March 13, 1969

NDP

William Arnold Peters

New Democratic Party

Mr. Peters:

On a point of order, Mr. Chairman, may I ask whether the sponsor of the bill would agree that Avco Delta Corporation is a United States owned corporation? Would he not also agree that London and Midland is listed in the report of the Superintendent of Insurance as a Canadian company and that this change of name would not only change the name but would change the ownership of this company from a Canadian company? The hon. member for Ottawa Centre shakes his head. I suggest that the evidence provided to the committee of the other place indicates that this company is now totally foreign owned and should no longer be listed as a Canadian company. Is this not correct?

Topic:   PRIVATE BILLS
Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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LIB

James (Jim) Gordon Lind

Liberal

Mr. Lind:

That is not correct. This company is not totally foreign owned. As a matter of fact, this company is controlled by Avco Delta Corporation, but there are common shares in the hands of Canadian shareholders.

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Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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NDP

Randolph Harding

New Democratic Party

Mr. Harding:

One per cent or less. Now, Mr. Chairman, may I continue. Again I ask the sponsor of the bill where he stands. We have had other private bills in this house in respect of which substantial amendments have been offered which in effect gave

March 13, 1969

Private Bills

Canadians the right to buy back the shares. I do not know what the members of the Liberal party generally think about the ownership of our financial institutions, but I should like to place on the record a few remarks from a very responsible and reliable source concerning what is happening in respect of the control of the financial institutions of this country. I should like to place this on the record because it is very important. In 1956, 12 years ago, the royal commission on Canada's economic prospects stated in its preliminary report:

Foreign ownership of the stocks of the Canadian chartered banks and of life insurance companies, which are incorporated under Canadian law, is not particularly large at the present time. It is desirable that Canadian control of these institutions be maintained. The commission suggests, therefore, that appropriate action be taken to prevent any substantial measure of control of the chartered banks and of life insurance companies from coming into possession of non-residents. One way in which this might be accomplished would be to provide by statute that any shares in such institutions which are acquired by non-residents of Canada in the future would be ineligible to vote. This restriction should not be applied to existing non-resident holders of such shares.

I did not make that statement. That comes from a group of Canadian economists. They are warning the people.

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Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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LIB

James (Jim) Gordon Lind

Liberal

Mr. Lind:

Yes, but may I ask the hon. member a question?

Topic:   PRIVATE BILLS
Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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NDP

Randolph Harding

New Democratic Party

Mr. Harding:

What is happening is-

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Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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LIB

Jean-Thomas Richard

Liberal

The Acting Chairman (Mr. Richard):

Order, please. The hon. member has the floor.

Topic:   PRIVATE BILLS
Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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NDP

Randolph Harding

New Democratic Party

Mr. Harding:

Did the hon. member wish to ask a question? I will gladly give way.

Topic:   PRIVATE BILLS
Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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LIB

James (Jim) Gordon Lind

Liberal

Mr. Lind:

Does what the hon. member has just read have any connection with the change of the name of London and Midland General Insurance Company?

[DOT] (5:30 p.m.)

Topic:   PRIVATE BILLS
Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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NDP

Randolph Harding

New Democratic Party

Mr. Harding:

It certainly does. That was no question, Mr. Chairman.

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Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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LIB

Jean-Thomas Richard

Liberal

The Acting Chairman (Mr. Richard):

Order. I have been listening to this exchange and it is just a repetition of the same question and the same answer. I think the hon. member should proceed with his speech.

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Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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NDP

Randolph Harding

New Democratic Party

Mr. Harding:

Thank you, Mr. Chairman. However, we intend to try and get information from the sponsor of this bill before the debate is concluded. I referred to 1956. I should now like to come to 1959. I shall read

what the Superintendent of Insurance at that time, Mr. MacGregor, said in 1959.

In my reports in recent years I have drawn attention to cases where control of a Canadian life assurance company passed from Canadian interests to interests outside Canada. In the three or four years preceding 1958 there was much activity in the shares of Canadian life assurance companies and control of a number of companies was acquired by external interests through purchase of a majority of shares from Canadian shareholders. This makes-

He is referring to 1959.

-the sixth life insurance company where control has passed into external hands in recent years.

