September 20, 2000

PC

Mark Muise

Progressive Conservative

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.

Topic:   Government Orders
Subtopic:   Financial Consumer Agency Of Canada Act
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BQ

Pauline Picard

Bloc Québécois

Mrs. Pauline Picard (Drummond, BQ)

Mr. Speaker, I am pleased to participate in the debate on this important bill. We have been talking about this bill for more than seven years, and we are at least two years late in dealing with legislation on financial institutions.

First of all, I would like to congratulate my colleague, the hon. member for Saint-Hyacinthe—Bagot, on his hard work in the finance committee, his exceptional contribution, and the amendments he has moved on the legislation of banks and financial institutions.

World competition is increasingly fierce. The six major banks in Canada are small, compared to their international competitors.

When we compare our big banks to the American or the Asian banks, especially those in Japan, we find that what is needed is a legislative environment conducive to increasing the ability of our financial institutions to hold their own against international competition as well as the competition that will inevitably begin to appear within the markets of Quebec and of Canada.

The Bloc Quebecois supports the spirit of the proposed legislation and several of its provisions. However, if the amendments that we will put forward are rejected by the House, we will vote against Bill C-38 for three reasons.

First, Bill C-38 grants many powers to the Minister of Finance to determine all by himself what the future of the banks in Quebec will be.

Second, Bill C-38 provides no guarantee that the minister will take into consideration the specificity of Quebec's financial system.

Third, there is no concrete measure in Bill C-38 to ensure better access to financial services for the poor.

Under Bill C-38, which was introduced on June 13, 2000, the Minister of Finance will have the power to decide on his own the future of banks in Quebec. It is unacceptable for this discretionary power to be as strong as the act itself, if not stronger.

The Bloc Quebecois is concerned about the fact that a single shareholder could, with the approval of the Minister of Finance, hold a 65% interest in the National Bank, the largest Quebec-based bank.

There is no need for the Minister of Finance to allow this kind of excessive control to give the National Bank the flexibility it needs to continue to prosper.

How can a shareholder holding 65% of the shares of a bank give more flexibility than 65 shareholders each holding 1% of the shares? We need legislative guarantees against any negative impact these new ownership rules might have on employment of professionals, consumer services, small businesses, decision centres and the role of Montreal as an international financial centre.

The stakes are just too high to rely on only one man, the federal minister, especially since there are no legislative guarantees in the bill. Bill C-38 does nothing more than list some elements to consider that are under the sole control of the Minister of Finance.

Worse still, Bill C-38 is full of phrases like “The Minister may deem necessary” or “such and such a section of the Act will cease to apply if the minister so decides”.

In other words, this bill can be made to say whatever Ottawa and the Minister of Finance want, in terms of deciding on their own the future of Quebec's banks. It is not obvious that the finance minister's bill will bring about more healthy competition on the national market. But competition is more important for our future economic development than the creation of big banks to compete on the world market. Nonetheless the Minister of Finance has decided to make a law for big banks, even if that means sacrificing Quebec banks like the National Bank, which is the institution for small businesses in Quebec.

As far as consumer protection is concerned, the Minister of Finance remains vague and the bill is more wishful thinking than real political action. The bill establishes the financial consumer agency, which is intended to protect the consumer, according to the minister.

The Bloc Quebecois is a staunch defender of consumer rights. This is evidenced by the debate that we led regarding the privacy legislation, Bill C-54, which became Bill C-6.

We remind the government that Quebec already has legislation dealing with this issue, including the Consumer Protection Act, the Privacy Act and acts relating to insurance, trusts, credit unions and securities.

The establishment of a new agency is likely to create new regulatory overlap with the measures already taken by Quebec in an area which, after all, is a provincial jurisdiction.

The bill includes a provision called “low-fee retail deposit account” which, according to the minister, seeks to ensure access to financial services for low income people. No one except the minister really knows what this “low-fee retail deposit account” is. No one except the minister knows who will be able to open such an account, and no one except the minister knows whether this account will be accessible everywhere. Why? Because all these issues will be dealt with through regulations. For the time being we must be satisfied with the minister's fine rhetoric, but this is not enough of a guarantee to state that consumers will be better protected by the new legislation.

