Bill C-28

James Rajotte Edmonton—Leduc, AB

Mr. Speaker, I want to thank all the members of Parliament who spoke to this motion today and in November. I certainly appreciate all their thoughts and words on this.

We delved a little into financial literacy and fiscal policies of the government. It is certainly possible for there to be people who are financially literate but who disagree with the fiscal policies of the government. We ought to ensure that we are focused on financial literacy when members come to vote on this motion and also when discussing Bill C-28.

In wrapping up, I want to thank all of the individuals and organizations that have been working in this area for years. Most of them have been doing so on a voluntary basis. I have been amazed by the number of people who have contacted me by email or letter and who have come to my office to talk about the initiatives they have been working on. The non-governmental organizations have talked about the work they are doing in schools. They are bringing mentors into schools to teach young people about financial literacy.

In fairness, I should point out that people in the media have been doing a lot of work in this area. Many journalists have been writing about financial issues for years and making some real efforts to educate Canadians about financial literacy and to educate and inform them as best as possible in terms of making their own financial decisions.

I have to point out I received many emails, calls and letters after Jane Taber wrote an article in the Globe and Mail on this issue, much more than after the original debate in the House of Commons. I am somewhat surprised that she has a wider readership than Hansard on a daily basis, but I do tip my hat to her because that article certainly did cause a discussion nationally.

What has been driven home to me in discussing it with people is that there is a lot of effort being made out there and a lot of outstanding work, but there is a lot of duplication and overlap.

I want to emphasize the second priority of the task force report, which is leadership and collaboration. Why this is so important is there are so many people and organizations doing so many good things across the country that we need to have some collaboration with all of these groups. That is addressed in the motion in terms of having the one website portal working with the Financial Consumer Agency of Canada. It is also why leadership is so important.

I strongly encourage members in the House to do as the member for Edmonton Centre suggested, which is to vote for Bill C-28, because that is the first recommendation of the task force report. It is the very first recommendation and the one in my view which must be put into play.

I want to acknowledge the work of organizations such as the Financial Literacy Action Group. I will list the seven organizations for members' benefit: ABC Life Literacy Canada, the Canadian Foundation for Economic Education, Credit Canada, Financial Planning Standards Council, the Investor Education Fund, Junior Achievement, and Social and Enterprise Development Innovations. There are other organizations as well. The Economic Club of Canada has started an initiative where it takes students to the TSX or to another institution to teach them about financial literacy. It should be commended as well.

I want to thank the members of the task force, the chair, Don Stewart, and others. I encourage people to read the report. It is very readable. It is an excellent report with 30 recommendations and five priorities. I encourage members to read the report and to work on implementing it as best we can. That is obviously the first point in my motion, which is to work to implement the recommendations of the report, to work toward a single source website for financial literacy, to require federally regulated financial institutions to disclose their contributions, that the Financial Consumer Agency of Canada curriculum be in schools, and to designate November as financial literacy month.

I take the point members have made in the House and others have made by email. This is very much about lifelong learning. Lifelong learning is one of the five priorities identified by the task force. This will very much be part of it. It does not simply stop at high school and leave people on their own. It is very much about lifelong learning.

I encourage people and members in the House to support this motion. I thank them for their words thus far. This is an increasingly complex world for all of us and we need to empower people. This motion on financial literacy is about empowering individuals, families and businesses so that they can make better decisions for themselves. I thank members for their comments and I hope they will support this motion when it comes up for a vote.

Laurie Hawn Edmonton Centre, AB

Mr. Speaker, I am pleased to have the opportunity to discuss Motion No. 269, sponsored by the member for Edmonton—Leduc. In his decade-plus period of service to his constituents here in Parliament, the member has become highly regarded among his colleagues and observers across Canada, especially in his current capacity as chair of the finance committee. I was proud to serve as president of his constituency association. I am proud to vote for him as my own MP. I also applaud him for his work today in promoting and increasing awareness of an important issue affecting all Canadians, financial literacy.

