Bill S-5 (Historical)

Financial System Review Act

An Act to amend the law governing financial institutions and to provide for related and consequential matters

This enactment amends a number of Acts governing financial institutions. It also amends legislation related to the regulation of financial institutions. Notable among the amendments are the following:
(a) amendments to the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act and the Trust and Loan Companies Act aimed at reinforcing stability and fine-tuning the consumer-protection framework; and
(b) technical amendments to the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act, the Trust and Loan Companies Act, the Bank of Canada Act, the Canada Deposit Insurance Corporation Act, the Canadian Payments Act, the Winding-up and Restructuring Act, the Office of the Superintendent of Financial Institutions Act, the Payment Clearing and Settlement Act and the Financial Consumer Agency of Canada Act.

The House proceeded to the consideration of Bill S-5, An Act to amend the law governing financial institutions and to provide for related and consequential matters, as reported (without amendment) from the committee.

Finance

[James Rajotte, Conservative, Edmonton—Leduc, AB]

Mr. Speaker, I have the honour to present, in both official languages, the seventh report of the Standing Committee on Finance regarding Bill S-5, An Act to amend the law governing financial institutions and to provide for related and consequential matters.

The committee has studied the bill and has decided to report the bill back to the House without amendment.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

You're absolutely right, Mr. Chair. That being said, the concerns are that Bill S-5 changes that context.

You're absolutely right that within the Bank Act, it would be outside of the scope of this bill to make those changes. The question that Mr. Mai is asking is this. Within the scope of Bill S-5, then, currently the process requires an approval from the Superintendent of Financial Institutions. There is a requirement for approval. With the amendments in Bill S-5, it is changed from a requirement for approval to what is a default approval. If there isn't the response and there isn't an application for an extension—a consideration on the decision—it's default approval.

That is of some concern to us. We do understand it's outside of the scope of Bill S-5 to change the Bank Act. We're not suggesting changing the Bank Act. What we're asking is this. Within the scope of Bill S-5, how we would then ensure that there is no default approval. I gather what you are telling us is that the decision would have to remain with the Superintendent of Financial Institutions.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Couldn't this be done in Bill S-5? Would the Bank Act need to be amended?

[The Chair, Conservative, James Rajotte]

I call this meeting to order, the 49th meeting of the Standing Committee on Finance. The orders of the day, pursuant to the order of reference of Tuesday, February 14, 2012, are Bill S-5, An Act to amend the law governing financial institutions and to provide for related and consequential matters.

We're very pleased to have officials here from the Department of Finance. We have Ms. Diane Lafleur. We have Ms. Jane Pearse, Ms. Leah Anderson, Ms. Eleanor Ryan, Mr. Joseph de Pencier, and Mr. Khusro Saeedi. Thank you all for being with us. You're here obviously for any questions members may have.

Colleagues, we have nine amendments from the official opposition. The first amendment I have deals with clause 53, so we will go through clause-by-clause consideration, and as you know, pursuant to Standing Order 75.1, consideration of clause 1 is postponed. Therefore, the chair will call clause 2.

Now, I'd like to proceed.... Mr. Julian.

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, on the contrary. It has been suggested in the past when we have had budgets on Thursdays that we were doing that so we could go out and talk to Canadians about it for several days. Clearly, our interest is to tell Canadians about our economic action plan 2012 which is focused on keeping taxes down and creating jobs and economic growth for Canadians. We hope we will be able to speak about it a lot to Canadians. We are confident that they will see that we share their priorities strongly. I thank the opposition House leader for giving me the opportunity to explain that.

We will conclude this hard-working, productive and orderly week in Parliament by continuing debate on Bill C-31, the protecting Canada's immigration system act this afternoon and tomorrow. We will also debate that bill on Monday, March 26.

Next week is a constituency week where we will all be hard at work in our ridings.

The highlight of the week we return to Ottawa will be when the Minister of Finance rises in the House to present Canada's economic action plan 2012. That will be on Thursday, March 29 at 4 p.m. Canadians can look forward to our economic action plan which will include, as I indicated earlier, important measures focused on jobs and economic growth.

I understand that the Standing Committee on Finance agreed to a responsible work plan for its study of the financial system review act, Bill S-5 so that this House can pass the bill before Canada's banking laws expire in mid-April. Canada has the world's soundest banking system. It is important that we keep it this way. That is why I trust we will see a responsible approach to this bill in the House, similar to what we saw at committee. In anticipation of the bill being reported back to the House tomorrow afternoon, I will be giving priority to report stage and third reading of Bill S-5 on Tuesday, March 27 and Wednesday, March 28.

If we have additional time on those days, I hope we can finish second reading debate of Bill S-4, the Safer Railways Act, and then deal with Bill C-12, the Safeguarding Canadians' Personal Information Act, at second reading.

On Thursday, March 29, we will resume debating Bill C-24, the Canada–Panama Economic Growth and Prosperity Act, before question period. After question period, the House will turn to Bill C-15, the Strengthening Military Justice in the Defence of Canada Act.

Friday, March 30, shall be the first full day of debate on the budget.

[The Chair, Conservative, James Rajotte]

I appreciate that, and Mr. Phillips, I appreciate your brief and your presentation.

You support Bill S-5 going forward, but you'd obviously like to see the review. You're heartened by the comments from the finance department and from the Senate committee. Now in your responses to some of the members' questions, my understanding is this could be the start of the review and the next five-year Bank Act review, or would you like it addressed before that?

[The Chair, Conservative, James Rajotte]

Now are you suggesting, though, that we amend Bill S-5 in any way?

[Hoang Mai, NDP, Brossard—La Prairie, QC]

First, I would like to thank our witnesses for being here today.

We believe that, with Bill S-5, the government has imposed too many limits. This is a five-year review. The government has not engaged in a review which would protect consumers against fees, or protect the superintendent and cooperatives. We do not think that the government has done its job.

The government sent the bill to the Senate. If I remember correctly, the Senate received 30 briefs. It then proposed a technical review only, when in fact that would have been a time to find solutions. I think that what you are saying today is very important. It is important to study every aspect of the bill. Mr. Phillips actually said a few words about that, and Mr. Giguère will also ask you some questions on that matter.

I personally would like to focus on issues which affect consumers, who have been forgotten in the bill. Section 219 offers some protection, but it is not enough.

My question is about banking fees. Can you talk a little more about banking fees and credit card interest rates? What are the problems? Were they addressed in the bill? By the way, I don't think so. What problems are associated with credit cards and banking fees?

Mr. Sommers, you can answer all of these questions.

[Jean-François Vinet]

That is a very good observation.

In fact, we are not here to attack every aspect of Bill S-5. We are not here to review the entire bill. We have five minutes, and then we have one-minute discussion periods.

We have focused on that one aspect which, in our opinion, is the most important one. It regards—

[Shelly Glover, Conservative, Saint Boniface, MB]

Forgive me. I agree. You have, absolutely.

Monsieur Vinet, I'd like you to speak directly to Bill S-5.

Draft section 219 is aimed at consumers and calls for consumer protection regulations. The fine would increase from $200,000 to $500,000.

Do you think this will help to protect consumers? In what way does this help protect them? Will the increase have a beneficial effect?

[David Phillips]

—the extension of the charter, so I spoke directly to Bill S-5.

[David Phillips]

But I am here to talk about Bill S-5 and I made three points—

[Shelly Glover, Conservative, Saint Boniface, MB]

Yes, and I have a question about Bill S-5 for Monsieur Vinet as well, Chair.

[The Chair, Conservative, James Rajotte]

Mr. Phillips did want to address your point on what he has concerns about in Bill S-5.