A notice by the bank is the only thing provided in Bill C-38 in the case of the closure of a bank branch or a reduction of services available to consumers. With such an unrestrictive provision, how can the Minister of Finance claim that there will be increased access to financial services? The minister is the only one convinced of that.

There are a number of problems with this bill and we intend to propose amendments at report stage. It is not an easy task, given the countless pages of the bill itself and of its schedules, all 900 pages of it. We realize that the discretionary power given to the Minister of Finance is much too great for a single individual.

It is like this Liberal government and its leader, the Prime Minister, who appoints all the ministers, senators, the Governor General of Canada, the lieutenant governors in all the provinces, the justices on the supreme court, and government officials, including those abroad.

Until recently, one man, the Prime Minister, had at his disposal the personal files of 34 million individuals, dead or alive, in Canada in the longitudinal file of Human Resources Development Canada. He also has a file on most journalists, concocted by the Canada Information Office, the official propaganda organ. And now we have the Minister of Finance going a step further and wanting to decide on his own, at his discretion, the future of Quebec's major banks. This sort of thing would make certain dictators drool.

Throughout the bill, whenever there are provisions concerning banks, insurance companies, trusts, anything to do with the financial sector, the minister always reserves the right to determine, based on criteria known to him alone, whether or not an operation is acceptable. He alone defines certain concepts such as low-fee retail deposit accounts.

Generally speaking, we would have liked more clarity regarding the decision making process and also more specifics regarding certain concepts, such as the low-fee retail deposit accounts for the poor.

We do not oppose increased consumer protection. However, we do oppose provisions that duplicate and overlap those that are already included in the Quebec consumer protection act. Consumer protection is an exclusive provincial jurisdiction. The Liberal government has a tendency to want to centralize everything. It is systematic, disgusting and often insidious.

As I said, the bill is important. It was also important that it be introduced in the House, but we oppose certain provisions and if our amendments are not approved at report stage, we will vote against this bill.

Topic:   Government Orders
Subtopic:   Financial Consumer Agency Of Canada Act
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BQ

Pierre De Savoye

Bloc Québécois

Mr. Pierre de Savoye (Portneuf, BQ)

Mr. Speaker, in this business of the banks, one thing catches my attention. It is not necessarily something that surprises me. There are many things that unfortunately have stopped surprising me in the House since 1993. But this caught my attention.

There are some big banks in Canada. There are a few, not dozens, that are big. The National Bank, not to name names, is one of these big banks.

But when it comes to a bill like the one before us, the minister establishes two categories: the big banks which are bigger and the big bank which is the smallest. It happens that the latter is the National Bank. It is not surprising that it is the smallest, because it operates primarily in Quebec and Quebec represents only one quarter of the Canadian population. It is therefore not surprising that it is the smallest of the big banks, but it is still a big bank.

One might wonder why the Minister of Finance establishes two categories of big banks. This has repercussions because the big banks in the privileged category will not be able to be easily “sold” to foreign interests, while the other big bank, the smaller one, will.

If Quebec were a country, it would not have considered passing legislation that would have allowed its big bank to fall into foreign hands.

I can understand that Canada's Minister of Finance wants to introduce legislation so that these big banks cannot fall into foreign hands. But I wonder why he is prepared to sacrifice the smallest of the big banks, which happens to be a Quebec bank, and allow it to fall into foreign hands.

The legislation in its present form worries me. I am not the only one it worries; many others are concerned. I repeat that with this legislation, the young offenders legislation and other legislation, I am tired of not yet having my own country. That day cannot come soon enough for me.

The member for Drummond could perhaps give us her view of this situation.

Topic:   Government Orders
Subtopic:   Financial Consumer Agency Of Canada Act
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BQ

Pauline Picard

Bloc Québécois

Mrs. Pauline Picard

Mr. Speaker, I thank my colleague for the information he just gave us to add to this debate.

I totally agree with him. One can wonder why this bill raises from 10% to 20% the percentage of shares of large banks that can be purchased by an individual.

