
A fourth way in which we are encouraging domestic competition
here in Canada is through the entry of foreign banks via
branches. This legislation was in place a couple of years ago,
again as a result of extensive consultation, but we have enhanced
it in this legislation to bring the foreign banking regime in
Canada up to a level playing field with Canadian institutions,
again requiring amendments in the legislation.
A fifth way in which we are encouraging domestic competition for
the benefit of consumers is by opening up to the payment system
the operations of life insurers, security dealers and money
market mutual funds. This means that these new institutions
would be able to have funds of a customer on hand and the
customer would be able to exercise chequing privileges on that
account, again enhancing competition.
The third major heading under this bill is the protection of
customers. We think customers are best protected under any
regime where there is maximum competition, so I have outlined
what the government is doing in terms of enhancing competition.
However, even with competition we have found in the past that
there were those who remained unbanked; basic financial services
were not available to them. This is why the government has taken
measures under the heading of access. We are ensuring that
Canadians have access to the financial services they need. We
have introduced measures which would require the opening of
accounts with a minimum amount of ID. Past credit or employment
history, provided there is no fraud, would not be a bar to
cashing government cheques.
As well, I have recently entered into a memorandum of
understanding, a signed agreement, with eight of the large
deposit taking institutions, which would make basic bank accounts
available for Canadians. They are not all the same. This is not
a cookie cutter, because we believe that competition will benefit
consumers. However, each institution has come up with its own
basic account with a minimum number of transactions, be they in
person or via the Internet.
1120
The costs are set forth and range among the five from $2.95 to
$4 a month. We are making sure that those who can least afford
it have access to the basic banking they need to get off welfare,
to be able to deposit that cheque so it is safe and secure, and
to pay their bills, including rent. This is important because,
really, it is almost impossible to get off welfare if one does
not have access to this type of basic banking.
As well, we have put in place rules for the closure of bank
branches because that could be another way that access to basic
services might be denied. We do not treat the banks as
utilities; what we have said is that if they want to close a
branch, that is their business decision. We are not going to
force them to operate branches that are not profitable. That
would undermine the strength of our financial services sector.
However, what we have said is that they have to give notice. If
the branch is in an urban area, they must give four months'
notice so people can make alternative arrangements. If the
branch is in a rural or less populated area, they must give six
months' notice. This is so the community itself can find
alternatives for the provision of these basic banking services.
Some of the alternatives will come from other institutions. With
the closure of many branches in some of the western provinces, we
have seen how provincial credit unions have come in and bought up
those branches, at the same time ensuring ongoing employment to
all of the employees who otherwise would have been affected. This
is one of the virtues of giving notice. The federal government
is also prepared to play a role in remote communities. Perhaps
the post office could be the place people could look to for basic
banking.
Another area where we have had the views and interests of
consumers in mind is the financial consumer agency of Canada.
Right now there are three federal departments in Ottawa that deal
with enforcing our laws as they relate to consumers: Industry
Canada, the Office of the Superintendent of Financial
Institutions and the finance department itself. We are putting
all of these operations under one roof. There will be savings in
the costs of administration in so doing. It will be much more
effective and efficient. We think this is a step forward for
consumers.
We have had in place for a number of years the Canadian banking
ombudsman. In this bill we are trying to expand the role of the
Canadian banking ombudsman so that it covers all financial
institutions. In an era of conglomeration where different types
of financial institutions, such as banks, insurers and trust
companies, are coming under the same ownership and the same roof,
we think consumers would be better served if they could go to one
dispute resolution centre for all their disputes regarding
financial services, as opposed to having to find different ones
depending upon what type of financial service they are having
difficulties with. We also believe that the financial
institutions sector will be better served by having this type of
single dispute resolution centre.
Of course under the constitution we cannot mandate that entities
which are not owned by banks have to come to this centre. That
is why we have undertaken to work in very close co-operation with
the joint forum of financial regulators from the provinces to
find a way to bring together the disparate dispute resolution
mechanisms aimed at helping consumers today. We welcome the
efforts undertaken by Dina Palozzi of the Financial Services
Commission of Ontario and Doug Hyndman from the British Columbia
Securities Commission, who are heading up this task force which
also has representation from the federal government.
1125
The fourth major thrust of the bill is to ensure that on an
ongoing basis we have responsible but responsive regulation of
the sector. Of course safety and soundness have to be number
one. That is why the bill has a number of measures which give
enhanced powers to the Office of the Superintendent of Financial
Institutions to intervene where there are difficulties, to remove
directors if necessary and to impose fines where there is blatant
disregard of our regulatory regime.
At the same time we want to ease the regulatory burden. This is
why we are streamlining the approval system. Many approvals
would be done on an exception basis: a request for an approval,
if it goes to OSFI and is not denied within 30 days, would be
deemed automatically passed.
It is critical as we go ahead that we have in place an evolving,
dynamic regulatory regime, because we are seeing incredible
changes with globalization, with exploding technology, with
conglomeration and with consolidation, all of it taking place on
a global basis. Our regulatory regime must be capable of keeping
up with this. That is why in Bill C-8 we have reserved to the
minister many areas of ministerial discretion. If it were there
in black and white law, it would require an act of the House to
change it. That is why we want, in many areas, to have this
ministerial discretion.
As a minimum, within five years this law will sunset, again
triggering, I hope, vigorous debate, with a telescope on the
future looking at where the sector is heading, but because the
changes in this industry and sector are so dynamic and so global,
we cannot predict where they are going to be. We cannot predict
what types of countermoves or accommodating moves we must make in
order to ensure that we have a dynamic, competitive sector
helping our consumers and competing globally. This is why we are
committed as a government to reviewing the bill, not just five
years from now but at any time sooner should it be necessary to
do so, and then making the necessary changes.
In conclusion, I thank the stakeholders, the institutions, the
financial sector, consumers' groups, members of this House and
members of the other House. I particularly thank finance
officials who have worked so assiduously on this, as well as
those in OSFI and the other institutions, for bringing the bill
to fruition in what I believe is a very responsible and critical
way. Because the bill has had input from so many, I believe that
it behooves us as parliamentarians to give it serious
consideration. Because we have already had the input, I ask that
it receive speedy passage. I would hope that it goes from this
Chamber as quickly as possible into committee, where the real
detailed work can be done and the witnesses can be heard.
Mr. Richard Harris (Prince George—Bulkley Valley, Canadian
Alliance): Mr. Speaker, I understand that I have
approximately 40 minutes. I am asking for unanimous consent of
the House to split any unused time with my colleague from
Saanich—Gulf Islands.
The Acting Speaker (Mr. Bélair): Is there unanimous
consent?
Some hon. members: Agreed.
1130
Mr. Richard Harris: Mr. Speaker, Bill C-8 is a bill to
establish the financial consumer agency of Canada and to amend
certain acts in relation to financial institutions. While we in
the Canadian Alliance are very supportive of the bill in most
respects, we maintain that the government has been very slow in
modernizing the regulations in the acts that govern banking and
financial institutions.
The government has been in power since 1993. This is the first
major piece of banking legislation, or legislation covering the
other types of institutions outlined in the bill, that the
government has brought in. As a result of it being so slow to
react to global conditions, the global economy and what has been
happening in industry in other countries around the world, we
have seen ourselves, our banks, our institutions, our securities
companies and our life insurance companies being left
considerably behind other countries that have been more forward
thinking in modernizing the financial institutions in their
country.
Canada should have played a more leading role in setting an
example for other countries to follow. As parliamentarians know,
we have one of the safest and finest banking financial services
industry in the world. We have been for the most part very
prudent in setting regulations and ensuring that Canadians had a
good financial services system to serve them. At the same time,
until 1993 we were quite forward thinking in providing the tools
for our domestic banks to compete in global opportunities.
We had all the reasons to set Canada up as a standard throughout
the world for other countries to follow. Unfortunately the
Liberal government did not take that initiative. It has played
the role of a follower rather than a leader. For all the talk
about how much good the government has done and how much
attention it has paid to this sector of our economy, it has not
been the leader that it should have been.
That being said, I may now have some nice things to say about
Bill C-8. It calls to modernize Canada's financial services
industry. Canadian consumers have been demanding a more
competitive financial services sector and more choices as to
where they do their financial business. In addition, the players
in the industry, the banks, the insurance companies and
securities companies have been requesting more flexibility to
catch up with their competitors in the global economy so that
they can take part in opportunities.
By catching up, I refer to having the provisions to make
acquisitions within Canada and having in place a formal merger
approval process. If they decided that it would be in their best
interests and the best interests of their customers to merge with
another domestic bank, they would have a formal process to
follow. They would not have to leave anything to chance nor
would they have their proposals subject to interpretation by a
number of different parties that have an interest in this merger.
1135
Under the legislation there will be a formal process. One would
assume that if this is a process that has some sound reasoning
behind it, two banks will be able to sit down and say that this
is the criteria they have to meet, these are the steps they have
to take and if they do, they can expect, according to the
legislation, approval of the merger. That allows them to do some
long term planning.
In this business, as a bank or an insurance company, one has to
be able to have that opportunity to look far beyond tomorrow,
certainly in order to set one's business plans in place. We have
some criticism with the five year sunset clause.
Even though the legislation took about seven years, and now the
government has promised to review it in five years, I believe the
financial services industry, while welcoming the five year
renewal in relation to what we have gone through, would like to
have the opportunity to see far beyond that. They would like to
see 10, 15, 20 years down the road. The government perhaps could
have put the sunset clause together a little differently or else
left it out altogether. It could have simply had an ongoing
review process where amendments to the act could easily be made
rather than having a sunset review.
There are many aspects to the bill of almost 900 pages. While
we have some areas of concern, I did state that it addresses many
of the things the Canadian Alliance finance group, of which I am
the critic when it comes to banks and financial institutions, has
been pressing the government for a number of years to get with
the program in relation to making some changes.
I think back to 1994 when I believe the first white paper was
brought in by a former secretary of state who had many years in
the banking industry. Nothing was done. I think back to a
couple of years later when there was another study done. Again,
nothing was done. Then we had the MacKay task force report which
was about two years ago. Finally, we had the legislation ready
to go and then the Prime Minister in his wisdom, wisdom and
Liberals seems to be an oxymoron at times, called an early
election. Bill C-38 died at that time.
While the secretary of state was delivering his address in
closing, he thanked a number of people. I would like to point
out to him that he forgot to thank the member for Prince
George—Bulkley Valley. When I read over the legislation, I was
quite flattered because I and our party were way ahead the
government in the legislation.
In November 1998 I delivered a report to our caucus, and to
anyone in the industry who cared to read it. It was called
“Competition: Choice You Can Bank On”. It covered a whole
myriad of things in the financial services sector. It was
accepted by our party and was applauded by practically everyone
in the financial services sector as a forward thinking plan for
the future of financial services in Canada.
I am really flattered when I read the bill because our party and
I used my 1998 report as a benchmark to scrutinize Bill C-38, now
C-8. There is an astonishingly close similarity between what is
in the legislation and what is in my November 1998 report.
I am sure the secretary of state simply forgot to thank me. I
know he read and reread my 1998 report in order to get a good
grasp on what was needed to be put in here.
1140
I want to talk about some of the points we support such as the
legislation that allows a bank to develop into a holding
structure. It is going to give banks far more flexibility to
compete, particularly with foreign banks that are coming here,
not necessarily establishing bricks and mortars but a credit card
company, or banking by phone or lending by phone. This will
greatly enhance our domestic banks to compete with foreign banks.
Certainly we want foreign banks to establish their branches in
Canada. It goes back to giving consumers choices. We support
the new provision to allow the banks to restructure under a
holding company.
We talked about increased access to the payment system which
will allow life insurance companies and security companies to
basically operate like banks as far as deposits and cash
clearing. This will end the monopoly over the payment system
that the banks have had and will increase the choices once again.
We talked about the ability for credit unions to expand into a
national bank structure owned by one member one vote. We noticed
that was not in the legislation, but we know that perhaps this
will be dealt with in a separate piece of legislation. We are
going to ask the secretary of state to put it on record. We
support that principle.
The provision to allow banks to set up under a smaller
capitalization is going to increase choice once again. Those
parties will be able to set up smaller regional banks with an
initial $5 million capitalization. I hope that investors who
want to get into the banking business will take advantage of this
provision. Again, we have increased choice for consumers.
I talked about the formal review process for mergers and we
support that. We are quite pleased about the absence of the
banks' ability to retail insurance and auto leasing through their
branches. That has been left out of the bill and the
prohibition still remains. There is no doubt that some day,
sooner or later, the banks will be in the auto leasing and in the
insurance business. I do not know if that is going to be such a
bad thing. However, because that provision is not in the bill,
it gives the auto leasing business and the insurance business,
which is a very competitive and vibrant business in Canada, a
chance now to begin to lay plans for the most assured entry of
the banks into those businesses. It gives them some time.
I have talked to representatives from the industry and have said
that the banks will not be out forever, but here is some
breathing room. I told them not to miss the opportunity to start
laying some plans for the impact of the banks coming into their
business. I hope they are making plans to mitigate the impact of
banks coming into that business.
When it comes to the financial consumer agency of Canada, our
party has some concerns in as much as the agency will report to
parliament through the Minister of Finance. We are quite
concerned with the fact that within the bill there are tremendous
powers given to the Minister of Finance. We believe those powers
should be given to parliament, and by extension, the finance
committee as opposed to the Minister of Finance.
1145
I will talk about the financial consumers agency as an example.
While the bill calls for that agency to report to parliament
through the Minister of Finance, we would prefer that the agency
report directly to the House. By extension, this would allow a
review process to be done by an all party finance committee.
I think that would serve Canadians better in terms of openness
and a non-partisan look at what the financial consumer agency has
to say.
We hope we will be able to deal with this in committee. I know
the government is anxious to make improvements to the
legislation, perhaps through amendments in committee, and I am
sure it will welcome that amendment with open arms and will get
on with it.
I want to talk about the financial services ombudsman and,
again, the financial consumer agency. I just hope and pray that
this will not be another means for the Liberal government to give
jobs to its friends, something we have seen so many times.
I expect a number of defeated Liberals may appear on these
boards. I hope the government will be able to surprise us and
that we will see some people who have never expressed any type of
strong Liberal leanings, as impossible as that may sound, when it
comes to government appointments. We will look forward to that.
I see the hon. member nodding his head again so I know he likes
the idea.
We will support the bill, of course, but we will raise our
concerns through amendments. I want to straighten out the
secretary of state. He seems to have the idea that regulating
low cost bank accounts of $2, $3 and $4 a month will somehow get
Canadians off welfare. I fail to see the direct correlation
between having a bank account and getting off welfare.
There are a number of reasons why people are on welfare. First,
people, through circumstances that are no fault of their own, are
unable to work. We have a responsibility to look after such
people through the social welfare system.
Second, there are those people who simply do not want to work
and just love welfare Wednesday, and they will never work whether
they have a low cost bank account or not.
There are other people on social assistance who would dearly
love to work but unfortunately, in a number of the provinces and
throughout the country, there simply are no jobs. This situation
exists because while we have been able to generate quite a bit of
revenue from our export economy, our domestic economy still needs
a lot of help.
That means that the federal government, working in co-operation
with provincial governments, could do far better in providing an
environment that would ensure a buoyant economy right across the
country, and not just in pockets where there are conservative
governments such as in Ontario and Alberta, which have booming
economies despite the deterrents presented by the Liberal
government.
We would prefer that the government, instead of counting on low
cost bank accounts to get people off welfare, took a serious look
at how it has been curtailing economic growth and how this has
not helped investors and businesses create new jobs for people on
welfare.
1150
I know my colleague from Saanich—Gulf Islands has a lot of good
things to say about the bill, both from a supportive point of
view and a critical point of view.
I look forward to committee, as I know do members of the
government, the secretary of state, his parliamentary secretary
and everyone connected with the bill on the finance committee.
They are very anxious to see the amendments we put forward. They
will appreciate the wisdom of them and be very supportive.
Mr. Gary Lunn (Saanich—Gulf Islands, Canadian Alliance):
Mr. Speaker, I am pleased to stand on behalf of all people of
Saanich—Gulf Islands to speak to the bill. We saw it in the
last parliament as Bill C-38; it is now Bill C-8. It died on the
order paper when the election was called.
We owe a huge thanks to the member for Prince George—Bulkley
Valley who just spoke. He wrote a very detailed, in depth report
titled “Competion: Choice You Can Bank On” back in November 1998. I had
been elected for just over a year at that time and remember
receiving a copy of the report. It was very detailed and very
long.
He went into every possible detail of financial institutions and
banking and how we could improve it for consumers and give them
more choices. There was broad consultation with the industry. I
was impressed by how much work went into the report and by how
much knowledge he had on the subject.
A few years later we in the opposition see exactly what work we
have done. Actually the government adopted a lot of it and of
course never gave any credit for it.
I applaud the member for Prince George—Bulkley Valley. He has
done a phenomenal amount of work in the financial services sector
over the last few years. He can be proud when he sees the
government actually adopting a number of his measures.
Let us talk about what the bill will do. As we have seen in the
last few years, a number of major banks wanted to merge. They
put forward proposals to do so which were all quashed by the
government.
I am pleased to see that the government has finally come out
with a formal merger process so that at least financial
institutions know where they stand. They literally invested
millions and millions of dollars to go through the process, only
to be stopped in the end. Some would argue it may have been for
political reasons, that the Minister of Finance was annoyed
because he did not get advance notice. That is not the right
reason to stop mergers.
Our interest has to be consumers, to ensure that their savings
and investments will be secure in these institutions. We should
also allow the institutions to compete more in the global economy
and offer more choices for consumers. I am pleased to say, as my
colleague has stated, we believe that will happen.
There are a couple of very positive aspects to the bill. We are
pleased to see that the government left out the auto leasing and
insurance sectors at this time. I agree with my colleague. I do
not think it is appropriate to bring them in at this point in
time. There was a lot of lobbying by financial institutions that
wanted to get into the market. They recognized that they had
huge lists of people to whom they could market and offer package
services, from auto leasing to insurance to banking services.
The insurance and auto leasing sectors right now do a very good
job and are very competitive. As the hon. member pointed out, it
is inevitable that there will be changes in the years to come.
We should prepare for them, but it is the right decision at this
point in time not to go down that road.
1155
I do have some concerns with the creation of a financial
consumer agency of Canada. The agency will report directly to
the Minister of Finance. We have seen over the last few weeks
what happens when the government makes appointments based on
politics, appointments which report to a minister as opposed to
parliament where there is complete openness and transparency.
Even when in opposition the Liberals recognized that the ethics
counsellor should report directly to parliament. In their very
first campaign book in 1993, the Liberals stated that the ethics
counsellor should report directly to parliament so that there is
openness, transparency and a level of trust for the Canadian
people. There have been decisions in recent months that have
raised many concerns, yet members of parliament have no access to
the reports.
The same concern is raised here with the financial consumer
agency. It would report directly to the Minister of Finance, the
same minister who I believe will be responsible for appointments
to these agencies or boards, which may become a political dumping
ground for defeated candidates or large donors to the government.
Some would say that is a bit biased, but the facts speak for
themselves. We have seen that so much in the past. It does not
end.
Let me read a recent press release. This is enough to make
anybody throw up. On Friday, February 8, it stated: “The Minister of
Citizenship and Immigration today announced the appointment of
Lou Sekora of Coquitlam, B.C. as a part time citizenship judge”.
We all know that Mr. Sekora was defeated in the riding of Port
Moody—Coquitlam—Port Coquitlam in the last election. When I
phoned a few of my colleagues on the other side, Liberal members
of parliament who are good friends, to tell them about the
appointment, they started to laugh. They thought it was
absolutely hilarious. It was pure, blatant partisanship.
Again, our concern is when there is not openness and
transparency. I have a lot of respect for the Minister of
Finance but when this type of legislation is introduced it lends
itself to abuse. We tend to question whether appointments are
based on politics or on the real needs of Canadians. That can
happen down the road. I believe the finance committee should be
given the opportunity to scrutinize and re-look at these
appointments.
Those are some concerns we have in the official opposition.
Again, I only speak from the record. We also see the massive
problems with the ethics counsellor. We will be voting on that
tomorrow night on the Canadian Alliance opposition supply day
motion, where members of the government will have an opportunity
to correct the very same wrong they have put into this
legislation. They will have the opportunity to vote on a motion
to have the ethics counsellor actually report to parliament and
not to the Prime Minister.
I am sure my colleague from Prince George—Bulkley Valley, who
is quarterbacking the legislation for the Canadian Alliance, will
submit proposals to the bill when it goes to committee. However,
there are a lot of positives in the bill that we are pleased
with. It will give consumers more options and the financial
institutions the environment where they will be able to compete
globally, and we are going to a global economy. Those are some
areas with which we are quite pleased.
The government member who first spoke on the bill talked about
how it would help people on social assistance. It is an
incredible stretch to suggest that lower service fees on bank
accounts will help people on social assistance. It borderlines
on preposterous to even suggest that.
The former premier of British Columbia, Mr. Glen Clark, came up
with an idea somewhat similar to that by opening a credit union
in one of the poorer neighbourhoods. He thought it would help
those people.
If the government really wants to help the people who are
struggling to find jobs and get back on their feet, it should
adopt some of the tax cut proposals put forward by the member for
Medicine Hat over the last three years when he was the finance
critic. We were pleased to see that the government, almost
wholeheartedly, adopted a lot of the proposals contained in the
member's 1998 report entitled “Competition: Choice You Can Bank
On”, but we would have liked some things to have gone further.
1200
If the government really wants to help people on social
assistance who are struggling, who do need tax cuts and who do
need a stronger economy where the business community can thrive,
it would create economic opportunities for meaningful,
long-lasting jobs. That would really help them. We will
continue to push these ideas forward.
Under the new U.S. administration of President Bush, our
neighbours to the south have embarked on a massive tax cut in the
neighbourhood of $1.6 trillion. It believes that the economy is
beginning to slow down in the United States. I agree with
President Bush that those tax cuts will likely create more
government revenues and create more meaningful and lasting jobs.
It is the private sector that invests money into the businesses
which creates opportunities for employment.
I do not believe the government can create lasting jobs.
It can create short term jobs and do all types of funding, but at
the end of the day it does not really create any kind of security
for people.
I am pleased to speak to the bill and look forward to it going
to committee. I am absolutely confident that we will be putting
forward some amendments that will strengthen the bill. This is a
time for all of us to support the bill, send it off to committee
where the experts from the industry can scrutinize it and give us
their input and then put forward some positive solutions to the
bill.
[Translation]
Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): Mr. Speaker, I am
pleased to speak on this important bill, Bill C-8—the former Bill
C-38—to reform the financial institutions and create the
financial consumer agency of Canada.
From the beginning of the process leading up to this bill, the
Bloc Quebecois has been closely associated with the suggestions
made through the Standing Committee on Finance.
In September 1998, the Bloc Quebecois also submitted a
memorandum expressing its view of the MacKay report, which is
behind financial institution reform.
We made a number of recommendations in it geared to the
modernization of the financial sector and especially of the
environment in which the financial sector and the banking sector
more specifically were evolving.
We realized the importance of renewing the regulatory and
statutory context of financial institutions, which had not
been renewed for five years. We were in fact behind the time in
some respects, something that was becoming a cause of concern
when we could see how quickly the North American and, more
specifically, the Canadian financial sector was changing. We
were somewhat frightened by the thought of developing in a
context that was already several years out of date.
We were the first to ask the federal government to change the
rules on the ownership of financial institutions, which
prevented businesses from acquiring other businesses in
complementary sectors, since the financial institutions act did
not permit it.
1205
I would like to quote the brief the Bloc Quebecois tabled in
1998 with the Standing Committee on Finance, in which we asked
the government, among other things:
At the time, we supported, and we continue to support, changes
on ownership rules to enable groups, such as insurance
companies, investment companies or a brokerage firm. The aim
was to build strength so that, with markets opening in the
financial sector and competition appearing from outside the
country and even from within it, the quality of services
provided by them could be assessed in a healthy business
environment and consumers advised of what they would get for
their money.
We warned the government against the rule of 10%. Let me
explain that, because I think it is worthwhile to do so. It is a
bit complex, but when we take the time—and I have the time to do
it this morning—it is easy enough to understand.
Before the minister introduced his bill, a single individual
could not hold more than 10% of the banks' shares. This meant
that 90% of the voting shares of a bank were allotted among the
public. An individual still cannot hold more than 10% of a
bank's voting shares and 90% of these shares must be allotted,
that is they must be widely apportioned among the public.
With the changes proposed in the bill, we have a totally
different situation. The 10% rule becomes the 20% rule. This
means that, in the case of major banks—this applies to them—with
equity of $5 billion or more, a single individual cannot hold
more than 20% of the shares, whether that person is a Canadian
or a foreigner, while 80% of the shares of these major banks,
again those with equity of over $5 billion, are allotted to the
public.
The bill proposes two other categories regarding ownership. The
second category includes banks with equity of $1 billion to $5
billion. For these banks, the degree of ownership is different
from that of major banks. In the case of these middle size
banks, a single individual can own up to 65% of the shares. The
other 35% must be widely distributed among the public.
This is a major change. We still wonder why, considering that
the 50% plus one rule is the generally accepted one for full
control of a business, 65% of the voting shares of a bank such
as the Laurentian Bank, for example, which has equity of less
than $5 billion, could be owned by a single individual. The
other 35% would be allotted among the public in a democratic
fashion.
This is a revolution, a financial one, of course. I call it a
revolution because, up to now, the philosophy that has driven
all successive governments since passage of the Bank Act many
decades ago was to give the financial institutions' shares a
wide distribution, to prevent an individual from holding too
much control over the banking institutions or the financial
institutions in general; as everyone knows these institutions
have a strategic importance in the economy.
The practice of widely distributing the voting shares of a
financial institution to prevent one individual from holding
extraordinary power over the Canadian financial sector or even
industrial sectors stems from a policy that was renewed from
decade to decade.
1210
We have to realize that the financial sector is a public
interest sector in the sense that multimedia companies,
companies in conventional industries or anywhere else have to be
able to rely on a solid, open and transparent financial sector,
one that will not be detrimental but rather useful to them.
Having a single individual controlling a financial institution,
that could be a lending institution for SMBs, could give rise to
touchy situations as far as conflicts of interest are concerned.
Here is an example. The main shareholder of a medium sized bank
owns more than 50% of the voting shares of the bank, which makes
loans to small businesses. But the main investor or shareholder
of the bank is also involved in the same industry as a small
business that is asking for a loan from the bank.
The shareholder who owns more than 50% of the voting shares and
therefore has full control of the bank making loans to small
businesses will have the final say on the loan request of the
business in the industry where the main shareholder is also
involved. The main shareholder of a bank can also be an
industrialist in a given industry.
In the past, we have avoided this kind of situation where an
industrialist involved, say, in the steel industry, who has full
control of a lending institution can sideline his competitors
because such control allows him to have the last say on loan
requests from competitors. This has been avoided in the past
through widely held ownership of financial institutions and
especially banks.
We now have a dangerous situation where, in banks with a capital
between $1 billion and $5 billion, a single person can own up to
65% of voting shares. That individual has full control.
We do not like this. In Quebec, we have one institution in the
category of medium sized banks in Canada, and that is the
National Bank, the bank used by SMBs in Quebec.
We think it is very dangerous for an institution such as the
National Bank to end up with rule changes whereby one person
could hold 65% of shares, while the remaining 35% would be held
by a wide range of members of the public.
Some said that there were no longer any problem, that it had
been addressed with Bill C-8, formerly C-38, and that in any
event the National Bank now had equity capital topping
$4 billion, which could soon reach, and even exceed, the
$5 billion ceiling, putting it into the category of a major
Canadian bank.
In that event, the same ownership rules applying to those banks
would also apply to the National Bank. No one individual could
hold more than 20% of shares, and 80% of other voting shares
would then be widely held, thus eliminating the problem.
There are two ways of looking at this: the first is that the
National Bank does not yet have $5 billion in equity capital, and
it could be months before this ceiling is reached. Also, it is
clear from Bill C-8 that—even if a bank reached a certain level
of equity capital, even if the National Bank had over $5 billion
in equity capital—the Minister of Finance has full discretion to
determine the number of years or months needed before this bank
can reposition itself in a new category with respect to
percentage of shares.
1215
A three year period is specified. In other words, 10 months or a
year from now, the National Bank could reach a level of equity
capital exceeding $5 billion, which would put it into the
category of a major bank subject to the ownership rule of 20% of
the voting shares being held by a single shareholder, whereas
the other 80% are widely held. It could be considered as such,
but it is up to the Minister of Finance.
Several clauses of the bill refer to the finance minister's
discretion. The Minister of Finance is given so much
decision-making power that, with this bill, the government is all
but crowning him legislative emperor of the financial
institutions sector.
Towards the end of the bill, entire paragraphs contain a
provision saying that the minister may do this and that.
Finally, this is a bill that could be called discretionary from
the minister's point of view. It is all about discretion.
Therefore, even if the National Bank reached a level of equity
capital above $5 billion, the finance minister could decide to
consider it as belonging to the category of 20:80 percentage
ratio of voting shares only in three years.
Moreover, subclause 393(2) gives the finance minister the power to
specify a later day as the day from and after which the
financial institution must comply with the new provisions of the
law. So, this creates a situation where, even if the National
Bank reached a level of equity capital exceeding $5 billion
within the next year, the minister could decide that the new
category or ownership rule will apply only in three, four or
five years.
This period of three, four or five years is an eternity in the
financial sector. Anything can happen during that time. The
National Bank might not be protected from a takeover by a single
individual or by speculators for resale, thus enriching only
one, two or three individuals instead of everyone.
Can we take that chance? As I said, three, four or five years
is an eternity in the financial sector. Anything can happen
during that time, especially when one realizes the speed with
which changes take place. Ought we not to set some criteria for
this ownership issue in order to avoid having the negative
effects of the new provisions blow up in our faces in the coming
years in connection with the National Bank or some other
financial institution?
Just to provide hon. members with a slight idea of the speed
with which changes can take place, I will quote from the
MacKay-Ducros report, which is what led to the bill being
drafted by the Minister of Finance and his secretary of state.
The latter indicated that two virtual banks had cropped up
within two years, as the MacKay-Ducros commission sat. In less
than two years, these two virtual banks started up: the
Citizen's Bank of Canada, a subsidiary of the Vancouver City
Savings Credit Union, and ING, the subsidiary of a major Dutch
financial conglomerate.
BNA and the Capital One Corporation, both of these American
credit card specialists, have begun Canadian operations, again
during the less than one and one-half years the MacKay-Ducros
commission was sitting.
A number of special financing corporations began to operate in
Canada, among them Finova and Heller Financial. Nine new pooled
investment fund companies also started up within that same
period of under two years. From September 1996 to May 1998, the
number of pooled investment funds available in Canada rose from
954 to 1,079, again in under two years.
1220
Because of the rate these changes occurred during the
deliberations of the MacKay-Ducros Commission, which in fact
caused the commission to make certain adjustments at the end of
its deliberations, anything can happen to the National Bank.
We, as Quebecers, need guarantees and additional safeguards,
within the bill, to reassure us in this regard and essentially
eliminate the negative effects of the new rules of ownership, by
taking specific criteria included in the bill into account.
The Quebec finance minister and the deputy premier, Bernard
Landry, wrote the federal Minister of Finance last June to
express his concern on the way the situation was changing and on
the first draft of his bill.
The Quebec finance minister and deputy premier, Mr. Landry, said
in a letter to the federal Minister of Finance that with
respect to the National Bank public interest in the present
matter had to be defined according to four criteria, which he
identified and which would complement the bill before us this
morning, to the satisfaction of the opposition. These criteria,
included in Bill C-8, could eliminate the risks I have just
mentioned.
