November 1, 1976 (30th Parliament, 2nd Session)

Mr. Adrien Lambert (Bellechasse):

Mr. Speaker, first of all,
I must thank the minister and the government for bringing forward Bill C-16, which gives us the opportunity to discuss this very important subject, namely the very wise use of one's credit to ensure one's future and to protect one's dependants.
As a matter of fact, it is a very important subject and in the release, dated October 27 which was distributed to us by the minister, I find the following in the second paragraph:
This bill on credit has several goals:
1) to protect Canadian borrowers from loan sharking and excessive interest rates.
We have been in favour of this objective for a long time, Mr. Speaker. Furthermore, I think we said it often enough in this House to convince every Canadian.
2) to increase the quatity and the quality of information on credit available to the public, thus eliminating unjustified complications and causes of confusion in this area,
3) to establish strict and consistent regulations in order to protect all borrowers and depositors
4) to rationalize federal legislation on credit.
I say that all these goals are highly commendable, Mr. Speaker, and that is way the day after the bill was tabled in the House of Commons, there were big headlines in the newspapers: Measures to protect consumers and borrowers from loan sharking.
Then a deep sigh of relief was breathed by those whom the bill is designed to protect. They told themselves: at last, the government is going to protect the little people, the underprivileged. Yet, it must be remembered that here, in this very House, bills as commendable as this one have been introduced and passed, bills which are now in our statute books but have failed to bring the expected results. It does not mean that the law is not good. It is because it is not being strictly enforced. Laws are applied slackly to the big interests, to those who control our economy and our credit.
It has often happened that legal proceedings were taken against monopolies and then the case dragged on before the courts, and finally, after a hearing was held, those companies were imposed fines with as much impact as a quarter for ordinary people. A fine of $25,000 for corporations which have earned millions and millions of dollars of excess profits looks good in the eyes of the public, but it is not what one might call a very effective law.
That is why, as far as this bill is concerned, I consider that those sanctions provided here are not severe enough. We will still witness circumstances allowing people who are used to live as hangers-on at the expense of the low-income earners to make tremendous profits by circumventing the law. If by any chance some organizations are sued, the poor judge who on the bench convicts those organizations or individuals must abide by the law and enforce the maximum penalty, which I think is far too weak.

November 1, 1976
Protection of Borrowers and Depositors
Mr. Speaker, rates of interest are the basis for the major issue in our country-inflation. And in the communique as well as in the bill, we see that interests will now be cataloged. There will be interests that will be called legal interests. There will also be what will be called usury interests. Some others will be called unwarranted interests and criminal interests. But who will determine what interest rate the consumer, the borrower is dealing with. Ele will have to complain, to appear before agencies, even to take legal action in order to establish that the law gives him no protection, even if it says: The lender has to establish that the interest rate is warranted. There are two sides to every question. If the complainant wants to show his side of the story, he will have to pay, Mr. Speaker, in order to establish that he is really penalized by an interest rate which is exorbitant, unwarranted or even criminal.
Then, in such circumstances, I think it would advisable, when the bill is before the committee, to bring forward an amendment in order to clarify the situation and to determine once for all what should be a normal interest rate, a specified rate, and never mind the rest. I believe that all other rates are usurious, either unwarranted or criminal, it is loan sharking. And the government itself must presently suffer the consequences of such loans at exorbitant interest rates; that is inflation.
The same thing occurs in industry, trade, business, everywhere unduly high interest rates. That is why prices are rising. That is why many businesses are in a difficult position. That is why we have inflation and also unemployment. All these things go hand in hand.
Furthermore, Mr. Speaker, the release reads as follows:
Consumer credit has shown a tremendous increase since the last war. In 1948, the outstanding consumer credit totalled $835 million. By 1967, it had spiralled to $8.6 billion and, finally, to almost $24 billion by 1975.
Mr. Speaker, I am prepared to believe that private individuals go into debt in a thoughtless and excessive way, but are the governments setting a good example in this connection? Are the governments not going too far? Are the governments speaking the voice of reason in this matter?
Whether it is the central government, the provinces or the municipalities, let us examine the statistics. Let us compare them with statistics on personal indebtedness and we will discover that our governments have really not set a good example in that regard. We are drawn by an example. When the example is good, so much the better; when it is bad, so much the worse. But just the same we are imitators.
Mr. Speaker, there are all kinds of factors inciting the small wage earner to spend hastily. How many ads are shown on television? We know, Mr. Speaker, how costly is the use of television whether for advertising or for political information to the public. It is exceedingly costly. Throughout the day we have TV programs inviting people to spend. All the fine points of such and such a product are shown, even when it is beyond one's means, today there is the advantage of credit cards for ladies and gentlemen. Spend, mortgage your future. That is