The smallest bank, namely the National Bank, is based in Quebec. It is still a big bank, but, as my colleague explained, it operates in a smaller area since it is based in Quebec. An individual could hold 65% of the shares, which means that there is a greater risk of unfair competition.

A business person who holds a 65% interest in a bank like the National Bank could deny a loan to another business person, because this competitor could probably hurt his or her business. That is why we are saying that it could lead to unfair competition.

We cannot have one set of rules for the other big banks and another one for Quebec-based banks. What was the minister thinking when he decided to include this provision in the bill? Was it just another way of putting Quebec in its place?

Our economy is booming. Things are going well, but Quebec should not benefit from all that.

Topic:   Government Orders
Subtopic:   Financial Consumer Agency Of Canada Act
Permalink
LIB

Pierre Pettigrew

Liberal

Hon. Pierre S. Pettigrew

Come on.

Topic:   Government Orders
Subtopic:   Financial Consumer Agency Of Canada Act
Permalink
BQ

Pauline Picard

Bloc Québécois

Mrs. Pauline Picard

The federal government, this Liberal government, has set itself the additional duty of centralizing everything.

Topic:   Government Orders
Subtopic:   Financial Consumer Agency Of Canada Act
Permalink
LIB

Pierre Pettigrew

Liberal

Hon. Pierre S. Pettigrew

Things are fine in Quebec.

Topic:   Government Orders
Subtopic:   Financial Consumer Agency Of Canada Act
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BQ

Pauline Picard

Bloc Québécois

Mrs. Pauline Picard

I would point out to the Minister for International Trade things are not as fine as all that. He need only look at his former department, Human Resources Development.

Topic:   Government Orders
Subtopic:   Financial Consumer Agency Of Canada Act
Permalink
LIB

Pierre Pettigrew

Liberal

Hon. Pierre S. Pettigrew

Things are fine in Quebec.

Topic:   Government Orders
Subtopic:   Financial Consumer Agency Of Canada Act
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BQ

Pauline Picard

Bloc Québécois

Mrs. Pauline Picard

If things are going well in Quebec, it is because there are some Quebecers who have taken charge. His government is, however, still trying through every means possible to create problems for us and to centralize everything, because it wants to have all the power. There is no way we will allow that to happen.

Topic:   Government Orders
Subtopic:   Financial Consumer Agency Of Canada Act
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BQ

Gilles-A. Perron

Bloc Québécois

Mr. Gilles-A. Perron (Rivière-des-Mille-Îles, BQ)

Mr. Speaker, Rivière des Mille-Îles is one of the most beautiful rivers in Quebec and it is located in the Montreal region. I must invite you to go down it by canoe in August. The downriver excursion is a very popular event; this year more than 4,500 people took part. My riding is along the shores of this lovely river.

Let us talk of something other than lovely rivers, even it is a whole lot more interesting to talk of Rivière des Mille-Îles than Bill C-38.

When I hear the Minister of Intergovernmental Affairs boast about how well things are going in Quebec, I realize he is not being realistic. I tell myself he is not coming to see the day-to-day situation.

His riding is located in the heart of Montreal, so where is the Minister for International Trade?

Yes, things are going well in Quebec. But if I were a federal government member or minister, I would not brag, because Quebecers are the ones who are doing all the work. Considering all the money that has been taken from the social transfers to the provinces since 1993, the minister should know that if we have a balanced budget in Quebec, it is not thanks to Ottawa's help. Heavens no.

Let us now deal with Bill C-38. It is true that I read it quickly, but I spent enough time on it to come to a conclusion. Upon reviewing this bill, I came to the conclusion that, in his proposed bank reform, the Minister of Finance is assuming, through Bill C-38, the right to be the only one to decide the future of banks in Quebec. If this is indeed the case, then it is truly worrisome.

If my interpretation of this bill is right, if the minister is assuming this right, then it is really scary.

My colleague, the hon. member for Drummond, delivered a brilliant speech, which shows that she came well prepared. Does she share my impression that the Minister of Finance is assuming the right to be the only one to decide the future of banks in Quebec?