The criteria are as follows:
First, we should evaluate the effect of the change on the banks'
current activities, including the services available.
Second, the effect of the change—
In the case of a change in ownership of the National Bank, for
example.
Third, the effect of the change on the economy and technological
development of Quebec.
Fourth, the effect of the change on the financial sector and on
Montreal's role as a financial centre, including the keeping of
the ultimate decision-making centres in Montreal.
Mr. Landry continued, saying:
We think that the legislation should contain provisions ensuring
respect for these measures, which would be taken to prevent the
unfavourable effects of allowing one person to hold more than
20% of the voting shares in a bank in the previously mentioned
areas.
The opposition, the Bloc Quebecois, is not alone in its concern.
All of Quebec is worried.
That is why, when the secretary of state told me about the
evolution of the bill in this respect, he told me it would be
different from the first version. He indicated that, with the
publication of the new Bill C-8 on the reform of financial
institutions, the Minister of Finance had released new
guidelines.
In light of these guidelines, I can tell the House that it would
not take much to satisfy us with respect to the ownership rules.
In fact, all that it would take is for these guidelines at the
very heart of Bill C-8 to be included, so that the minister has a
legislative obligation to take into account not only the
interests of the Canadian financial sector, the solvency of
those who wish to change the ownership of voting shares in a
bank such as the National Bank, and the experience of such
shareholders, but also the regional effects of such a decision.
It would be easy to take the secretary of state's guidelines and
include them in Bill C-8.
The bill already contains a suggestion of them.
It would simply be a matter of completing them with the
guidelines that accompanied the bill and that were released by
the Minister of Finance and his Secretary of State when Bill C-8
on the reform of financial institutions was introduced a few
days ago.
Clause 396 defines certain criteria to which I more or less
alluded, namely: the best interests of the financial system, the
experience of the shareholders and their track record, their
character and integrity, their competence and experience and the
impact of any integration of the businesses and operations of
the applicant with those of the bank on the conduct of those
businesses and operations.
1225
We could add, at the end of that clause, criteria such as the
impact of the proposed transaction on the safety and soundness>of
the bank, on direct and indirect employment at the head office
and in the branches, including professional jobs or those
requiring special expertise, on the needs of consumers, on the
bank's businesses and operations, on the bank's prospects in the
context of the global marketplace, on the best interests of
Canadians and, where the bank operates principally in one
region, such as Quebec, on the best interests of those living in
that region.
We could even add to these guidelines the last paragraph found
in the document provided by the government, which reads as
follows:
A proposed transaction that would lead to a change in de facto
control of a former Schedule I bank with equity between $1
billion and $5 billion, and raises major public interest
concerns, would be subject to a similar public review process as
a merger between large banks.
In the guidelines on the rescheduling of banks previously listed
in schedule 1 and whose equity is lower than $5 billion, thus,
in the government's reference document, there are some
provisions that alleviate our concerns, if we find in the thrust
of the bill a reference to the criteria that I have stated,
including to the last paragraph, which deals with public
interest, and which also calls for public review.
Why is the government not doing this? This morning, during a
briefing with high officials, we were told that introducing
these criteria and guidelines in the thrust of the bill might
constrain the government and prevent the finance minister from
having some flexibility.
I do not understand why the finance minister agrees to introduce
guidelines and criteria such as those in clause 396 of Bill C-8,
and talks about the interest of the Canadian financial system
and about more criteria. Regarding the additional criteria
contained in a guideline, which he says he wants to apply in
case of a change of ownership of the National Bank, why are
those criteria already included in the bill less constraining
than those in the guidelines he has made public and intends to
follow?
That is the question we must ask ourselves. When talking about
the interest of the Canadian financial sector is no problem, but
it is when it comes to the interest of the regional financial
system, that is the Quebec system, I do not see openness, I see
a problem.
The fact is the Minister does not want those guidelines to be
included in the legislation because that would impose upon him
the obligation to take all these effects into account. That is
what is preoccupying.
If the bill only referred to guidelines on medium cap banks,
this would be a step in the right direction and we would
consider supporting the bill.
Frankly, I must say there are other problems. However, we intend
to propose amendments to this bill. For instance, there is the
issue of consumer protection. I will come back to this issue
later. We intend to propose amendments that will improve the
bill generally.
If it were not for the major irritant, the change of ownership
rule applying to medium size banks, we would be a bit more
willing to work with the government in order to pass this bill
rapidly.
Up to this point, there has been a positive evolution. I recall
that about eight months ago, the Minister of Finance did not
want to hear about guidelines or evaluation criteria regarding
ownership changes for medium size banks. Today, after the
election, the government is introducing guidelines. This is a
step in the right direction, even if it is not enough.
I believe that the government has shown a good disposition until
now, showing an increasing openness, which we find satisfactory.
It would only need to go a small step further and I believe that
we would be ready to fully support its efforts in that
direction.
1230
We have other concerns with this bill. As I said earlier, we
will be bringing amendments throughout the legislative process
leading to passage of Bill C-8.
I mentioned before the widely held voting shares of the
financial institutions, including the banks. The concept of
widely held shares was used to avoid the problems I raised
earlier. But this has caused more problems, since with these
widely held shares, any person holding a mere 10% of the
shares—the maximum soon to be 20% of the shares—has effective
control over the bank and the board of directors.
In the past, we have mentioned and wholeheartedly supported the
proposals of the Quebec association for the protection of savers
and investors. Its 12 proposals call for a greater
democratization of the decision making process and of the board
of directors of the banks and financial institutions in general.
These proposals are as follows. It may be time for the finance
minister to pay attention. While he portrays himself as the
great champion of democracy, he has allowed the boards of
directors of the banks to act as if they were feudal lords and
to completely ignore the needs of the small shareholders and
investors. They do not even need the support of this majority of
shareholders to appoint each other to key positions. I appoint
you, you will appoint me, and we will keep things in our little
inner circle.
The Quebec association for the protection of savers and
investors' proposals are as follows, and we support them and
will continue to support them strongly.
First, the association asks that the positions of chairman of
the board and chief executive officer be two separate positions.
Second, the association asks for a reduction of the barriers
regarding election to the board of candidates chosen by the
shareholders, instead of candidates being chosen exclusively by
the board or by the executives in place and instead of a system
where I appoint you, you appoint me and we appoint ourselves.
Third, the association asks that the number of boards where a
member can sit at the same time be limited. To avoid conflicts
of interest, this might be a good idea.
Fourth, the association asks for the implementation of a process
that is more democratic for the election of board members,
through votes that are separate and cumulative and without any
restriction to the list previously drawn up.
Fifth, the association asks for the elimination of potential
conflicts of interest between board members and those who supply
goods and services to the institution. Too often we see a board
member who is also part of a business that supplies goods and
services to the financial institution. It is easy to make such a
business flourishing in such an environment.
Sixth, the association asks that it be mandatory for financial
statements to be submitted for review and discussion during the
shareholders' annual meeting.
Seventh, the association asks that the directors' compensation
policy be submitted to the shareholders' approval. It would be
interesting if most shareholders could determine what amount a
board member receives for the services he provides.
The association asks for the adoption of a code of procedure for
shareholders' meetings.
The association calls for businesses to fully record the minutes
of all shareholders' meetings and to send those minutes to all
shareholders.
The association calls for a reduction of barriers to the right
of shareholders to make proposals for and during shareholders'
meetings. They do not have that right today.
The association calls for giving securities commissions the
right to decide if shareholders' proposals are in order. It is
the board of directors that has that right at present;
consequently, this right is exercized only by a very small group
of people.
The association calls for limiting the powers granted by proxy
to executives for shareholders' proposals not yet discussed by
the shareholders or for extending these powers with
corresponding means to all shareholders having registered a
proposal.
Moreover, the association calls for giving access to all
shareholders in the name of the real shareholders.
Finally, it calls for relaxing the legislation in order to allow
for communications between shareholders.
1235
Those are proposals to improve decision making within financial
institutions to ensure that decisions are not made by a small
number of people on behalf of the majority of shareholders, who
are small shareholders.
We would have liked to see these proposals included in the
minister's bill since, as we said earlier, banks and boards of
directors of banks especially operate in a somewhat archaic,
feudal way that is not quite democratic. The association has
done excellent work up until now to heighten people's awareness
about the fact that they own a few shares, but that they do not
have any say.
A limited number of individuals all have the power to determine
what is good for all the shareholders and what is not.
Throughout the process, we are going to propose amendments
relating to matters of this type. In the event we obtain a
favourable response from the government, hon. members can be
assured that we are not in opposition just to oppose anything
the party in power happens to present. If something is good, we
will support the government's efforts. In the past seven years
we have demonstrated that we are prepared to support good
provisions coming from government for the good of the population
in general. We are not here to block the progress of
government, particularly when the public interest is very much
involved, as is the case with reform of the financial
institutions.
We shall continue to work very seriously in order to improve
this bill.
The minister tells us, moreover, that the bill is in place in
order to improve the environment in which all Quebec and
Canadian businesses evolve, so that they may better face the
major challenges that arise, particularly as borders are opening
up, as globalization sets in. As a result, major competitors
that are highly efficient internationally will be able to
compete in our markets, and we and our businesses will be able
to compete with them anywhere in the world.
As disciples of globalization, we support this policy and this
government approach.
However, we are well placed to see that the government gives up
when the time comes to take action in very specific areas to
support business. It is simply not there for them.
I am going to give a few examples—we will be coming back to this
a bit later in the session but I think this is a good time to do
it—examples relating, for example, to gasoline and petroleum
products.
Instead of going in the right direction and increasing the
powers provided under the Competition Act to hold major oil
companies accountable and allow us to take steps to prove that
there is collusion among them to set prices that are detrimental
to consumers, the government chose not to do anything. It chose
not to strengthen the Competition Act, not to suspend the excise
tax for a while, which would have given a reprieve to
independent truckers who are being gouged at the pumps. The
government also chose not to suspend the GST on heating oil for
a while to give a break to those who use that type of heating
fuel.
Some businesses that rely heavily on oil for their finished
products have seen their costs go up by 15% to 20%. This is a
huge increase. It is their profit margin. But the government did
not come to their help.
As for employment insurance, we asked that the system be
improved and we also asked for lower contributions, particularly
in light of the tragic situation of labour intensive businesses.
Just take the restaurant business. During the election campaign,
I was made aware of the fact that in the restaurant business
40% of the taxes paid by businesses are payroll taxes. This is
enormous. It is more than the income tax paid by these
businesses to the federal government.
1240
There again the government should be sensitive to the plight of
Quebec businesses. Instead of saying “we have the answer, we
reformed the financial sector and thus ensured the profitability
of businesses”, the government should do something else.
The same goes for shipyards. Why did the federal government,
which claims to care about the development and growth of high
potential businesses, not implement the shipbuilding policy that
we have been advocating for years?
We will come back with the bill and we hope there will be good
provisions from the government, because before the election it
seemed prepared to pass the bill introduced by my colleague
from Lévis.
Mines are a very promising sector in terms of expansion and job
creation. The mining sector is not what it used to be. It has
been modernized over the years and is very capital intensive.
In Quebec alone it accounts for 17,000 jobs. However, it is
suffering considerable problems due to fluctuations in
international prices.
The government could have drawn on its willingness to help
businesses, increased, for example, financial provisions for
mining companies. It could have increased tax deductions for
exploration, and to give the country a shipping and rail
transportation network that would make the mining sector in
Quebec and Canada more competitive.
There is no mention of that. Generally, the government talks of
supporting business but when it is time to do something
specific, it is not there.
In the case of e-commerce as well, it is said that over the next
three years 180,000 jobs could be created in Quebec and Canada.
The federal government has not shown any desire to shoulder
this sector. One hundred and eighty thousand additional jobs is a
lot. There are 95,000 at the moment.
In short, these are examples, and we will be coming back to
them. For the time being, the financial sector is under
consideration, thanks to Bill C-8. Rest assured that, if the
government responds favourably to our amendments, we will
support this bill.
In the meantime, it must demonstrate a little greater openness.
There is already a little more than there was last year.
We hope that by the time the bill is passed it will be a matter
of fact.
[English]
Mr. Peter Stoffer (Sackville—Musquodoboit Valley—Eastern
Shore, NDP): Mr. Speaker, it gives me great pleasure to rise
in the House today to discuss Bill C-8, the financial sector
reform act.
The member for Regina—Qu'Appelle, who has been a member of the
House since 1968, has been a very active member of the finance
committee. A former colleague of the House did yeoman work for
the people of Canada and for the House of Commons, Mr. Nelson
Riis. Mr. John Solomon did great work in the finance committee
by bringing forward financially related matters to the House of
Commons for all Canadians. It gives me great pleasure to
congratulate them and thank them for their work on behalf of all
Canadians and our party.
We could not help but notice that members of the Canadian
Alliance were patting themselves on the back, saying what a great
job they had done and how the Liberals had incorporated many of
their aspects into the legislation. We in the New Democratic
Party would also like to congratulate our member from
Regina—Qu'Appelle for many of his motions and ideas over the
years that are finally incorporated into the bill. Also, I will
be splitting my time with the great member for Winnipeg North
Centre. I will take the first 10 minutes and she can take the
remaining 10.
I will go over some of the positive aspects of the bill.
Before doing so, let me indicate that the bill is 900 pages
thick. It changes 4,000 statutes of legislation. It is
incredibly complex. There is no one in the House or in the
country, even with an array of lawyers, who can figure out
exactly what it all means in the end.
1245
Anyone who says he or she understands it completely is simply
not telling the truth. I certainly do not profess to know all
about it nor could I even attempt to, but our member for
Regina—Qu'Appelle has studied it thoroughly. He and his staff
have gone over it fairly extensively and have come up with their
own concerns about and recommendations on the piece of
legislation.
One positive aspect of it is that it expands the access to the
payment system, which is one of our long held positions. This is
a measure that increases competition by allowing insurance
companies to offer chequing deposit accounts. Most important,
and this is something that I personally really like seeing, it
helps credit unions compete by allowing the creation of a single
national service entity to support credit union membership. This
is a long held New Democratic position.
Also, as members know, there are a lot of people throughout
Canada who have complaints about banks. Besides bashing the post
office, bashing the banks in one way or another, whether it be
for service charges or closure of an institution or facility in a
rural town, is one of the great Canadian pastimes. We bash the
weather, the post office and banks.
An article appeared in a daily newspaper in Nova Scotia on
Saturday about something that Scotiabank has done. It is simply
outrageous that Scotiabank, a fine reputable institution like
that, would send out to unsuspecting people in the country
cheques in the amounts of $500 to $5,000. They sent these out
mostly to senior citizens, saying, “here you go, folks, here is a
cheque for $500 to $5,000”. A lot of people had no idea what this
was all about until they cashed the cheque and spent the money.
Then they found out that in essence it was a cash advance on
their credit cards. They did not ask for it. No one told them
it was coming. It just appeared in their mail one day.
Mr. John MacLeod, the business editor of a daily newspaper,
pointed out quite accurately that someone in Scotiabank should
have his or her head taken off for this one. It is absolutely
scandalous that a bank with this reputation throughout Canada,
one of our longest serving institutions, should do that to
unsuspecting people. It is simply misleading. It is like the
negative billing option with the cable companies. That is
exactly what that bank did. As long as banks partake of that
kind of practice they will never have the confidence and goodwill
of Canadians that they need in order to move forward in the
financial sectors.
If we had a Canadian financial services ombudsman and a consumer
protection agency, which the bill offers, it would start the
consultation process whereby the banks can legally be forced to
provide a low cost account. This is a position we have held for
a long time. We have to offer those people on low and, in many
cases, no incomes the opportunity to use financial services at a
low cost that is more beneficial to them.
I must say in jest that for anyone to say this will get people
off the social assistance rolls, it simply is not on, as much as
we would like to see that happen in a very positive way. I could
not quite understand why the secretary said that. That simply is
not on.
The bill also formalizes a process of collecting data on small
business lending and does not expand the banks' business powers
into the areas of auto leasing and insurance networking. This is
a long held position of ours, in spite of a recommendation by the
MacKay report which said that they should.
Some of the negatives in the bill are very clear. It abandons
the wide ownership rule, which means that instead of the 10%
ownership rule it would be 20%. That means we could have two
people very closely related to one another owning 40% and 60% and
so on. That consolidates too many financial services into very
few hands.
We believe that down the road the bill and other legislation
that will probably come to follow it will eventually lead to full
bank mergers and full institutional financial mergers. That
would mean that instead of having the broad range of competition
within Canada that we see today or that we have seen before, we
would see a lot more competition from foreign interests such as
Europe, the United States or Asia. That may or may not be a good
thing for Canadians, but one thing is clear: a lot of Canadians
have no deep understanding, no clear understanding, of what the
legislation means to them in their daily lives. Another thing
the bill does, which is rather ironic to be talking about, is
concentrate far too much power in the hands of the Minister of
Finance; we call it the new banking czar.
1250
In the area of parliamentary reform, where we are talking about
loosening the powers of the PMO, various ministers and the
government side in order to give members of parliament more say,
clout and power in representing their constituents, it seems
rather ironic that we are talking about a bill that does the
complete opposite and gives far too much power to the Minister of
Finance. In fact in many ways the devil is in the details. By
obscuring the facts, the full impact of the legislation may not
be understood by many people. The bill is riddled with
regulatory clauses changeable by order in council, which means
that the order in council can ignore the wishes of parliament and
make changes by decree, thus avoiding the House of Commons and
any legitimate debate in the future.
Another failure of the legislation is something the United
States has but we have yet to incorporate. I am talking about a
community reinvestment act. This would provide the opportunity
to force the banks to reinvest a certain percentage of their
profits in their local communities. This would be the same as it
is in the United States. We believe it would go a long way in
assisting the more extremely rural areas.
One thing the legislation does not do is to in any way stop
rural bank closures, which is something that a lot of people in
rural Canada are greatly affected by. For example, what about
the closure of the banks in Sheet Harbour or Musquodoboit Harbour
or anywhere in the country where there are small rural
communities that need access to financial institutions? The
legislation paves the way to make bank closures even quicker,
especially of the branches. The argument of course is that
foreign companies like ING Bank and others can come into the
country and have virtual banking, with no need for the bricks and
mortar.
However, a large percentage of Canadians depends on bank
branches. They need to see a teller. They need to understand
specifically how to fill out the forms for their regular chequing
accounts, how to fill out their bank books and everything else.
In fact last week one of my constituents passed on and his wife
was left with no idea of how to balance a cheque book or do any
aspect of banking. Her husband did it all. In how many families
in the country does that situation exist today? If the male
member of the family passes on and leaves everything to his wife,
as in that particular case, can she understand all the
intricacies of her financial account and everything else? This
happens all the time.
Mr. Dennis Mills (Toronto—Danforth, Lib.): Mr. Speaker,
the point made by the member for Sackville—Musquodoboit
Valley—Eastern Shore about making sure that our rural
communities are not being forgotten in the legislation is a valid
point. This was a key point raised in the caucus task force of
the Liberal Party.
Along those lines I have another point that is in line with the
member's thoughts. In 1993 we had a crisis in the country, and
it was the attitude of the major financial institutions toward
small businessmen and businesswomen. The access to capital for
these men and women was a travesty. A number of us from all
parties on the House of Commons committee on industry worked
together and designed a report for the House which was called
“Taking Care of Small Business”. The focus was on businessmen
and businesswomen.
1255
I am concerned that in the last few months I have been hearing
from my constituents more and more that the old attitude is
starting to creep back in, with the banks losing their
sensitivity toward the small business fabric of the country. So
throughout the debate I hope that members from all sides will
remind each other that there should be a very direct signal given
to the financial institutions that the commitment of the House
toward small businessmen and businesswomen will in no way, shape
or form be diminished by the legislation.
Mr. Peter Stoffer: Mr. Speaker, I thank the hon. member
from the governing party for his statement. He is absolutely
correct. We have to keep our eyes on the ball regarding
individuals in small businesses. They are the backbone of our
economy. We have to ensure as legislators that any financial
bill that comes forward takes into account the special interests
and needs of small business. If we all do
that then the bill will be a positive one and will move things
forward. We must think not only of small businesses in the rural
areas but of young people getting into young entrepreneurship
programs throughout the country. We must make sure they have
access to capital within Canada which meets their needs and meets
the changing demands of our new economy.
Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Mr.
Speaker, I am pleased to follow my colleague from Nova Scotia in
putting on record concerns and comments from the New Democratic
Party with respect to Bill C-8. It is interesting to note that
the debate has just turned to the whole issue of sensitivity of
banks to the communities they are supposed to serve and, by
implication, the role of government in ensuring that the banks
live up to those commitments.
I will begin my discussion by referring to the government's own
discussion paper of June 1997 from the task force on the future
of the Canadian financial services sector. In that report it is
noted that:
Canada, like other modern economies, has traditionally relied on
government to provide some assurance that financial institutions
are reputable and well-managed, and that they will meet their
commitments. In our society, it is accepted that ownership of a
regulated financial institution is a privilege, not a right.
It is important that we look at Bill C-8 from that vantage point
and from those words by the government and acknowledge that it
provides a significant framework for financial services in the
country today.
I would assume that there is also an acknowledgement on the part
of government in Canada today that access to basic banking
services is a right. I hope I am correct in making that
statement. I hope that is the basis upon which we are
proceeding, because it is fundamental to this discussion and
critical to the analysis of this very comprehensive, very
detailed, very complex piece of legislation before us. We could
spend months analyzing and scrutinizing 900 pages of legislation.
It is a very important piece of legislation and I hope it gets a
thorough debate in the House before it goes on to committee.
There are many areas of concern with respect to the bill that I
could focus my attention on, but I want to do one thing this
morning and that is to focus on the question of access. Are we
as members of the Parliament of Canada fulfilling our
responsibilities to ensure that in legislation, in the laws of
the land, people, regardless of where they live and regardless of
their economic circumstances, have access to basic banking
services?
1300
I would suggest that right now that is not being fulfilled today
and it will not be fulfilled under the legislation. I would
assert that many individuals and many communities are being
discriminated against by the actions of the big banks and the
inaction of the government. It has been noted before in the
House that many communities have been hit hard by bank closures.
They have virtually wiped out that right to access personalized
banking services.
The hardship facing rural communities, many that have lost all
of their banking services, was mentioned this morning. I do not
need to mention the many older neighbourhoods, inner city
communities of large centres across the country that have been
abandoned by the big banks. I would like to give a case study of
Winnipeg North Centre.
Winnipeg North Centre, which has a voting population of well
over 60,000, is noted for the significant degree of economic
hardship and high element of poverty. It is known for its higher
than average proportion of senior citizens. It is known for the
strength of small businesses that have built the community. While
they are prepared to stay, they are suffering daily because
institutions like the big banks are abandoning our communities.
That community, which I represent, has suffered enormously by the
actions of the big banks and the inactions of the government.
In the almost four years that I have served as the member of
parliament for that area, we have seen six bank branches close.
In a very needy and very committed community, we have been left
with a very small number of banks branches that people can access
for basic banking services. It is an appalling situation.
People, especially low income citizens, senior citizens and small
businesses, have been left virtually abandoned without access to
banking services.
What has the government said in the face of this? First, delays
in the legislation, which offers a tiny initiative, a step
forward with respect to bank closures, have caused the problem.
The horse is out of the barn. The government's delay with
respect to the review of the financial services sector, and now
the delays with respect to putting in place meaningful proposals
to stop bank closures, has caused the problem. This is the issue
we are dealing with today.
What is the point in talking about improved access for low
income Canadians when banks in their neighbourhoods keep closing?
What is the point of talking about access for people living in
poverty who want to get off of welfare and break that cycle of
dependency when in fact there are no banks left to access? That
is the kind of situation we are talking about.
What is the point of a bill that talks about four months' notice
of a closure, when there are no other alternatives? What is the
point of legislation that does not first ensure that the banks
are living up to their commitments and providing the services
that people have need of, expect and are entitled to by right of
belonging to a civilized society?
The citizens in my community have been dealt one blow after
another. Each time one of the big banks closed a bank branch,
they rallied. They came forward and said that a message had to
be sent to the big banks and to the government saying that they
would not stand for this. They are hurting their very
livelihoods and security as members of the community. We
continue to run up against a brick wall.
We have tried to appeal to the sensitivities of the big banks,
to no avail. We have tried to get through to the Minister of
Finance, to no avail. What did he say in response to appeals to
him to intervene? He said the government could not really tell a
private business what to do and believed that the Bank of
Montreal had lived up to the spirit of the bill. That most
recent closure in my community was really the linchpin and the
final straw in terms of people's feelings of being abandoned.
This bank did not even give constituents in my area four months'
notice. I realize that the bill has not passed. We have nothing
to hold over banks' heads to say that they have broken the law.
Is there not enough goodwill on the part of the banks and is
there not enough power in the hands of the finance minister to
make a difference and make banks to live up to the most basic
elements of human decency and dignity? There was no adequate
notice nor a single bit of consultation with the community about
the impact that it would have on people in that area, not one
shred of decent consultation.
1305
The bill states that in some cases if there are questions about
profitability, there should be consultation. I know for a fact
that all of the branches which are closing in my area are
profitable. The profits are just not big enough to satisfy the
big banks.
Surely the government has a role to play in providing some
access to basic banking services. Surely the legislation has to
live up to that basic fundamental question. Are services
available to all citizens regardless of where they live and how
much income they make? Is access guaranteed as a right by virtue
of belonging to a civilized society? The situation is no.
The government and the banks have failed communities like mine
just because they are hard pressed, low income, older
neighbourhoods and inner city communities; just like they have
abandoned rural communities. They have failed those communities.
The bill hardly does anything to ensure that the situation is
reversed and that fundamental right of access is guaranteed to
all citizens. That is one reason why we cannot support Bill C-8.
I hope that in the committee process the government takes these
concerns seriously. I hope it is open to amendments to ensure
that there is some meaningful process in place to ensure that
people have access to banking services, that communities are not
abandoned by the big banks, that there is some recognition of the
loyalty that customers have had in the banks over the years and
that banks are not left to simply play the casino global
marketplace without concern for the communities that have made
them profitable in the first place.
Mr. Ken Epp (Elk Island, Canadian Alliance): Mr.
Speaker, I listened with interest to the speech. I have a lot of
sympathy for what she is saying. There are a certain number of
people in our society who do not have big bank accounts and who
simply need the basic banking services in order to cash a cheque.
Sometimes it is a welfare cheque or payment for work. All they
need is the ability to cash the cheque. I agree with her that it
should be available.
However, to say that banks be forced to keep a whole branch open
in order to provide that service is perhaps stretching it. For
example, she said that banking services are a right. A lot of us
think access to food is a right. We do not want to have our
Canadian citizens starving to death.
Would we then pass a law that states that grocery stores must
stay open in a community whether they continue to lose money year
after year? If they lose money, where will the money come from?
Eventually, they would not be able to pay their operating
expenses and their employees. They would not be able to stay in
business. Would she apply that same criterion to grocery stores
as she would to banks?
I am sympathetic to what she is saying. However, I think
there are entirely different ways of providing basic banking
services than just forcing branches to remain open when they are
experiencing a loss or perhaps are way under target in terms of
what the profit in a branch should be.
1310
Ms. Judy Wasylycia-Leis: Mr. Speaker, with respect to the
issue about how banks are different from the neighbourhood
grocery store, we all have to keep in mind that we are talking
about regulated financial institutions that have a responsibility
to serve society according to a prescribed framework and set of
laws. There is a responsibility upon the government to ensure
that those regulated financial institutions live up to their
obligations as set out under the law. We are dealing with
something quite different than corner grocery stores.
As the government itself acknowledged in a discussion paper, and
as I said earlier, a regulated financial institution is a
privilege, not a right. There are certain powers and benefits
that have been bestowed upon the banks and that commitment to the
Canadian people has to be honoured.
On the question about viability and serving communities, I want
the member to know that I am not just talking about people living
in poverty who need to find access to basic bank accounts. I am
talking about entire communities that happen to be inner city,
older neighbourhoods, not suburbia and wealthy communities, that
are being abandoned by the banks because they are just not
producing a big enough profit for the bank in question. I am not
talking about keeping banks open that are not profitable.
In the case of Winnipeg North Centre, eight bank branches have
closed in just five years. There is no information about whether
or not they were profitable because the banks are not
forthcoming and because the government does not require them to
prove that they are profitable.
The legislation makes provision for a consultation process in
the event that there might be seen to be some negative impact on
the community. I am telling all members that there is a huge
impact on my community. I do not think it is probably different
from a lot other rural communities and older neighbourhoods.
The fact of the matter is the banks are calling the shots. They
do not have to prove whether or not they are making a profit.
They do not have to deal with the impact on the consumers,
citizens and the spirit and health of that whole community. They
are abandoning communities and we will have to pay the price down
the road. The government has a responsibility to hold the big
banks to account for that basic principle and to ensure some
element of decency on that whole question of how many bank
branches are reasonable, where they should be and what
communities should have access to them.
Mr. Inky Mark (Dauphin—Swan River, Canadian Alliance):
Mr. Speaker, I listened with interest to the response to the last
question. I have the same problem. I come from a constituency
which is rural based. Over the last many years the banks have
basically left many of the small communities. In fact, there was
a case where one of the major banks gave up and the credit unions
took over.
I know that a lot of the small communities have a small
population base. The credit unions tend to be very people and
service oriented. I can say that from my own experience having
sat on a regional credit union board for many years. What would
be the member's solution to ensure that financial institutions
stay in small communities in rural Canada?
Ms. Judy Wasylycia-Leis: Mr. Speaker, that is a very
important question. How do we deal with that situation?
First, we try to get the government to amend its legislation to
have some teeth when it comes to bank branch closures. The onus
should be on the banks to prove that they are not profitable.
There should be a moratorium on any closures until the community
has been informed and there is evidence that a particular branch
is not viable.
Second, we should give greater support to credit unions that
are reaching out, filling the vacuum and creating some hope for
rural communities and as in the case of my constituency in
the inner city urban communities as well. We have to do moret.
Mr. Scott Brison (Kings—Hants, PC): Mr. Speaker, it is
with pleasure today that I rise to speak on Bill C-8. Since it
is my first time rising in the House for an actual speech since
the resumption of parliament, I would like to take this
opportunity to thank the people of Kings—Hants for the honour
and privilege of representing them again.
I also thank them for their unswerving support in the fall
byelection when my leader was elected as their representative
during a very critical time in the history of our party. I do
not think they wanted me back. I think they wanted to keep my
leader just a little bit longer but the unnecessary fall election
precipitated changes for which we were not in control.
1315
The global financial services sector has undergone more changes
in the last 10 years than in the previous 150 years. No major
regulatory reform has occurred in the financial services sector
for the last 10 years.
In 1993 Canada was ahead of the U.S. in terms of regulatory
reform affecting the financial services sector. Today we are far
behind the U.S. in this critical area of our economies,
particularly with the last vestiges of the Glass-Steagall act
being gone now from the U.S.
The government has dilly-dallied, dithered and delayed at every
opportunity. It has really been dragged to this point, kicking
and screaming, to actually address some of the issues of the
financial services sector.
In 1998, when the MacKay task force came out with a
comprehensive set of recommendations, which balanced consumer
interests as well as competitiveness issues for Canada's
financial services sector, it represented what should have been
considered a recipe, not a buffet.
Instead of taking that report, working with it, treating it
respectfully for its tremendous contribution to the debate of
this important public policy area and implementing many of the
recommendations, the government chose to cherry-pick some of the
more politically palatable recommendations of the MacKay report.