That is enough sucking up to one of my colleagues. Today we want to talk about the motion that presents constructive ways to improve financial literacy in Canada. It is good news, and I appreciate that my colleague from across the floor mentioned it. We would respond to the recommendations of the task force on financial literacy. We would create, promote and continuously upgrade a single source website for financial literacy to increase public awareness and improve access to information for all Canadians. We would require federally regulated financial institutions to publicly disclose their contributions to financial literacy initiatives. We would ensure that the Financial Consumer Agency of Canada works with willing provinces and territories to promote financial literacy to youth in particular. As well, we would designate November as financial literacy month.

Everybody agrees that those are things to do, but surprise, surprise, the folks across the floor do not think we are doing it properly. Welcome to Parliament.

Our Conservative government supports today's motion, as we support improving financial literacy to assist Canadians achieve greater control over their own finances.

Our economy is built on the millions of financial decisions that Canadians make every day. More than 60% of total spending in Canada's economy, which is the lion's share of our economy, is consumer spending. Investment and consumer spending go hand in hand. They create jobs, growth and wealth. Improving financial literacy helps consumers act knowledgeably and with confidence in managing their personal financial affairs. That is why ensuring that all Canadian consumers have access to the right tools and the right information is so important. It will allow them to make choices that best serve their interests, especially younger Canadians.

As Steve McLellan, head of the Saskatchewan Chamber of Commerce recently observed:

...an element of the whole person certainly is the writing and the reading, but it's also to be able to plan their own life and manage their own [finances]....

A good foundation of financial literacy, including an understanding of personal budgeting and the impact of interest rates, can help our young people successfully manage their money now and build a higher quality of life in the future.

Whether it is a question of saving for retirement, financing a new home or balancing the family budget, improving the financial literacy of Canadians would add to our competitiveness, the stability of our financial system and the strength of our economy. That is why, as outlined in budget 2009, Canada's economic action plan, we put a plan in motion to build a cohesive strategy on financial literacy, starting with the creation of a task force on financial literacy. This builds on our government's already strong actions in this regard.

For example, in budgets 2007 and 2008, we provided the Financial Consumer Agency of Canada with new funding to undertake financial literacy initiatives, focusing initially on youth. This included a partnership with the British Columbia Securities Commission in developing The City, a web-based high school financial literacy program available across the country. This strategy of boosting the financial knowledge of Canadians goes hand in hand with our Conservative government's ongoing leadership to enhance consumer protection for Canadians using financial services.

For instance, to help out consumers of credit cards, we introduced measures in 2009 that require clear and simple information on credit card application forms and contracts, and timely advance notices of changes in rates and fees. Just today it was announced that we are taking action on unsolicited credit card cheques, something that is overdue. We also limited credit card business practices that are not beneficial to consumers. We established a 21 day minimum grace period for new purchases made with a credit card and limited some debt collection practices. These measures were widely applauded by consumer groups. The Consumers Association of Canada gave them high marks remarking, “they will address the key consumer concerns in the market without having unexpected adverse consequences for consumers”.

A strong and stable financial system also depends on the ability of its users to make informed decisions. That is why our Conservative government launched the task force on financial literacy, to make recommendations on a national strategy to improve financial literacy in Canada. The task force delivered its final report in February 2011. We are working to implement many of its recommendations.

In fact, Bill C-28 is before Parliament as we speak. Bill C-28, the financial literacy leader act, responds to the central recommendations of that task force report by calling for the appointment of a financial literacy leader to spearhead the government's ongoing role in strengthening the financial literacy of all Canadians.

While the task force acknowledged that excellent work was being done across Canada to improve financial literacy, more can always be done. In fact, the report's number one recommendation was as follows:

The Task Force recommends that the Government of Canada appoint an individual, directly accountable to the Minister of Finance, to serve as dedicated national leader. This Financial Literacy Leader should have the mandate to work collaboratively with stakeholders to oversee the National Strategy, implement the recommendations and champion financial literacy on behalf of all Canadians.