Topic:   Government Orders
Subtopic:   Financial Consumer Agency Of Canada Act
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BQ

Pauline Picard

Bloc Québécois

Mrs. Pauline Picard

Mr. Speaker, my colleague is absolutely right. This bill is very lengthy one that runs to 900 pages. It is also very complicated.

Some of its provisions state that the minister, one person, has the final say on certain operations. When we read the bill, we notice that there are many provisions where the minister can decide arbitrarily, on a whim, when it suits him. He decides to accept or not. Nobody knows what his criteria are. We know nothing. He does not say nothing. He is assuming the right to be the only one to decide.

That is what the government did with Bill C-20. It has ignored Quebecers and our institutions and wants to be the only one to decide the future of Quebecers.

Topic:   Government Orders
Subtopic:   Financial Consumer Agency Of Canada Act
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NDP

Louise Hardy

New Democratic Party

Ms. Louise Hardy (Yukon, NDP)

Mr. Speaker, I will be sharing my time with the member for Winnipeg Centre.

I am pleased as well to speak to Bill C-38 which involves financial sector reform, a bill, as has been mentioned, that is 900 pages long and certainly deserves thorough scrutiny.

It was interesting to listen to the Minister of Finance today during question period talking about generational debt. This is a man, along with our Prime Minister, who was in the House in the eighties and nineties when that huge debt was created and a large part of it is due to compound interest.

He was talking about this generation and himself as someone who was going to be a saviour. It was in fact our parents and the men and the women who were in the war and lived through the depression. They made sure their children went to school and got an education. They made sure there would be pensions, unemployment insurance benefits and housing programs. They made sure that people would have homes and that they could afford the gas and the heating fuel to keep their houses warm.

Here we have a government that has slashed and burned those programs. It was not the social programs that caused the debt. It was, as I said, compound interest that was paid to financial institutions in the eighties and nineties that caused the debt to spiral.

I agree that we have a debt and that it needs to be paid, but we also have a debt to the homeless and to the people who are on emergency lists at hospitals. People are dying because they are being turned away from emergency wards. Those debts are far more important than the debt to private institutions such as banks.

We have a finance minister who has been visibly taking public money and transferring it into private hands and we have no say. The big announcement of an extra $12 billion goes right to the banks. Nobody in the House has any say over how that money will be treated, who it will go to or who it should go it. It is completely out of our hands. That is reprehensible and shocking when we have other debts besides financial debts.

These financial institutions are the most privileged, profitable and wealthy institutions in Canada but they pay very little tax compared to the profits they make. They put nothing back into their communities. The bill will not require them to reinvest in their communities. They will be able to pull out of communities and end banking services at will without any recourse for the communities involved.

The New Democratic Party, just on principle, does not support the bill. There are things in it that are worth supporting but not in comparison to what is not worth supporting. We do support the expanded power to credit unions. We think it is important to modernize financial institutions and make sure there is better competition for insurance companies. The bill will provide more power to the House of Commons in bank mergers.

It seems that this huge financial bill went through a screening in a backroom committee where no elected official or average Canadian could have a say. I do not know about most members of parliament but I do not know any wealthy people. Most of the people I know barely make it from month to month, paycheque to paycheque and being able to buy shoes for their kids for the start of school. Most of us do not have any access to the world of privilege or wealth.

We in the NDP do not support the bill because it abandons the wide ownership rules and it will lead to a concentration of power into a few hands. We do not need more public money going into private hands or more public power going into private hands. In a democracy we want to keep power where it belongs, in the hands of the people as much as possible.

The bill also gives far too much power to the finance minister. Why would we want to do that when he already has enormous power? Why would we want him to have that much power over the way we exchange goods or the way we make decisions? In fact, very few of us can get away from a world that depends on money. The minister will have a final say on mergers, acquisitions, regulations and ownership levels, and that is just not acceptable.

There will be no accountability between a bank and its community. As do some states in the United States, the bill will not require banks to reinvest in the communities where they have made their money. Banks make their money off our money. There will be no guarantees of rural access to banking. We cannot stop bank closures or provide no cost accounts. It reduces capital requirements for small banks and there is no control on high risk derivative products or off balance sheet liabilities.