In fact, the government made public policy based in many cases
on perception as opposed to dealing with the realities. Public
policy and changes in public policy should always be based on
reality and not on perception.
Before I go further, it is important that I declare I have
involvements in the financial services sector. I have an
involvement with an investment bank, not one of the chartered
banks but with an investment bank. As such, while there is no
direct linkage or effect of the legislation on independent
investment banks, it is important that I do declare that as an
interest.
Currently Canadian chartered banks are delivering on the whole,
if one looks at it from a realistic perspective, reasonably good
value to Canadians. We have a stable and an efficient system
with among the lowest service charges in the industrialized
world. We have 500,000 Canadians working for banks with a
payroll of $22 billion, and exports of $50 billion per year of
services. Ultimately, at the end of the day, over seven million
Canadians actually own bank shares directly or indirectly.
It is important that we balance consumer interests, which are
essential and need to be adhered to, and the interests of bank
shareholders because in most cases they are the same people. Many
of the investment vehicles that Canadians are relying on for
their future post-retirement financial well-being, such as
pension funds or mutual funds, have been invested in banks.
It is very difficult to invest in a mutual fund in Canada
without investing in a bank. The percentage of the TSE that is
consumed by banks in terms of investment capital is significant.
We are fooling ourselves if we try to divide consumer interests
from shareholder interests consistently because the two can be
balanced, and the MacKay report demonstrated that.
It is also easy to bash banks, with the possible exception of
politicians. Bankers are probably the least popular group in
Canada. We should remind ourselves that it is not a legitimate
reason to attack banks. We should actually base our attacks on
some specific issues as opposed to simply doing it because by
bashing banks we can make ourselves as politicians marginally
more popular.
1320
There are several positive features in the legislation. A
negative feature, however, will be that it will lead to a
dramatic increase in the level and layers of bureaucracy. The
legislation will give the finance minister unnecessarily great
and sweeping powers to intervene. It will require banks to
publish information that arguably is of no practical purpose
except to appease some of the advocacy groups.
On the positive side, the ownership and capitalization rules
will be less restrictive. It will be easier to start a small
bank. That is very good for the level of choice that Canadians
will have ultimately in their banking services. Banks will have
wider investment powers.
I am looking forward to changes in the co-operatives act, which
will enable credit unions to compete more directly with banks and
improve the competitiveness factors and services available to
Canadians particularly in rural communities.
Foreign banks will have more flexibility in Canada. While that
is a positive feature from a consumer's perspective, and we are
supportive of foreign banks having greater access, we should
recognize that foreign banks are gobbling up market share in
Canada. Whether it is an MBNA or an ING, whether it is in the
credit card business, small business lending or Internet banking,
foreign banks can come in here without the impedimenta of bricks
and mortar or legacy costs of bricks and mortar and compete
directly with our Canadian owned banks on very specific areas of
niche businesses.
By cherrypicking those businesses it expose the napes of our
Canadian banks to a lot of competition. These foreign banks are
not necessarily playing by the same rules in terms of commitments
to communities, reinvestment and that sort of thing.
While we are supportive of greater levels of foreign competition
from the perspective of individual consumers, we have to be
careful that we do not handcuff our Canadian banks, expose them
to this competition, and at the same time jeopardize the returns
of many Canadians who are investing in these banks.
There will be greater access to the payment systems for life
insurers, securities dealers and money market mutual funds. That
will lead to greater levels of products and services and a
greater variety of products and services for Canadians.
There will be a more transparent merger review process. It is
still lengthy and demanding, but at least a basic set of ground
rules is established by the legislation. At the end of the day
the finance minister will still have the final say. I believe
that the competition bureau should at the end of the day be able
to rule on this matter.
We should not be sucked back into the vortex of the highly
politicized merger debate that erupted in the House a couple of
years ago when the Liberal caucus witch hunt on banks occurred.
They referred to it as the Liberal caucus task force on the
financial service sector, but it turned out to be a witch hunt.
The ministerial discretion provided by the legislation in any
number of areas is significant, with sweeping powers to approve
or reject mergers and order effective changes to the payment
system.
I have heard my colleagues in the New Democratic Party refer to
the minister becoming a banking czar of Canada with the
legislation. I do not think that is far off. With the leadership
considerations of the Liberal Party of Canada, the dual role of a
finance minister who may be a leadership candidate at some point
in the future, the potential for politicization of this very
important public policy debate is high.
The last time the minister had an opportunity to negotiate with
banks to get conditions from banks such that the interests and
concerns of Canadians were met adequately before mergers were to
proceed, he simply slammed the door. I believe on December 14,
1998, he just slammed the door on bank mergers for short term
political interests instead of negotiating..
At that time the Bank of Montreal and the Royal Bank had
committed, if the mergers were allowed to proceed, to a doubling
of lending to small business from $25 billion to $50 billion.
They also committed to the establishment of a new bank for small
business lending, a reduction in service charges and an increased
number of staffed outlets.
These are some of the types of things that actually could have
benefited Canadians if legitimate discussions and negotiations
were to have occurred, but they did not because of politics.
1325
The five month approval process for a proposed merger is a long
time in the hyper-competitive global financial services sector.
We recognize the importance of the process but we also have to
recognize the speed with which changes occur and conditions
change in this environment.
The cross pillar merger restriction is a matter of government
policy but it could, in many ways, be wrongheaded if we look at
what is happening elsewhere. In fact it is intuitive to expect
that a cross pillar merger would lead to greater levels of
security not less, and that it would be beneficial.
As a result of the legislation, the government will have power
to intrude to a greater extent in the financial services sector
than in any other Canadian industry. Banks and other large
financial services firms with equity in excess of $1 billion
would need to do public accountability statements on an annual
basis describing their contributions to the Canadian economy and
to society, such as small business lending practices, charitable
donations, community involvement and the location of any branches
opened or closed.
I have banks in small and rural communities in my riding. It is
very important that we work with the banks to ensure the
continuation of services in these communities. We have to be
cognizant that banks are not the only necessary service being
provided to Canadians by the free market. Certainly financial
services are necessary to all Canadians but so is food and
shelter.
The logical corollary of the government's arguments, as
presented in the legislation, would be that ultimately we would
need to force companies like Sobey's and Loblaws to provide free
food to Canadians regardless of income. In fact people building
apartment buildings would have to build some extra apartments
because there will be a need to provide free apartments by
the private developers to individuals regardless of income.
We should start first with Canada Post. Certainly Canada Post,
as a crown agency, should be giving out free stamps to people
regardless of income if the government is to follow its own
logic.
We need to ensure that a bank closure in a rural community goes
through the same process as a grocery store closure. Surely,
food is as important as banking services.
What I am trying to point out is that there are near toxic
levels of hypocrisy in the legislation in the way it treats one
sector and does not deal with the realities of what we enjoy in
Canada as a free market. There are now more banking outlets in
Canada as a result of technology than there have ever been. Any
one of us can withdraw money at a grocery store with a bank card.
We can use also use bank cards to buy groceries.
Technology has made a huge impact on improving banking services
for Canadians at the grassroots level. I believe that in areas
where the Bank of Nova Scotia has no branch outlet it has been
working proactively with the post office in order to provide some
level of service. There is nothing at the end of the day,
particularly for senior citizens, that beats actually dealing
with a human being as opposed to an automated teller.
The credit unions' ability to take over banking services in some
of these communities is the type of transition that needs to be
encouraged. Sometimes the government's approach to some of these
issues is very wrongheaded and is based on the anachronistic
notion that somehow governments should regulate and overregulate
until eventually the private sector will do everything the
government tells it to do. The effect of that over the long
term, if we apply it to every sector in the economy, would
actually be very negative for all of us.
1330
We will be supporting the legislation because by and large the
positive changes are long overdue and simply cannot be delayed
further. This piece of legislation was another victim of the
early election call.
We are supporting the legislation despite some of the less
positive elements of it. Another area of the legislation that on
the surface sounds very good but has some real problems is the
new consumer agency.
First, there is no reason why the agency could not report
directly to parliament as opposed to the minister. The agency
would be paid for by the financial institutions. Ultimately this
agency, as well as the increased regulatory burden on our
agencies, will lead to increased costs for the banks. There is
no way around that. The costs will ultimately be passed on to
consumers or will result in a lower return for about seven and a
half million silent Canadian investors who are depending on the
returns for their retirement incomes.
The new agency and the regulations could have a less than
desirable impact. As a result of the law of unintended
consequences, many of the positive impacts that people foresee
from this agency and this greater level of regulation may not
come to pass. Canadians might see higher costs for banking
services as the costs are passed on to them in the end.
I am concerned that we may be further exposing our already
disadvantaged Canadian banks in terms of the global environment.
We seem to be handcuffing Canadian banks while exposing them to
foreign competition.
Under the legislation bank holding companies in Canada would
need ministerial approval for most categories of permitted
investments. In the U.S., financial holding companies need only
notify the federal reserve board 30 days after making a non-bank
acquisition. These are some of the disadvantages that could lead
to significant problems down the road for the Canadian financial
services sector.
I hope that in 10 years we do not look back at this legislation
and other policy movements by the government and see that they
were in fact the beginning of or the planting of the seeds of a
foreign owned Canadian financial services sector.
We all like to complain about the banks. I have done it a lot
myself. However, if there is a worse thing for a guy like me
from Cheverie, Hants county, Nova Scotia than dealing with one of
the big banks based in Toronto, it would be dealing with one of
the big banks based in Zurich, New York or Chicago, a bank with
no vested interest in the future of this country. The need for
strong, Canadian-owned financial entities becomes particularly
important in the context of national unity.
I hope we do not look back at this legislation and other
decisions that are being made in this place at this time as
having been the beginning of the end of a strong, Canadian owned
financial services sector.
Some of the Luddite elements of the legislation are at best
egregious and wrongheaded. Less generously, I think they are
dangerous for the future of the Canadian owned financial services
sector and these jobs that Canadians depend on as we enter an
exciting 21st century.
The opportunities available to Canadians in the global
environment are almost limitless, but we have to ensure that the
Parliament of Canada and Government of Canada do not limit those
opportunities by trying appease to the politics of the short
term.
Mr. Shawn Murphy (Hillsborough, Lib.): Mr. Speaker, I
appreciate the opportunity to speak to Bill C-8 which would
implement the new policy framework for Canada's financial
services sector.
1335
At the outset I wish to reaffirm the government's commitment to
provide a fair and balanced framework that preserves the health
and strength of the sector, while at the same time allowing its
evolution to proceed to the benefit of all Canadians.
The new policy framework is guided by four overriding
principles. The principles are: First, the financial
institutions must have the flexibility to adopt to the changing
marketplace to compete here and abroad.
Second, there must be vibrant competition. This is necessary to
ensure a dynamic and innovative sector.
Third, consumers, and I am talking about personal consumers and
small businesses, regardless of income, regardless of whether the
consumers be big or small or whether they reside in rural or
urban areas, must receive the highest possible standard of
quality and service.
Last, the regulatory burden should be lightened wherever
possible, consistent with sound, prudential and public interest
objectives.
Although each of these fundamental principles that guide the new
framework is equally important, I have chosen to focus my remarks
here today on the issue of consumer protection.
As we all know, the financial services sector plays a very
important and vital role in the everyday lives of Canadian
consumers. Financial institutions take consumers' deposits,
supply access to payment services, such as cheques and point of
sale debits, and provide mortgages and car loans. In short,
financial institutions permeate every aspect of our financial
lives.
While having regard to everyone, I am talking today about
consumers and businesses who are all dependent on financial
institutions. It is vital in Canadian society that consumers
have protection when dealing with financial institutions.
The dramatic changes brought about by globalization and
technological innovation, which other speakers have indicated
here today, have contributed to a much more complex business
environment. While consumers benefit from a far greater choice
of products and services, these choices at the same time are
being made more difficult by the greater complexity of products
offered by financial institutions. Consumers often lack
information to enable them to make the wisest choice. This lack
of information may leave them exposed to unfair or abusive
commercial practices.
To promote a better balance in the delicate relationship between
consumers and financial institutions, it is important that the
legislation, Bill C-8, ensure that consumer rights are protected
adequately. The legislation, which was introduced here last
week, would address the situation and better protect and empower
all consumers of financial services.
Bill C-8 would implement a number of measures that go further to
protect consumers than any previous legislation and, at the same
time, and this is important, would address the need to provide
financial institutions with an environment that is conducive to
their continued growth and success.
1340
We believe that in order to be effective any consumer protection
legislation must include the following criteria: an assurance
that all Canadians have fair access to Canadian banking services;
accessible oversight and redress mechanisms; and strong consumer
safeguards including an accountability framework.
With respect to access, I would note that many Canadians, for a
variety of reasons, do not have access to basic financial
services or are unable to access services in a way that fully
meets their needs.
As members may recall, an agreement on access was reached in
February 1997 between the major banks and the federal government.
In that agreement the major banks committed to improving access
to basic services for low income individuals by establishing
minimum identification requirements for opening accounts and for
cashing government cheques.
Bill C-8 would legislate key elements of that agreement. Banks
would be required to open an account for anyone who has basic
identification, and neither employment nor a minimum deposit will
be a condition of opening such an account.
The legislation includes regulation making authority regarding
the provision of such a low cost account. The government has
agreed however to hold off introducing regulations for the time
being. Instead, it has recently concluded a memorandum of
understanding with individual banks regarding the provision of
the low cost account.
While the low cost account offers a range of choices to
consumers, it adheres to certain standards that will ensure that
all Canadians have access to a bank account at an affordable
price. This will help ensure that all Canadians have access to
basic banking services and will address the concerns of consumers
who do not feel comfortable with the new technology of automated
banking services.
The financial consumer agency of Canada would monitor the banks'
compliance with these undertakings and would consult with consumer
groups representing low income Canadians as to how the
self-regulatory approach is working.
Should the FCAC find at any point in time that the banks are not
respecting the terms of the agreements, the government at that
time will not hesitate to exercise its regulation making
authority to require banks to offer a standard, low cost account
with specified features.
Another area that merits government attention is branch
closures. The legislation calls for a four month notice period
to provide consumers, especially low income and
disabled consumers, with the ability to make alternate
arrangements. It also consults with community leaders, to bring
everyone into the picture for a proper consultation. This issue
was recognized in the MacKay task force and it is being
legislated.
The financial consumer agency of Canada would be a regulatory
agency, an information gathering and public advocacy agency,
with the ability to regulate a whole milieu of consumer interests
that are now dispersed throughout other government departments.
1345
In summary, I state that the framework of Bill C-8 ensures that
consumer protection will be at the forefront of Canada's
financial services sector for the 21st century.
Mr. Peter Stoffer (Sackville—Musquodoboit Valley—Eastern
Shore, NDP): Mr. Speaker, the hon. gentleman from the
governing party mentioned the positive sides of the bill, but
there are negative sides to it as well. He mentioned consumer
protection but there is no community protection.
There is no protection to stop a bank from closing its branches
in rural areas affecting people who desperately need those
services. There is no community reinvestment act in the
legislation which, by the way, the United States has in its
legislation.
Would the member and his party be amenable to amendments in
these areas in future discussions of the bill?
Mr. Shawn Murphy: Mr. Speaker, the learned member raises
two issues. The first issue was with regard to bank closures and
communities. My response to him is that banks have a fiduciary
duty not only to their depositors who in many instances are low
income and disabled Canadians but to their shareholders. They
cannot be legislated to keep banks open when they are not
making a profit.
Regarding accountability, banks will be required to file
annually an accountability statement so that Canadians from coast
to coast will be able to judge how banks are contributing to the
economy and to society generally from a regional basis, from a
provincial basis and from a national basis.
Mr. Peter Stoffer: Mr. Speaker, I welcome the new member
for Hillsborough who replaced George Proud who did yeoman's work
in parliament on behalf of Prince Edward Island. I not only
thank Mr. Proud for his work, but I also welcome the new member
to the House of Commons.
The bill provides an awful lot of power to the Minister of
Finance, the new banking czar, as the member for
Regina—Qu'Appelle put it. We have grave concerns about what
that kind of power would do to the Minister of Finance. Has he
or his party thought about the ramifications of the bill to the
people of Canada?
Mr. Shawn Murphy: Mr. Speaker, I assume the member is
speaking about the merger issue. Everything has to go through
OSFI. It has to go to the competition bureau.
Any merger has to go through a lot of steps, but it has to go
back to government. We cannot have mergers being approved by
some other agency. They have to come to the government and the
Minister of Finance.
Mr. Ken Epp (Elk Island, Canadian Alliance): Mr. Speaker,
I am delighted to be able to enter into the debate on Bill C-8,
which will establish a new organization of government, the
financial consumer agency of Canada. It also involves the
amendments of a number of acts.
I am aware that we cannot use props so I cannot show the people
of Canada the size of the bill without actually reading from it.
I will just open it at random here and read one of its sections:
That subsection (6) does not apply in respect of a particular
transaction if the bank is acquiring control of an entity whose
business includes an activity referred to in paragraph 2(b),
other than a specialized financing entity.
1350
That is only one of three parts of section 390(7) on page 480 of
the massive bill. We obviously see that the task of the
opposition in bringing a critique to the bill is mammoth indeed.
For us to go through and decipher the meaning of even one
paragraph almost stretches the brain to capacity.
I will not be able to go through it entirely. Nor is that the
purpose. However I want to go on record by saying that I agree
with the bill in principle. We should send it to the finance
committee forthwith, so that we can do some detailed study, along
with our researchers, and listen to the witnesses that come
before it.
I had the privilege of being on the finance committee in the
previous parliament. We spent quite a bit of time on what was
then Bill C-38, which was essentially the same bill. We heard
from many different interest groups. Some were very much in
favour of the particular legislation going forward. Others came
to us with very specific concerns.
In fast summary I could mention three of the groups had great
concerns. Those who ran automobile dealerships and automobile
leasing companies were very concerned that we should not, in
amending the way banks operate, give them the ability to become
involved directly in automobile leasing. I have not read every
word in the 900 page document, but as far as I know that
prohibition is still maintained and we will not have the problem
of having banks in automobile leasing.
The second group was the insurance people. They do not want
banks to sell over the counter insurance because it would be
deemed very unfair in the competitive field. I am not saying I
agree with it but that was their argument. They made us a very
strong presentation. I believe it is upheld in the legislation
as well.
The third group that was very significant in its impact
statements to the committee represented the down and outers in
society, the people who do not have large financial holdings and
in many cases no holdings at all.
They require basic banking services. They were concerned with
monopolization and the concentration of the finance industry in
fewer and fewer holding companies that they would be even more
disadvantaged. They gave presentations to the committee. I
believe the bill addresses their concerns to some degree. I have
some philosophical questions about the way it does, but it is an
interesting concept.
I will talk very briefly about different parts of the bill, the
financial consumer agency of Canada act. It is appropriate to
commend the Secretary of State for International Financial
Institutions for the openness that is apparent on that side of
the House in listening to the debates and incorporating into the
legislation the various concerns we as a party and Canadians are
bringing to the debate.
I also commend the member for Prince George—Bulkley Valley, one
of our members in the Canadian Alliance, who has worked very hard
in bringing forward ideas, concepts and principles that should be
incorporated in the way our financial institutions are run.
He has done commendable work. It is interesting that many of the
things that he first came up with in his report are incorporated
in the legislation.
1355
To all the people out there listening in radio land I say that
the work of a good, effective opposition is useful in parliament.
We think we could do better if we were on the government side,
but we on the opposition side are influencing the government. We
should debate each other in a respectful manner, not the way we
were forced to debate in the last election campaign. We should
debate issues forthrightly and talk about the different options.
Then debate is useful. An effective opposition is very
important.
I also emphasize that we need a very strong financial sector.
Sometimes the in thing to do is to bash banks. Many of us
receive complaints from our ridings about the way people are
treated in banks. We have to respond to them. Usually we try to
get them in contact with the right people so their problems can
be solved. Many of the complaints we hear about banks are
specific.
Having strong banking and financial sectors is absolutely
critical. We ought not to get into a malaise of complaining
about them all the time, although it is appropriate through
legislation and other presentations for us to put forward the
wishes of our constituents and the fact that they deserve good
service from banks.
Consequently I appeal to the banks to make sure they run their
businesses properly. They should do this so that legislators do
not have to come up with too many 900 page documents to regulate
and control how they do their business. My first choice would be
for them to make their decisions in an honourable fashion so that
the public does not have reason for complaints or to come to us
as legislators with a cry to bring in regulations and laws to
control and restrict the behaviour of banks.
In a very real way banks have to exercise a serious social
conscience. They have to make sure that they are treating their
customers fairly. They have to make sure that all depositors and
all people who have invested in banks are giving their money in
trust to organizations that are credible and solid. The last
thing we want is a financial organization that is tenuous and
cannot be depended upon. It is very important for the banks to
do this work. It is also very important for the government to
bring in regulations and a framework for financial institutions
which permit that to happen.
I will comment on some specifics with respect to the Bank Act.
There is a change in the way banks are governed. One important
point is that the ownership of banks is now more flexible.
STATEMENTS BY MEMBERS
1400
[English]
GREATER TORONTO AIRPORT AUTHORITY
Mr. Derek Lee (Scarborough—Rouge River, Lib.): Mr.
Speaker, I congratulate the Greater Toronto Airport Authority for
its recent initiative in instituting a new ground transport taxi
permit system at Toronto's Pearson International Airport. The
GTAA has demonstrated industry leadership in developing a fairer
system, which benefits the travelling public.
The new system lowers economic barriers to entry for new taxi
drivers. The cost had exceeded $200,000 in the secondary market.
The public will no longer have to bear the imputed cost of this
entry capital. The number of licences issued will now match
demand, and market sensitive fees will generate fair revenues for
airport overheads.
I also thank the city of Mississauga mayor and council for
working with the GTAA, allowing access by licence holders to city
taxi permits on a restricted basis for use in connection with
airport ground transport.
The public is now seeing better service and more efficiency at
Toronto airport. We are excited by the future potential of our
new airport terminal now being built by the hardworking Pearson
airport team.
* * *
AGRICULTURE
Mr. Leon Benoit (Lakeland, Canadian Alliance): Mr.
Speaker, most people in the world struggle from day to day to buy
the food they need, but most Canadians have earned enough already
this year to pay for their food for the entire year. The reason
is that farmers in Canada are so efficient and so good at their
jobs.
What thanks do they get? I thank and many Canadians thank
farmers, but the government really does not seem to care. If it
did it would be fighting to remove export subsidies and other
trade distorting subsidies in Europe, Asia and the United States.
That would increase the price farmers get for their grain.
If the government cared, it would lower taxes and unfair user
fees so farmers' costs would go down. If the government cared
about farmers, it would fix the regulations that hurt farmers. It
would lower freight costs and allow new marketing opportunities
for farmers.
Unfortunately the government's record on agriculture speaks for
itself. Now is the time for the government to do the right
thing. It really would not hurt to thank farmers for providing
the best, lowest priced food in the world.
* * *
KARL DAVID HOEFEL
Ms. Sarmite Bulte (Parkdale—High Park, Lib.): Mr.
Speaker, I rise today to salute and congratulate one of my
constituents, Mr. Karl David Hoefel, who on Friday, February 2,
received the medal of bravery from the Governor General of
Canada.
Bravery decorations recognize people who risk their lives to
save or protect others. Specifically, the medal of bravery is
awarded for acts of bravery in hazardous circumstances.
On August 28, 1999, Mr. Hoefel saved two women from drowning at
North Beach Provincial Park. When he heard cries for help from
swimmers who had been swept to the deeper waters of Lake Ontario,
Mr. Hoefel and his wife entered the high surf on an air mattress
and, guided by the voices of the victims, made their way to the
closest one and helped her back to shore.
Mr. Hoefel then re-entered the dangerous waters and battled
waves until he reached the second woman approximately 1,500
metres away from shore. Both struggled to hold on to the rapidly
deflating mattress as they drifted to shore.
Mr. Hoefel certainly deserves to be recognized for his actions,
which can only be described as selfless and heroic. He is truly
an example to all Canadians.
* * *
[Translation]
TRANSPORTATION
Ms. Yolande Thibeault (Saint-Lambert, Lib.): Mr. Speaker, last
week, the Government of Canada announced two important projects
for the economy of the Montreal region.
As mentioned last Thursday by the federal transport minister,
the Government of Canada will be investing approximately
$7 million in a preliminary design study for a light rail
transit system on the ice control structure of the Champlain
Bridge.
The following day, the government announced it was providing
funding for another project, this time $120 million to
renovate the deck of the Jacques-Cartier Bridge in Montreal.
These projects should largely resolve the traffic problems on
these bridges.
I am delighted at these initiatives, which will improve the
quality of life of residents of the South Shore, and
particularly of those in the riding of Saint-Lambert.
* * *
DRUGS
Mr. Guy St-Julien (Abitibi—Baie-James—Nunavik, Lib.): Mr.
Speaker, the November 2000 issue of Reader's Digest contains an
article written by Larry Collins entitled “Holland's Half-Baked
Drug Experiment”.
Twenty-four years after the legalization of marijuana, the
results are terrifying. “We have left our kids with the idea
that it's perfectly all right to smoke it, and from there it was
an easy step for them to move to the notion that it's also okay
to use mind-altering substances like ecstasy”.
There are still many proponents of the Dutch legislation, both
within Holland and elsewhere. But even some of them now agree
with opponents that there has been a tendency to indulge in
wishful thinking. However we cannot tackle a problem of this
amplitude with our eyes shut.
I suggest members read this article in the November 2000 issue
of Reader's Digest.
* * *
1405
[English]
PARKS CANADA
Ms. Cheryl Gallant (Renfrew—Nipissing—Pembroke, Canadian
Alliance): Mr. Speaker, on January 31, HRDC directed Parks
Canada to take immediate measures to protect park wardens from
danger while they are engaged in law enforcement activity. The
Minister of Canadian Heritage has had three reports since 1993
stating that park wardens are at risk.
Since that time Parks Canada has been engaged in an ad campaign
featuring a park warden with the suggestion that all is well in
the national parks. Despite the multimillion dollar smokescreen,
all is not well in Canada's wilderness. Wildlife is being
slaughtered while the minister funds false images.
The minister should know that 60 grievances have been filed over
job conditions in the last six months alone and that the January
31 labour board ruling means wardens are out of uniform and off
the job.
The ad campaign is a gross misuse of public funds. It is sad
that the minister responsible has millions of dollars to spend on
ads to mislead the public but no money to ensure the safety of
our park wardens as they protect wildlife in our national parks.
Actions speak louder than words. It is time to equip our
wardens to do the job they were trained to do.
* * *
AGRICULTURE
Mr. Peter Adams (Peterborough, Lib.): Mr. Speaker, no
other country has the high quality, diverse and inexpensive food
that we do in Canada. We spend under 10% of our income on food.
No other country spends less and some spend twice as much. The
reason for this is an extraordinary, diverse and efficient
agricultural sector.
Across Canada farmers and their families produce a huge
selection of healthy food at minimum costs. They do this in face
of subsidized competition overseas.
By paying such a low price, are we not in fact short changing
farmers? In some regions and for some crops it appears that we
are.
I urge all Canadians to buy Canadian food products and to buy
them as close to the farm gate as possible. If necessary, be
prepared to pay a premium for higher quality and freshness. Let
us make sure that our agricultural sector remains strong and
vibrant.
* * *
[Translation]
GALA DES OLIVIER
Ms. Christiane Gagnon (Québec, BQ): Mr. Speaker, last evening
at Montreal's Monument-National, the third annual Gala des
Olivier was held. The Olivier awards were created in 1999 in
honour of one of the great Quebec comics, Olivier Guimond, to
celebrate comedy and the people who bring comedy to our lives.
Clémence Desrochers was the recipient of the Association des
professionnels de l'industrie de l'humour award. It was a token
of the great affection, love and esteem in which this great woman
is held. Over her 40-year career, her monologues and songs have
provided us with an accurate and moving picture of scenes from
everyday life.
Congratulations to all the organizers of this great evening,
particularly to Claudine Mercier and Mario Jean, who were at the
helm of this event and managed to keep us in stitches.
Bravo to all those who received Oliviers and all those who were
nominated, great masters of amusement all.
* * *
[English]
HOUSING
Ms. Nancy Karetak-Lindell (Nunavut, Lib.): Mr. Speaker,
in winter the housing crisis in Nunavut becomes more evident. In
such a harsh climate no one can survive without shelter. Inuit
know this and traditionally everyone is taken in from the cold.
Sleeping on a porch or on a floor is better than freezing
outside.
Currently 15% of the Nunavut population is on the waiting list
for housing. As the population of Nunavut is growing by 12% per
year, this waiting list will certainly increase in numbers.
I assure my constituents that I am committed to working with the
federal and territorial governments to improve the situation. The
challenge of housing in Nunavut is a huge problem, but when we
all work together toward the same goal I know we can achieve
great things.
* * *
HEART MONTH
Mrs. Diane Ablonczy (Calgary—Nose Hill, Canadian
Alliance): Mr. Speaker, February is heart month, fittingly
enough. This is a time for all of us to give some extra thought
to that marvellous little creation, the human heart, and how we
can keep our own in top condition. It likes a diet low in fat.
It loves to get out for a little exercise. It is a non-smoker.
Heart disease is the leading cause of death and disability in
this country. It costs all of us nearly $20 billion every year.
That is why representatives of the Heart and Stroke Foundation of
Canada and the Canadian Cardiovascular Society are here today.
They urge government and non-governmental and professional
organizations to work together to find ways to combat this
crippling condition.
1410
Every Canadian could also be part of this fight. If we treat
our hearts well they will reward us with many years of faithful
service, the better to enjoy life and all it has to offer.
* * *
INTERNATIONAL CRIMINAL COURT
Mr. Irwin Cotler (Mount Royal, Lib.): Mr. Speaker, the
July 1998 adoption of the treaty for the establishment of an
international criminal court is the most dramatic development in
international human rights and international criminal law in the
second half of the 20th century.
On June 27, 2000, parliament enacted comprehensive, historic,
watershed legislation to implement the ICC statute for Canada and
to provide the legislative foundation to bring war criminals to
justice. As of today 140 countries have signed the treaty and 28
countries including Canada have ratified it.
The ICC treaty will end a culture of impunity, deter national
crimes, protect international peace and security, and serve as an
international justice model.
In a word, the ICC treaty is a wake-up call and a warning to
tyrants everywhere. There will be no safe havens, no base or
sanctuary for the enemies of humankind. As well, our domestic
legislation will place Canada at the forefront of the
international justice movement and give juridical validation to
the anguished plea of victims and survivors from the second world
war to the killing fields of today of “never again”.
* * *
EAST COAST MUSIC AWARDS
Mr. Peter Stoffer (Sackville—Musquodoboit Valley—Eastern
Shore, NDP): Mr. Speaker, last night all of Canada witnessed
another great instalment of the East Coast Music Awards. On
behalf of all members of parliament I extend congratulations to
all the award nominees and the winners, from Damhnait Doyle of
Newfoundland to Lenny Gallant of P.E.I., or as Jonovision says
“PE1”, and Natalie MacMaster of Cape Breton.
For all of us who are lucky enough to call the east coast home,
the musical culture that is expanding to the rest of Canada and
throughout the world is quickly becoming a great success story.
Great music and great culture have long roots in Atlantic
Canada, from the immortal Portia White to Wilf Carter, Dutch
Mason, Great Big Sea, the Rankins, the Nova Scotia Mass Choir,
the Barra MacNeils, Roch Voisine, Barachois, Stan Rogers, Harry
Hibbs, Don Messer, Rita MacNeil, Men of the Deeps, and many more.