done under the complacent eyes of governments, members of Parliament, like us. And little is done, not by members of Parliament because quite often they are too busy, but in any event we all know this is going on almost if not 24 hours a day.
Just look at the pages of your papers, particularly those dealing with credit. Look at the enticing ads inviting people to spend, and in the other page: Madam, order your Master Charge, Chargex, or any other credit cards. Yet we know that the use of credit cards requires moderation. It is very useful to travel. It is excellent. But one has to know how to use it. When there is exagerated advertising like that it is not surprising that at a certain moment individuals should be in debts over their heads for years and years to come.
Mr. Speaker, I remember Commander Desjardins, the founder of the caisses populates, who was an officer in this House when he was younger, an exemplary man, a man who practiced what he said. It is a lot, Mr. Speaker, to practice what one says. To tell others is nice but to practice it is better because the example, as I suggested earlier, is much better than words-acting.
What did Commander Desjardins do? He realized that the little French Canadian people in our community had possibilities but that our money was not being used as it should. While I was still very young I attended a meeting with my father in a school room-not like the nice ones they have today but with little tilt-over seats. Everybody tried to fit in-it was fine for the smaller ones but the taller ones had problems. And for the first time I heard someone say that thrift is a virtue, and since it is a virtue it must be practiced. We were shown that if we wanted to cooperate, if we wanted to put our pennies, our dollars together it was possible to use them in our community to prepare the future of our children. I understood the lesson, I took note of it, and several people my age noted the idea. We understood that thrift is a virtue. We have tried to put it in practice. It has therefore become the practice to think before spending, to earn first and spend later. Today, with the advantages of the credit system which is made available to them, people are led to believe that the best way to live is to spend today what they will earn in five, ten or twenty years if the Good Lord keeps them healthy. It is not surprising that figures show that people are in debt and that they have mortgaged all their credit.
Mr. Speaker, I think we should also take action in this bill to limit this exaggerated publicity, this invitation to spend, thinking that there will be no end. We should be careful, Mr. Speaker! Here is an example of this: Suppose there is a refrigerator full of food in the house. Because it is full, everyone has the right to take from it, but no one has to replenish it. Will it become empty? Of course, it will, and very soon! In our country, we are living somewhat in this way. We have the impression that we are entitled to everything and that we have no obligations. This is why there are so many people who do nothing and who produce nothing. This is why the economic situation of our country is going down and this is why our country is in a slump.
November 1, 1976

I have just dropped my glass. This is not a great loss. If there were only one glass lost in the administration of the government, I think we could show a surplus at the end of the year.
Mr. Speaker, we are asking people to make sacrifices and to tighten their belts. Let us look at what happened at the Olympic Games. We were supposed to have modest Games. We were told the Games would not be too expensive. I too like beautiful games! Recently I got a French a deck of cards and I found it very beautiful. That is fine, but we must restrain ourselves.
We also had a lottery and this is a modern or ancient way to finance the public sector. People were urged to buy tickets in order to win a million dollars. I have known poor people who needed a higher income so as to pay their debts, but they took chances because there was a catch behind the ticket.
What happened during the Olympic Games? In order to go and see foreigners run for 15 days, we have mortgaged the Canadian people for 20 or 25 years. Children yet to be born will have to pay taxes for such wastefulness. The same amount could have been spent on more profitable projects. If homes had been built for low or middle income families, the same number of jobs would have been created and we would have something to show for it. Now we are caught as well as the mayor of Montreal and also Mr. Bourassa who is having a hard time in the province of Quebec precisely because of the positions he took on those issues.
Mr. Speaker, I do not want to be considered as a member of Parliament, a Quebecer who is against those organizations. Indeed not. But I want to prove that they really went too far. Today we are asking Canadians: Tighten your belts, you must absolutely practice restraint and economy.
Mr. Speaker, this bill contains other good provisions and gives some advantages to small earners who sometimes will have to take legal action. The loan aspect has been looked after to prevent unwarranted rates and the credit rating must be taken into account, but we do nothing about the true rate which is charged and which is responsible for small interest rates. I said several times in this House that I am not an expert but it does not matter, we have eyes to see and ears to hear. Interest rates are controlled by chartered banks. The minister says in his statement and I quote:
Banking institutions issue a large part of consumer credit and are exclusively under federal jurisdiction.
It means that banking institutions are our chartered banks and that we should have a provision in this bill about the power that should be given to the Minister of Consumer and Corporate Affairs, a very special provision to ensure that interest rates be somewhat reduced so that they will not increase excessively. And if we exceed the ceiling provided in this bill, we must have the guts to take legal action, even against the big institutions that create 95 per cent of the money supply in our country. Mr. Speaker, this is the main source of credit.
Protection of Borrowers and Depositors
I know that individual credit is controled, that the credit to small enterprises is controlled, but we should control the credit of the community and stop getting money from institutions that charge unwarranted rates, and it should be provided in this bill.
Yet, Mr. Speaker, I know that during the debate on this bill, in committee, at the report stage and on third reading, we shall have the opportunity to study the question further. At that time we should study many other clauses. We should say frankly what we think about them and I encourage all my colleagues in this House to study the matter further before they pass the bill with which I agree in principle, but some details should be adjusted. I ask that we study this bill very carefully and, when it will be passed, that the minister and his senior advisers make it work efficiently so that it will not be a mere joke.
M. Speaker, those are the comments I wished to make at the second reading stage. I shall take the floor again a little later.