May 6, 1965

LIB

Walter Lockhart Gordon (Minister of Finance and Receiver General)

Liberal

Mr. Gordon:

Mr. Chairman, the bill to be based on this resolution provides for the revision of the Quebec Savings Banks Act under which two savings banks operate, one in Montreal and one in the City of Quebec. This bill follows, wherever appropriate, like provisions in the bill to revise the Bank Act, and many of the administrative changes proposed in that bill have been incorporated in this one as well. I shall be pleased to give a more detailed explanation when the bill is before the House for second reading; and after it has been given second reading I shall move that it be referred to the Banking and Commerce Committee.

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink
LIB

Herman Maxwell Batten (Deputy Chair of Committees of the Whole)

Liberal

The Deputy Chairman:

Shall the resolution carry?

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink
NDP

Frank Howard

New Democratic Party

Mr. Howard:

Mr. Chairman, because we are in Committee I think the rules will permit a question to be posed to the Minister which, if he has time, I think he will be able to answer. Are banks which are incorporated under the Quebec Savings Banks Act, banks in the same sense as, say, the Bank of Montreal? Is it permissible for savings banks, for the sake of argument, under this Act to do business in British Columbia, just as an example?

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink
LIB

Walter Lockhart Gordon (Minister of Finance and Receiver General)

Liberal

Mr. Gordon:

There are important differences, Mr. Chairman. The banks that are incorporated under the Bank Act have more

DEBATES 1021

Quebec Savings Banks Act powers and can do a lot of things that the banks incorporated under the Quebec Savings Banks Act are not entitled to do. I would prefer to answer more detailed questions when the bill is before the House, if I may.

[DOT] (9:40 p.m.)

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink
NDP

Frank Howard

New Democratic Party

Mr. Howard:

Just one other question, if I may, Mr. Chairman. I can appreciate the desire of the Minister to deal with this matter when the bill is before us, when we will be able to see it in black and white, but it would be helpful if the Minister would point out which provisions relating to the Bank Act, the resolution regarding which has just been dealt with, are also applicable to the Quebec Savings Banks Act. For instance, the provision about interest rates, the one about provincial government participation, the one about mortgage lending and the like.

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink
LIB

Walter Lockhart Gordon (Minister of Finance and Receiver General)

Liberal

Mr. Gordon:

Perhaps I might briefly summarize the provisions of this bill. The principal features are, first, the extension of the banking powers of these two banks for a further period of 10 years up to July 1, 1975, to conform with the period for the decennial revision. Second, the provision to prohibit after July 1, 1970 the election or appointment of a person to be a director if he has reached the age of 75. That was something which was incorporated into the Bank Act some time ago.

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink
NDP

Frank Howard

New Democratic Party

Mr. Howard:

Will he be sent to the Senate then?

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink
LIB

Walter Lockhart Gordon (Minister of Finance and Receiver General)

Liberal

Mr. Gordon:

I do not know what will happen to him. I am rapidly approaching that age myself so I will have to look into this. Third, a provision to permit the banks to fix any price on new issues of shares which is not less than $1 par value. That is something which can be done under the Bank Act. Fourth, provisions with respect to resident, non-resident and government ownership of shares of savings banks, which are the same as those in the bill to revise the Bank Act and which I dealt with briefly at the resolution stage of the previous bill. Fifth, an increase in the amount banks may lend on conventional mortgages and, sixth, an increase in other lending and investment powers.

They are the main provisions of the bill. The Royal Commission on Banking and Finance recommended that the savings banks be given the same powers as the chartered banks. However, these banks have expressed no wish to extend their operations to include commercial lending but prefer to carry on under their own Act as in the past.

May 6. 1965

Quebec Savings Banks Act

I should perhaps answer my hon. friend's direct question put to me a few moments ago. These two banks can operate only in the Province of Quebec.

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink
NDP

Frank Howard

New Democratic Party

Mr. Howard:

What about interest rates?

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink
LIB

Walter Lockhart Gordon (Minister of Finance and Receiver General)

Liberal

Mr. Gordon:

Same limits.

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
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RA

Gilles Grégoire

Ralliement Créditiste

Mr. Gregoire:

Mr. Chairman, I wish to ask the Minister of Finance a question.

Can he tell us if the reduction from 8 to 7 per cent of the chartered banks' liquid reserves applies also to the savings banks in Quebec?

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink
LIB

Walter Lockhart Gordon (Minister of Finance and Receiver General)

Liberal

Mr. Gordon:

Mr. Chairman, I would be delighted to answer as many questions as I can, but I do think it would be more appropriate to do so when we come to that stage of the proceedings where detailed questions are normally put to the Minister concerned.

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink
RA

Gilles Grégoire

Ralliement Créditiste

Mr. Gregoire:

Mr. Chairman, I should like to direct a supplementary question to the Minister.

If he were assisted by his experts, perhaps he could give an immediate answer to our questions.

What we want the Minister to tell us is whether the percentage of cash reserves that the Quebec savings banks have to maintain when they grant loans will also be reduced, as proposed for chartered banks. Moreover, can he tell us what percentage of cash reserves the savings banks will have to keep from now on?

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink
LIB

Walter Lockhart Gordon (Minister of Finance and Receiver General)

Liberal

Mr. Gordon:

The same procedure will be followed as in the past, Mr. Chairman.

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
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RA

David Réal Caouette

Ralliement Créditiste

Mr. Caouelle:

Mr. Chairman, we should like the Minister of Finance to tell us what the difference is between the chartered banks, concerning which changes were discussed earlier, and the Quebec savings banks? Do these enjoy the same privileges as chartered banks in Canada?

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink
LIB

Walter Lockhart Gordon (Minister of Finance and Receiver General)

Liberal

Mr. Gordon:

No, Mr. Chairman. As I just pointed out, it was suggested by the Royal Commission that the Quebec savings banks be placed, for all practical purposes, on the same footing and be permitted to go in for commercial banking, as do chartered banks. But the Quebec savings banks decided they

did not want to do this, that they would like to continue their operations in the way they have been successfully doing for many years, so there is no reason to force them into a field which they do not wish to enter.

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink
RA

Gilles Grégoire

Ralliement Créditiste

Mr. Gregoire:

Mr. Chairman, I should like to direct another question to the Minister of Finance.

Is it not a fact that savings banks have to keep liquid reserves equivalent to 100 per cent of their loans or deposits?

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink
LIB

Walter Lockhart Gordon (Minister of Finance and Receiver General)

Liberal

Mr. Gordon:

Five per cent, Mr. Chairman. May I just point out that I think this is a fairly good example of some of the small differences in percentages about which we have heard so much this evening. We have been hearing all sorts of figures tossed out by our friends in that corner of the House-as an hon. Member says, these great experts in finance, who in my humble opinion, if they ever got their hands on the financial machinery of this country, would bring about one of the greatest financial panics which Canada or any other country could ever experience.

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink
?

Some hon. Members:

Oh, oh.

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink
?

Some hon. Members:

Hear, hear.

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   DECENNIAL REVISION AND EXTENSION OF POWERS
Permalink

May 6, 1965