We also extend special congratulations and good luck in March to
Grammy nominee Natalie MacMaster.
Jigs and reels have expanded to rap, Acadian blues, folk, soul,
choral and instrumental.
* * *
[Translation]
PIERRE-DE-LESTAGE HIGH SCHOOL
Mr. Michel Bellehumeur (Berthier—Montcalm, BQ): Mr.
Speaker, on January 7, fire destroyed the Pierre-de-Lestage high
school in Berthierville, the county seat of the riding of
Berthier—Montcalm, which I have the honour of serving since
1993.
This tragedy, which caused bedlam in our community, has
seriously disrupted the lives of hundreds of students and their
parents. In a spirit of solidarity, the community has pulled
together to make it possible for the student body of some one
thousand young people to complete their school year at the high
school in Saint-Félix-de-Valois, L'Érablière.
Today I would like to draw attention to the courage of the
students, parents and teachers of this school and the great
spirit of co-operation from the institution in the neighbouring
municipality which took them in the day after this sad event.
My best wishes to all students and staff of both schools for the
rest of the school year, and congratulations on the spirit of
brotherhood that has enabled these young people to continue their
schooling with peace of mind and will therefore contribute to
their academic success.
* * *
[English]
AGRICULTURE
Ms. Susan Whelan (Essex, Lib.): Mr. Speaker, I am very
concerned for the future well-being of farm families from coast
to coast who are struggling to survive under the weight of
increasing input costs as prices for their commodities continue
to remain well below the costs of production.
Our grain and oilseed growers in particular need more financial
support. They need it delivered quickly, or spring planting
could be at risk for many.
I strongly encourage the government to immediately finalize with
the provinces and farm groups the improvements needed to ensure
agriculture's future.
* * *
CORRECTIONAL SERVICE CANADA
Mr. Peter MacKay (Pictou—Antigonish—Guysborough, PC):
Mr. Speaker, it is high time the Liberal government ceases its
current practice of lowering security classifications to enhance
parole eligibility for violent criminals. Law enforcement and
victims groups have chastised the Liberals for defending CSC's
ludicrous policy of frequently moving killers from maximum to
medium or minimum security prisons only months into their life
sentences.
As prisons like the Kingston pen were set to increase transfers
by 29%, the solicitor general's order for a review is cold
comfort to anyone. The proverbial horse is out of the barn.
The Liberals tried to deny former CSC Commissioner Ole
Ingstrup's creation of the 50:50 quota system that established
the practice of rushing violent criminals through the prison
system at record pace. Then CSC incredibly allowed murderers
like Antonio Lorenz and Michael Hector to receive minimum
security placements months into their life sentences for violent
murders.
With problems and incidents in our prisons up 25% this year and
dangerous practices of fast tracking and releasing of cold
blooded killers, the solicitor general should remove his head
from the sand and instead of simply mouthing the words public
protection actually do something about it.
* * *
1415
THE ENVIRONMENT
Hon. Charles Caccia (Davenport, Lib.): Mr. Speaker,
mercury is a toxic substance listed under the Canadian
Environmental Protection Act.
In Canada mercury has contaminated fish as well as traditional
northern foods. A large source of mercury emissions and other
airborne pollutants comes from coal fired power plants. Their
emissions are an environmental hazard and a public health risk.
Recently the states of New York and Connecticut have asked
Ottawa to assess the damage caused by Ontario's coal fired power
plants to their population. Hopefully the environment minister
will conduct a comprehensive assessment, considering the fact
that Canada has signed international agreements on mercury
emission production.
The United Nations protocol on heavy metals committing Canada to
reduce emissions of mercury, cadmium and lead by 50% requires now
strong domestic implementation for the protection of public
health.
ORAL QUESTION PERIOD
[English]
ETHICS COUNSELLOR
Mr. Stockwell Day (Leader of the Opposition, Canadian
Alliance): Mr. Speaker, last week we asked the Prime Minister
to explain the apparent conflict of interest between his meeting
with the immigrant investment brokers and then the flow of funds
that began just days after that to the Auberge Grand-Mère Hotel,
which of course was attached to the golf course that he still
had shares in, contrary to what the Minister of Industry tried to
tell us last week.
The Prime Minister said that he had nothing to do with this,
that in fact this was all controlled by the Quebec government.
In fact we have now obtained documents from the Quebec
government showing that these funds were not managed by the
Quebec government but by the brokers themselves.
Will the Prime Minister please try to explain why he denied that
these funds were in fact controlled by the brokers.
Hon. Herb Gray (Deputy Prime Minister, Lib.): Mr.
Speaker, it is my understanding that the brokers were carrying
out their work pursuant to a program administered by the Quebec
government. In any event, neither the Prime Minister nor the
federal government have played any role in the flow of funds and
where they went.
Mr. Stockwell Day (Leader of the Opposition, Canadian
Alliance): Mr. Speaker, the documents are here and now I am
able to give him the information. The information we have here
is that the Quebec government was not in the direct management
and control of these funds. The Prime Minister stood here on
February 7 and said “the investment fund is managed by the
province government”, and yet he knows very well these funds are
not.
When he met with those investment brokers, some of whom had
criminal records or charges pending, he was aware of that fact at
the time. Was it because of the apparent conflict of interest
that he was trying to hide these facts?
Hon. Herb Gray (Deputy Prime Minister, Lib.): Mr.
Speaker, there is no real or apparent conflict of interest. This
is what was found by the ethics counsellor and this is what he
confirmed on Friday. The assertion that the Prime Minister owned
the shares at the relevant time is totally not accurate.
Mr. Stockwell Day (Leader of the Opposition, Canadian
Alliance): Mr. Speaker, the ethics counsellor was just out
last week saying that he did own those. The Prime Minister
had better take up that point with the ethics counsellor.
[Translation]
As regards the regulations for selecting immigrant investors,
I cite the Government of Quebec document entitled “Le courtier
gérera le placement de l'investisseur”.
And the broker and not the Government of Quebec manages the
funds. Why did the Prime Minister wrongly try to transfer
responsibility onto the back of the government—
[English]
The Speaker: The Leader of the Opposition will want to be
very prudent in his choice of language. I think he knows that it
is out of order to suggest that a member has said something that
is false in the House. There are disagreements, I understand,
between hon. members in respect of certain facts, but to suggest
that some member said something false I think is getting very
close to the line.
Hon. Herb Gray (Deputy Prime Minister, Lib.): Mr.
Speaker, I will very carefully follow the admonition of Mr.
Speaker. I hope that the Leader of the Opposition will do the
same and withdraw his false assertion.
1420
Miss Deborah Grey (Edmonton North, Canadian Alliance): Mr.
Speaker, what would be terrific is if the industry minister would
recant what he said on February 8. He defended the Prime
Minister's dodgy involvement with immigrant investor funds by
claiming that the Prime Minister's shares in the golf course were
held in a blind trust. That is 100% false. He can check that
with the ethics counsellor.
This business about who owned the shares, the Prime Minister got
those shares back on January 27, 1996. They were his. He had an
interest in the hotel right beside the golf course at the Auberge
Grand-Mère.
Did the industry minister make those claims out of ignorance or
fear?
Hon. Brian Tobin (Minister of Industry, Lib.): Mr.
Speaker, first, I spoke with the ethics counsellor this morning
to double check the facts. I would suggest that the member, or
any other member, or any member of the media could do the same
because he is quite happy to convey accurate information.
The reality is that shares were not held by the Prime Minister
prior to 1993 because they were sold. The proceeds from those
shares were not realized until a much later date. Indeed, the
Prime Minister's lawyer, who is also a trustee, in consultation
with the ethics counsellor and the Prime Minister, sought to
secure the proceeds from that sale. That was confirmed in a
conversation this morning. I would suggest—
The Speaker: The hon. member for Edmonton North.
Miss Deborah Grey (Edmonton North, Canadian Alliance):
Now there is dodging, Mr. Speaker.
Let me quote something else from the industry minister. He said
recently, and I quote, “Ministers are required to ensure that
their affairs are dealt with by putting those in trust, and that
is what the Prime Minister did”.
He could not have been more clear, but he could not have been
more wrong.
Why does the industry minister just keep tossing off the truth?
Hon. Brian Tobin (Minister of Industry, Lib.): Mr.
Speaker, the real question is, why does the Leader of the
Opposition, who cost the taxpayers $800,000 for slander, proceed
to more slander again in the House with comments directed at the
Prime Minister of Canada? Why will he not withdraw?
* * *
[Translation]
HEATING OIL REFUNDS
Mr. Gilles Duceppe (Laurier—Sainte-Marie, BQ): Mr. Speaker, the
Minister of Finance has chosen to send cheques of $125 and $250
to reduce the burden of the cost of heating oil to those who get
a GST refund?
If the government wants to give the money to people, that is
fine with me, but a lot of people paying heating costs did not
receive this money, while others, who do not heat, even with
oil, did.
Is this not proof of a purely vote getting measure, improvised
and not thought out, announced on the eve of the election, a measure
that completely missed its mark?
Hon. Jim Peterson (Secretary of State (International Financial
Institutions), Lib.): Mr. Speaker, clearly, when, a few months
ago, we saw the problems low income Canadians were having in
paying more for such expenses, we acted.
We acted quickly to help these people. We did not say there was
no problem. We said we would address it.
Mr. Gilles Duceppe (Laurier—Sainte-Marie, BQ): Mr. Speaker, it
was obvious there were problems. The government could have been
a bit more responsible, rather than adopting a measure on the
very eve of the election.
Would it not have been more judicious to suspend or reduce the
GST on heating oil in addition to using refundable tax credits
for those using heating oil so that the measure directly
impacted those facing problems with the increase in the cost of
heating oil, and not everyone on the eve of the
election? That seems logical.
Hon. Jim Peterson (Secretary of State (International Financial
Institutions), Lib.): Mr. Speaker, we dealt with this question
six months ago. The minister said he would discuss it with his
provincial counterparts. The response of the provincial finance
ministers was no.
Mr. Michel Gauthier (Roberval, BQ): Mr. Speaker, cheques for
$125 were sent to people who do not pay for heat, while some who
do did not get any money.
For example, inmates in federal or provincial institutions that
are heated by the crown received cheques for $125 to compensate
them for their heating costs.
Will the government finally admit that its obsession with
visibility led it to put the maple leaf on cheques paid directly
to people, with the result that it completely missed its target?
1425
Hon. Jim Peterson (Secretary of State (International Financial
Institutions), Lib.): Mr. Speaker, obviously, it is illegal for
inmates in federal institutions to receive that credit. We are
investigating the matter to see what we can do to correct that.
Mr. Michel Gauthier (Roberval, BQ): Mr. Speaker, the Secretary
of State has just admitted that the Department of Finance acted
illegally. He should have thought about that before taking that
measure, not after.
Will the Secretary of State admit that, by distributing millions
of dollars to people who have no heating costs, the government
completely missed the boat? It missed its target. It did not do
anything to solve the issue of heating oil costs. We can now
conclude that the government's obsession with visibility has a
price tag.
Hon. Jim Peterson (Secretary of State (International Financial
Institutions), Lib.): Mr. Speaker, the hon. member claims that
we totally missed the target. Not at all.
We admitted that we experienced some minor problems. As for
inmates, they account for less than 0.1% of the whole budget for
that item.
There was a problem affecting low and middle income Canadians,
and we had to take action. We did so and we are very proud of
that.
* * *
[English]
FOREIGN AFFAIRS
Mr. Svend Robinson (Burnaby—Douglas, NDP): Mr. Speaker,
my question is for the Minister of Foreign Affairs.
Last week Amnesty International urged the Prime Minister and
team Canada to speak out on the dramatic deterioration of human
rights in China, including assaults on freedom of religion of
Falun Gong practitioners and, in Tibet, torture and the
suppression of dissent and labour rights.
How then does the foreign minister explain the Prime Minister's
bizarre suggestion yesterday that the human rights situation in
China has actually improved? Will this minister show that Canada
is serious about human rights by co-sponsoring a strong
resolution on China at the upcoming session of the UN commission
on human rights?
Hon. John Manley (Minister of Foreign Affairs, Lib.): Mr.
Speaker, the hon. member knows that we do take the issue of human
rights seriously and that is one of the reasons that the Prime
Minister raised it with his interlocutors in China.
Apparently the member does not share the view of the leader of
the New Democratic Party in the province of British Columbia who
said “I was delighted that the Prime Minister raised the issue
in an absolutely frank fashion”.
Mr. Svend Robinson (Burnaby—Douglas, NDP): Mr. Speaker,
perhaps the minister might want to indicate whether Canada will
co-sponsor a resolution at the upcoming commission.
Last week the Dutch foreign minister cancelled his upcoming
visit to China because the Chinese government refused to allow a
round table to go ahead in Hong Kong with human rights
practitioners including Falun Gong.
If Canada is serious about human rights in China, will our
government and Prime Minister sponsor a similar round table
during this current team Canada visit to China? Will we show we
are serious about human rights?
Hon. John Manley (Minister of Foreign Affairs, Lib.): Mr.
Speaker, the Prime Minister will have the opportunity to address
the issue of human rights again during his visit. He has made
Canada's position very clear. It has been our ability to engage
China over the years because we have been seen by them to be
their friends. This is why we have been able to make progress on
a continuing dialogue on human rights, including the important
contributions we have made to enhancing the judicial process in
the People's Republic of China.
* * *
BUSINESS DEVELOPMENT BANK OF CANADA
Right Hon. Joe Clark (Calgary Centre, PC): Mr. Speaker,
my question is for the Minister of Industry.
I have reason to believe that in seeking a president and CEO of
the Business Development Bank, the bank changed executive search
firms between the appointment of Bernie Schroder and that of
Michel Vennat.
Will the minister confirm that there was a change in search
firms? Will he tell us why? Will he table the recommendations
made by both firms? Will he table the board minutes recommending
the change in search firms?
Hon. Brian Tobin (Minister of Industry, Lib.): Mr.
Speaker, I have to tell the right hon. gentleman that I have no
information that would support anything he has just said. I
would be very glad to take his question as notice and try to
respond in greater detail.
Right Hon. Joe Clark (Calgary Centre, PC): Mr. Speaker,
I wonder if the minister would also make a commitment now to
provide that information to the House of Commons?
Perhaps the minister knows now, but if not he could take this as
notice. Could he tell the House the name of the executive
search firm that recommended the appointment to the Business
Development Bank of Mr. Jean Carle? Will he table the
recommendation of that firm respecting Mr. Carle?
1430
Hon. Brian Tobin (Minister of Industry, Lib.): Mr.
Speaker, I could only repeat to the right hon. gentleman that I
will take all these questions as notice.
* * *
HUMAN RIGHTS
Mr. James Moore (Port Moody—Coquitlam—Port Coquitlam,
Canadian Alliance): Mr. Speaker, the Prime Minister has
dropped his commitment to justice.
Prior to the team Canada trip news stories were filled with
reports of his commitment to human rights in China. Now that he
is on the ground there he seems to have changed his tune by
saying that Canada is too small of a fry to stand up for what is
right.
Canada has endangered species legislation that mandates fines of
up to $25,000 or six months in jail for people who knowingly
import products from endangered species, so we ban the
importation of ivory to protect endangered African elephants.
Why is the government prepared to give more protection to African
elephants than to Chinese prisoners of conscience?
Hon. Herb Gray (Deputy Prime Minister, Lib.): Mr.
Speaker, the assertions of the hon. member in his premise are
absolutely wrong. The Prime Minister has spoken out vigorously
on human rights in China during his current visit in his meetings
with the Chinese premier. He will continue to do so and maintain
this dialogue throughout his visit.
I am sure that we will hear more strong words from the Prime
Minister during the course of his visit. His dialogue and
assertions have been confirmed by NDP Premier Dosanjh of British
Columbia.
Mr. James Moore (Port Moody—Coquitlam—Port Coquitlam,
Canadian Alliance): Mr. Speaker, I guess the answer is hurry
up and wait. In 1999 Canada imported a staggering $8.9 billion
worth of products from China. There are reports everywhere from
groups such as Amnesty International that some of those products
are made by prisoners of conscience in labour camps.
Since 1930 the United States has had a law specifically
prohibiting the importation of goods made by prisoners or forced
labour. In the mid-1990s the American state department began
working aggressively to ensure that goods made by Chinese prison
labour were not imported into the United States.
When could Canadians expect a similarly tough attitude in
defence of human rights in China?
Hon. John Manley (Minister of Foreign Affairs, Lib.): Mr.
Speaker, there are very few countries in the world that can have
the influence that Canada has with China.
The hon. member raises, in my mind, some questions of exactly
what the Alliance policy is with respect to trade. Is it
suggesting that the Prime Minister and the nine premiers with him
are wrong in promoting trade with China? Is the member
suggesting that the Alliance policy is that Canada should
withdraw from engagement with China and sit back on the sidelines
where it can have no influence?
Canada is making a difference in China as it is around the
world. Part of the reason for that is our history of engagement
and active encouragement.
* * *
[Translation]
COST OF PETROLEUM PRODUCTS
Mr. Pierre Brien (Témiscamingue, BQ): Mr. Speaker, by agreeing
to send out rebate cheques to Canadians to offset the large
increase in the cost of heating oil, the Minister of Finance
admitted that there really was a problem with the cost of
petroleum products.
Will the Minister of Industry give us a progress report on the
investigation into the cost of petroleum products which he
commissioned from the Conference Board of Canada, a board on
which, I remind the House, the major oil companies sit?
Hon. Jim Peterson (Secretary of State (International Financial
Institutions), Lib.): Mr. Speaker, the question is a good one.
We hope to have an answer from our officials as soon as possible.
Mr. Pierre Brien (Témiscamingue, BQ): Mr. Speaker, a
preliminary copy of this report has been circulating since last
October, and the government was supposed to receive the final
copy in December.
Is the delay in releasing this report not a sign of the lack of
political will of this government which, throughout this whole
business, has done nothing but try to buy time, on the theory
that the crisis would fade away on its own, when in fact it has
not?
Hon. Jim Peterson (Secretary of State (International Financial
Institutions), Lib.): Mr. Speaker, it is my impression that the
report will be tabled as quickly as possible.
* * *
[English]
EMPLOYMENT INSURANCE
Ms. Val Meredith (South Surrey—White Rock—Langley, Canadian
Alliance): Mr. Speaker, last year the Minister of Human
Resources Development was in charge when there was a billion
dollar boondoggle, and this year she has to explain why there is
a $651 million bungle.
In 1996 the EI program had an error rate of 4% and last year
under the minister's leadership the error rate jumped to 6.6%.
That amounts to $651 million.
Could the minister explain why under her management the number
of mistakes made is growing at such an astonishing rate?
1435
Hon. Jane Stewart (Minister of Human Resources Development,
Lib.): Mr. Speaker, this is the first time I have had the
opportunity to congratulate the hon. member on her new role as
critic to the department. I hope she has as much fun with the
files as I have had.
She will be interested to know that in the department we have a
94% success rate in processing employment insurance claims. That
is not good enough. We want to be 100% on the money, and that
means working with employers, employees and staff in the
department. We will continue to work in that regard.
Ms. Val Meredith (South Surrey—White Rock—Langley,
Canadian Alliance): Mr. Speaker, contrary to rumour, I do
have a compassionate soul.
Last year's comprehensive tracking system report for employment
insurance stated that the most likely value of incorrect benefit
payouts was $651 million, or 6.6% of all benefits paid.
The 6.6% rate of error is more than 1.5 times worse than the
historical rate of 4%. Could the minister explain why Canadians
should trust her to manage their tax dollars?
Hon. Jane Stewart (Minister of Human Resources Development,
Lib.): Mr. Speaker, again let us be clear that 94% of the $9
billion in employment insurance benefits are paid correctly.
The hon. member will understand that this is a partnership with
employers and employees. There have been significant changes in
the Employment Insurance Act since 1996. We are working together
to ensure that benefits are paid accurately and on time because
they are important to the lives of Canadians.
* * *
[Translation]
INTERNATIONAL TRADE
Mr. Pierre Paquette (Joliette, BQ): Mr. Speaker, the Prime
Minister has indicated in the House that there has been
opposition from other countries about their negotiating position
relating to the free trade zone of the Americas being made
public. They have a right to that, but the population of Canada
and Quebec has the right to know what is being negotiated.
Does the government commit to making public the working texts of
the nine sectorial negotiating groups in order to ensure that
there is true public debate? Let us be clear.
We do not want to know what the others' positions are, nor the
Canadian position, just what is on the table, what is going to
be negotiated.
Hon. Don Boudria (Leader of the Government in the House of
Commons, Lib.): Mr. Speaker, in recent days, the hon. member has
raised a number of questions in the House on this matter.
He is surely aware that I have, on behalf of the government,
made the offer of an information session for all MPs and for
each caucus separately, so that they will be properly informed
on this matter.
Mr. Pierre Paquette (Joliette, BQ): Mr. Speaker, I do not think
we understand each other properly here. I am not talking about
a briefing session. We want to know the contents of the basic
text on which they will be negotiating.
We remember how Canada nearly got us into signing an agreement
like the multilateral agreement on investment, which everyone
now considers a disaster.
Will the government make a commitment that no agreement will be
ratified as part of the free trade zone of the Americas
negotiations without a debate and vote in this House?
Hon. Herb Gray (Deputy Prime Minister, Lib.): Mr. Speaker, we
have made our position available on the Internet. It is a
public position. Obviously, the Bloc Quebecois does not have
the same position as its Parti Quebecois masters in Quebec, who
obviously want to participate fully in these negotiations and
are in favour of such an agreement. This is a major difference
of opinion.
* * *
[English]
GUN CONTROL
Mr. Garry Breitkreuz (Yorkton—Melville, Canadian
Alliance): Mr. Speaker, the registering and licensing of
firearms has been so badly bungled by the justice department that
the government is now trying to privatize the mess.
The system is riddled with errors. Even the government's own
privacy commissioner has raised numerous concerns and last week
said that it may be necessary to have an official review of the
whole firearms system.
Is privatization an attempt by the justice minister to distance
herself and the government from this huge mess so that they will
not have to answer questions and be directly accountable?
Hon. Anne McLellan (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, yet again the member for
Yorkton—Melville has it all wrong.
We are not privatizing the firearms licensing and registration
system. Let me reassure the hon. member that the government, and
in particular the Minister of Justice, will remain fully
accountable and responsible for this program.
1440
Mr. Garry Breitkreuz (Yorkton—Melville, Canadian
Alliance): Mr. Speaker, despite what the minister says, it is
on the Internet.
A week ago the minister claimed the registry was a phenomenal
success. Now she is privatizing it because of “fiscal and
operational” concerns. Private information in the gun registry
will be used as evidence in court and would result in SWAT teams
being mobilized.
The gun registry is already infamous for its mistakes. Who will
be liable for the mistakes made by a private company running the
registry?
Hon. Herb Gray (Deputy Prime Minister, Lib.): Mr.
Speaker, although the member's assertion about privatization is
inaccurate, it is very interesting that the Alliance Party is in
desperation now opposing privatization.
What will it be abandoning next? I thought it was in favour of
privatization, even though this is not our position with respect
to the gun control system.
* * *
AUTOMOBILE INDUSTRY
Mr. Sarkis Assadourian (Brampton Centre, Lib.): Mr.
Speaker, my question is for the Minister of Industry. Recently
DaimlerChrysler announced the elimination of the entire
production shift at its Brampton plant.
Will the minister please inform the House on the steps the
federal government is taking to assist the automobile industry,
in particular those affected in my riding of Brampton Centre?
Hon. Brian Tobin (Minister of Industry, Lib.): Mr.
Speaker, I thank the member for Brampton Centre for his question.
Indeed he has been most concerned about the decisions announced
by DaimlerChrysler.
I want to inform him, regarding the DaimlerChrysler Bramalea
assembly plant in Brampton, that the job reductions there are a
result of a move to two shifts from the current three.
I have had discussions with the president of DaimlerChrysler
Canada and the CAW. We have been in close contact with the
province of Ontario. We will do everything in our power, that is
all the affected departments, labour, HRDC and others, to ensure
that these reductions and the impact on workers are kept to a
minimum.
* * *
FOREIGN AFFAIRS
Mr. Bill Blaikie (Winnipeg—Transcona, NDP): Mr. Speaker,
my question is for the Minister of Foreign Affairs. Only the
Minister of Foreign Affairs could tell the House whether or not
the government intends to follow up on what the Prime Minister
has been saying in China by co-sponsoring a resolution at the
upcoming meeting of the UN commission on human rights.
Could the minister tell the House whether or not it is the
intention of the government to co-sponsor such a resolution?
Hon. John Manley (Minister of Foreign Affairs, Lib.): Mr.
Speaker, the meeting lies well out into the future. We still do
not have any proposed text or language.
As is always the case, before we make a decision on whether or
not we would co-sponsor, we would want to look at the language
that is proposed and decide whether it meets the objectives that
Canada would want to pursue.
Mr. Bill Blaikie (Winnipeg—Transcona, NDP): Mr.
Speaker, I must say that is a pretty timid response when we
consider the way the government is prepared to stand up to
Brazil. Perhaps, if we could get China to do something to
Bombardier, we would have a whole different foreign policy.
While I am talking about big corporations, I notice that CIDA
has given a grant of $280,000 to Monsanto for a project in China.
Is the minister responsible aware of this, and does she approve
of this kind of corporate welfare?
Hon. Maria Minna (Minister for International Cooperation,
Lib.): Mr. Speaker, China had already approved the use of Bt
cotton in the country. China asked Canada to provide Canadian
know-how and expertise to ensure the appropriate use and
management of this crop.
The project is consistent with Canada's biotechnology
guidelines. We adhere to them 100%. CIDA did not provide money
directly to Monsanto.
* * *
AGRICULTURE
Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Speaker, my
question is for the Minister of Agriculture and Agri-Food.
The decision to ban the beef in Brazil, was it done through the
minister's office in CFIA or was the direction given only by the
Minister of Industry?
Hon. Lyle Vanclief (Minister of Agriculture and Agri-Food,
Lib.): Mr. Speaker, as officials in the CFIA outlined very
clearly in a technical briefing on Friday in this building, the
recommendation comes from the Canadian Food Inspection Agency.
As minister, I was certainly informed of that recommendation,
but the recommendation came from the Canadian Food Inspection
Agency for the banning of the importation. The recommendation to
recall product comes, as it should and always does, from the
Ministry of Health.
Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Speaker,
the Minister of Agriculture and Agri-Food sat back and watched
agriculture being destroyed. Now he is opening the doors so that
other countries can follow the same rules as Canada, not based on
science but based on politics.
Why is the minister standing here right now and suggesting that
other countries should not follow the same rules that he set for
banning Canadian exports?
1445
Hon. Lyle Vanclief (Minister of Agriculture and Agri-Food,
Lib.): Mr. Speaker, I find it absolutely appalling that the
hon. member stands in his place and says that it is not the role
and duty of the government to protect the food safety of the
people in Canada.
This is a decision on food safety and has absolutely nothing to
do with trade. Again, I am very disappointed that the hon.
member says over there and says the decision should be something
else.
* * *
CORRECTIONAL SERVICE CANADA
Mr. Larry Spencer (Regina—Lumsden—Lake Centre, Canadian
Alliance): Mr. Speaker, yesterday it was reported that
Canada's federal prison staff may resort to job action or
lawsuits after a top down decision by Correctional Service
Canada. The decision will subject guards to more frequent
security searches than the convicts.
We are all for a zero tolerance policy on drugs in our federal
prisons, but could the solicitor general explain why his war on
drugs is focused more on honest, law-abiding staff than on the
convicted criminals they guard?
Hon. Lawrence MacAulay (Solicitor General of Canada,
Lib.): Mr. Speaker, this is a security measure which helps
the staff of Correctional Service Canada. Quite simply, if they
are under pressure to bring drugs into an institution, and the
prisoners and the staff know they will be searched on the way in,
it makes common sense that they would not be asked to bring them
in.
What we want is drugs kept out of our prison system, and that is
what we will do.
Mr. Larry Spencer (Regina—Lumsden—Lake Centre, Canadian
Alliance): Mr. Speaker, we know what the government's on the
fly approach has resulted in before. Last week we saw the
heating rebate fiasco result in countless prisoners receiving
heating rebate cheques after the government proceeded with haste
before the election.
Once again the government has proceeded with haste. It has
ignored its promise to consult with the Union of Solicitor
General Employees before coming to any decision regarding daily
searches of prison guards. Why has the solicitor general chosen
to ignore his promise to consult with the union?
Hon. Lawrence MacAulay (Solicitor General of Canada,
Lib.): Mr. Speaker, there are always measures taken by
Correctional Service Canada.
When I became the solicitor general I indicated that I wanted to
stop the movement of drugs into our penal institutions. That is
what we will do.
* * *
[Translation]
REPRODUCTIVE TECHNOLOGIES
Ms. Pauline Picard (Drummond, BQ): Mr. Speaker, recent
scientific breakthroughs in discovering the code of the human
genome point to a world of science in feverish activity.
While the Baird report on this issue dates from 1993, and
although we have asked the government on a number of occasions
to give us its position on these fundamental issues, nothing has
been forthcoming.
When will the government finally assume its responsibilities and
introduce proper legislation before it is too late?
Hon. Herb Gray (Deputy Prime Minister, Lib.): Mr. Speaker, the
hon. member has raised a very interesting question, but one that
requires a detailed answer. I will therefore take it under
consideration.
Ms. Pauline Picard (Drummond, BQ): Mr. Speaker, with its
irresponsibility and its inexplicable lethargy in dealing with
the matter of cloning, is the government waiting for businesses
operating in this sector to set up here simply because there is
no regulation?
[English]
Hon. Brian Tobin (Minister of Industry, Lib.): Mr.
Speaker, as the member knows, the government has established the
Canadian biotechnology advisory committee. It is a committee of
independent experts to advise it on policy matters related to
biotechnology in all these questions.
This spring CBAC will be consulting with Canadians across the
country on all of the matters that have been raised and will
report back to government. In due course government will decide
on the next steps.
* * *
FISHERIES
Mr. John Cummins (Delta—South Richmond, Canadian
Alliance): Mr. Speaker, on Friday the Minister of Fisheries
and Oceans announced a plan which will result in the buyout of
20% of maritime fishermen.
Privately the minister has stated that the government is
prepared to spend almost $500 million on his plan, which will gut
fishing communities in the maritime provinces. The minister
claims that this destructive policy is the government's necessary
response to the Marshall decision. Will the minister table the
government's legal opinion that obliges him to proceed with this
destructive and divisive plan?
1450
Hon. Herb Dhaliwal (Minister of Fisheries and Oceans,
Lib.): Mr. Speaker, once again the hon. member has his facts
all wrong. On Friday the Minister of Indian Affairs and Northern
Development and I put forward a long term plan to deal with the
Marshall decision.
We are on a two track system. The Minister of Indian Affairs
and Northern Development is looking at the broader issues of
aboriginal rights and treaty rights. As Minister of Fisheries
and Oceans I am continuing the good work that we did last year in
building agreement and providing entrance into the fishery by the
aboriginal community as asked by the Marshall decision.
We are responding. It was very successful last year and we will
continue to do so.
Mr. John Cummins (Delta—South Richmond, Canadian
Alliance): Mr. Speaker, the supreme court has stated that the
purpose of recognizing aboriginal rights was to reconcile
aboriginal and non-aboriginal communities. The government's
response to the Marshall decision has failed miserably on this
point.
We have obtained documents under access to information which
show that the Prime Minister received advice on the Marshall
decision from the Privy Council, contrary to what we hear from
the minister.
How does the minister explain away this contradiction? Will he
table the legal opinion on which his policy is based?