In 1960 we had another warning from the Superintendent of Insurance, the watchdog of all the insurance agencies in this nation. This is what he told us in 1960:

The acquisition of control of established Canadian companies by British and foreign insurance companies means a permanent loss in the share of the life insurance business in Canada transacted by Canadian companies under Canadian control. The formation of a new life insurance company is a difficult undertaking and requires the investment of large amounts of money with no expectation of a return on the investment for many years in the future. Such companies are difficult to replace. The chance of repatriation of control is much less than if the shares were in the hands of individuals.

Again we had this warning from the head man in the insurance field. And what do we get in this house? We have private member after private member introducing private bills, some of them to hand over Canadian insurance companies to the very people the former Superintendent of Insurance has been warning us about. No wonder people are becoming apprehensive. During 1961, control of nine Canadian fire and casualty insurance companies passed to British or foreign hands. These transfers are largely responsible for the reduction in the proportion of fire and casualty premiums written in Canada by Canadian-controlled companies, from 26.5 per cent in 1960 to 22.4 per cent in 1961. So, on down the line have we gone until today.

I should now like to refer to the 1967 report, the latest one which I have. All hon. members have received this report of the Superintendent of Insurance. Let us consider the fire and casualty insurance figures for 1967. If people think this is unimportant, all they have to do is consider the portfolios of investment that these companies control in this nation of ours; they will then realize the tremendous power they wield. We should appreciate the necessity of keeping control of such companies within the confines of our own nation. Warnings have come from people

March 13, 1969

who certainly do not belong to the party which I represent. They must be looked upon as extremely responsible people. They have warned this government, and the elected representatives of the government, to be careful or we will lose economic control of our own nation.

In 1967 the net premiums written amounted to $1,467 million. This is a tremendous sum of money. Canadian companies-we call them Canadian companies-controlled about 43.2 per cent of this business. However, a number of these Canadian companies were controlled by British or foreign companies. I shall not give the percentages because it would take too long to read them, but the bulk of the investment control does not lie with Canadian companies in the fire and casualty insurance field.

These statistics should alarm any thinking Canadian. It is amazing to me that anyone elected in a riding of Canada would come to the House of Commons and try to turn over another little chunk of the Canadian economy to outside interests. We in the New Democratic party, are asking members who sponsor private bills to talk to the companies that come to them. They should tell these companies that they are Canadians, interested in Canada. They should ask the companies to accept amendments to their bills which would mean that Canadians would have an opportunity to buy back over a period of time control of the companies. Such a suggestion was made by the previous speaker.

Two or three companies have already done this because they realized that Canadians from the east to the west in this nation were becoming concerned about the problem. We have asked that these questions be dealt with. The hon. member said he has not approached this company and there is no need to approach it. But he willingly accepted the job of coming to the House of Commons and trying to persuade his colleagues to accept this and other private bills which would allow a sell-out of another chunk of our economy.

Our party is saying it is time we called a halt to this practice and sat down as members of political parties-every one of us is interested in Canada-and arrived at a solution to the problem. If one is interested in Canada, he does not start selling this nation piecemeal, bit by bit. We are asking that the sponsor of the bill seriously consider the matters we have raised. It is not too late to do this, because I doubt whether the bill will pass this evening. I suggest that the hon.

Private Bills

member go back to the company and place before it the proposition that other companies have incorporated in their bills. This bill can be amended; it is not too late to do it. There can be included in the bill the very provision for which we are asking, namely, that Canadians be given an opportunity to become part owners in this country and its economy. Such a provision must be written into the bill. We ask that such amendments be made to it. We suggest that the hon. member sponsoring the bill should rise in the house this afternoon and tell us that he will take this proposition back to those who asked him to present the bill to the House of Commons.

[DOT] (5:40 p.m.)

Topic:   PRIVATE BILLS
Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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LIB

Grant Deachman

Liberal

Mr. Deachman:

Mr. Chairman, we have just been treated to the kind of speech which in the past few years we have heard in this house during private members' hour. We have listened to such speeches as N.D.P. members have fervently argued in order to retard the business and economic progress of Canada. No one can argue this case better than do the hen. members who, throughout their history in the House of Commons, have been confined to the far left hand corner of the house because of the theories which they hold with regard to business and economics in Canada. The case before us this afternoon hinges on the view of hon. gentlemen opposite of what is a Canadian company. A Canadian company might be a company which is wholly owned by Canadians. It might also be a company which is, in part or even to a considerable extent, controlled by people abroad who felt it was worth while to come to a country of business growth and of economic stability such as Canada and to invest money for the progress of their company and to the benefit of the Canadian people. But hon. members opposite, who have held up these bills, have constantly argued that foreign capital militates against the progress of the Canadian economy and industry. We do not believe that on this side of the house.