I believe that our Conservative government's outstanding record of promoting financial literacy and consumer protection would only be enhanced by this appointment which would coordinate our efforts to ensure that they remain effective.

As the task force report tells us, improving financial literacy in Canada will “require a focused, centrally recognized champion. Clear leadership and coordination are needed at the national level. Sustained, steady progress over the long term is unlikely to be achieved without dedicated stewardship”. I am confident that the appointment of a financial literacy leader would achieve these goals in coordination and bring us further to the worthy goal of the member for Edmonton—Leduc of improving financial literacy in Canada.

I spent 12 years before coming to Parliament as an investment adviser, stockbroker and branch manager. My wife and son are still in those roles. Most people are too busy to pay close attention to their investments. That makes sound financial advice very important. Financial literacy though, makes the average investor more comfortable with what that financial advice means.

If an investment adviser cannot explain an investment to the understanding of the average investor, then the investment is probably a bad idea. Sound and effective investing is not rocket science. Neither is financial literacy. It simply takes an effort by those giving advice and a reasonably informed investor. At the very least, people should read books like The Wealthy Barber.

Our government's commitment to financial literacy through programs that will be started as a result of Motion No. 269, and the expertise of a financial literacy leader will provide an important step forward for Canadian families. Statistically, only 51% of Canadians maintain a budget and 31% struggle to balance their books and pay their bills.

Let me conclude by saying that our government has shown its faith in the long-term effects of financial literacy on the well-being of Canadians and the Canadian economy by increasing funding of financial literacy initiatives on an ongoing basis. We remain committed to doing everything we can to help Canadians as they prepare for a healthy financial future. We are doing things almost on a daily basis. I just mentioned the unsolicited credit card cheques. We also took action today to introduce a mortgage code to help Canadians better understand what a mortgage means because that can be a fairly confusing financial transaction. Obviously, it is probably the most important or biggest financial transaction that most people will make.

I certainly applaud my colleague from Edmonton—Leduc for bringing this motion forward. It is one that I sense will be supported, notwithstanding the typical rhetoric we get that is just part of this place and I understand that. I strongly recommend that all members vote in support of this motion.

Raymond Côté Beauport—Limoilou, QC

Mr. Speaker, I wish to congratulate my hon. colleague on her speech on such an important topic.

In my speech yesterday on the same topic, I spoke at length about the government's reprehensible abandonment, which Bill C-28 will definitely not resolve. What really troubles me is that, because of this abandonment, and because of the complexity of the financial products coming on the market more and more, many people have become victims of their own lack of knowledge and inability to face the music.

Is the government not trying to heap blame on the very people who are likely to lose out here, who will become victims of abuse of these products?

Laurin Liu Rivière-des-Mille-Îles, QC

Mr. Speaker, I am pleased to have this opportunity to speak to Bill C-28, An Act to amend the Financial Consumer Agency of Canada Act, which would create the position of financial literacy leader to strengthen Canadians' financial literacy. This initiative was inspired by a report from the task force created by the Conservative government and chaired by bankers, including Donald Stewart of Sun Life Financial and Jacques Ménard of BMO Nesbitt Burns.

I went through the literacy report that was released in February 2011. To my great surprise, it contained not a word about credit card companies' quasi-usurious interest rates, not a word about financial institutions' lack of transparency concerning their fees, not a word about the questionable practices of banks that demand exorbitant fees when people try to pay off their mortgages early. Do not expect to find a mea culpa in this report from bankers who have sold highly speculative toxic financial products for years and continue to do so. Honestly, I was very disappointed.

The Conservatives keep telling us that consumers get themselves into debt because they do not know how to read a credit contract. But the government is ignoring the fact that annual interest rates on credit cards are often around 20%.