Hon. Herb Dhaliwal (Minister of Fisheries and Oceans,
Lib.): Mr. Speaker, I was before the fisheries committee of
which the hon. member is a member. We clearly pointed out what
the legal position of the government was in terms of
interpretation of the Marshall decision.
The Marshall decision clearly said that there is a right to fish
commercially. We are responding to the decision and will
continue to do so.
Last year, when the opposition member was saying it could not
work, we had 30 signed agreements. We had aboriginal people
earning a livelihood and participating in the fishery. It has
worked very well. We will continue. We have a long term plan.
Unfortunately they do not have a plan.
* * *
ATLANTIC CANADA OPPORTUNITIES AGENCY
Mr. Rodger Cuzner (Bras d'Or—Cape Breton, Lib.): Mr.
Speaker, in my riding of Bras d'Or—Cape Breton, and indeed
throughout all of Cape Breton, we see evidence of good work being
done by the Atlantic Canada Opportunities Agency and its sister
agency of Enterprise Cape Breton Corporation. However the
official opposition has stated that regional development agencies
such as ACOA will be abolished.
My question is for the minister of state responsible for ACOA.
Given the recent tabling of ACOA's departmental performance
report and the auditor general's report, could the minister tell
the House about ACOA's effectiveness throughout Atlantic Canada?
Hon. Robert Thibault (Minister of State (Atlantic Canada
Opportunities Agency), Lib.): Mr. Speaker, let me
congratulate the hon. member for Bras d'Or—Cape Breton on his
election to the House. I thank him for his first question. It
is good to hear a good question from across the aisle.
The performance report summarizes the broad scope of ACOA's
impact in Atlantic Canada. ACOA has met or exceeded its targets
in terms of job creation, loans to rural businesses and
assistance to new exporters.
The five year survival rate of ACOA clients is two and a half
times better than that of other Atlantic firms. In addition,
employee payrolls of ACOA clients continue—
The Speaker: The hon. member for Wild Rose.
* * *
FOREIGN AFFAIRS
Mr. Myron Thompson (Wild Rose, Canadian Alliance): Mr.
Speaker, when I raised a question of whether the immigration
minister likely briefed Fhang Wei, a high ranking government
official who had been indicted by the U.S. for people smuggling,
the government House leader said this had been proven to be
unsubstantiated.
The RCMP did not investigate this matter. The CIC says it did
not. Could I ask the House leader who in the dickens investigated
this?
Hon. Lawrence MacAulay (Solicitor General of Canada,
Lib.): Mr. Speaker, when the RCMP receives a complaint it
evaluates the situation and decides if an investigation should or
should not take place. It evaluates the information that is
given to it. Obviously in this case it did not investigate.
Mr. Myron Thompson (Wild Rose, Canadian Alliance): Mr.
Speaker, obviously the RCMP was at this meeting. I do not think
it was there to carry the ministers bags.
They must know who was at the meeting. They must have a list of
who was at the meeting. I would suggest that the minister
provide the House with a list of attendants because national
security is at risk when these kinds of things happen. I find it
amazing that it is not being investigated.
When it is national security, a crime against all of Canada, why
would they ignore it?
1455
Hon. Elinor Caplan (Minister of Citizenship and Immigration,
Lib.): Mr. Speaker, I inform the member opposite that Colin
Walker of the RCMP was present on the trip. A spot was offered
to my critic. Unfortunately the Alliance member chose not to
attend.
He should leave his conspiracy theories at the door. This is
the House of Commons, not the X-Files.
* * *
[Translation]
INDIAN AFFAIRS
Mr. Richard Marceau (Charlesbourg—Jacques-Cartier, BQ): Mr.
Speaker, five years ago, the Royal Commission on Aboriginal
Peoples, struck at a cost of $50 million, tabled a well received
report. Since then, the government has been dragging its feet
and refusing to act on it.
The native peoples have had enough empty promises and want
specific action to meet their desperate needs.
Can the Minister of Indian Affairs and Northern Development tell
us today which recommendations by the Erasmus-Dussault commission
he intends to implement in this session?
[English]
Hon. Robert Nault (Minister of Indian Affairs and Northern
Development, Lib.): Mr. Speaker, in my 30 seconds I do not
think I could explain to the hon. member all the things the
Government of Canada has done as it relates to the royal
commission.
If the member would allow us to brief him, we would give him the
explanation of what “Gathering Strength” has done for first nation
people and where we are going in the future.
* * *
FOREIGN AFFAIRS
Ms. Jean Augustine (Etobicoke—Lakeshore, Lib.): Mr.
Speaker, Canadians have expressed concern about the situation in
Sudan. It is one year since the special adviser to DFAIT, Mr.
Harker, submitted his report.
Could the Secretary of State for Africa tell us what Canada's
position has been in response to Mr. Harker's report?
Hon. David Kilgour (Secretary of State (Latin America and
Africa), Lib.): Mr. Speaker, since the Harker report the
government has done a number of things, including opening an
office of the Canadian embassy in Khartoum with the mandate to
promote the peace process in human rights. Second, it appointed
Lois Wilson as our special envoy to the Sudan peace process.
Third, we expect Talisman Energy to avoid becoming involved in
actions that result in more suffering for civilians.
Much more shrieks to be done in the conflict that has been going
on now for almost 45 years. The suffering by civilians and
children is simply beyond belief.
* * *
TRADE
Mr. Gary Lunn (Saanich—Gulf Islands, Canadian Alliance):
Mr. Speaker, earlier today the Minister of Foreign Affairs
suggested that we should look at our trade policy with respect to
human rights before we start questioning the government.
I would like to quote the Canadian Alliance policy which says
“We will not provide foreign aid to governments with a record of
human rights violations”. Which part of that quote does the
Minister of Foreign Affairs not agree with?
Hon. Herb Gray (Deputy Prime Minister, Lib.): Mr.
Speaker, the hon. member should listen to what he is saying. When
he read from his policy he talked about foreign aid. What is the
position on trade? Does he want to tell western Canadians that
we should not sell wheat and other grains to China?
We are able to pursue human rights and trade at the same time.
The Prime Minister is leading a vigorous dialogue in support of
human rights in China and will continue to do so during his trip.
He will also pursue the interest of western Canadians and all
Canadians in more trade with China.
* * *
[Translation]
PETROLEUM PRODUCT PRICES
Mr. Pierre Brien (Témiscamingue, BQ): Mr. Speaker, earlier,
the Minister of Industry did not seem to know it was his
department that asked the conference board to conduct an
investigation into the oil industry. The preliminary version of
that report has been circulating since October.
Does the minister have the final report of the Conference Board?
[English]
Hon. Brian Tobin (Minister of Industry, Lib.): Mr.
Speaker, I thank the hon. gentleman for his question and inform
him that the conference board is concluding its work with respect
to the particular question. I expect the report will be made
public in the days if not weeks ahead.
* * *
HEALTH
Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Mr.
Speaker, the auditor general clearly said that we do not have
enough good scientists in the government today. It is certainly
clear that we should not be trying to gag the ones we have.
My question is for the Minister of Health. Why does he attack
employees who are trying to protect the public? Will he instead
concentrate on building a fail-safe system of dealing with the
potential mad cow disease here rather than grandstanding
elsewhere?
1500
Hon. Herb Gray (Deputy Prime Minister, Lib.): Mr.
Speaker, the hon. member is mistaken in her choice of language.
As I understand it, the officials in question were not working in
the branch that responded to the recommendation of the food
inspection agency on banning beef from Brazil.
They had no direct connection or responsibility in the area. I
think it is quite proper for questions to be asked of them by
their superiors as to why they were taking a position on some
matter for which they were not responsible.
In that connection, I repeat, the officials in the Canadian Food
Inspection Agency found that there was a case for banning the
import of that beef. They recommended that to the minister.
The Speaker: Hon. members, with their enthusiasm for
short questions and short answers, has allowed us to get more in
than usual, in fact more than any other so far.
* * *
PRESENCE IN GALLERY
The Speaker: I draw the attention of hon. members to
the presence in the gallery of the Honourable Mike Farnsworth,
Minister of Social Development and Economic Security of the
province of British Columbia.
Some hon. members: Hear, hear.
ROUTINE PROCEEDINGS
[English]
NATIONAL DEFENCE ACT
Mr. Inky Mark (Dauphin—Swan River, Canadian Alliance)
moved for leave to introduce Bill C-259, an act to amend the
National Defence Act (Snowbirds).
He said: Mr. Speaker, I am pleased to reintroduce my private
member's bill from the last session which amends the National
Defence Act to protect the Snowbirds. I thank the member for
Kootenay—Boundary—Okanagan for his support in seconding my
private member's bill.
Canadians across the country perceive our Snowbirds as a
Canadian icon. They thrill millions of people throughout North
America annually. Unfortunately their future is unsure and is
certainly not protected. The only way we could protect this
national icon is to amend the National Defence Act so that the
Snowbirds are entrenched in the act itself. This is exactly what
my private member's bill calls for.
I ask all members of the House and all Canadians to support it.
(Motions deemed adopted, bill read the first time and
printed)
* * *
HOLIDAYS ACT
Mr. Inky Mark (Dauphin—Swan River, Canadian Alliance)
moved for leave to introduce Bill C-260, an act to amend the
Holidays Act (National Heritage Day) and to make consequential
amendments to other acts.
He said: Mr. Speaker, I thank the member for
Kootenay—Boundary—Okanagan for supporting my private member's
bill to make a day in February a national statutory holiday.
Members of the House and Canadians know that February is the
only month of the year in which we do not have a statutory
holiday. Heritage is already celebrated in February, so it only
makes sense that Canadians deem heritage day a statutory holiday.
1505
Canadians have found new interest over the last decade in the
heritage of the country. My private member's bill calls for the
government to amend the Holidays Act to include the heritage day
statutory holiday. I ask all members to support the bill.
(Motions deemed adopted, bill read the first time and
printed)
* * *
PATIENTS' BILL OF RIGHTS
Mr. Greg Thompson (New Brunswick Southwest, PC) moved for
leave to introduce Bill C-261, an act to establish the rights of
patients in relation to health, treatment and records.
He said: Mr. Speaker, it is a pleasure to introduce the
patients bill of rights. The purpose of the bill is to establish
the rights of Canadians to consistent quality health care
services across Canada, personal rights respecting the receipt of
health care services, and the corresponding responsibilities of
patients in dealing with health professionals.
The Minister of Health would be required to seek the commitment
of the provinces to adopt and protect these rights and
responsibilities. Full fiscal transfers are dependent on
provinces agreeing to the principles embodied in this enactment.
What better time is there to talk about health care than
following an election where it was the number one topic.
Hopefully the bill will go a long way toward resolving some of
our health care issues.
(Motions deemed adopted, bill read the first time and
printed)
* * *
FISHERS' BILL OF RIGHTS
Mr. Greg Thompson (New Brunswick Southwest, PC) moved for
leave to introduce Bill C-262, an act to establish the rights of
fishers including the right to be involved in the process of
fisheries stock assessment, fish conservation, setting of fishing
quotas, fishing licensing and the public right to fish and
establish the right of fishers to be informed of decisions
affecting fishing as a livelihood in advance and the right to
compensation if other rights are abrogated unfairly.
He said: Mr. Speaker, the bill was introduced in the last
parliament and was a votable bill. It enjoyed support from both
sides of the House. Unfortunately the government could not see
fit to support it as strongly as members on this side of the
House. Nonetheless, it encouraged a lot of debate on the topic
of fish and fishermen's rights. I know that technically this is
called the fishers' bill of rights. However, being from the old
school, I still call them fishermen.
This is a bill to establish the rights of fishers, including the
right to be involved in the process of fisheries stock
assessment, fish conservation, setting of fish quotas, fishing
licensing and the public right to fish. It establishes the right
of fishers to be informed of decisions affecting fishing as a
livelihood in advance, and the right to compensation if other
rights are abrogated unfairly.
Given one of the position papers just brought down by the
government with regard to fishermen, I am sure we will enjoy more
support on that side of the House.
(Motions deemed adopted, bill read the first time and
printed)
* * *
NATIONAL AGRICULTURE INDUSTRY RELIEF COORDINATION ACT
Mr. Rick Borotsik (Brandon—Souris, PC) moved for leave to
introduce Bill C-263, an act to establish a national committee to
develop policies and procedures to ensure co-ordination in the
delivery of programs by governments in the case of agricultural
losses or disasters created by weather, pests, shortages of goods
or services or market conditions, and the co-ordination of the
delivery of information, assistance, relief and compensation, and
to study the compliance of such programs with World Trade
Organization requirements.
He said: Mr. Speaker, we have had the patients' bill of rights
and the fishers' bill of rights. I suppose I could call this the
farmers' bill of rights.
This is the reintroduction of a private member's bill that would
like to put into place a consistent program that would be able to
develop a long term strategy for agriculture and support systems.
This is in fact a desperate need right now and I look forward to
being able to debate this on the floor of the House.
1510
(Motions deemed adopted, bill read the first time and
printed)
* * *
PARLIAMENT OF CANADA ACT
Mrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.)
moved that Bill S-10, an act to amend the Parliament of Canada
Act (Parliamentary Poet Laureate), be read the first time.
(Motion agreed to and bill read the first time)
* * *
[Translation]
PETITIONS
MR. ARTHUR KABUNDA
Mr. Yvon Godin (Acadie—Bathurst, NDP): Mr. Speaker, I wish to
present a petition signed by more than 300 people from my riding.
The petitioners point out that, on December 29, 2000, Arthur
Kabunda, a student at Bathurst Community College, in New
Brunswick, met with a tragic death during a trip to his native
country of Burundi. He was killed, along with about 20 other
fellow countrymen, by a group of rebels.
The petitioners wish to express their indignation and their
dismay at such barbaric actions and hope that some day this
violence will stop. They also wish to express their solidarity to
the people of Burundi and to all the other nations suffering the
horrors of war.
Consequently, the petitioners are asking parliament to
officially convey to the family and friends of Arthur Kabunda its
condolences on behalf of all Canadians, and to publicly condemn
such acts of violence.
[English]
CRIMINAL CODE
Mr. Jim Gouk (Kootenay—Boundary—Okanagan, Canadian
Alliance): Mr. Speaker, I have three petitions today.
The first petition is from a group of constituents who are
opposed to corporal or physical punishment. They feel that it
leads to actual child abuse and to a possible increase in
criminal activity. They consequently ask for the government to
repeal section 743 of the criminal code.
HEALTH CARE
Mr. Jim Gouk (Kootenay—Boundary—Okanagan, Canadian
Alliance): Mr. Speaker, my second petition is from a group of
people concerned about the lack of housing and care facilities
for the elderly. They call upon the government to provide
measures for one time infrastructure funding to revitalize health
care facilities and provide resources for innovative and creative
ways to address the needs in the most economic and efficient way.
PALLIATIVE CARE
Mr. Jim Gouk (Kootenay—Boundary—Okanagan, Canadian
Alliance): Mr. Speaker, the third petition actually contains
approximately 10,000 signatures from the west coast of British
Columbia right through to Atlantic Canada, although it originated
from a group of very conscientious volunteers in my riding.
The petitioners are concerned about the lack of palliative care,
the care for those who are dying. They call upon parliament to
collaborate with the provinces to provide funding to provide for
home care and pharmacare for the dying. They also request
collaboration with them for appropriate education and training
for all members of end of life teams, for the provision of
financial assistance and job protection for family members who
provide care for the dying as recommended in the Carstairs
report. This petition has 10,000 signatures and more will
follow.
EMPLOYMENT INSURANCE
Mr. Greg Thompson (New Brunswick Southwest, PC): Mr.
Speaker, thank you again for recognizing this poor little corner
of the House. You have been more than generous today.
This petition, pursuant to Standing Order 36, petitions the
House as follows. The petitioners draw the attention of the
House of Commons to the following: that the two week waiting
period for employment insurance benefits is causing undue
financial hardship for many families; and that the two week
waiting period system means families must wait four weeks before
obtaining their first employment insurance benefit.
1515
Therefore the petitioners call upon parliament to revise the
employment insurance regulations to remove the two week waiting
period.
Just to summarize, the two week waiting period to us does not
mean a lot, but people earning minimum wage it means a lowly $120
a week benefit. It puts their family in a very difficult set of
circumstances in terms of waiting periods. In other words, they
cannot afford to buy groceries or heat the house, so we are
calling upon parliament to do something about it.
The Speaker: The hon. member for New Brunswick Southwest,
despite his protestations about this corner of the House and so
on, is an experienced member. He would know beyond most of us
that reading petitions is not on. Indeed he should give a
summary as he did at the end.
I heard him reading. I know he knows that is against the rules.
I know in future he would not want to set a bad example for the
newer members of the House and would want to comply with the
rules in every respect and give a summary instead of reading his
petitions.
* * *
QUESTIONS ON THE ORDER PAPER
Mr. Derek Lee (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.): Mr. Speaker, I ask
that all questions be allowed to stand.
The Speaker: Is that agreed?
Some hon. members: Agreed.
* * *
REQUEST FOR EMERGENCY DEBATE
AGRICULTURE
The Speaker: The Chair has an application for an
emergency debate from the hon. member for Brandon—Souris.
Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Speaker,
once again I would like to put forward to you in your good graces
the opportunity under Standing Order 52 to entertain an emergency
debate in the House with respect to what is happening in
agriculture today.
Unfortunately no programs have come forward recently from the
government side of the House that would allay some of the
problems with respect to the financial difficulties and the
urgency that farmers face, programs that they are calling for now
for spring seeding.
I would simply like to have an opportunity, not only for our
party but for other parties in the House, to put forward their
views on how the situation could best be resolved.
Under your good graces, Mr. Speaker, I do wish that we could
have an open debate, an honest emergency debate on this very
crucial issue.
SPEAKER'S RULING
The Speaker: The Chair has considered the request of
the hon. member for Brandon—Souris very carefully and is
satisfied that the request appears to meet the exigencies of the
standing order.
Accordingly I am disposed to permit a debate under Standing
Order 52 on the question of agricultural policy as raised by the
hon. member.
However, in considering it, the Chair has certain options
available to it. One is to defer the debate for a further time.
I am inclined to do that until tomorrow evening. That gives the
Chair additional latitude in that instead of starting the debate
at 8 o'clock, it could start at the conclusion of the votes that
are scheduled for tomorrow evening at the time of adjournment.
Accordingly I propose that the debate will start at that time
and will continue to no later than the hour provided in the
standing orders, namely midnight. There will be a debate on this
subject for all hon. members.
GOVERNMENT ORDERS
[English]
FINANCIAL CONSUMER AGENCY OF CANADA ACT
The House resumed consideration of the motion that Bill C-8, an
act to establish the Financial Consumer Agency of Canada, and to
amend certain acts in relation to financial institutions, be read
the second time and referred to a committee.
Mr. Ken Epp (Elk Island, Canadian Alliance): Mr. Speaker,
I am delighted to continue my speech, which I began before
question period today.
I also thank you, Mr. Speaker, for giving us the privilege of
debating the issue of agriculture. I commend the member from the
Progressive Conservative Party for once again raising that issue.
It is an issue which is very important to all of us who are
representing ridings that have a fair number of farmers in them.
We look forward to that debate tomorrow evening.
To continue with our debate on Bill C-8, the act to establish
the financial consumer agency of Canada, before we were
interrupted I was talking about some of the issues that are dealt
with in the bill. As I indicated, we are mostly interested in
supporting the bill. It is a bill that is long overdue. If
anything, we should probably chastise the Liberal government for
not acting more quickly.
1520
One of the things in the bill that I consider to be very
important is that it does provide for more competition. I have
observed over the years that not only myself personally but many
of my friends and, since I became a member of parliament, a
number of my constituents, appreciate having a choice.
We have had quite a bit of discussion about airlines lately,
about the fact that with less competition we seem to be getting
lower service levels from Air Canada. It would be wonderful if
we had a very strong, viable competitor, because that would mean
we would then get better service as consumers.
The same thing is true in the banking industry. It has happened
to me more than once in my life that I have been displeased with
the way I was mistreated by the banks on certain particular
issues. I had, in every instance, the option of saying to that
bank “I am out of here, you are done” and saying that I was not
accepting its low level of service and the way it treated me. I
did that. I will not mention the specific banks. I have dealt
with several. I have always appreciated the opportunity to go to
a competitor.
It just so happens that I have now been a member of the credit
union in my community for a large number of years. I should not
use this venue to advertise for the credit unions, but I am glad
that this legislation will provide a greater ability for credit
unions to offer good competition to the banks. I have found the
credit unions very responsive to the needs of their members. That
is because instead of being owned by big investors somewhere,
they are actually owned by the people who bank there. We have
membership meetings. We have shareholders' meetings, and we can
go to them, listen to the reports and put forward motions. We can
make suggestions to the board of directors, which usually tries
to respond to them. Sometimes, of course, they cannot because of
various restrictions being put on them.
I like the fact that in Bill C-8 there is more opportunity for
competition. The rules for starting up new banks have been made
more favourable. The requirement that a group now needs to have
only $5 billion capital in order to start up, as opposed to the
previous $10 billion, is a good forward move. There is a
reduction in the requirement to have 75% of the board of
directors be Canadian. That is reduced to 66%. That is a good
move because it permits people from other countries to
participate as well in establishing competitive banks in this
country. I believe that can only help our own domestic banks to
provide better service.
There is also, of course, a better and a more transparent
process for merging existing banks. We support in general the
legislation that is being proposed on that account.
There is also an improvement to consumer protection in the bill.
One of the things we struggle with as members of parliament is
what happens when a constituent comes to our office with a
complaint against a specific bank. There are some cases that are
very difficult to deal with. There are some that are impossible
as they are legal matters and we cannot deal with them.
Sometimes we find that just being able to show support for the
person to the bank or the banking ombudsman helps to get these
problems solved.
The new legislation in Bill C-8 requires that all banks and
financial institutions have in place complaint procedures. In
other words, they cannot just do this on an ad hoc basis. They
must actually come up with a formal procedure for dealing with
complaints, which must be reported to the Office of the
Superintendent of Financial Institutions and is subject to
review.
There is a very good consumer protection change in the bill
which has to do with the Canada deposit insurance. Until this
bill is passed, banks are required to hold insurable deposits.
That is now being changed so that the banks themselves will be
insured institutions, so I believe that in general there is
greater protection for consumers and for depositors.
1525
There is also better access to the access to payments system.
This is a great improvement. There are a lot of financial
institutions that are not banks but transfer great amounts of
money to Canadian citizens, for example, investment firms, life
insurance firms and so on. With their ability to access the
payments system there is better service for consumers at a lower
cost, because it basically cuts out one of the middlemen in the
transaction. Giving access to the insurance companies, trust
companies and others means that they can actually set it up so
that they can transfer money directly into recipients' accounts,
on an annuity, for example, without having to go through the
bank, thereby saving money. It should be a more reliable and
efficient service. We support that move.
Insurance companies are a vital part of our financial base in
the country. They are important. They are one of the pillars of
the financial structure. I am sure that essentially everyone in
the House and, I would hope, everyone listening on TV or hearing
this later on, will take the time to make sure that they have
insurance in place. It is a very important thing to protect
families and others. Here again, Bill C-8 provides for a more
equitable system for establishing new insurance companies. There
are lower capital requirements, which hopefully will increase the
amount of competition and thereby improve service for Canadians.
Finally, there are some other protections for consumers in the
Office of the Superintendent of Financial Institutions.
All in all, this bill is worthy of our support. We should
probably make sure that it gets to the finance committee as
quickly as possible. Hopefully, interested people who have
identified some amendments they would like to see included in
this 900 page document will appear before the committee and show
us, chapter and verse, what needs to be amended. We as a
committee will then consider that and hopefully the outcome will
be a new structuring of financial institutions in Canada, which
will make them strong in the long run, give us great financial
stability in the country and make us a major competitor in world
markets.
Mr. Peter Stoffer (Sackville—Musquodoboit Valley—Eastern
Shore, NDP): Madam Speaker, when the hon. member started his
speech prior to question period he mentioned the thickness of the
bill and its 900 pages. I am wondering if he could elaborate how
his party or parliament should break down this 900 pages so that
it is easily explainable to the people of Canada because, as we
know, the bill covers over 4,000 statutes. It
changes literally everything that we do in parliament when it
comes to financial concerns. I am wondering whether he has an
easier solution to how we explain this to Canadians so that
everyone in the country can understand exactly what is happening
with this very important legislation.
Mr. Ken Epp: Madam Speaker, it is very difficult to
compress into 2 or 3 pages what is contained in 900. It is true
that a lot of it is technical and in great detail. Some of the
concepts in the bill can be expressed in a sentence or two. I
think that what we need to do is make sure that consumers,
customers of the banks, ordinary citizens, are aware of the
avenues they can use if they have a complaint.
They should also have full access to the ombudsman's office. I
would recommend that banks put into their offices signs, phone
numbers and addresses of websites people can visit for more
information, or to find relief for their complaints if they have
complaints, or where they can offer suggestions for better
service from their banks.
1530
We must also remember that banks right now are competitive. It
is not in their interest to do things that would send customers
to other banks, which, as I said in my speech, some banks have
done to me in my lifetime. It is usually in their interest to
keep their customers. We must rely to a great extent on the
banks themselves to communicate with their customers and to treat
them in a way that will keep them there.
As far as parliament is concerned, in communicating this to our
constituents the best we can do is to pick some of the
highlights, write a short summary, put it into our local papers
or into our householders and hopefully it will get through.
Mr. Peter Stoffer (Sackville—Musquodoboit Valley—Eastern
Shore, NDP): Madam Speaker, the hon. member stated that we
should rely on the banks to treat their customers properly. As
he probably knows, the Scotiabank recently gave out $500 to
$5,000 cheques to unsuspecting customers throughout the country.
These elderly citizens thought it was either a gift or a donation
from the bank, when in reality it was an unauthorized cash
advance on their Visa cards.
When the Scotiabank does something like that and when the
business editor, John MacLeod, of the Daily News mentions
his outrage at this, how can we honestly trust the banks to do
the right thing in all circumstances?
My question for the hon. member is, if the Scotiabank attempts
to get away with something like that on unsuspecting customers,
should there not be legislation in place to ensure that no bank
or major financial institution can get away with so-called
negative option billing or these so-called goodies out of
customers who are unsuspecting?
Mr. Ken Epp: Madam Speaker, one of the dilemmas
legislators face, of course, is to what degree they should pass
legislation to protect people from their own negligence. If I
get a cheque from someone, especially from a bank, I will read it
to see what the fine print says. We all know good and well that
there is no such thing as free money. That should be an alert
right there. I would think that the primary responsibility is
with the consumer in this case.
We do that in other areas. We cannot buy any other product
without the company presenting it in such a way that it will keep
our business.
If I were one of the people ripped off by the Scotiabank in that
way—and I would use that characterization of it—I would just go
to a different bank. I would tell the bank that I was done with
it, that I wanted my money back and that I was going elsewhere. I
know some people cannot do that because only one branch of the
bank is close to them and the next one is far away, so they have
limited options.
I would again say to the banks that if they do things like that
they are only inviting legislators, like the House of Commons, to
pass rules that restrict them in how they can advertise their
business. They need to use their heads. The other thing open to
consumers is a giant class action suit, after which the banks
would never repeat it again.
[Translation]
Ms. Pauline Picard (Drummond, BQ): Madam Speaker, as this is
my first speech in this new parliament, I want to congratulate
you on your appointment to the Chair. I also wish you the best of
luck.
I would like to take this opportunity to thank all my
constituents and assure them that I will always be available and
proud to represent them in parliament.
1535
On February 7, the Minister of Finance reintroduced his bill to
reform the financial services industry in Canada. Last spring's
Bill C-38, which died on the order paper when the fall election
was called, therefore became Bill C-8. Today, we are resuming
second reading of the bill where we left it off. This new
legislation, which will henceforth govern the financial services
industry, will probably be passed in June at the latest.
Bill C-8 introduces a number of new provisions, including one on
bank ownership.
First, under the proposed legislation, a single shareholder will
be able to own up to 20% of voting shares in one of the five
major Canadian banks. The ceiling is now 10%.
Second, single shareholders will be able to control smaller
banks with assets between $1 billion and $5 billion, such as the
National Bank and the Laurentian Bank in Quebec.
Third, businesses and individuals will also be able to create
their own banking institution.
Fourth, the new bill leaves the door open for major banks to
resort to mergers, something they have been doing for a very
long time. But the bill provides for public hearings at which
the institutions concerned would be required to defend the
merits of transactions for the common good.
I am pleased to speak to Bill C-8, an important bill introduced
in this new parliament. However, although I am in agreement
with the spirit of Bill C-8, I am surprised to see that the
changes we have been told about do not appear in the body of the
supposedly amended bill. These changes consist of guidelines.
This is where we have a problem.
Everyone is aware of the Bloc Quebecois' interest in amending
the legislation governing financial institutions. We
contributed to the debate by submitting a brief, because we
believe in the need for a legislative environment which helps to
increase the capacity of our financial institutions to deal with
global competition.
Foreign incursions into Canadian financial services markets are
already an undeniable reality.
In recent years, a number of foreign banks have established a
presence in certain areas, such as electronic banking, credit
cards, bank investment services and discount trading. In this
era of globalization, they are competing with Canadian banks on
their own turf.
As I have said, the Bloc Quebecois wholly subscribes to the
spirit of the new legislation and to a number of its provisions.
That said, certain problems we found during the last legislature
are still present in the new bill. Even if we note a considerable
change as far as the demands of the Bloc Quebecois and Mr. Landry
are concerned, the four points are not incorporated into the bill
but into the guidelines on the reclassification of former
schedule 1 banks with assets of under $5 billion.
I would like to tell the hon. members what the applicable
criteria are. These are: the safety and solidarity of the bank,
direct or indirect employment, location of the bank's
decision-making and administrative centre, consumer requirements,
the bank's business and activities, and the bank's future
prospects in a global context. These are the elements set out in
the guidelines, but not in the bill itself, which concerns us
somewhat.
Examination of the bill in its entirety also shows the frequency
of loopholes such as “the minister may, if he sees fit” or
“provisions of the act cease to apply if the minister should so
decide”.
1540
There is too much room for discretionary powers for a single
man, namely the Minister of Finance. Wherever there are
provisions on banks, insurance companies, trust companies, and
the financial sector as a whole, the minister reserves the right
to alone decide, from criteria known to him alone, whether an
operation is unacceptable or not. He defines certain concepts,
such as low-cost deposit accounts. It is unacceptable that this
discretionary power has such sway, more even than the law
itself.
In general terms, we would have preferred greater clarity in the
decision making process and greater detail on certain concepts,
such as low-cost deposits for the disadvantaged.
As regards consumer protection, the Minister of Finance remains
vague and expresses more wish than real policy. The bill
contains a number of provisions intended to protect and empower
consumers of financial services. However, most of the groups
heard in committee feel that these provisions are vague and will
complicate the agency protection mechanisms.
Among others, there are provisions that intersect or overlap
provisions of Quebec's consumer protection legislation. We
oppose this. Consumer protection is exclusively a provincial
matter.
However, protection specific to the banks can be a federal
matter. But when we talk about consumer protection or the
protection of personal information, this is a provincial matter,
exclusively.
This bill talks of new intrusion by the federal government in
areas of Quebec's jurisdiction. The Government of Quebec is,
however, well covered by an array of laws. They include the
consumer protection act, the personal information protection
act, the insurance act, the trust companies act, the Quebec
savings companies act and the credit and securities act.
All of these acts contain elements of consumer protection.
How then will consumers know which legislation applies? Will the
Quebec consumer protection act apply in a specific case?
