Mr. Mark Muise (West Nova, PC)
Mr. Speaker, I am pleased to have been given the opportunity to rise before the House to offer my support for Bill C-38, an act establishing the financial consumer agency of Canada and to amend certain acts in relation to financial institutions.
I believe the bill has been a long time coming. The PC Party of Canada, like most people associated with the banking industry, have been waiting for years for the government to enact such legislation.
I must say it has been a long wait. We have had task forces explore ways in which Canada could assist our banking industry. There has been much consultation and various reports presented to the government which have finally led to the drafting of this important piece of legislation. Bill C-38 is the culmination of a tremendous amount of effort by many people. These individuals should be congratulated.
The bill provides an overhaul of federal laws governing banks and other financial institutions. Changes being proposed in the legislation are expected to promote more efficiency and growth within the banking industry. The bill will allow increased share ownership for larger banks and provide financial institutions with an opportunity to do more through holding companies while also giving them a broader range of allowed investments. These changes will help our financial institutions compete in an ever changing global environment.
At present no single shareholder can own more than 10% of a large bank. The bill will raise that limit to 20% yet still prevent the control of a large bank by any single shareholder. The legislation will allow financial institutions an opportunity to create regulated, non-operating holding companies. These changes could allow smaller institutions to come together and compete with other larger institutions. Such competition could only be beneficial to the Canadian consumer.
Financial institutions could expand their investments in the fast growing e-commerce sector. Technology is quickly changing the way consumers conduct their financial affairs. Therefore it is imperative that our financial institutions be at the forefront of this new evolution.
It is very important to recognize that about 220,000 Canadians work in the banking industry in Canada. Even more impressive is the fact that more than 500,000 people work in the Canadian financial industry, a crucial industry in the Canadian economy.
Our financial services sector allows exports of nearly $50 billion worth of services each year. That represents 5% of Canada's GDP.
Over the past number of years our financial institutions have been under increasing pressure coming from our southern neighbours. Changes to our federal laws governing banks and other financial institutions are required if they are to compete in the global economy. I know that our banking institutions in West Nova can benefit from the changes being proposed in the legislation.
If I might digress, with the ever rising, ever higher profits that the banks are receiving, it is only appropriate that I mention small banks being closed in rural Canada, more specifically in my riding of West Nova. We have a small bank in Freeport on the islands off Digby Network. That bank has been there for years and years and is very important to the businesses that operate in that area. Yet we are advised that it is being closed.
Another bank in Caledonia in the riding of my colleague from South Shore is being closed as well. That bank affects individuals who do business in my nearby riding. In these times it is very important that even though we have to look at changes to how banks operate we still have to take into account how important these small banks are to our regional economies and to the areas they serve.
Over the past number of years our financial institutions have been under increasing pressure from our southern neighbours. As I said earlier, we have to enact changes that will permit our Canadian banks to work in the global economy.
Another industry that will be affected, and I am sure the banks in West Nova will appreciate this point, is the trucking industry which is faced with high and ever increasing diesel costs. If the price of diesel fuel is not soon reduced we will see our banks experiencing defaults on loan payments and becoming used truck industries. Their parking lots will be full of used trucks that truckers will not be able to afford to put fuel in and to make the payments on.
I am concerned that the cost of fuel will have a negative impact on our local economy by increasing the cost of goods which will in turn be another hard impact on consumers. I digress, but it is important that we touch on these issues because they play a very important role in our economy.
Let me go back to exploring the substance of the legislation. The bill will allow banks to set up a holding structure that could separately regulate subsidiaries such as retail banks, credit card companies and insurance firms.
Coming from the insurance industry prior to my political career, I know how difficult and how bothered insurance companies are by the potential for banks to market insurance. I am glad, and I am hopeful that the committee will study that. The PC Party in no way supports the sale of insurance by banks. For that matter, we also do not support the leasing of cars. That is one of the recommendations we will be continuing to push forward at committee.
The aim of the bill is to allow banks to evolve to meet competition and, at the same time, protect consumers. I would argue, however, that due to the government's slow reaction to the changes in the financial services sector, Canada has already fallen behind our global competition.
One thing is clear. After years of uncertainty from the current government, it has finally added some clarification and stability to the banking industry. The PC Party will be supporting this bill and we feel that this is the first step in the right direction.
Subtopic: Financial Consumer Agency Of Canada Act