I would like to quote from the evidence given by a few individuals who expressed concern about this bill. First of all, Ken Georgetti of the Canadian Labour Congress said, “Canadians need better government policy rather than lectures on how to save money.... This report heaps blame on 'uninformed' individuals, and completely ignores the predatory behaviour of financial institutions.”

Jim Stanford of the CAW said,“Many financial literacy programs devolve into admonishments for individuals to save more. This is misplaced....”

Lauren Willis, a professor at Loyola Law School in the United States, also denounced the government's approach. She said, “When consumers find themselves in dire financial straits, the regulation through education model blames them for their plight, shaming them and deflecting calls for effective market regulation.”

The ministers of this government like to rise here in the House of Commons and tell us that it is up to Canadians to save and plan for their futures. Those same ministers then turn around and slash social programs like the ones designed to ensure a decent retirement for our seniors.

For instance, instead of strengthening the public pension system, they created a pooled registered pension plan, which will only encourage investors further to choose risky private funds and stock markets.

We also know that the Prime Minister told the bankers in Davos that he was going to make cuts to the old age security program and that one way he was going to do so was by increasing the eligibility age from 65 to 67.

Last week, I held a public consultation in the town of Boisbriand in my riding. I can tell you that people are very worried about the fact that the government refuses to take responsibility where the financial security of our seniors is concerned.

It is not up to the public to pay for the Conservatives' F-35s. It is not up to the public to pay for the tax credits that are given to corporations.

With the creation of pooled registered pension plans, the dismantling of old age security and the reinforcement of tools for small investor autonomy, the Conservatives' message is very clear: the government, as they see it, does not need to look after the financial security of seniors and retirees. That approach makes no sense.

For Barrie McKenna of the Globe and Mail, “Looking to financial literacy to fill the void is like asking ordinary Canadians to be their own brain surgeons and airline pilots. The dizzying array of financial products, mixed with chaotic and increasingly irrational financial markets, makes the job of do-it-yourself financial planning almost impossible—no matter how literate you are”.

The other problem is that households with a high debt load often do not have the means to use these individual retirement planning mechanisms. Some 30% of Canadian families do not have any retirement savings outside the Canada pension plan.

As Jim Stanford of the CAW clearly observed, personal savings will never be a significant source of financial security for most Canadians since they are unable to save as a result of their low incomes.

It is all well and good to encourage personal saving, but it is this government that caused Canadians to lose well-paid jobs, particularly in the manufacturing sector, and replaced them with unstable jobs. It is under this government that Canadians' quality of life has declined. Single mothers who struggle to put something away for retirement are not to blame. Students in debt who cannot count on secure employment when they graduate are not to blame. And the seniors whom the government is asking to work two more years even though it knows that many of them not capable of doing so are certainly not to blame.

The New Democrats have a better plan for financial security at retirement. We are proposing that the government strengthen the guaranteed pension plans in Canada and Quebec and gradually double benefits in an affordable manner, thereby giving Canadians an acceptable level of guaranteed income during retirement. These are the general circumstances surrounding Bill C-28.

In the time I have remaining, I would like to address two other issues: the bill adds a useless bureaucratic institution and it does not require the candidate to be bilingual.

Given that Canada's current consumer protection regime is extremely fragile, I fail to see how adding a new layer of bureaucracy will help consumers. Without any real political direction, guidance on how to increase financial literacy or accountability mechanism, there is no reason to believe that the financial literacy leader will have the tools needed to carry out his mission. As the hon. member mentioned, this bill does not even include a definition of financial literacy.

At a time when the Conservatives are preparing to cut government programs by 10%, it does not make any sense to create another bureaucratic structure responsible for protecting consumers. If the government really wants to invest in protecting consumers, why does it not simply support the Financial Consumer Agency of Canada, Option consommateurs or the Réseau de protection du consommateur du Québec?