Quebecers might wonder when they look at the federal legislation
and the laws we have in Quebec. How is one expected to know which
act shall prevail? Will it be the Quebec consumer protection act
or the new federal legislation? It is really not clear. Let us
not forget that legislation respecting consumer protection is
provincial legislation.
Consumer protection also concerns another group, namely the
poor. The bill provides a definition of “low-fee retail deposit
account”. Can anyone tell me what is meant by a “low-fee retail
deposit account”?
According to the Minister of Finance, these so-called low-fee
retail deposit accounts will ensure accessibility to financial
services for low income people. Even though I got a Bachelor of
Arts degree, I still cannot figure this one out.
No one knows who will be entitled to such an account, except the
minister. No one knows if that account will be accessible
everywhere, except the minister. Why? Because all these issues
will be covered by regulations. One must really have confidence,
or else ignore what is going on. We cannot understand, because
the bill does not provide explanations.
1545
The government is saying “Trust us. This will be covered in the
regulations”.
This is all we have to go on for now, but it is not an assurance
that consumers will be better protected under the new
legislation.
When a branch closes and there is a reduction in services
available to consumers, all the bill requires the bank to do is
give six months' notice. Whether the bank is being closed in
one, two, three or four months, it is still being closed. What
good is this provision?
How can the minister say that such a weak provision ensures
increased accessibility to financial services? The Minister of
Finance is the only one who thinks so.
Let us imagine the case where a bank in a given region decides
to close its doors because it is not doing enough business. We
say that there is nothing in the bill guaranteeing the community
that the bank must provide services. The bill says that the
bank must give six months' notice before closing.
Is this good enough for the community served by this bank, when
it was the community's savings that improved the bank's bottom
line? One day, if business is down, the owners say: “We will
restructure it, move it to a larger centre. You folks can find
somewhere else to bank.
We gave you the required notice and now we are closing”. This
is unacceptable and it is not looking out for consumers.
When it comes to the real social and community role of banks, we
would have liked the Minister of Finance to have paid attention
to the proposals submitted by the Bloc Quebecois member for
Hochelaga—Maisonneuve concerning reinvestment by banks in the
community. I know that my colleague will be speaking to Bill
C-8. We will have an opportunity to hear him.
In addition to the problems for consumers, there is a major
problem in this bill with respect to ownership of major banks
and financial institutions in Canada.
At this point, I should mention the bill's flexibility in
allowing financial institutions to pursue their activities, and
to deal with competition and globalization.
However there is a difference between the flexibility found in
some aspects of the bill and the fact that some of our financial
and banking institutions could be literally turned over to one
investor who could gain total or near total control over these
institutions or their management.
What we do not understand, and there lies the rub, is that in
the case of the largest bank in Canada, the Royal Bank, one
individual could own 20% of the shares? It used to be 10%. Now
the percentage has climbed to 20%.
The reason given by the minister for not allowing more than 20%
is that, in his view, it could be dangerous if one shareholder
owned more than 20% because he could take control. One
individual could take control of a major bank, a foreign
investor could take control of the Royal Bank.
But in the case of the largest bank in Quebec, the National
Bank, which is a medium size bank, one individual could own 65%
of voting shares.
Why such a difference? Why such discrimination?
1550
Why should it be more dangerous in this case? The minister says
it cannot be raised to 30%, 40% or 50% for the largest bank, the
Royal Bank, because it could be dangerous.
But in Quebec, the National Bank, which holds the business
assets of Quebecers, could be bought by one individual who could
own up to 65% of shares. In this case, it is no longer
dangerous?
Why allow one individual so much control over the savings of
Quebecers? This does not make any sense.
In some of the clauses I have read, they say it is not serious,
that the National Bank has got to about $4 billion and will be
governed by the rules for the major banks, where a shareholder
could not hold more than 20% of voting shares.
Before this could happen, the Minister of Finance reserves the
right to examine the entire situation and it could take up to
three years before the bank could be allowed to come under the
20% rule.
During those three years, what is there to stop a foreigner from
coming here and making use of the 65% rule to acquire all the
power and then transferring the head office and all specialized
jobs? The bank would be subject to foreign interests or a
foreign business.
Why is this dangerous in one instance and not dangerous for the
National Bank? We still wonder, why take the risk? Why two
different measures, one for the big banks and one for the medium
size ones? In this case, the risks are the same.
We have other criteria to add to this bill, and will do so via
amendments.
Reference has been made to the guidelines. These are not part
of the bill, but rather an aside, and the Minister of Finance
reserves the right to apply them or not, as he sees fit. It is
not reassuring to us that they are not an integral part of the
bill.
The Minister of Finance of Quebec had sent a letter to the
Minister of Finance of Canada calling for him to take these
provisions into account, in order to reassure the consumers of
Quebec and the people with savings. In his letter he wrote:
To ensure that a merger of the major banks is in the public
interest, there is provision that such a merger will subject to
a process of examination and that approval for the amalgamation
will be subject to certain predetermined criteria. If this
approach is necessary in the case of a bank merger, a similar
approach is all the more justifiable when an individual is
allowed to hold more than 20% of the voting shares of a low or
moderately capitalized banks.
Public interest should be defined, in the present instance,
according to the following criteria:
—The effect of the change on the activities of the banks,
including available services.
—The effect of the change on employment at head office and in
the branches and including professional jobs or those requiring
particular expertise.
—The effect of the change on the regional economy and on the
region's technological development.
These are the criteria we want to see and this is why we will be
making amendments. I hope the government will support them.
1555
[English]
Mr. Gurmant Grewal (Surrey Central, Canadian Alliance):
Madam Speaker, congratulations on your new appointment as
Assistant Deputy Chairman of Committees of the Whole. I will be
sharing my time with the hon. member for Richmond who is about to
make his maiden speech.
I rise on behalf of the people of Surrey Central to participate
in the debate on Bill C-8, an act to establish the financial
consumer agency of Canada and to amend certain acts in relation
to financial institutions.
I am proud to do this because the financial services sector is
the largest sector in the British Columbia economy. Our largest
banks employ about 26,000 people in British Columbia. Banks in
Canada employ about a quarter million people directly and
contribute approximately $80 million a year to charities in
Canada and about $4.5 billion annually in taxes to our provincial
and federal governments.
Despite the contributions that the banks and other financial
institutions make, they are a sound foundation as the backbone
of our economy. Our banks, trust companies, credit unions,
mutual funds, insurance companies and others are very important
to our economy.
The bill proposes to address the calls to modernize Canada's
financial services industry. Canadian consumers of financial
services have demanded a more competitive environment while our
banks have been seeking approval to merge and to have more
flexibility in the way they structure their operations.
The bill is an attempt to catch up to other countries that have
made changes long ago to their financial services industry. The
Liberal government has been dragging its feet on this matter for
about seven years. This is too bad because our financial
institutions must have the ability to make long term plans for
the future. Once it is passed into law, we hope the bill will
give our banks the opportunity they need to perform long term
planning. I doubt that will happen because of the five year
sunset clause in the bill.
My colleague from Prince George—Bulkley Valley has a great deal
of experience and has been of great assistance to the official
opposition working on our financial services policy group. The
official opposition wrote a banking report in November 1998
entitled “Competition: Choice You Can Bank On”. The report forms the
backbone of our financial services policy. It is a very good and
detailed report.
The bill addresses some of the changes we on this side of the
House have been pressing the government to enact. The official
opposition has been carrying the flashlight to show the Liberals
their darkness. After ridiculing our policies they have been
stealing them from time to time. We encourage them to steal more
of our policies, but unfortunately they do not get them right.
I understand that my colleague on the Canadian Alliance
financial services policy group will be pursuing the government
with amendments to the bill at committee stage. We hope the
government will show some respect for what we propose.
We recognize that a strong financial services industry is
essential to Canada's economic well-being. This means we need
strong banks, insurance companies and other financial
institutions. We need to create an environment for our financial
institutions to flourish domestically and have the ability to
take advantage of opportunities in the global economy.
Canada has one of the safest financial services systems in the
world. We urge the government to ensure that these consumer
benefits continue and not be changed or lost.
Outside the House critics of the bill are saying that in the
past five years there have been many changes to the world
financial system. The bill has been left behind. The bill used
to be Bill C-38 which died on the order paper. It does not go
far enough to bring our banks up to date with what is going on in
the world.
1600
International changes since 1996 are not reflected in the bill
that is largely the same as what the Liberals introduced in 1996
but allowed to die on the order paper. They have been trying to
pass the bill for far too long. It is out of date in many ways.
There are some who say that the bill is too little too late for
our banks and that it will not help to strengthen the performance
and competitiveness of our banks at home and abroad. They have
already lost ground and they will not be able to make up those
lost yards.
Other countries are well ahead of Canada. The United States has
allowed its banks to merge with insurance companies. The
Liberals insist on leaving it to their finance minister to decide
what mergers can go ahead and which cannot.
By lowering the amount of money required to open a bank, we hope
that the legislation will allow more banks to be set up in rural
areas of Canada. The smaller the capital the more encouragement
for institutions to jump into it..
The bill should enhance consumer choice by allowing insurance
companies and mutual fund firms to use bank cheque clearing
systems. If the banks take over the auto leasing and insurance
industries they may hurt our economy since a significant amount
of jobs are created by small businesses like car dealerships and
independent insurance companies. The further entry of banks into
the insurance and auto leasing markets should only be allowed if
major auto financing and insurance companies have access to the
Canadian Payments Association which they have been requesting.
Banks must not have a competitive advantage over auto leasing and
insurance companies. There must be a level playing field for all
competitors within a given market.
The Canadian Alliance supports the creation of a holding company
structure where banks will be able to remove some of their
non-banking operations, such as credit card businesses from bank
regulations, by establishing separately regulated holding
companies. This new structure would allow our banks to compete
more effectively against foreign non-bank competitors.
We support increased access to the payments system so that life
insurance companies, money market mutual funds and securities
dealers will be allowed access to increases in consumer choice.
We support expanding the role of credit unions. I can say that
because for about three years, before becoming a member of
parliament, I was a director of the second largest credit union
in Canada. I saw the environment from the inside. I know that
the credit unions are not getting the same support as the
financial institutions. They are not only consumer and community
oriented, but they also have a good network of branches that help
people at the community level.
We are disappointed that this measure is not included in Bill
C-8 despite the recommendation in the MacKay report to allow for
it. We believe that the government has failed consumers since
this measure was seen to be a key point in increasing competition
and benefiting consumers of retail banking, that is by the credit
unions.
We are concerned about the measures in the bill that would
regulate access to financial services. We are concerned about
regulating branch closures. This kind of initiative by the
Liberals is unnecessary red tape. The banking industry already
considers it good business practice to properly justify any bank
closures and to give fair warning to the communities or their
customers.
The bill also proposes a financial consumer agency responsible
to the finance minister. These bureaucratic positions would be
filled with Liberal appointments, like Mr. Lou Sekora, just as
many other failed Liberal candidates have been given patronage
plum jobs by the Liberals.
We would support an independent ombudsman selected by the House
with penalty enforcement powers and the ability to make binding
directives when necessary.
1605
In conclusion, we hope the Liberals will pay considerable
attention and take our amendments seriously. We hope they will
listen to the witnesses who will be appearing before the
committee. We will support the bill with amendments,
particularly in the areas of credit unions establishing
co-operatively held banks; the tremendous power given to the
Minister of Finance; the bureaucracy created by the new
commissioner of the FCAC; and the regulation that demands banks
to provide money losing personal accounts.
Mr. Joe Peschisolido (Richmond, Canadian Alliance): Madam
Speaker, I take this opportunity to thank the voters and
constituents of Richmond, which is I think the best place to live
in the lower mainland of British Columbia, for giving me this
opportunity to represent them and to be here today to talk about
this technical but very important piece of legislation.
It is interesting that my maiden speech will be a rather
technical one. However, I think it is important to say, as my
friend from Surrey Central has mentioned, that the Canadian
Alliance supports the general thrust of the legislation. We hope
to offer constructive amendments to it at committee stage.
I will take this opportunity to go point by point in a little
bit more detail than my colleague and talk about the position of
the Liberal government and how we will be helpful in supporting
where we believe support is necessary, and opposing in a gentler
constructive way where we believe that opposition is necessary.
The member for Surrey Central talked about the Canadian
financial services ombudsman. We all know that this agency would
be responsible to the finance minister. It would be designed for
all financial institutions. The Canadian Alliance believes that
it will simply be another bureaucracy with no powers and filled
with Liberal appointments. What we should have, and what the
Canadian Alliance will follow through on at committee stage, is
an independent ombudsman selected by the House with our
colleagues, with the powers of penalty enforcement and also with
the power to make binding directives to the banks.
I will also talk about the holding company structure. The
Canadian Alliance does support this new structure because it
would allow Canada's banks to more effectively compete against
foreign non-bank competitors and other alternative financial
institutions.
We have many financial institutions in Richmond. We have credit
unions, the TD Bank and the Bank of Montreal. I was actually
discussing this proposal with the bank manager of the TD Bank.
We are in complete agreement with the bill on this and we will
work very closely with the government to pass the legislation.
With regard to expanding the credit union role, I reiterate that
we are disappointed that the government did not take the MacKay
report into consideration when dealing with this point. The
Canadian Alliance supports the move to restrict widely held
ownership to 20% because we think it will strengthen the global
position of Canada's domestic banks.
To go back to Richmond riding again, we have the TD Bank and the
Bank of Montreal. We have a wonderful opportunity to move in not
only south of the border, where we have many integrations
occurring in the financial services, but if we are able to pass
the legislation, we can be world players in the international
field, particularly in the Asian market.
On the issue of allowing smaller banks, we are talking about the
minimum capital requirements to establish a new bank, trust
company or insurance company. We support this initiative because
it would provide more consumer choice, which basically is what
this is all about.
1610
We can talk about percentages and holding requirements. Even
though we are in opposition we believe we are a constructive
force. Ultimately we are trying to give the greatest choice to
consumers at the lowest possible price. The greater the
competition, the greater will be the incentive to have lower
costs on service charges and on a variety of issues.
With regard to restrictions on auto leasing and insurance, the
Canadian Alliance believes that the auto leasing and insurance
markets are currently very vibrant and competitive industries.
The banks must continue to be restricted from offering auto
leasing and insurance products directly through their branches to
avoid unduly concentrating financial power in their hands. We
are talking about competition where we do not want a monolithic
entity stifling competition and where we can have a variety of
players in the field such as local brokers.
I have a variety of local insurance agents in Richmond. They
work very hard to give the best possible price and products to
the people of Richmond. I am sure we have hard working brokers
across the country. I take this opportunity on behalf of the
Canadian Alliance to congratulate the hard working men and women
who work within these industries.
With regard to regulating access, my friend talked about the new
regulations that would set lower ID requirements for opening
accounts and proof of employment would not be a requirement. This
is excessive red tape. It is an issue that is not being properly
addressed. Let us allow the industry to address it. We believe
it is an area that the government should not be delving into.
Let us allow the forces at play to deal with it.
We applaud the government side for finally dealing with this
issue. As my friend from Surrey Central mentioned, we must have
a very strong and vibrant financial service so that our whole
economy can function properly. We are a bit disappointed and
saddened that the seven year process has occurred with a lot of
political manoeuvring rather than sound business economic
decision making. However, I am sure that in committee stage we
will be able to work very closely with the government to make
sure we come up with a top notch bill.
Mr. Dennis Mills (Toronto—Danforth, Lib.): Madam
Speaker, I congratulate the member for Richmond on his maiden
speech in the House of Commons. Let me be a bit partial toward
this member for just a brief moment. We have an alumnus past
together at Saint Michael's in Toronto. I celebrate that part of
his life. It is just too bad that somehow he ended up with the
Canadian Alliance. He had a strong tradition of real liberal
values and I can only hope that his upbringing and his education
will be a moderating influence on the Canadian Alliance.
The member represents the riding of Richmond but he also has
deep roots in the greater Toronto area. I humbly point out to
the member that it is important that financial institutions be
reminded constantly that we on all sides of the House are
attentive to the treatment of and access to capital for small
businesses.
I was hoping that perhaps the member would stand in his newly
minted role as the member for Richmond and commit a large
part of his time to making sure that our financial institutions
are very vigilant in looking after small businessmen and women
and their access to capital activities.
1615
Mr. Joe Peschisolido: Madam Speaker, let me thank my
friend from Toronto—Danforth for those very kind words. One
thing my friend did not mention is that we may have gone to the
same high school but my friend may have gone a few years earlier
than I did.
There is a note saying that the youth looks at things in a very
passionate and emotional way and then they simply grow up. In
response to my friend's questions on my meanderings and my moving
over on the political spectrum, perhaps I simply grew up and
looked at things the way they ought to be looked at.
I share my friend's concerns about the importance of providing
capital to small business. We have talked about big business.
The Prime Minister is off to China trying to get contracts for
big companies. That is a legitimate thing to do, if they are
actually able to get them. However, no reputable economic thinker
disputes the importance of small business to the strength of the
economy. If we cannot have access in a fast and efficient way at
rates which are competitive, we are not going to do things in a
good way.
Let me simply thank my friend across the aisle for his comments
and say that we will work together. I am sure all of my
colleagues in the Canadian Alliance would agree that we need to
have a strong financial services sector with banks and financial
institutions that offer loans to the small businessman and woman.
Mr. Pat Martin (Winnipeg Centre, NDP): Madam Speaker, I
am glad to have the opportunity to join the debate on Bill C-8.
As has been pointed out by previous speakers, the bill is a
reincarnation of Bill C-38 which died on the order paper last
fall at second reading.
We can tell by the amount of debate in the House on this bill
already today that there is great interest among all Canadians
to see reform of our financial institutions and the whole
financial sector. This stems from a growing feeling on the part
of Canadians that our current financial institutions are failing
to meet the needs of the average Canadian.
There is a growing sense that our chartered banks, which most
people grew up with as symbols of stability, that they were
something to be proud of and which were given charters for
specific reasons, are failing to meet their mandates under
the terms of which they were given their charter.
We all know that the five chartered banks have an exclusive
monopoly on certain financial transactions, for instance, the
right to process credit charges. These profitable transactions
are huge. This is a sector that they have been given exclusive
right to and the trade-off was that they would meet the needs of
the average Canadian community and the average Canadian citizen
for their basic financial services.
I can begin by saying that in the riding of Winnipeg Centre that
has been anything but the case. In fact, there has been a flight
of capital from the inner cities across the country, Winnipeg
Centre being no exception. There is almost a seemingly vote of
non-confidence in our communities as people watch these
institutions fold up their tents, leave and not provide the basic
services that they were charged with the responsibility to offer.
In fact, they are doing anything but that. As was pointed out by
the previous speaker, small businesses are not given a loan
unless they can prove that they do not need it.
More and more of the basic financial services, such as having a
neighbourhood branch within a reasonable distance for senior
citizens or people of low income, are getting to be a thing of
the past. These services are being taken over by ATMs or by
large corporate branches that may be in the centre of the
financial district, but they are not in the communities and they
are not in the small towns in and around rural Manitoba.
1620
There has been a growing resentment over this trend of bank
closures. This came to light a couple of years ago when the
banks were anxious to merge to form even larger institutions.
Many Canadians mobilized at that time, specifically to stop the
bank mergers. However, other realities came to the forefront.
There has been a growing frustration with not only the lack of
services in the communities. It forced Canadians to have a
really serious hard look at what our major financial institutions
were or were not really doing for us.
It has even mobilized people who own shares in the various
banks. There is a growing shareholder movement among people who
own shares in the five chartered banks. I had the privilege of
going to two of the national shareholders' meetings recently. I
never thought in my wildest dreams that I would be going to a
shareholders' meeting of the Royal Bank or the Bank of Montreal.
I do not own shares in either of those institutions, so I had to
borrow some proxy votes in order to crash the gates and get in.
Our point was that at a time when the banks seem to be operating
on their own and without any input from the Canadian people who
cause them to be, we needed to seize the issue somehow and put a
little bit of democracy back into the corporate system. In other
words, if we were unable through our elected institutions to
coerce the banks into doing their job of servicing Canadians,
perhaps if we mobilized through a shareholders' rights movement
we could coerce the banks into doing the job that they were hired
to do or they were given the exclusive right of some financial
transactions in exchange for.
It was rather interesting. I do not know, Madam Speaker, if you
have ever been to a shareholders' meeting of one of the major
chartered banks. Probably many of the people in the room have. I
certainly had not. I was very surprised that as many as 1,400
people crammed the hall in a major hotel in downtown Toronto to
attend the meeting. I thought it would be like other meetings of
its type that I had been to, like union meetings where people
would move a motion, have it seconded, debate it and the motion
would either pass or fail based on its merits.
In actual fact, nobody there seemed interested in talking about
very much except for the actual returns of that quarter of that
actual fiscal year that was being reported on. We went there
with a number of people who moved real motions that we thought
would benefit the average Canadian. There were only nine
resolutions put forward in the whole meeting. We moved all nine
and I seconded all nine.
One of the resolutions was to limit the salary of the CEO of the
bank to ten times that of the average employee, which he thought
was kind of an innovative move. It was quite a fair resolution
too when one thinks about it. If the average employee makes
$40,000 or $50,000 a year working for the banks, the CEO would
then get 10 times that or $500,000 or $600,000 a year. We would
think that is pretty fair compensation.
That motion did not pass. We seconded it and argued it
aggressively as to why that would be more fair. We even pointed
out that the average CEO of a Japanese corporation makes 10 to 13
times that of the average worker of the enterprise over which
they govern. In the case of the bank presidents of the Royal
Bank and the Bank of Montreal that figure is 80, or 90 or 120
times the earnings of the average employee. Those are wildly and
grossly inflated salaries to reward these bank presidents for
doing what? For cutting off access to services for average
Canadians. This seemed to be their reward.
Granted there were record profits involved and quarter after
quarter they were making more money, but all the time they were
raising service charges, closing bank branches and denying basic
services like loans to small businesses. No wonder they were
making a profit and rewarding each other very handsomely.
When we looked at that structure, no wonder they were voting
each other big raises. They all seemed to sit on each other's
boards of directors. I learned a lot when I crashed that
shareholders' meeting. As a socialist and a trade unionist,
attending a shareholders' meeting like that was a real education.
We learned that one of the boards of directors of the bank, I
believe the Royal Bank, George Cohon, the CEO of McDonald's, sits
on 50 other boards of directors.
Each one of those boards meets about 10 times a year. That is
500 board meetings a year that presumably one would have to
attend, but nobody can do that. The only board meeting one
really has to go to is the board meeting when they vote on a
raise for the board of directors. Then the other members of that
board will come to that board of directors meeting and vote for a
massive raise.
1625
It becomes an incestuous little circle of people who vote each
other massive pay increases. That is what motivated us to try to
interfere with that whole circular process and cap it off.
Whatever rate of pay one is paying one's employees, one can pay
oneself 10 times that, but that is enough. Frankly, we do not
believe that banks deserve to be rewarded for cutting off access
of Canadians to basic banking services. That is one of the
shortcomings that we pointed out.
Another motion that we moved demanded gender parity on the board
of directors; 50:50, female to male. We came close on that. It
is really ironic that the person that moved the motion was a
famous Bloc separatist named Yves Michaud. He is the person
whose motions I was seconding. The results of that vote were
exactly the same result as in the last Quebec referendum, 49.6 to
50.4. There is something about that number that Yves Michaud
seems to generate in people. I do not know if it is because he
moved it. Perhaps I should have moved the motion myself. We
thought that was a good idea. There was a great deal of
interest.
One of the other motions that we moved was the very thing that I
pointed out with the increasing of CEOs wages, salaries and
compensation. Due to the fact that they all sit on each other's
boards of directors, we also moved a motion that would limit the
number of boards one could sit on to 10. If they all want to sit
on each other's boards, let us make it a reasonable number. In
this way we hoped to somewhat democratize the corporate structure
and give the people who actually rely on the bank's services to
some say on what the banks do or do not do.
In my riding of Winnipeg Centre, we have seen bank branches
close in an almost epidemic way. The same is true for my
colleague from the riding of Winnipeg North Centre. The banks
are shutting down branches like there is no tomorrow in the hopes
to increase their profits even more. The trade-off was supposed
to be that we would give them the exclusive right to certain
financial transactions in exchange for reliable adequate service
and even some accountability to the community at large.
For instance, in the United States there is a community bank
investments act which mandates that banks reinvest a certain
amount of their profit into the community that they serve, even
if it is not the most profitable venture, or a break even venture
or marginal venture. If it is something of community interest, a
non-profit group that wants to get started but is short of
capital, the banks would be mandated by the community investment
act to invest in at least some of these things to move the
community forward for its own benefit.
Bill C-8 does one thing. It helps the credit union movement. I
should say something positive about that. Many of those people
are so disillusioned with the service, or lack of service, that
they have been getting from the chartered banks. They have been
gravitating toward the credit unions in order to get access to
the financial service that every family and small business need.
One of the positive aspects of Bill C-8 is that it will finally
allow a national structure for the credit unions, a credit union
central, so that they would be recognized as an entity that way.
We think that is a very positive step. We see it province to
province. We have a Manitoba credit union central. Now there
can be a national structure along those lines.
However, the shortcomings far outweigh those small benefits.
Canadians are looking to the banks for support for the most
basic of services and are being denied them. In a time when the
banks are showing record profits, one would think that there
would be some feeling that they should be able to enhance their
service to Canadians instead of continually reducing them in
spite of record profits quarter after quarter.
1630
Our position is that the banks have done nothing to deserve
being rewarded with the additional freedoms they would enjoy
under Bill C-8. We believe Bill C-8 would, in a small way,
enable the banks to achieve what they failed to achieve recently
under the bank mergers. It almost institutionalizes the concept
that banks will eventually merge, in that it specifically talks
about that eventuality and the possibility it would be dealt with
in parliament.
Instead of being dealt with on a random ad hoc basis, it more or
less contemplates that mergers sooner or later will be a fait
accompli. Canadians recoiled at the whole bank merger idea. The
society of seniors spoke out vehemently that they were concerned
that if banks were allowed to merge further and get even bigger,
their interest in serving the small homeowners or small
businesses would be even less.
We all know that much of the profit the banks are making now is
really from their offshore and corporate customers, not from the
average citizen and the small mortgages that homeowners might
enjoy.
Another thing that comes to mind, and I wish we had thought of
it at the shareholders' meetings of the banks, is to protest the
fact that when the Minister of Finance outlined the recent round
of tax cuts, the announcement that the corporate tax rate will go
down from 17% to 16% slipped by without very much notice.
I have heard different figures as to what effect this will have
on the chartered banks. One figure that I heard is that as much
as $75 million a year will be kept by the banks as a result of
that one percentage point change in the corporate tax structure.
I would ask the House of Commons and all Canadians what the
chartered banks have done for us recently to deserve a reward
like this, a kickback, if we will, of up to $75 million per year
that they will now be able to keep above and beyond the record
profits that they enjoy quarter after quarter?
One might sense that I am quite critical of our financial
institutions. We were hopeful that Bill C-8 would come down hard
and advocate on behalf of Canadians. We expected the Canadian
government to be champions of Canadians and not, frankly, to
cater to the interests of financial institutions and give them
the enabling legislation they might need to go through with what
they failed to do last year.
Many seniors have visited me in my riding to tell me how
disappointed they were that their local bank branch was closing,
and they wanted to know why. When they appeal to the banks they
get a long, convoluted restructuring message on how the banks
will be better able to serve their customers through e-commerce
and ATMs, and that now people can bank on the Internet, switch on
their home PCs and have all those banking services available to
them.
That is not much consolation for a low income senior citizen on
a fixed income. The seniors in my riding resent losing what they
counted on as being part of their community and part of their
neighbourhood. As I said in my opening remarks, it really looks
like a vote of non-confidence in a neighbourhood when the local
bank branch does not see fit to stick around because it does not
sense enough economic activity to warrant keeping its doors open.
What does a boarded up bank say about one's neighbourhood and
about the viability of the town, the community or the inner city
neighbourhood that one lives in?
Some people have called the attitude of the banks toward
ordinary Canadians abusive and unaccountable to the community.
What we had hoped to see in a bill dealing with financial
institutions was a return to that accountability.
This reminds me of a parliamentary junket to Botswana that I was
invited on. The outgoing president of Botswana, Masire, was one
of those African leaders who really was committed to his
community. It was one of those countries that was not corrupt
and that worked hard in the post-war era to try to build a
nation.
Masire had chartered banks in his country with the exact terms
and conditions that we put on ours. That is what he said in a
meeting with the minister, which we attended. However, the banks
disappointed him and failed to meet their commitments in such a
way that he said to hell with them. He said that he was going to
invite the whole world to come and bank in Botswana because those
to whom he gave that exclusive privilege had failed the country.
1635
I am not saying we are at that point. I am not saying it is
quite that drastic for us yet, but there is a growing feeling
that we are giving chartered banks the exclusive right to some of
the most profitable transactions. The processing of credit cards
is one example. Every time a credit card is used the processing
fee must be done by one of the chartered banks. If we give banks
that exclusive right, we want something in return.
We do not want to see boarded up banks in our communities. We
want a commitment to and reinvestment in our communities. Banks
should take some of their record profits and do more than just
donate to the Winnipeg Ballet or to some other arts program to
improve their image. If they gave one-tenth of what they spend
on TV advertising, which is a huge campaign to try to improve
their image, people might feel compensated for some of what they
have lost in service.
There are huge gaps in banking law. There is a real need to
address the overall picture and the way Canadians view the banks,
whether in terms of providing services, the insurance aspect of
things, what the banks have been trying to grab, or all of their
financial activities. We need to put the reins on them in some
respects.
The bill, thankfully, stops short of giving them all they have
asked for in terms of being a single window shopping centre for
all financial transactions, whether auto insurance, life
insurance or whatever. We have not gone that far.
We want to see that banks with some accountability to the
community and not just to their shareholders. If they are to be
motivated by profit alone and by no secondary objectives
whatsoever, why are we giving them exclusive monopoly on certain
transactions?
I predict there will be a growing shareholders rights movement
and that more people will be buying 100 shares of one of the
banks so that they can crash the shareholders meetings, hijack
the meetings and get some of the amendments we put forward
through.
If Canadians were polled, they would be horrified that some
people make $8 million a year to run one of the chartered banks.
The basic salary might only be $1.5 million a year, but when
stock options and shares are added up, they are making $8 million
to $10 million a year for not really doing their job. Why reward
people for failing to do the job they were asked to do?
Mr. Sarkis Assadourian (Brampton Centre, Lib.): Madam
Speaker, I have two questions for the hon. member from the NDP.
Could he tell the House what the return is on capital investment
of banks? I want to know how much money they invest in total and
how much they get in return. If he knows the answer to that, I
would appreciate hearing from him.
Second, how much of the profits banks make came from service
charges to consumers last year?
Mr. Pat Martin: Madam Speaker, I was a proxy shareholder
at the shareholders' meeting. I do not have access to all the
inside information that the banks might circulate on what their
total revenue is or on the amount that they spend in the
community. What I am sharing with the House is the frustration
that Canadians feel over what they see to be a lack of services
to the community and a lack of reinvestment in the community.
I can give graphic case by case examples of small businesses
that could expand in my riding if it were not for lack of access
to venture capital. They could expand and grow and hire more
people if they had better accessibility to capital. The banks
are turning them down. The feeling is that if they cannot prove
they do not need the money, the banks will not give it to them.
In other words, if they need it they will not get it. If they do
not need it, the banks will give them all they want.
I do not know if the intention of the member's questions is to
act as some corporate shill for the banks. I do not think the
banks need his help to defend themselves. They spend millions
and millions every year running ads on TV trying to paint
themselves as warm, fuzzy parts of the community.