Topic:   PRIVATE BILLS
Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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NDP

William Arnold Peters

New Democratic Party

Mr. Peters:

That is not true.

Topic:   PRIVATE BILLS
Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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LIB

Grant Deachman

Liberal

Mr. Deachman:

They argue that it is unCanadian unless a company is Canadian in the terms which they describe, that is to say that it finds the bulk of its capital in this country and that it does not find the bulk of its capital from outside of Canada for any investments which might add to the production and to the benefit of the Canadian economy.

March 13, 1969

Private Bills

I want to ask: What is a Canadian political party? That would be a good thing to discuss here apropos of what has been said of Canadian companies this afternoon. Is a Canadian party a party which is for the most part supported by U.S. unions, for example, and which in the eyes of virtually all Canadians who have watched them over the years is not much more than a Canadian subsidiary of U.S. unions which dominate Canadian unions?

Topic:   PRIVATE BILLS
Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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?

Mr, Harding:

You do not know your history.

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Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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LIB

Grant Deachman

Liberal

Mr. Deachman:

We know on this side of the house that the leader of their party, who has gradually beat a retreat across the west, has been finally pushed off the mainland onto an island, but still clutching firmly a piece of Canadian soil. We know he went down to Boston during the last election and there he was promised the support of the United States unions which own the N.D.P. Yet, they come into this house and call themselves a Canadian party.

We do not mind saying they are a Canadian party. We know they are good citizens, misguided though they may be. We know they are misguided in good faith, but we do not deny them the right to call themselves Canadians. There is nothing wrong with that.

All I want to say to these gentlemen is-

Topic:   PRIVATE BILLS
Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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?

An hon. Member:

We are better Canadians than you are.

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Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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LIB

Grant Deachman

Liberal

Mr. Deachman:

-that there are different ideas with regard to what constitutes a Canadian entity or organization than the example one sees when examining that very party.

So, I wonder whether or not we could look at this bill which is before the house in a more practical light, in the light of how we have developed this country by bringing people here from abroad, some of whom have become members of that party. Do we say they are not fit to be Canadians? No, sir. It is a privilege to come from abroad and to become Canadian. It is a privilege to come here with one's capital, to make it grow and to assist in the development of Canada. But hon. members opposite find something wrong with it. Let me say that we do not. I ask them this afternoon to reflect on what constitutes Canadians. They are people with faith in their country, sufficient faith to come here and settle, to take part in its political life and its development. They are people with enough faith to bring their capital here from abroad,

to invest in the country and assist in making it grow. That is what has helped to make Canada great.

I want to say that certainly we must struggle to retain our own political freedom in this country and to maintain a growing investment in our own equity. This is part of being good Canadians economically, to take part in the economic development of the country and to invest our dollars in it. But we would be going against the history of the economic development of Canada if we were to follow the kind of theories which have been put forward by hon. gentlemen opposite as they defeated these bills one after the other, year after year, during the period in which I have been in the House of Commons. It is hokum of the highest kind and will continue to be hokum as long as they preach it.

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Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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RA

Henry P. Latulippe

Ralliement Créditiste

Mr. Latulippe:

Mr. Chairman, I am happy to have the opportunity to participate in this debate on Bill C-101. I understand that this insurance company wants to change its name, and take an English name and a French-Can-adian name. So this insurance company will have two names.

Generally speaking, we have nothing against insurance companies. We believe that there are too many of them in this country. I think that their premiums are too high for the services they provide. On every street corner there are insurance salesmen trying to squeeze money out of Canadian taxpayers, on the pretence that their companies know where to invest, and that they can better manage that money than the individual.

Earlier, I heard the sponsor of this bill say that these companies come here to invest capital. I want him to know that they come here to seek Canadian funds to invest later on. Insurance companies have no need to invest capital, as they gather funds as soon as they start to operate. So, they raise funds to form the company and as soon as this is done, they do not need this capital any longer. It is put in a reserve. In the past many insurance companies were raising capital in Canada to invest abroad. Isn't that a shame, Mr. Chairman? There lies the evil. A company should be exclusively Canadian, and all the capital it extracts from the Canadian nation should be reinvested exclusively in Canada. Parliament should act to make compulsory for all insurance companies and all other companies that draw off Canadian capital in order to reinvest it elsewhere, to invest in Canada. In fact, we

March 13, 1969

need capital, and above all foreign capital, because we do not have enough. If our capital is sent abroad, the situation will be even worse.