In 1999 our Canadian banks made $9.1 billion in profits. That kind of money seems unimaginable to the average Canadian when they pay $2 billion in federal tax. The banks also got a 7% reduction in corporate tax in the 1999 budget.

As I said, banks are privileged but they do need to be dealt with fairly. The financial sector does have to be reformed but it should not be reformed at the expense of the individual Canadian who has a very hard time going to the bank. Small businesses struggle when approaching banks for loans. They could at least invest in our communities.

In closing, I want to say that we in the NDP oppose on principle second reading of Bill C-38.

Topic:   Government Orders
Subtopic:   Financial Consumer Agency Of Canada Act
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REF

Jim Abbott

Reform

Mr. Jim Abbott (Kootenay—Columbia, Canadian Alliance)

Mr. Speaker, I beg your indulgence. As you know, following question period I raised the issue of a report that had been referred to by the Parliamentary Secretary to the Solicitor General. I indicated that my understanding of the practice and procedures of the House was that because he did not refer specifically to the report, I could only request that it be tabled.

I have had an opportunity in the intervening period—and this is the first opportunity I have had, which is why I beg the indulgence of the House under this point of order—to review the blues.

The Parliamentary Secretary to the Solicitor General said “I am pleased to report to the House today that review is now complete”, referring to the SIRC review, “and has been submitted to the solicitor general”. This is important. He says “There are three points in that submission that I would like to refer to all members of the House”. He is referring to points contained in the report. He continues, saying “The first is that there was no political interference as alleged in the media. The second is the draft report in fact indicated it was deeply flawed. The third is that there is no evidence of any substantial nature that was part of that draft report”.

In his response to my supplementary question, at the conclusion of his response I refer you to the sentence where he stated “The facts today are evident and they are presented here in the House”.

I refer to the House of Commons Procedure and Practice , page 518, chapter 13. I would like to read a portion of a paragraph pertaining to tabling of documents and speeches.

As Speaker Glen noted in a 1941 ruling, “an honourable member is not entitled to read from communications unless prepared to place them on the Table of the House. The principle upon which this is based is that where information is given to the House, the House itself is entitled to the same information as the honourable member who may quote the document.”

Mr. Speaker, my argument is simply this. I recognize that I have not had an opportunity to call the parliamentary secretary's office but I did want to be on the record as early as I possibly could, at the earliest possible moment, and move from making a request of the government but rather to state that the government really must follow parliamentary practice where clearly the solicitor general's parliamentary secretary kept referring to these documents.

At the risk of being too repetitious, I am going to read this again. He said “There are three points in that submission that I would like to refer to all members of the House”. Then he elucidates on those three points.

I note that there is a House official for the government in the House today. I therefore request that he undertake to see that this SIRC review which was submitted to the solicitor general, which I have subsequently found out was submitted about a week ago, is tabled forthwith.

Topic:   Government Orders
Subtopic:   Points Of Order
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LIB

Bob Kilger

Liberal

Mr. Bob Kilger (Stormont—Dundas—Charlottenburgh, Lib.)

Mr. Speaker, respectfully, I am not totally familiar with the incident being raised by my hon. colleague from the Canadian Alliance. However, I would expect and hope that in the usual wisdom of the Chair the parliamentary secretary in question, the Parliamentary Secretary to the Solicitor General, would have an opportunity before yourself in the Chamber to give the appropriate explanation, and based upon and following a decision by the Chair, certainly appropriate action might be taken.

Topic:   Government Orders
Subtopic:   Points Of Order
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?

The Deputy Speaker

The Chair indicated when the member for Kootenay—Columbia raised this issue earlier that that is exactly what is anticipated, that the parliamentary secretary would take the matter under advisement. I presume that either he would table the document or come in with an argument as to why he should not table it. That is still the position of the Chair.

I thank hon. members for their submissions and I look forward to hearing from the parliamentary secretary in due course.