1640
Both the member who asked the question and I know that nothing
could be further from the truth. Most of their profits are
generated from their corporate and offshore accounts. I attended
two shareholder meetings and learned that over 50% of their
revenue was actually from their offshore activity.
There is very little money to be made in handling either ma and
pa's bank account or the $50,000 mortgage for some newlywed in my
riding. There is no money in that, and they would just as soon
get out of it and pass it over to the credit unions.
If that is their attitude, why are they being rewarded, every
time we turn around, with exclusive rights to the financial
transactions I mentioned or with another drop in the corporate
tax rate?
The Canadian Taxpayers Federation is always talking about tax
freedom day. On June 26 Canadians enjoy tax freedom day; they
actually get to keep their money. There used to be a corporate
tax freedom day, but it started getting in the way of New Year's
eve. The parties started to blend together, so corporate tax
freedom day was stopped because they were getting embarrassed.
The New Year's eve party and the corporate tax freedom party
would merge into one event.
Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP):
Madam Speaker, the member for Winnipeg Centre raised a very
important issue that must be addressed by the House as we pursue
Bill C-8. The issue has been invisible to date, and I am
surprised that more members are not speaking up about the impact
of bank closures on their communities.
I am talking about rural communities, isolated northern
communities, inner city older neighbourhoods, and whole
communities that have been abandoned by the big banks and that do
not seem to be addressed in the legislation.
The member for Winnipeg Centre and I have experienced numerous
bank branch closures over the last several years. Low income
residents, senior citizens and small businesses are not able to
get the services they need and deserve.
Would the hon. member have any suggestions for the government
to improve the legislation? Would he support the idea of a
moratorium on bank branch closures until such time as we can put
in place proper mechanisms for addressing profitability and
community viability? Would he agree with the idea enunciated by
our colleague from Regina—Qu'Appelle about some form of
obligation on the part of the banks to reinvest back into the
communities that gave them their position of profitability in the
first place?
Mr. Pat Martin: Madam Speaker, the hon. member for
Winnipeg North Centre asked me the number of bank closures in my
riding in the past seven years. I can give her the number since
I was elected in 1997. Twelve branches have closed in my riding
alone during that period. It is an epidemic. It is an absolute
flight of capital from the inner city, or at least the presence
of bank branches.
The hon. member also asked what we would have liked to have seen
in the legislation that might have mandated some accountability
or some reinvestment in the community from the banks that have
been allowed to prosper under their exclusive privileges. There
were repeated calls at the committee stage throughout the
development of Bill C-38 to put it in language similar to the
community reinvestment act of the United States.
The United States is the ultimate free market country. Nobody
is saying that the community reinvestment act somehow gets in the
way of the free movement of capital. It is a sensible
restriction on banks. Yes, they can make profits and yes, they
can prosper and flourish, but some designated amount must be
reinvested into the community that gave them the profits they
enjoy.
It would not have been difficult to do this. It is a huge
shortcoming in the bill and a missed opportunity for us to be
advocates and champions for Canadians instead of being champions
for the big banks.
I use the term corporate shill. Are we shilling for the banks
with this legislation? Is that what we are really doing, or are
we standing up on our hind legs and advocating on behalf of
Canadians?
1645
Mr. Sarkis Assadourian: Madam Speaker, earlier I asked
the hon. member for Winnipeg Centre two questions and did not
receive any answers. I hope he takes a few hours tonight or
tomorrow before he comes to the House to research the questions
in order to give me the appropriate answers, because I am looking
for them. They are very valid and important questions for the
taxpayers of the country.
Mr. Pat Martin: Madam Speaker, it was kind of a
non-question. I did take the hon. member's first questions very
seriously but could not answer them with specific numbers. I do
not think anyone in the House of Commons today could.
What we know is what Canadians are telling us. They sense that
the profits are not going into the community, that the profits
are sometimes leaving the country.
I have heard the argument on the other side that we all enjoy
the benefits when the banks make money because we are all
shareholders in the banks and that even if we are not personally
shareholders, maybe the pension plan that we belong to with our
union invests in bank stock, so we want them to flourish and
prosper.
However, we also want something to go directly into the
community. That is not an unreasonable request. When the banks
are enjoying record profits quarter after quarter and do nothing
about their service charges and the increase in fees, with an
increase of up to 150% in recent years, it is no wonder they are
making a profit. It is not unlike the Liberal government's EI
system, whereby if government takes in more money than it gives
out obviously there will be some left over. We want a tangible
return to Canadians, a real hard return, one that benefits the
community and not just the shareholders.
[Translation]
Mrs. Suzanne Tremblay (Rimouski-Neigette-et-la-Mitis, BQ):
Madam Speaker, I am pleased to take part in the debate on Bill
C-8, an act to establish the Financial Consumer Agency of Canada
and to amend certain acts in relation to financial institutions.
This bill replaces Bill C-38, which as they say died on the
Order Paper when parliament was dissolved last October, after the
Prime Minister decided to call an early election, having not yet
completed four years of his mandate.
To begin with, this is essentially the same bill. Bills C-38 and
C-8 are twins. But they are not identical because, in addition
to a few minor amendments to ensure a closer match between the English
and French texts, there is a major change with respect to
the demands made by the Bloc Quebecois and by Bernard Landry,
Minister of State for the Economy and Finance and Deputy Premier
of Quebec, a change which would ultimately make the bill more
acceptable by adding amendments anyway.
I was saying that the federal government decided to respond in
part to the demands and expectations expressed by minister Landry
by incorporating in its bill four points the Government of Quebec
felt were important. However, these points were incorporated not
in the bill itself, but in the guidelines on the reclassification
of the banks listed in schedule 1 whose equity capital is under
$5 billion.
The guidelines that accompanied the release issued on the day
the Minister of Finance introduced his bill, clearly stated
that, and I quote:
Any transaction involving a recategorization will be considered
on its own merits, and should demonstrate that it would foster
opportunities for the bank to grow and better serve the
customers of the bank.
In considering whether a proposed transaction involving a
recategorization is in the public interest, the Minister shall
take into account all matters that the Minister considers
relevant, including:
safety and soundness of the bank;
direct and indirect employment;
the location of the mind and management of the bank;
needs of consumers;
businesses and operations of the bank;
and prospects for the bank in the context of the global
marketplace.
1650
However, since these elements were not included in the act, they
could be changed by the minister who could, for example, yield
to the pressures of powerful international lobbies.
That being said, I must say without any hesitation that Bill C-8
raises many questions in my mind. When I think about what I have
seen and observed with this government over the past eight
years, I am concerned. I am concerned by, among other things,
the government's arrogance, its contempt for democracy, its
inability to fulfil its own promises and by the ease with which
it yields to the pressures of the well-to-do and crushes the poor.
I could go on and on, because there are so many reasons to be
concerned about this government.
Let us take a look at a few things that are scary in this bill.
Bill C-8 gives full power to the federal Minister of Finance to
decide, alone, the future of Quebec banks.
With Bill C-8, the Minister of Finance will be able to decide
alone, at his own discretion, the future of Quebec banks. I find
it truly unacceptable that this discretionary power is as strong
as if not stronger than the act itself.
The Bloc Quebecois is concerned that a single shareholder could,
with the agreement of the Minister of Finance, own 65% of the
shares of the National Bank, the number one bank in Quebec.
There is no need for the Minister of Finance to authorize this
excessive control to ensure the flexibility of the National
Bank. How is it that a shareholder owning 65% of a bank will
give it more flexibility than 65 shareholders owning 1% each?
We need legislative guarantees against any negative impact these
new ownership rules might have on employment, for example, on
consumer services, on small business services, on decision
centres and, most of all, on Montreal's role as a hub in the
area of international finance. The stakes are just too high for
Quebec to rely on only one person, the federal Minister of
Finance, especially since Bill C-8 offers no real legislative
guarantees.
As I said earlier, the bill does nothing more than list some
elements to consider that do not go far enough and that are
under the sole control of the Minister of Finance.
Even worse, it seems to me that the finance minister's bill is
full of holes which should be cause for concern to any person of
goodwill. Why must the government write such thick bills if it
does not seek clarity? How will this government be able to judge
the clarity of others if it is incapable of seeing its own lack
of clarity? One factor which contributes to clarity is
precision. See for yourselves. On page 55 of the bill, clause
385 sets out the public holding requirement for banks. However,
we learn a little further on, in clause 388, and I quote:
On application by a bank, the Minister may, if the Minister
considers it appropriate to do so, by order exempt the bank from
the requirements of section 385, subject to any terms and
conditions that the Minister considers appropriate.
As well we see that the provisions of the act cease to apply if
the minister so decides. In other words, this is a bill with
flexible parameters, one that will allow Ottawa and the Minister
of Finance to decide unilaterally on the future of the National
Bank.
It is not obvious that the federal Minister of Finance's bill as
presented will ensure healthy competition in the national
market. Yet this competition is more important to future
economic development than striving to be bigger internationally.
1655
But the Minister of Finance has decided to make legislation in
favour of the big banks, even if by so doing he has to sell out
the banks of Quebec, including the National Bank, the one known
as the bank of small and medium size business in Quebec.
When I think of the way certain individuals, including the
Minister of Intergovernmental Affairs and member for
Saint-Laurent, want to see Quebec suffer, I tell myself this is a
really powerful weapon in the hands of the federal Minister of
Finance, if ever the federal government decides to act.
In this case I say to my fellow Quebecers, here is another
really good reason, just one more, to create our own country, so
that we can make our own decisions on what we want to do with
our banks.
As regards consumer protection, the Minister of Finance remains
vague and expresses more wish than real policy.
Bill C-8 will establish the financial consumer agency whose
purpose, according to the finance minister, will be to protect
consumers.
The Bloc Quebecois is and has always been a protector of human
rights and citizens as evidenced by the debate held in this House
on Bill C-54 that dealt with the protection of personal
information and died on the order paper in 1997 to be
reintroduced as Bill C-6 and given royal assent on April 13,
2000.
I want to remind the House that Quebec already has several laws
protecting consumers. For instance, there are the consumer
protection act, the privacy act, as well as all the legislation
on insurance companies, trust companies, savings and credit
unions and securities.
This new agency will only create duplication in regulations,
given all the measures that have already been taken by the
Government of Quebec in this area which, need I remind the House,
is under provincial and not federal jurisdiction.
The finance minister takes the credit for including in Bill C-8
a measure, the low-fee retail deposit account, as described in
section 448.2, that would provide low income people greater
access to financial services.
With regard to this famous low-fee retail deposit account,
nobody except the minister knows exactly what it is all about.
Nobody knows what are the prescribed characteristics mentioned in
this clause and which would entitle an individual to a low-fee
retail deposit account. Nobody except the minister of course
knows whether such an account will be available everywhere, in
every bank in Canada and Quebec.
How is it that, as we are talking, the minister is the only one
who knows the answer to all these questions? It is very simple.
The minister is the only one who knows, because all these issues
will be defined in the regulations. As we are having this debate
in the House, we do not have a clue about what will be in the
regulations.
True enough, if the regulations had been made an appendix to the
bill, it would have increased the thickness of an already
voluminous piece of legislation. For the time being, all we have
to go by is the minister's word.
Once bitten, twice shy, however. Members of this government have
made so many promises during three election campaigns, in 1993,
1997 and 2000, without keeping their promises or being true to
their word, that I must say the fine words from the Canadian
Minister of Finance are not enough to be able to categorically
state that consumers will be better protected under this new law.
I also question what is in the bill regarding branch closure; I
wonder what will happen with the reduction in services available
to consumers. The only measure provided by Bill C-8 is that a
bank must give a four month notice before closing a branch.
Before, people learned about the closure the very morning their
branch was to close. With the finance minister's bill, they will
know about it four months ahead of time.
1700
With this bill, the government can do precious little to
prevent, through legislation or coercion, the anticipated closure
of a branch. With a clause that is so unrestrictive, how can one
claim, like the finance minister does, that this bill will
improve access to financial services? The minister is the only
one who can have this kind conviction and optimism.
Bill C-8 does not provide any concrete measure to ensure greater
access to financial services for the poor. That would have been a
step in the right direction. The minister should know by now that
there is a real problem there. He could have made use of the bill
introduced by my colleague and friend, the hon. member for
Hochelaga—Maisonneuve, in the second session of the 36th
parliament. The bill was entitled an act to amend the Bank Act
and the Statistics Act (equity in community reinvestment). Its
main goal was to ensure that certain branches of banks take
measures to facilitate access to credit for persons who have a
residence or a place of business in a federal electoral district
in which the branches are located.
Bill C-8 does not give any guarantee that the minister will take
into consideration the specificity of the financial system in
Quebec.
Madam Speaker, if you and I could have a conversation on the
subject, I am almost convinced that you would tell me “The hon.
member is well aware of the fact that the minister is himself
from Quebec, and he takes Quebecers' interests to heart”. I
would regretfully have to tell you that the minister is indeed
the member for Lasalle—Émard, but that he ignores or purports to
ignore that Quebec is a people whose financial system has its own
specificities, and that the minister in no way takes that into
account in Bill C-8.
I might add that we would have this conversation if you did not
hold your present position. I know that you now have to be of the
utmost neutrality. But if you were a backbencher, as I am, we
could have had this little chat.
My colleagues, the members for St. Hyacinthe—Bagot and
Drummond, who are finance critic and assistant finance critic,
respectively, will propose amendments to Bill C-8 on behalf of
the Bloc Quebecois to counter the inequity towards Quebec's major
banks. I hope the extended Liberal caucus from Quebec will keep
its promise of standing up in Ottawa for Quebecers. To this day,
this caucus has given its support to the government each time it
has introduced bills going against promises made during the
recent campaign. Will I be forced, once more, to conclude that
the population has been misled? I am waiting for proof and it is
much too long coming.
Mr. Yves Rocheleau (Trois-Rivières, BQ): Madam Speaker,
first, I want to congratulate my colleague from
Rimouski-Neigette-et-la Mitis for her eloquent speech. We can see
that she has really studied what she was talking about and has a
very good grasp of it. You are missing a fine discussion with
her, I am sure.
However, we cannot talk about banks and the Bank Act without
talking about a distinguished Quebecer who tackled the issue in
the last few years. The hon. members know that I am talking about
Yves Michaud, a former Quebec delegate to Paris and who, instead
of taking a very comfortable and well-deserved retirement,
decided instead, in spite of his age, to put all his energy, all
his talent and all his eloquence—and has plenty of all that—at
the service of not only the consumers, but also of small equity
investors. He wanted to make the operations and management of the
banks and probably the Bank Act itself more democratic and more
beneficial to those who put their trust in this very important
system in our social and economic culture.
Therefore, I would like to honour Mr. Michaud for the very
important things he did for the nation and people of Quebec.
1705
The hon. member for Rimouski-Neigette-et-la Mitis made me realize
that there is one more argument to add to our long list of
arguments in favour of promoting sovereignty. We sovereignists
have so many arguments that we need to update the list
regularly. However, there is one that was offered to us on a
silver plate in this financial institutions reform, and it is
the terms and conditions governing special treatment, the
special status. I think it is most appropriate to use this
expression in relation to the National Bank, the national bank
of Quebecers, the bank of SMBs.
The 20% foreign ownership of major Canadian banks becomes 65% in
the case of Quebec's national bank.
I would like my colleague, the member for Rimouski-Neigette-et-la
Mitis, to tell us what, according to her, might be the
intentions of the federal government in granting a special
status not to Quebec but to its national bank.
Without imputing motives to the federal government, what is its
purpose in putting the National Bank in such a vulnerable
position, totally exposed to foreign control? A crucial sector
of our economy could end up in the hands of foreign interests.
I would like to know if the member has an opinion on this, on
the deeper motives of this government toward Quebec and the
national bank of Quebecers.
Mrs. Suzanne Tremblay: Madam Speaker, this is an extremely
important question. Of course, I do not know what were the
government's motives behind such a decision. There is however
one thing I am trying to understand. When I looked into my
crystal ball this morning, on the train—
An hon. member: Where you were served in English only.
Mrs. Suzanne Tremblay: —where I was served in English only, I
realized that the Government of Canada wants the banks to be the
key strategic components of its economic development plan.
The government has decided to protect the banks, especially
those operating in Canada, against foreign invaders. It has
therefore set the limit at 20% of shares per shareholder, and
will not go higher than that.
However, in the case of the National Bank, a bank operating
mainly in Quebec, which helps out small businesses which in turn
greatly support the economic development of Quebec, should the
proportion of shares be allowed to increase to 65%, there could
be a takeover that would change the whole political situation
and result in the National Bank not lending so much money to
small businesses anymore.
I am not sure what it is, but what I realized this morning is
that there is some danger here, a trap, or a trick, to use one
of the favourite expressions of the Minister of
Intergovernmental Affairs. There is more here than meets the
eye. There is again a double standard that is meant to hurt
Quebec.
I hope my fellow citizens will understand that we now have one
more reason to create our own country: to make what we want out
of our bank.
[English]
Mr. Bill Blaikie (Winnipeg—Transcona, NDP): Madam
Speaker, I congratulate you on your appointment to the chair. We
look forward to you presiding over the Chamber with a great deal
of wisdom, most of which you may have acquired in the various
committees of the House. I congratulate you on behalf of myself
and, I am sure, my colleagues.
I have just a few things to say about the bill. As many people
have pointed out, this is a bill that was before the House before
the election. It is a very large bill of 900 pages. Bills
having to do with banks tend to be like that, which is probably a
good reason for getting it into committee as soon as possible
after everybody has his or her say with respect to the principle
of the bill and what is in it and what should be in it but is
not. That is what I will talk a bit about today.
1710
First, with respect to the positive aspects of the bill, which
our critic, the member for Regina—Qu'Appelle, has already
highlighted on a number of occasions, one of the things we see as
a positive in the bill are the changes with respect to the role
of credit unions. This is something the NDP has advocated for
many years. The changes with respect to credit unions are
certainly seen by us as a positive development.
However, some of the other things that have the appearance of
being progressive are not necessarily as progressive as we would
like. I am referring to the agency the bill will create, which
will be headed by a commissioner appointed by the governor in
council. We would have liked a more democratic structure, with
representatives from various stakeholders overseeing the FCAC to
ensure that it does not become a watered down consumer agency.
This legislation includes only cosmetic measures to improve
access to basic banking services. At a time when service charges
are on the rise again and banks are forcing us to pay for our own
laptop banking, the government has abandoned its commitment,
which it made in June 1999 in its financial policy paper, to
force banks to provide a low cost account.
Indeed, banks are moving to make it almost impossible to have a
low cost account, even the kinds of accounts which many people
have had for many years. People are receiving correspondence
from their banks instructing them that many of the things that
they used to be able to do as part of their basic banking service
will now be a matter of the banks charging for them.
It is not enough that the bank presidents already make 30 and 40
times more than the tellers who work in their banks. It is not
enough that these people make these obscene amounts of money. No,
they are going to ding the poor just a little more, in the name
of what, I do not know. Is it in the name of greed? Or is it
that euphemism for greed we hear so often in the language of the
marketplace, is it that they have to be more “competitive”?
It is the same logic which I am sure will lead, thanks to other
elements of the bill, to renewed talk of mergers and to renewed
talk of megabanks. Of course with the loosening up of the
foreign ownership provisions, we will see not just new merged
banks but new merged banks that are owned more by non-Canadians.
These are some of the objections that we have to the bill. It
seems to me that at a time when we hear so much from the private
sector about the deficiencies of government services, the banks
themselves, as major institutions, have become so user unfriendly
in terms of charging people for everything they do and for every
service they provide that it is a wonder that there are not more
people turning to credit unions or hiding their money under their
mattress or turning to almost anything but the banks. The banks
are absolutely ravenous, it seems to me, when it comes to their
pursuit of profit through nickel-and-diming ordinary Canadians
who are in the habit of dealing with banks.
There is one thing I would like to see in terms of financial
legislation that I do not see here. Perhaps it would not be
appropriate for it to be in this particular bill, but then again
it might be. It has to do with bankruptcy legislation itself.
I am still dealing with people in my constituency who were done
out of wages, severance pay and holiday pay when particular
companies went under. Ordinary workers are the last people on
the list. Everybody else gets paid off first. Many of these
people find it very difficult to turn the page, because they know
that a great injustice has been done to them and yet there is no
legislative framework in which to pursue the justice they are due
in these kinds of circumstances.
1715
What justice is achieved is often achieved over the course of
many years. I am thinking, for example, of the people who were
put in a terrible situation by the privatization of CN Express
and the eventual closing down of that privatized company, or of
the workers in my riding who found themselves in a similar
position with respect to the sale of CP Express. I am sure the
list is much longer. These are just a couple of examples that I
am familiar with, where people have really been done in by
existing legislation or the lack of protection in existing
legislation when it comes to bankruptcies.
Another thing I think we need to have more of a debate on in the
House is what has happened to our whole monetary system. It
seems to me that when banking legislation is before us it is an
opportunity to reflect on this. I do not claim to be an expert
in these matters, but there is a growing body of opinion in
regard to this in the country, particularly among those who
either write for or subscribe to the newsletter put out by the
committee on monetary and economic reform, which I think is sent
to all members of parliament.
Not so many years ago our system was changed radically when we
abandoned the role by which the Bank of Canada created a certain
amount of the money that was available to the Government of
Canada for the financing of government programs, social programs,
et cetera. There is a growing body of opinion, which seems to me
to be a minority opinion, that something wrong was done when the
private banks were given the exclusive right to create money and
then subsequently given the right to create that money without
having anything to back it up, so that the money that is created
in the country today is money created by the creation of debt. It
is debt created by the private banks. This is not unrelated to
the situation in which governments find themselves in terms of
deficits, debt and the payment of interest.
It seems to me that a debate about money reform in the country
is long overdue, as is a debate about looking at ways of
recreating, perhaps with some changes—because the world does
change and some possibilities remove themselves and other
possibilities open up—the role of the Bank of Canada as a place
where money can be created and where the government can act in a
way that makes it less dependent upon the creation of debt by
private banks in order to create money.
These are just some of the comments that I saw an opportunity to
make in the context of this particular debate. I hope that this
does not lead somewhere down the line to us having to go back
into the trenches, or however you want to describe it, in order
to fight more and bigger bank mergers. There is every reason to
believe that this legislation sets up a process and creates the
opportunities for those very same kinds of bank mergers that the
government stood in the way of only a few years ago, albeit after
much encouragement by the opposition and, in fairness, by some of
their own backbenchers.
If the government were serious about preventing these kinds of
mergers and preserving competition in a Canadian context, it
would not be creating a situation where, by allowing Canadian
banks to merge we, in order to get competition, then have to open
up our borders to American competition. I am reminded of what
has happened in the airline industry: if we get enough Canadian
mergers it almost seems to be an instrument by which, ironically,
we could end up with more American ownership.
As a result of the merger of Air Canada and Canadian Airlines
what people are asking is how we are going to get more
competition. They are saying that we have to open up our borders
to competition from American airlines.
1720
One can see the same thing happening with respect to banks. If
we allow our economy to be dominated by one or two big Canadian
megabanks the next thing we know we will be hearing the argument
that we need more competition, so let us allow Chase Manhattan to
open up on every corner across Canada.
An hon. member: What is wrong with that?
Mr. Bill Blaikie: I heard an Alliance Party member ask
what is wrong with that. The Alliance Party members never did
get it. These are people who make absolutely no differentiation
between foreign ownership and Canadian ownership. That is their
position, but it is not the NDP position.
It used to be the Liberal position. There was a time when the
Liberal Party was known as a party that tried—sometimes in its
own feeble way, but nevertheless it tried—to defend the
interests of Canada and to defend the notion of Canadian
ownership against foreign ownership or at least against a
percentage of foreign ownership that was seen to be a threat to
Canada's ability to control its own destiny. Those days are gone
forever, it seems, those days of the Liberal Party's foreign
investment review agency, the Liberal Party's national
energy policy and the Liberal Party that was against free trade.
We now have, with the exception of the NDP, and sometimes only
recently the Bloc, and then again only some individuals, a
political monoculture in the House that seems to accept that it
is just fine to have a marketplace dominated by the Americans,
aided and abetted by a weak Canadian dollar which provides an
opportunity for our entire country to be bought up at fire sale
prices by the Americans, a political monoculture that says this
is just the invisible hand of Adam Smith working itself out. God
is in his heaven and the invisible hand of Adam Smith is doing
its work here on earth.
We do not subscribe to that particular creed and never have. We
see this bill as one more opportunity for not what we would call
the invisible hand but more like the mailed fist of Adam Smith
crushing the possibility of Canada ever becoming anything like
the independent country that it used to be.
At least my Conservative colleagues, a shadow of their former
selves numerically but obviously not in intellectual stature, ran
in 1984 and said they wanted to get rid of the foreign investment
review agency and the national energy program. They wanted to
let the marketplace do all these things. They at least were
intellectually honest about what they wanted to do. I am being
more than fair to them, because there were a few things that they
were not really honest about. By and large they said they wanted
to deregulate. They said they wanted to sell out the country and
when they got elected they did sell out the country, so people
got what they voted for.
The real tragedy here is the Liberal Party. This is the real
source of pathos, tragedy and betrayal in Canadian politics. The
Liberals are the people who once said they wanted to defend the
country. These are the people who used to be in favour of
regulating foreign investment. These are the people who said
they were against free trade. These are the people who used to
worship at the knee of Walter Gordon and others, yet not one of
them would qualify any more as a disciple of Walter Gordon. They
probably have never even heard of him.
This is the real tragedy in Canadian politics, that those who
would defend the country, its economy and its ability to have
some control over its own economic destiny have been reduced to a
remnant by the political monoculture that has ensued since the
passage of the free trade agreements. This particular bill is
just one more step along the way. We register our opposition to
it.
1725
Mr. Leon Benoit (Lakeland, Canadian Alliance): Madam
Speaker, the member from the New Democratic Party who just spoke
talked about selling out the country and American ownership. I
would suggest that if we want to slow down the Americans who are
buying Canadian companies, we do it by pursuing fiscal policy
that will cause the dollar to increase. The dollar is at an
artificially low level and that certainly does make it very easy
for Americans to buy us out instead of Canadians buying their own
companies. I would like the member to comment on that. That is
the way to have Canadians buy Canadian companies and keep
Canadian ownership: through pursuing proper fiscal policy, which
will cause the dollar to increase.
Further though, the member opposite talks about the Canadian
Alliance wanting to privatize everything and having that type of
policy. I say that is not true. In fact, we have an example
today of where we do not support the government, which talks
about privatizing the administration of the Firearms Act and
privatizing the enforcement, if we can believe it, of the
Firearms Act. That is completely unreasonable. I do not support
it and my party does not support that kind of policy. It is
a crazy policy. It is a taking privatization to the extreme. I
would like the member to comment on that.
Mr. Bill Blaikie: Madam Speaker, if there are limits to
the Alliance's affinity for privatization, it is good to know it,
but I notice that the National Post was kind of soft on
this idea today in its editorial, so by next week the hon. member
might be singing a different tune. He should not be so sure that
his party is dead set against this, because the people who really
call the shots in the hon. member's political culture might be
entertaining a different notion.
With respect to the question about the low dollar, I wish life
were as simple as the member makes it out to be. It seems to me
that right after the free trade agreement when we had the very
deficits that the government has sought to eliminate, we had a
high dollar. In fact, one of the conspiracy theories at the time
was that there had been an agreement to keep the Canadian dollar
high so that the free trade agreement could not work to Canada's
advantage. That was within the ambit of the free trade argument
itself. That was at a time when the government had not dealt
with the debt and the deficit.
Now the government has dealt with the debt, much to the damage
of our social programs and of a lot of individual Canadians
because of the way it was done, and the dollar is low. We have
been assured for five or six years now that the government got
the fundamentals right. How long do we need to have the
fundamentals right? Is it a sentence? Do we have to get the
fundamentals right for 10 years or 15 years or 20 years?
I say that to the member in the sense that I do not think it is
as simple as that. I do not think it just has to do with fiscal
policy. I am not sure exactly how it works. I am not sure
anybody is exactly sure how it works. I am sure the Minister of
Finance sometimes goes to bed at night wondering how it works and
why the Canadian dollar is the way it is. However, just to
assume that if we were to adopt Canadian Alliance policies
somehow the dollar would go up is a bit on the simplistic side.
Mr. John McKay (Scarborough East, Lib.): Madam Speaker,
I have not had an opportunity to congratulate you on your
appointment. I wish you all the best.
I enjoyed the hon. member's wide ranging speech. I was at times
hard pressed to know what it had to do with the subject of the
debate, but I heard him talk about fiscal policy, monetary policy
and the apparent demise of certain political parties. I was a
bit hard pressed to understand the relevance of the bill to those
subjects. Then the hon. member opposite brought up national
energy policy and firearms legislation. I suppose there are a
few things left to debate, but I just do not know what else they
are.
I would like to ask the hon. member whether he believes that the
passage of the bill will in fact lead to a more rational and
sensible process with which the Government of Canada can deal
with the demands of the marketplace and the demands of consumers
with respect to the whole process of bank mergers and
“rationalization” in the fiscal marketplace, and whether he
thinks that this bill does bring some sense and some relevance to
what is presently a somewhat chaotic process.
1730
Mr. Bill Blaikie: Madam Speaker, my impression from the
discussions I have had with our finance critic is that what the
member says is only partly true. What he is not saying is that
this really is setting up a process, not just for the
rationalization of banks, but so the government can rationalize
the rationalization of the banks in a way that it was not able to
do under the previous legislation.
This is setting us up so that the next time this issue comes up,
the Liberals can say that they followed the process in place and
that due process was served. When only two banks are left, the
Liberals can also say that they followed due process and what
else could they do.
[Translation]
Mr. Richard Marceau (Charlesbourg—Jacques-Cartier, BQ): Madam
Speaker, first I want to congratulate you on being appointed
Deputy Chairman of the Committees of the Whole. I wish you all
the best when you are called upon to referee our debates, which
tend to be raucous at times. I know you are passionate about and
attentive to the proceedings of this House, so I have no doubt
you will do a very good job.
I feel like I am watching an old movie. Bill C-8, formerly Bill
C-38, is one of these old movies being shown in the House these
days.
We heard the same arguments a few months ago, the same issues
were raised, and the same positions seem to be more entrenched
now.
During the debate on Bill C-38, now Bill C-8, Bloc members had
expressed several reservations regarding the bill, which were
shared by the Deputy Premier and Minister of Finance of Quebec.
Mr. Landry had stressed four main points. Before Bill C-38 was
introduced we had been told not to worry. They were going to
deal with it, everything would be all right, our concerns would
be addressed.
We were somewhat surprised—I would even say disappointed—to find
the elements we wanted to see not in the bill itself, or in any
piece of legislation passed by the House, but in the regulations
that will be appended to the bill.
As members know, unlike a bill that must be amended by this
House in order to be changed, regulations may be amended at will
by the executive or the Minister of Finance.
Finally, we are being asked to trust this government and in
particular the Minister of Finance and to hand over a blank
cheque. You will understand that we have some difficulty with
that, to say the least.
Bill C-8 gives full power to the Minister of Finance to decide on
his own the fate of Quebec banks without providing any guarantee
in connection with Quebec's distinctiveness. Heaven knows
Quebec is different. The bill provides no specific measure.
Although I do not always share the very 1960s rhetoric of my NDP
colleague, who said “wicked Americans, wicked capitalists, let
us turn the world upside down”, I agreed with him nonetheless on
certain points, including the importance of giving the
disadvantaged, who are often left out, greater access to
financial services.