I am thinking of an organization in my riding, the Lower Laurentians ACEF, which does an excellent job of teaching budgeting on a low income. This organization really helps the people in my riding. As an aside, I cannot help but criticize the fact that the bill does not explicitly state that the financial literacy leader must be bilingual. The past actions of this government betray its insensitivity towards French. Members will recall that this government did not hesitate to appoint judges and an auditor general who do not know French.

In the circumstances, it is understandable that the official opposition will try to amend the bill to ensure that bilingualism is one of the job requirements. Yes, financial literacy is very important, but this is not the type of debate that we should be having right now in the House of Commons. Furthermore, creating the position of financial literacy leader is a false solution. This new bureaucratic creature does nothing to allay the growing financial concerns of small investors.

We believe that the best way to support consumers is to create a department or agency that would be a one-stop shop for all consumer protection issues. This organization would cut down on bureaucracy because it would consist of structures that already exist, but are scattered throughout government.

I will now take questions from my hon. colleagues.

Kevin Lamoureux Winnipeg North, MB

Mr. Speaker, the government has not provided Parliament with a plan regarding Bill C-28. We do not know how much it is going to cost. In regard to the financial literacy leader, we need to know what sort of resources the government is prepared to allocate to the position.

As my NDP colleague mentioned, we have to be excused for not just buying into everything that the government is trying to sell with this legislation. It is one thing to say here is a bill but it is another thing to put some teeth in it. We are not convinced that there is a solid commitment to having a well financed office that would produce the desired outcome. We recognize how critically important the issue of financial literacy is. It is an important file. Young people need to be more involved in the financial environment. The benefits far outweigh any sort of potential costs that might be incurred in making sure that we do it right and that the federal government plays a leadership role.

Elizabeth May Saanich—Gulf Islands, BC

Mr. Speaker, I see nothing objectionable in Bill C-28. We need greater financial literacy among Canadians.

I wonder if the bill has been costed. We are considering creating a new office within the federal government. I imagine the bill speaks to the expense accounts of that office and someone with the title financial literacy leader.

Have we examined as a House whether the goals of the bill could be better accomplished through sufficient support to groups like the Consumers' Association of Canada or Democracy Watch? They have done a lot of good work in making Canadians aware of their banking processes.

Dennis Bevington Western Arctic, NT

Mr. Speaker, I want to thank my colleague for his discussion on Bill C-28. I have some concerns about the bill, having dealt with the government for six years. Many times the government sets up straw dogs that really do not accomplish much. The government has established a commission to look into complaints for human rights and environmental conditions around Canadian mining companies in other countries. The commission has basically done nothing.

In this country, we need a lot of consumer protection and consumer information. Financial information is a very important part of that. It is a very complex field for Canadians to understand how to best use their financial system to their own benefit. We are talking about playing a game against people who have much larger and more elaborate plans. How can we guarantee that what is in this bill will actually deliver anything for Canadians?

Jamie Nicholls Vaudreuil-Soulanges, QC

Mr. Speaker, I will start off by looking at the problems the national task force on financial literacy had from the very beginning.

First, it was headed by a former banker. I have nothing against bankers. My mother was a banker. She worked as a bank manager for the Bank of Montreal for over 35 years. She worked in human resources. I had an aunt who worked for the Bank of Montreal for the same period of time. My mom's friends worked for a bank. I am familiar with bankers and I have no problem with them.

The raison d'être of bankers is to market financial products. I know this because I lived in a banking family. Bankers sell financial products. There are certain marketing seasons when they sell RRSPs or different financial products. They have quotas. There are things that they have to sell. They are salespeople. That is their raison d'être. Often the financial products that they sell to consumers increase the profits of their institutions.

That is not a balanced way to start a group dedicated to the idea of financial literacy. It is similar to putting McDonald's in charge of nutrition policies. It is not a balanced way to do things.

Members know as well as I do that consumers sometimes get burned by financial products because they do not quite understand them. A case in point is the RESP.