Topic:   Government Orders
Subtopic:   Points Of Order
Permalink

The House resumed consideration of the motion that Bill C-38, 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.


NDP

Pat Martin

New Democratic Party

Mr. Pat Martin

Mr. Speaker, I was wondering if it was appropriate to have questions and comments on the debate of the member for Yukon.

Topic:   Government Orders
Subtopic:   Financial Consumer Agency Of Canada Act
Permalink
?

The Deputy Speaker

No one rose and that is why I am moving now to resuming debate. The hon. member for Winnipeg Centre has the floor.

Topic:   Government Orders
Subtopic:   Financial Consumer Agency Of Canada Act
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NDP

Pat Martin

New Democratic Party

Mr. Pat Martin (Winnipeg Centre, NDP)

Mr. Speaker, I appreciate the opportunity to join in the debate on Bill C-38.

Not everything we do in the House is really of enormous gripping interest to every Canadian. I know that comes as a surprise, but this bill is being followed very closely by Canadians. Most Canadians have a strong opinion on the state of the Canadian banking sector and the financial institutions that Bill C-38 seeks to regulate.

In fact most Canadians feel very strongly about Canadian banks. Most Canadians think that Canadian banks are greedy and bloated institutions that are not really serving the best interests of Canadians. That is why they anxiously awaited this legislation.

They waited patiently while the MacKay task force studied this country's financial institutions in great detail for over two years. That report was finally presented to the Minister of Finance. He chose to implement many of the recommendations which have now found themselves into Bill C-38.

Things that the MacKay task force dealt with covered many of the concerns that Canadians have. Many Canadians came forward and made representations to the task force. Even through their members of parliament they have come forward to complain bitterly about the inadequacies in the Canadian banking sector. They have complained bitterly about the closing of local banks, whether they are in the inner city of Winnipeg, which I represent, where services are being arbitrarily shut down, or in rural Canada. We heard the Tory member speak passionately about how frustrating it is for the people in rural Nova Scotia who see their local branches being shut down, things they came to expect from our chartered banks.

We have to remember that the chartered banks enjoy a privileged status. This is not any old business. This is not a Home Hardware that can decide to build a new store in one place and shut down another one somewhere else. That is completely its business; it is a completely private institution. The chartered banks are privileged in the sense that we guarantee them a certain amount of business and a certain amount of profit. In return they owe us a certain amount of service. That was the deal. That was the tacit agreement between the Government of Canada and the chartered banks. That is why they are chartered. But they have broken their promise time and time again.

In an era of unprecedented record windfall profits, what do they do? They shut down the local branches so that seniors and inner city people in my riding at least do not have access. In the inner city of Winnipeg over 20 branches from all of the five chartered banks were shut down. Branches were shut down arbitrarily.

The banks increased service fees. With record profits one might think they might be able to lighten up on the service fees perhaps. They have eliminated jobs. Every time a branch closes, jobs are usually eliminated. They have installed ATMs rather than personalized service, which many seniors are frustrated by, and then they have the audacity to charge customers every time they use the ATMs. The banks are saving a fortune in salaries by putting in those machines and then they have the unmitigated gall to charge a fee every time they are used.

These are real frustrations that Canadians have brought to the attention of members of parliament. They had hoped they would have been addressed in a document like this bill.

A number of shareholders are getting very active. Mr. Speaker, I do not know if you have ever been to a shareholders meeting of a major chartered bank, but I have. I crashed two of them last year. I say I crashed them. I borrowed some proxy votes and I visited them in the company of a wonderful man from Quebec, Mr. Yves Michaud, who is a champion of shareholder rights and of Canadians' rights in this regard. I think he is a Canadian hero and should get the Order of Canada for what he does. He goes to every one of those shareholder meetings of the chartered banks and he moves motions and amendments to try to democratize the corporate structure there and to force the banks to be more accountable to the needs of Canadians. It is kind of fun.

There were 1,200 people in the room all looking at their shoes. One would think it would be a democratic process where anybody could stand and move a motion or an amendment. Only nine motions were moved. All nine were moved by Mr. Michaud and seconded by me. That was it for the whole program of the day, believe it or not. In a room of 1,200 people one would think there would be more interest in how the banks are run but they were all as quiet as mice pretending nothing was wrong with their financial institutions.