Finally, Bill C-8 has no answer to the very well directed
questions of my colleague from Hochelaga—Maisonneuve on community
reinvestment.
1735
My colleague from Hochelaga—Maisonneuve, we will remember, is
the excellent representative of a region on the island of
Montreal hard hit by poverty. He has introduced many good ideas
on community investment—I will return to them—which, unfortunately
were not included in Bill C-8. That is regrettable.
We can only be concerned by the fact that a single shareholder
could, with the agreement of the Minister of Finance, hold 65%
of the shares of the National Bank, the largest Quebec bank. It
is the bank of the Quebec small and medium businesses. There is
an economic model in Quebec, and the National Bank is one of the
cornerstones of this model, based on entrepreneurship and the
SMBs.
Should Quebec lose control of as important a financial
institution as the National Bank, I think it would be very bad
for its economy.
We also need legislative guarantees against any negative impact
these new ownership rules might have on the employment of
professionals, consumer and small business services, decision
centres and the role of Montreal as an international financial
centre. The stakes are just too high for Quebec and its economy
to be left to the sole discretion of one man, the Minister of
Finance.
We want to make sure—and I would say our whole position on Bill
C-8 is based on this argument—that the future of Quebec's
banking system is not in the hands of one man. I think most
people would agree with that.
Giving anybody too much discretionary power is bad; giving a
federal minister too much power over Quebec's economy is even
worse.
Bill C-8 does not show a firm willingness to protect consumers,
particularly low income consumers, on the part of the
government. The bill provides for the establishment of the
financial consumer agency of Canada. I have my doubts about the
kind of authority such an agency could have in an economic
climate which, unfortunately, does not look too rosy, as we
know, as the United States are about to be hit by a recession.
We must ensure that not only middle income people but also low
income people have access to financial services. Unfortunately,
Bill C-8 remains vague and has more wish than real policy with
regard to accessibility and consumer protection.
Finally, I would like to return briefly to the importance of
reinvesting in the community. As I said earlier, the member for
Hochelaga—Maisonneuve introduced a bill in the last parliament
which would have required financial institutions to reinvest in
the communities in which they are located. It was based on the
community reinvestment act, American legislation—so we cannot be
accused of being leftist.
As my colleague said, this legislation would require a regulated
financial institution to show that its branches serve the
deposit and credit requirements of the community for which they
are chartered. This is where this issue becomes very important
for, as my colleague said, and I stress this point, branches
have an obligation to help meet the credit needs of the local
communities for which they are chartered.
In a global context, with people looking at the broader picture,
there is also a tendency to move closer to one's own
neighbourhood and community. While we believe that the Canadian
financial system must be strong and able to withstand the
buffeting of the global economy, this globalization must not
leave out individuals and entire neighbourhoods who are
unfortunately ignored in the rush to prosperity.
1740
In conclusion, I strongly urge the government to include the
four points we raised during consideration of Bill C-38 not in
the regulations, where they would be subject to the discretion
of the Minister of Finance, but in the actual legislation which
will be passed in the House. I also urge it to include the main
features of the bill on community reinvestment introduced and
strongly defended by the member for Hochelaga—Maisonneuve.
With these inclusions, the government could expect a much more
co-operative attitude from the Bloc Quebecois.
[English]
The Acting Speaker (Ms. Bakopanos): Is the House ready
for the question?
Some hon. members: Question.
The Acting Speaker (Ms. Bakopanos): The question is on
the motion. Is it the pleasure of the House to adopt the motion?
Some hon. members: Agreed.
Some hon. members: No.
The Acting Speaker (Ms. Bakopanos): All those in favour
of the motion will please say yea.
Some hon. members: Yea.
The Acting Speaker (Ms. Bakopanos): All those opposed
will please say nay.
Some hon. members: Nay.
The Acting Speaker (Ms. Bakopanos): In my opinion the
nays have it.
And more than five members having risen:
The Acting Speaker (Ms. Bakopanos): Call in the members.
And the bells having rung:
The Acting Speaker (Ms. Bakopanos): The vote on the
motion is deferred until tomorrow.
* * *
EMPLOYMENT INSURANCE ACT
The House resumed from February 5 consideration of the motion
that Bill C-2, an act to amend the Employment Insurance Act and
the Employment Insurance (Fishing) Regulations, be read the
second time and referred to a committee.
Mr. Peter Stoffer (Sackville—Musquodoboit Valley—Eastern
Shore, NDP): Madam Speaker, kudos go out to my critic from
Acadie—Bathurst, a member who travelled the country to debate
the EI changes of 1996 and the affect it had on workers,
families, businesses and communities clear across the country. I
honestly believe it was his report that pushed the government
into movement and to understand the terrible assault, for a lack
of a better word, it had on workers, their families and small
businesses.
It is most unfortunate that the member from White Rock, in her
opening statement about the EI changes, said that the bill was
nothing more than a Liberal Atlantic Canada re-election strategy.
That is an insult to all Canadians.
In fact it is a graver insult to those of us in Atlantic Canada.
After the comments from the member for Calgary—Nose Hill, from
one of their colleagues, John Mykytyshyn, and now comments from
the respected member of the House from South Surrey—White
Rock—Langley basically slamming Atlantic Canada for the EI
changes in the bill, as if the changes to EI only affect Atlantic
Canada, it is simple nonsense.
1745
The fact is that western Canada, to use their words, drains more
from the EI fund than Atlantic Canada. The fact is that the
sooner the Alliance Party realizes and understands that, quite
possibly it may have some success east of the Manitoba border.
Some of the changes in the new EI reforms, such as the intensity
rule, are very positive. We are quite glad that the minister and
the government have realized and recognized the error of their
ways and will change that.
A very crucial aspect of EI funding is the labour training. In
a changing economy, our party, and I am sure many
parliamentarians, are encouraging young people to not just have
one academic aspect in their lives, such as computer training for
the new economy, but to have a vocational trade as well. Many
young people take vocational training but those who take the EI
training are penalized for two weeks in the initial start of
their training.
My colleague from Winnipeg has indicated that we should
eliminate the two week clawback during training because it
penalizes workers who are trying to adjust to the new economy by
upgrading their skills. We believe the government should
recognize, honour and commit to that amendment. Workers should
not be penalized for trying to upgrade their skills. All
Canadians want to be productive members of the economy but they
need assistance. Some need literacy training while others need
training in social skills and various labour skills.
Everywhere we go in the country we see help wanted signs in most
service areas. We have a tremendous amount of help wanted signs
in my own area of Sackville, Nova Scotia which are more or less
entry jobs at Burger King, Swiss Chalet and so on, paying the
minimum salary. The workers in those areas, although proud to
have those jobs for now, want to upgrade their skills and improve
their lot and their family's lot in life. They want to be able
to move forward and be more progressive in the so-called new
economy and the demands of the new century.
We as legislators should provide people with the assistance they
need to get training, especially in the cases of single women
with children. It is very difficult for them to move forward and
get the training they require, not only vocationally but
academically, when they also need adequate care for their
children.
In some cases, especially in the rural parts of my riding, the
father has taken off and has abdicated all his responsibilities.
The mothers are left behind to raise the children. It is very
difficult to get child support from the father if he is not
working. What else can she do? She does not want to be a drain
on society. It is not something she wished upon herself or her
children. It is a circumstance of today's reality.
What should we do as government, as opposition members or as
legislators? We must ensure that we can offer that woman and her
children hope. We must provide the resources she needs to care
for her family and to get the proper training she will need to
get a decent job. We must ensure that she can become
self-reliant, look after her children and move forward. That is
the least we can do when there is a surplus of over $30 billion
in the EI fund.
We know that the money is technically gone and spent. The
Liberals have admitted that. I also believe the member from
Mississauga, who is a great speaker in the House when he gets up
on his hind legs and bellows out the Liberal rhetoric, has also
admitted that the money was spent on other programs and
initiatives.
1750
The fact is that it is not the government's money. That money
belongs to employers and employees. It does not belong to the
Liberal government to do as it wishes and give, for example, tax
cuts to major corporations, to the gun registry or anything else
it proposes to do. That money does not belong to the government.
It did not have the moral right to take that money and put it
into any program it so desires.
That money belongs to employers and employees. It is up to the
workers and the businesses to decide collectively what should be
done with a massive surplus like that and what should be done
about the future of the EI concerns.
Unemployment insurance is sometimes called employment insurance.
It is the Liberal way of reversing itself on its head. When it
first came in it offered great protection for workers and their
families in the unlikely event that they lost their job either
through a layoff, a company closure or anything of that nature.
The auto sector is going through a large upheaval. Thousands of
workers, especially in the Windsor area, are about to lose their
jobs. What would happen to those workers if there were no
employment insurance fund or payments in order to look after
them?
That money is essential to maintain their families, to maintain
some income for their households, and to look after small
businesses in the surrounding communities. It is essential that
the government get it right this time. Instead of pounding away
at workers and small businesses, it should start to realize that
unemployment insurance fund or employment insurance fund is a
vital part of the Canadian economy.
It is the workers and the businesses that put money into the
fund. It is certainly not for the Liberal government to decide
what to do with it.
A couple of members in the House who have since been defeated,
Peter Mancini and Michelle Dockrill, two great members from Cape
Breton, fought very hard for fairness in the employment insurance
fund throughout the country, not just in their region of Cape
Breton. They fought hard not only for the Devco miners but for
the Sysco workers, fish plant workers and other workers in their
area. Their eloquence and their stand to defend and fight for
what was right have finally moved the government in some ways.
We also know that the Canadian Labour Congress is supportive of
the initiative in some aspects, but it does wish to have some
amendments go through. We are hoping that eventually the
government will listen to some sound amendments by our party to
make the EI fund more accountable to businesses and more
receptive to workers and to communities throughout the entire
country. If the government does that, it would be very positive
indeed.
BILL C-2—NOTICE OF TIME ALLOCATION
Hon. Don Boudria (Leader of the Government in the House of
Commons, Lib.): Madam Speaker, I rise on a point of order. I
regret to inform the House that an agreement could not be reached
under the provisions of Standing Orders 78(1) or 78(2) with
respect to the second reading of Bill C-2, an act to amend the
Employment Insurance Act and the Employment Insurance (Fishing)
Regulations.
Therefore under the provisions of Standing Order 78(3), I give
notice that a minister of the crown will propose at the next
sitting a motion to allot a specific number of days or hours for
the consideration and the disposal of proceedings at the said
stage.
Mr. Chuck Strahl (Fraser Valley, Canadian Alliance): Madam
Speaker, I am a little puzzled. There has been no attempt by the
Canadian Alliance to slow the bill down. We are eager to get it
into committee.
I do not know about these consultations. Certainly from our
side, from our point of view as the official opposition, let us
get the bill into committee and let us get some witnesses in on
it right away.
Hon. Don Boudria: Madam Speaker, the hon. member is quite
correct. As a matter of fact, it is not his party that refused.
It was another one. Nevertheless, upon verifying twice within
the last few hours, that is still the condition I am forced to
report on to the House, and I just did.
1755
[Translation]
SECOND READING
The House resumed consideration of the motion that Bill C-2, an
act to amend the Employment Insurance Act and the Employment
Insurance (Fishing) Regulations, be read a second time and
referred to a committee.
Mr. Odina Desrochers (Lotbinière—L'Érable, BQ): Madam
Speaker, first, as it is the first time I have had the floor
during this 37th parliament, I am very happy to begin by thanking
my constituents of the great riding of Lotbinière—L'Érable, who
have returned me as their representative in the House of Commons.
This victory by the Bloc was reflected in all of the 50
municipalities of my great riding and this victory is due to the
500 volunteers who worked hard to keep the riding of
Lotbinière—L'Érable with the Bloc.
Speaking of the campaign, I would like to remind the House of
certain things that were said at the time, specifically on
employment insurance. Before going deeper into this bill, I am
going to bring forward some facts that marked the last election
campaign. During the next minutes, I am going to show, once
again, that the Liberals have not been true to their word, to
their promises.
We all remember the interview on an English language network
where the Prime Minister apologized and was very remorseful for
the devastating effects of the EI system reform.
That week, the Secretary of State for Amateur Sport adopted a
similar tone when he said that, when the Liberals returned to
power, it would be time to propose major changes in order to meet
the expectations of the unemployed.
I also remember that one week before the election, when the
Prime Minister was in New Brunswick and spoke so eloquently about
his election commitments, he forgot to mention that he would look
after the unemployed. One of his advisers immediately reminded
him that he should talk about the issue.
All this confirms that once again we have been the victims of a
real misinformation campaign. The unemployment issue has indeed
created confusion in parliament. No one has a clue. Everybody is
looking for the facts. We are trying to find out what the
government intends to do, but to no avail.
Let me reflect on the highlights of the reform, on certain
recommendations that the Bloc Quebecois intends to make. I will
also deal with the report tabled last week by the auditor
general.
For a few years now the Bloc Quebecois has been openly critical
of the surplus in the employment insurance fund. Only last week,
the auditor general said:
In his 2000 report, the Chief Actuary of Human Resources
Development Canada has estimated that a reserve of $10 billion to
$15 billion should be sufficient to guarantee the stability of EI
premium rates over a business cycle.
In the meantime, the Employment Insurance Account's accumulated
surplus has grown to $28.2 billion, almost twice the maximum
amount considered sufficient by the Chief Actuary.
We wondered. What did the Government of Canada, what did the
Liberals do with the surplus? The auditor general told us in a
rather direct manner:
The Account's operating surplus, in effect, provides a source of
revenue and cash flow for the government and helps reduce its net
debt.
This means that the government has taken money from the
unemployed, it has taken EI contributions to pay off the debt and
particularly to set up programs that often infringe on Quebec's
jurisdictions.
1800
What is going on in this parliament is totally unacceptable. A
few moments ago, the government House leader announced a first
time allocation motion, a first gag order.
What should we make of this whole issue? During the election
campaign, the big names in the Liberal Party of Canada said that
parliament would take its time to discuss the employment
insurance issue. Now that we are back here in the House we find
that the House leader is again playing the same game that he
started during the last session by moving gag orders to prevent
democratically elected representatives from saying what they have
to say about the Employment Insurance Act.
The Bloc Quebecois is strongly opposed to Bill C-2, a pure and
simple imitation of Bill C-44. However, it would be interesting
if the current government divided Bill C-2 in two, to ensure it
would respond more realistically to the expectations of
unemployed people.
We have a series of recommendations to make. I would like to say
that, already in the last parliament, the Bloc Quebecois had
been very forward looking, since it had introduced six bills to
improve the operation of employment insurance, to try to find
better solutions to respond to the needs of unemployed people.
The Bloc's requests are very clear. We ask for the elimination
of the intensity rule. This bill talks about this. We also ask
that the maximum insurable earnings be increased from 55% to 60%,
which would be much more realistic.
We also ask for the elimination of the discriminatory clause
towards new entrants to the labour force. We know this applies
to young people and women. We also ask for the elimination of
the qualifying period.
In Bill C-2 it is announced that the premium rate is to be
reduced to $2.25, but the auditor general's report has much more
precise calculations. This government is already late when it
says it wants to reduce premiums to $2.25. The chief actuary, an
employee of the Department of Human Resources Development,
believes that employees' premium rates should be between $1.70
and $2.20, which would cover the long term costs of the
employment insurance program.
In its planning documents, the Department of Human Resources
Development predicts that the accumulated surplus will reach
$34.6 billion by March 31, 2001. On August 31, 2000, the
unaudited balance of the fund's accumulated surplus was $32.4
billion. These figures disgust the public. These surpluses are
upsetting, they make no sense.
We understand that the Liberal government is trying with Bill
C-2 to hide the truth. It is trying to legalize what has always
been called the hold-up of the unemployed and the small and
medium businesses. If Bill C-2 ever passes, no one, including
the auditor general, will be able to intervene to bring this
government back to order.
Of late we have witnessed all sorts of operations making this
government, this parliament, increasing antidemocratic.
In the riding I represent and in all ridings in Quebec, there
are seasonal workers, men and women who return to the labour
market, young people who come onto the labour market. These
people, because of measures that are very difficult to
understand, cannot draw employment insurance.
Just imagine that a young person has to work 910 hours before
being entitled to draw benefits. A worker paying
benefits—depending on the region—must accumulate between 420 and
700 hours to be entitled to employment insurance benefits.
1805
The current act, which will not be amended by Bill C-2,
discriminates seriously against young people and women, who are
affected by this rule, that is, they must work 910 hours if they
return to the labour market.
If I look at Bill C-2, especially if I refer to the many promises
not kept by the federal Liberals in the latest election, it is
very thin in content. It offers no hope to the unemployed
waiting for major changes, which could have met their needs and
corrected the injustices committed against them by the Prime
Minister and his government in the last session.
When I think about what happened during the election campaign
and when I hear all the balderdash on employment insurance
coming from the other side, I wonder who knows the truth.
Fortunately, the Auditor General of Canada brought back some
kind of order last week. He gave some indications to try and
clear things up.
This bill is an insult to the unemployed. There is nothing in it
for them. It only mentions the abolition of the intensity rule
and some minor changes when everyone in Quebec and in Canada was
expecting so much.
The Liberals are laughing at the unemployed. They did it
throughout the election campaign and continue to do so here, in
the House of Commons.
The members of the Bloc Quebecois will continue to fight for
improvements for the unemployed. Fortunately, we have in the
House of Commons 38 men and women to protect the interests of
Quebecers. Even with the government trying to muzzle us and take
away our freedom of speech, I hope that, in the little time we
have, we can prove that Bill C-2 is an empty shell, that it
brings almost no changes to the system and is an insult to the
unemployed in Quebec.
Mr. Robert Lanctôt (Châteauguay, BQ): Madam Speaker, I am a bit
stunned. I am a new member and I think the debates we have in
this House in which we criticize certain aspects of a bill are
very useful.
I just learned from the House leader that the government intends
to limit debate on this bill. It is the first time that I
witness such a request. I think this request comes rather
quickly in that each comment I heard and each speech made by
members of all parties, particularly the Bloc Quebecois, have
clearly shown that there is abuse. That is why I am very
surprised to hear this request at this time.
The auditor general's report dated February 6—today is February
12—confirmed some of the questions we have been asking about
this bill. So it has been only six days, and the government has
already decided to limit debate.
I am sorry, but we are in the House of Commons where there are
301 members, including 38 from the Bloc Quebecois, and each of
these members would have something more to say. I have not
counted the exact number of members who have spoken so far, but
I am sure there are speeches that should be heard.
1810
I have a question for my colleague from Lotbinière—L'Érable. In
his riding, as everywhere in Quebec, figures are circulated
saying that the fund has a surplus of $7.2 billion for an
accumulated surplus of $28.2 billion. The auditor general has
told us that this was double the authorized amount.
However, we are forgetting the numerous self-employed people in
Quebec and in Canada. There are also the young students. We hear
fine speeches about young people, and the desire to help them.
Why then do they have to pay employment insurance premiums, when
we know that 30% or 40% of them will not be able to collect any
benefits?
The question has to be asked.
How do these people react in Lotbinière—L'Érable and across
Quebec when they are told that surpluses of over $28.2 billion
have been accumulated, as the auditor general said? And yet, the
government says we do not have enough money to say “Let us amend
the act. Let us at least take this opportunity to discuss it, to
try to improve it and to draft a clearer bill that will give
people access to this money”.
Mr. Odina Desrochers: Madam Speaker, my constituents have been
the victims of a partisan misinformation campaign.
On television, during the campaign, they accused the Bloc
Quebecois of not fighting for the interests of Quebecers. In
spite of that misinformation, 40% of Quebecers put their trust
in us. They knew that if they sent 38 members to the House of
Commons, these members would continue to fight for their
interests.
I have found a new word to describe what is happening on that
side. We hear about autocracy and democracy. I would call
whatever happened in the House of Commons during the last
session and during the last campaign and whatever is going on
right now “chrétinocracy”.
The Acting Speaker (Ms. Bakopanos): This is a new word for the
dictionary.
[English]
Mr. Larry Bagnell (Yukon, Lib.): Madam Speaker, the
member said that this bill offers nothing and that there are no
substantive changes, so I would have to assume that he would have
no problem if someone wrote to his constituents, listed the
improvements that are in the bill and said that the Bloc was
against the improvements.
[Translation]
Mr. Odina Desrochers: Madam Speaker, it is easy to answer that
question. There are almost no changes. Therefore, the list would
be very short; I would have no problem at all with that list
being presented to my constituents in Lotbinière—L'Érable.
Mr. Benoît Sauvageau (Repentigny, BQ): Madam Speaker, first of
all I want to congratulate you on your appointment.
In response to the question of the new member for Yukon, I could
read the list, because it is indeed not very long. There is the
abolition of the intensity rule, the abolition of discrimination
in the rule of tax clawback, the change in the definition of new
entrant, the indexing of the maximum yearly insurable earnings
and the reduction of the premium rate to $2.25.
I hope that answers his question and his interest for this
subject. In a spirit of co-operation, he too could oppose this
bill, because that is what the people in his riding would ask
him to do if they had the same information available to them.
Unless he must follow the party line, which would be very sad
for a new member.
First of all, as my colleagues did the first time they rose in
the House, I would like to thank the people in the riding of
Repentigny for putting their confidence in me. This is a riding
that you know well, Madam Speaker, as you visit it regularly.
Since you represent the other end of the island of Montreal, you
have the opportunity to come by often.
So, the great riding of Repentigny is an urban riding composed
for the most part of young families that have elected me and
given me their confidence for a third mandate. To all those who
voted for me I want to give my wholehearted thanks and assure
them that I will work hard, as I have over the last seven years,
to stand up for their interests here, in the House of Commons.
1815
First of all, I would like to talk about the previous bill,
because before we talk about this one, we have no choice but to
put it in context and look at its background.
We are debating today Bill C-2, but it is really a new
incarnation of Bill C-44. Technically, Bill C-44 died on the
order paper, because the government House leader, with all his
goodwill, made sure the Liberals did not call an election after
passing such a revolting bill. He did not see fit to use closure
or other parliamentary tricks to gag the opposition.
He made sure the bill would die on the order paper so they could
appear, during the campaign, to be more open on this bill.
Bill C-44, an act to amend the Employment Insurance Act, has
disappeared. The Prime Minister, who is in China today, has made
this comment about the bill: “We realized that this was not a
good decision, and we should not have done this”.
The Prime Minister said that Bill C-44 was not a good idea,
but one of his ministers is much more talkative. The minister
responsible for amateur sport often stumbles in his public
statements. Hon. members will certainly agree with me. He never
misses a chance to voice his strong opposition when a government
decision is not to his liking. If he does not agree with me, the
minister will get a chance to say so during the questions and
comments period, and if he does not say a word, it is because he
agrees—
An hon. member: Silence is consent.
Mr. Benoît Sauvageau: Silence is consent, says my colleague.
This minister said that after the election of a majority Liberal
government, I suppose he had a crystal ball at that time, it
would
re-establish the process and ensure that the right
changes were made, those responding properly to the majority of
the realities and needs of the people of Saguenay—Lac-Saint-Jean
and of all Canadians.
He must have made this statement in the Saguenay—Lac-Saint-Jean
region, which is why he named it. He concluded his statement by
saying “I am committed—this minister is very big on
commitments—to changes in the law, and we will make changes”.
This is what the Secretary of State for Amateur Sport said. I
welcome his contradiction of my quotes, if he is not in
agreement, during the question and comment period.
These are two quotes which strike me as very eloquent. The
Prime Minister said that they were wrong. As for the eloquent
Secretary of State for Amateur Sport, he said they were going to
make changes—“I assure you of this, I promise this” he said.
Still we find ourselves back with Bill C-2 and its very modest
changes, as I have been able to confirm to the hon. member for
Yukon.
This bill, brought back despite those two statements, despite
all the promises each MP and each prospective MP made in their
respective ridings, makes me think of a still more important
promise made by the Liberals, one they have also broken. If I
asked the Liberals to tell me which one I mean, I would have a
lot of different answers. Some would say the GST, some free
trade, but these are not the ones I mean. We will not hold a
contest, because there would probably be too many responses.
The promise that was not kept, and the two quotes prove it, is
the 1993 one in red book one, with respect to the public's trust
in the government and elected representatives.
In this regard, all parties are in the same boat. In 1993, the
government promised to restore the public's trust. I challenge
Liberal, Bloc Quebecois and Canadian Alliance members to go to
their ridings and check out the public's general level of trust
in us. This level of trust is very low, even after a promise
made seven years ago. Why? Because we have the proof, in the
two earlier quotes, that politicians, especially when they are
in power, too often make clear statements, but do not follow
through on their promises. The Prime Minister said he liked
clarity. Here was the proof: it was clear they were going to
make changes, they said. They said it even more clearly in 1980
and 1995. These changes did not happen, however, and there is
still no sign of them.
1820
In my opinion, the most important promise this government broke
was the one it made in 1993 to restore confidence in this
institution. If we had statistics on the votes of confidence in
1993 and those of today, I think that the rate would be down,
and it would be for reasons like this.
The red book also promised an ethics counsellor appointed by and
accountable to parliament. This political adviser appointed to
restore trust, is another failed Liberal promise.
To restore trust, we might have expected fewer criminal
investigations; there are many of them, including several in the
riding of the Prime Minister, among others, on a golf club he
previously owned and on a hotel he also owned.
To restore trust, perhaps we should listen to the most eminent
official in parliament, the one who, unfortunately for the Prime
Minister, was not appointed by him, that is the auditor general.
I believe the Prime Minister likes to say that we have the “best
and most beautiful country in the world” and the “best Prime
Minister in the world”. I congratulate him for the two Olivier
awards that he won yesterday as the year's best international
humorist.
But in this “best country in the world”, there is a good auditor
general.
The latter said in 2000 and repeated in 2001 that the way the
surplus in the employment insurance fund was being used was
outrageous and almost illegal. The Employment Insurance
Commission establishes a premium rate according to the economic
situation. The chief economist of the Royal Bank, who is here,
could confirm that the employment insurance premium rate has to
be defined according to the economic situation, whether things
are going well or not so well, according to the money that is
already in the employment insurance fund, and according to the
current rate and to the current surplus in this employment
insurance fund, which is twice what it should be, that is about
$30 billion.
The auditor general says this is outrageous. He repeats that is
outrageous, and the Prime Minister says “It is the opposition
that is wrong”. It is not the opposition that says that. The
opposition is quoting the auditor general, who has been
repeating that there is too much money in the fund.
What does having too much money in the EI fund mean for workers
and employers? Thirty billion dollars is an impressive figure,
but it has been said that this is too much. First, the money is
not used to help the unemployed but to reimburse the Canadian
government's net debt. Once again, the auditor general is the
one who says so.
The Canadian government deliberately took money out of the
pockets of the employers and the employees to eliminate the
deficit. That is a tax on salaries. If the government really
wanted to be clear and honest, it would levy a tax on salaries.
But once again, it prefers to disguise the truth to hide the
fact that it is not fulfilling its 1993 promise.
Since I have very little time left, I will conclude with this. I
call upon the government members to accept that at the very
least the bill be divided in two so as to allow members from the
Bloc to vote in favour of the very minimal amendments proposed
to the employment insurance. If they accept, they could reach a
larger consensus. I would also ask them to give us the
possibility to express our opinion on the outrageous theft of
the EI fund surplus.
The Acting Speaker (Ms. Bakopanos): I remind hon. members that
debate is now limited to 10 minutes and that there is no period
for questions and comments.
[English]
Mr. Peter MacKay (Pictou—Antigonish—Guysborough, PC):
Madam Speaker, I welcome the opportunity to speak to the bill,
formerly Bill C-44, which has generated a great deal of debate
and discussion around the country. It is certainly a matter of
great interest in my constituency in Nova Scotia,
Pictou—Antigonish—Guysborough.
The changes that we are discussing result from callous changes
that were made by the Liberal government to the insurance plan in
1997 which resulted in a public backlash that was attempted to be
remedied by the government in the wake of the 2000 election.
1825
Now in typical Liberal fashion, the call of the election
resulted in the death of the bill. We saw that with a number of
important pieces of legislation. While on the hustings though,
the Liberals dangled former Bill C-44 in front of the faces of
Atlantic Canadians in particular. Seasonal workers of course
were those who were most vulnerable on this particular piece of
legislation.
Hopefully, this early calling of the bill, the debate that has
ensued and the opportunity again to revisit these issues at the
committee is an indication that the Liberals are in fact quite
serious about passing this legislation and bringing about
improvements that will enhance the ability of seasonal workers to
benefit from the bill.
In my riding of Pictou—Antigonish—Guysborough the problems
with employment insurance are major issues of concern. Whether I
spoke to workers at Trenton steel plant, farmers in Lismore or
fishermen in Canso, the same complaints were prevalent when
addressing their EI concerns. The issue of undeclared earnings
was by far the number one complaint throughout the riding and was
given particular priority by those who engaged in shift work at
the Trenton Works Ltd. steel plant in Trenton, Nova Scotia.
Just to elaborate, there is a loophole in the undeclared
earnings section of the Employment Insurance Act which allows the
government to claw back moneys from individuals as an overpayment
even though the claimant never receives the benefit. That is the
crux of the issue. In essence, the government is taking money
back on earnings that were never actually realized by the
employer.
I spoke to members of the HRDC local office who administer the
EI claims in the maritimes and they too have expressed concerns
over the manner in which this particular section is implemented.
For example, during the weeks where a shift worker is employed,
the worker does not expect, nor does he receive any EI benefits.
At the end of hard week's work, the worker then fills out an EI
claim and sends it to be processed. However, the problem arises
if the worker is then asked to work overtime. That is there is a
change in the situation because of an overtime job that requires
the worker to be called back in. The worker, in some instances,
has already sent in the card. This is not an issue where the
individual is trying to deliberately mislead anyone, it is simply
a change in circumstance.
What then happens is the overtime hours will not be included in
the declaration of hours worked. Often a worker does not bother
to phone the HRDC office to report his or her additional hours
because the person knows that he or she does not qualify for
benefits for that particular week. The person knows that making
a change in the original card submission will only cause delays
in the processing. Sadly, those who are reliant on these
government cheques are in a catch-22. They are afraid, in
essence, that they will receive no benefits if they are
forthcoming with this information. There is also a shortcoming
in their ability to communicate this.
I know there have been attempts to deal with this anomaly by
setting up a 1-800 number. Again, it is very difficult for the
worker on shift work to provide that information to the local
office. The delays often result in a longer wait for claims
where individuals are not able to work or are not called in to
work and are therefore in receipt of no income.
Still when an EI representative phones the employer to confirm
how many hours the employee has worked, the discrepancy becomes
evident quite quickly. The employee is then penalized for having
submitted a fraudulent claim.
There is an issue that has to be addressed. There is an
opportunity in this particular bill to address this anomaly. The
penalties for fraudulent claims are enormous and unnecessary. The
penalty covers the entire period of pay as opposed to the pay
week where the infraction occurred. There is almost an issue of
double jeopardy here. Thus the employee's penalty would claw
back the much needed money even from weeks where the hours of
work were properly reported and a blanket penalty would be
imposed.
All of this may sound convoluted to any individual who has never
availed themselves of seasonal employment and been on the EI
system. For those who have, this is a real dilemma for seasonal
workers.
I know my time is short. I look forward to the opportunity to
continue participation in this debate when we resume the matter
tomorrow. I know the time is here to conclude for the day, but I
respect the Chair's indulgence and look forward to further
participation.
[Translation]
The Acting Speaker (Ms. Bakopanos): It being 6.30 p.m., this
House stands adjourned until tomorrow at 10 a.m., pursuant to
Standing Order 24(1).
(The House adjourned at 6.30 p.m.)