I want to make a transparent declaration to the House. When I was in my early thirties and took out an RESP for my daughter, I did not quite understand what I was getting into. The marketing material made it look like I could squirrel away money for my daughter and by the time she was 18 there would be enough money for her university education. I was conscious of the fact that when she did reach university age it would be quite expensive to put her through post-secondary education with the rising costs of education and the rising costs of living. I was really scared and I wanted to find a financial product that would allow me to pay for her education without any worries.

What I did not know was that I could lose that money easily. Call me a fool, but I did not know that the RESP would lose so much money when the market took a dive. My mother the banker did not tell me that fact either until I had lost half the value during the downturn in 2008. There was $12,000 in that plan and it went down to about $5,000 or $6,000. I worked hard to put that money aside. I believed that I was doing the right thing. The bank told me I was doing the right thing. The government told me I was doing the right thing. I believed them.

What we need in terms of financial literacy is somebody who will tell the people of Canada the whole truth, not just the marketing truth.

The Minister of Finance denied that we were in a downturn until the very end of 2008, but I felt it much earlier. I remember the government initiatives to boost people's contributions to RESPs in 2006 and 2007. There was quite a marketing drive by the banks and government. They were telling people to put their money into RESPs so that their kids could go to school.

I am sure people will say that I was a fool not to know how it worked before I put my money in the RESP. With raising a child, working full-time, taking care of my family, I did not have the time to sit down and look at what the RESP was about. It was never taught to me in high school. It was never taught to me in university. I was to teach myself from the bank's own marketing products and from the government literature. None of those things told me that I could lose my money just like that.

I know I am not alone in that. I know there are plenty of Canadians out there who have gone through similar experiences to me. Therefore, as much as we might say that I am a fool, if I am a fool, thousands of Canadians are fools. They need help understanding these financial products.

Francophones may find it even more difficult to learn about these financial products through this group because bilingualism is not a requirement for the position of financial literacy leader. Obviously, what the government wants to do is create a single consumer protection agency. However, that is not really within the purview of this bill. Consumer protection is not really included in the bill.

Instead, I would like to talk about one of the greatest problems for Canadians: savings.

If we are looking at the issue of financial literacy, I must agree with my colleague in the third party who said that the financial leader of the government was not quite literate, because we have serious problems. One of those serious problems is the savings of Canadians and it is one of the things that is effecting the competitiveness of our economy.

The former governor of the Bank of Canada said, in a report quite a while ago, that Canadians needed to save more. He said that they needed to save between 10% and 21% of their pre-tax income each year and that they needed to save consistently for 35 years to have comfortable retirement incomes.

According to a report prepared by the C.D. Howe Institute, which is not exactly a socialist organization, people who earn between $42,000 a year and $150,000 a year need to save between 11% and 21%.

What I see in Bill C-28 is the creation of a group that will try to market financial products, like credit cards, RRSPs and RESPs, without fully explaining what those products do or explaining it in a way that will promote those products to promote the profits of those institutions and banks. I do not think that is the way to teach Canadians how to be financially literate. We need to find a way for Canadians to save more money.

The Conference Board of Canada, looking at the World Economic Forum's 2011 report on competitiveness, said that Canada's macroeconomic environment rankings were weak. It said that a number of fiscal pressures were restricting Canada's economy from achieving its full potential. For example, Canada ranked 80th in terms of its gross national savings as a percentage of GDP and a lowly 129th out of 142 countries in terms of its overall government debt levels as a percentage of GDP.

It is clear that we need to help Canadians become financially literate but that starts with telling them to save more and finding efficient ways for them to save without marketing these financial products to them. I do not think the task force would be able to sufficiently explain these financial products to Canadians when it is obvious that the composition of the board would be compromised in that it would not be necessary for the head of the task force to be bilingual.

I have problems with the bill. I do not think it would do what the government states it would do, which is increase financial literacy. We need to take a serious look at how we can actually improve the financial literacy of Canadians. Looking at the statistics, I can see that we have a long way to go.