Mr. Chairman, several insurance companies claim to be exclusively Canadian, yet they are not at all. They come to seek Canadian capital and are contributing to the development of other countries. Then is the time to act. Those insurance companies should be exclusively Canadian, not only in name but also with regard to their operations.

It is asked to replace the present name for a Canadian name. That will only be a Canadian name and not Canadian capitals. The steps which will be taken by those companies should benefit Canadian citizens. Investments and all the money collected, all the profits of those companies, should be reinvested in Canada.

So far, few insurance companies have come to make investments in Canada, after earning money abroad. Almost all foreign companies transacting business in Canada have come here to extract Canadian capital and invest it where they pleased.

[DOT] (5:50 p.m.)

The investments of some of those companies are ill-distributed. As far as I am concerned, I live in a remote area of the Eastern Townships. Some insurance companies come and squeeze money out of the inhabitants of that area, but they never reinvest anything there. They do not reinvest to develop our area, under the pretence that it is not profitable. How do you explain that they come and take our money, but do not reinvest? Insurance companies are not working in the interest of society. They are not logical. They come and squeeze considerable amounts of money out of some areas of the country, but those very areas do not derive any benefit from this. In my area, it would seem that people are only good enough to pay insurance premiums since they do not receive in exchange anything which would promote development of the area. If we do not get anything, in my area it is because, it would not be profitable to invest, so they say. It is not profitable to reinvest but it is profitable to come and pocket thousands of dollars at one time from us.

We should put our foot down and ask again to insurance companies to reconsider what they are doing. If they are allowed to come and take Canadian funds they should be able to distribute their investments. Unfortunately,

Private Bills

they are allowed to reinvest according to their own will and where they see fit. When it comes to increasing interest rates however, they make no bones about it. Mortgages are allowed in several areas of Canada, at a certain interest rate but a few years later, they can be increased. Thus those who have borrowed from those insurance companies instead of from other companies have to pay a higher cost, because there is some difference between interest rates.

Mr. Chairman, all kinds of things are going on in insurance companies. We should establish an agency whose task would be to see that these companies are consistent with themselves, in the best interests of the Canadian economy.

Canadian Parliament should be kept informed of those companies' activities. I cannot blame too much the members of the New Democratic Party who want to know what those insurance companies do with the capital that they squeeze out of Canadians. And we lead people to believe that insurance is a beautiful thing. It is always good after one's death, but there are a great many other means for Canadians to make more profitable investments than in insurance companies.

Mr. Chairman, there are certain things that should be cleared up and reformed in our insurance companies. I mention that particular one, but I might lump all the existing Canadian insurance companies together in that respect, for they do not appear to provide the benefits they should, if one takes into account the amount of money they get out of the public.

Moreover, there are insurance agents-I do not hold it against them, though-who earn more than manufacturing concerns having 75 or 80 employees. Is there not something surprising in the fact that one man, by himself, with his small brief-case, can earn as much? Something is going wrong inside the insurance companies, Mr. Chairman. I spoke about the small agents at the bottom of the scale, but what about all those who earn $50,000, $75,000, $100,000 or $125,000 a year, all that at the people's expense. Buying insurance policies is not always a wise investment, as we can see. They begin by paying themselves huge salaries and this explains why many insurance agents do not want to become members of parliament since they earn four times as much selling insurance in their region.

The insurance companies are exaggerating and there is extravagance somewhere. If we

March 13, 1969

Government Organization want a just society and a sound economy we must at all costs inquire into the insurance business as well as into many others. There is no need to kneel to the insurance companies and trusts which generally take advantage of the people, without saying a word. Nothing is said because many members of parliament are associated with them. Many are drawing large dividends from insurance companies which up to now have always succeeded in protecting themselves and have always found a way to outwit the Treasury. Yet, they should not be better treated than others; on the contrary, they should be dealt with in the same way as all other enterprises in the country.

Mr. Chairman, once again, I ask parliament to appoint a committee to enquire into all aspects of our insurance companies, so as to be in a position to intervene should there be anything there that is not according to Hoyle. It is now six o'clock, Mr. Chairman.

Progress reported.

Topic:   PRIVATE BILLS
Subtopic:   LONDON AND MIDLAND GENERAL INSURANCE COMPANY
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GOVERNMENT ORDERS

March 13, 1969