One of the motions we moved was to limit the executive salary of the CEO to 20 times that of an ordinary teller. Frankly, that is still a whack of dough. The average CEO in Japan makes 13 times that of an average worker. The average CEO of a Canadian chartered bank makes 220 times that of an average worker. It is unbelievable. That motion failed. It did not succeed.

Another motion almost succeeded. We wanted gender parity on the board of directors. The result of that vote was 49.6 to 50.4, numbers we might recognize as they are exactly the same numbers as in the last Quebec referendum by some happy coincidence. That one failed just by a little.

Another motion we moved was to limit the number of boards that a director can sit on. George Cohon, the CEO of McDonald's, sits on 54 boards of directors, including the chartered banks. They meet 10 times a year. How can someone possibly attend some 550 board meetings and make intelligent rulings about how the organizations should be run? I do not think it can be done. That is why there is a paucity of ideas and accountability at the top level of the banks. Those guys just sit on the boards and they vote each other raises. I am sure of that.

We moved a motion to limit the number of boards of directors a person is allowed to sit on to no more than 10. That one did not succeed either.

It was an exciting exercise in trying to democratize the corporations. As governments lose power and lose their ability to manage the economy and the corporations take over more and more, the only way we are going to have any democratic say is if we democratize corporations. Frankly these corporations run above and beyond the dictates of truly elected parliaments like this one.

Most Canadians think that Canadian banks are not good corporate citizens. They are disappointed in the performance of Canadian banks. They do not give a hoot about mbanx. They want them to pay mtaxes. That would be better than having mbanx. How about some mtaxes from the Bank of Montreal?

One thing I will say is that John Cleghorn was a much better sport than Matthew Barrett. Matthew Barrett was really nasty about these amendments, especially the one about limiting his salary. Cleghorn at least got a chuckle out of it.

Canadians think that chartered banks do nothing but take and take and take and never give anything back in return. That is the image. It is the old Snidely Whiplash image with the top hat and handlebar moustache taking the mortgaged family farm at the first sign of danger. That is the image.

The banks have a big job on their hands in terms of public relations. They are spending hundreds of millions of dollars trying to convince Canadians that they are of warm, fuzzy, caring institutions that are fun to do business with. They are anything but. It is almost as absurd to watch the Liberals trying to paint themselves as the party of the centre left and the champions of health care. It is almost that absurd and that big of a stretch that Canadian banks flounder around trying to pretend that they care.

Ask any small business in Canada how much the banks care in terms of providing venture capital. They will not lend someone money unless it can be proven it is not needed. Even when they do, at the slightest hint of any trouble in the business, they just demand the loan. They call the loan, pull it right out from under it and another small business collapses.

We were hoping that Bill C-38 would have something like chapter 11 in the United States. I hate to look to the United States for ideas; it bothers me. However the United States at least has this sanctuary that a business can hide out in when the banks are trying to blow down its house. Chapter 11 is an interim stage before bankruptcy. The business calls its chapter 11 status and the banks cannot touch it, at least temporarily. We would have welcomed that.

A good example of how unbelievably and unabashedly greedy the banks have become is student loans. One of the obligations that was passed on to the banks in exchange for the exclusive privilege to do all the credit card transactions and the billions of dollars they get from that was to handle the student loans program. They handled it for a couple of years and they were not making enough money so they tried to dump it and get out of it.

Our party believes there should not be student loans because there should be free tuition. Nobody should be paying tuition to go to university, but that is another issue. If I were in charge of a $12 billion surplus, the first thing I would declare would be absolutely free tuition for every Canadian student. We can afford it. It would cost $3 billion a year. It would be a great idea. We would not be putting our students at the mercy of ruthless, greedy and bloated bankers who take advantage of them. I do not think that is in anybody's best interests.

Topic:   Government Orders
Subtopic:   Financial Consumer Agency Of Canada Act
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September 20, 2000