Finance Committee on May 28th, 2013

[Scott Brison, Liberal, Kings—Hants, NS]

Okay.

[Annie Hardy]

The Office of the Superintendent of Financial Institutions is the one that actually can answer those questions, because they're the ones who regulate. Also, there are rules in the legislation, and the superintendent has guidelines on how the board should make decisions. Risk decisions, for example, have to be debated by the board, but I don't have the full details in front of me.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Chair, I propose that Ms. Hardy provide us with that information.

Ms. Glover, my request is based on the same principle as was applied to clause 7—that we would table this until that information is brought to the committee later this morning.

[The Chair, Conservative, James Rajotte]

Okay.

Mr. Jean, did you want to get in before...?

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Well, I would if Ms. Glover is of that position. My understanding, and maybe Ms. Hardy can check, is that since subcommittees and their decisions are ultimately the responsibility of the board, and the board has to ratify the decisions of any subcommittees because they would have directors' liability in relation to those decisions, the board as a whole would be the issue and not just one of the subcommittees. But I'm certainly prepared to take Ms. Hardy's advice on this.

[The Chair, Conservative, James Rajotte]

Ms. Hardy, do you want to comment on that?

[Annie Hardy]

It's correct that the directors are liable for all of the decisions. Usually, all of the important decisions have to be reported at the board.

[The Chair, Conservative, James Rajotte]

Does that address your concern, Mr. Brison?

[Scott Brison, Liberal, Kings—Hants, NS]

I asked about the specific types of business that could be delegated to a committee of directors and how this would apply to that delegation. Ms. Hardy said that this information exists, but she doesn't have it on hand. It would be helpful if she could bring it back to committee later this morning. Once we have that information, I'd be more comfortable.

[The Chair, Conservative, James Rajotte]

Okay. I have Ms. Glover and then Mr. Jean on this.

Ms. Glover.

[Shelly Glover, Conservative, Saint Boniface, MB]

I was going to say that the information Mr. Brison is asking for in no way, shape, or form is going to change anything about the proposals in the budget.

It's nice-to-know information, of course, but as the witness has clearly testified, it doesn't change anything, because the boards are in fact the people who make the final decision.

I think we should move forward and vote on it. If Mr. Brison wants that nice-to-know information, I think we should provide it to him, but it doesn't affect the vote.

[The Chair, Conservative, James Rajotte]

Okay.

I'll go to Mr. Jean and then to Mr. Brison.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I think it's a novel question from Mr. Brison. But ultimately, the board is responsible for all the decisions of any subcommittee, so I don't see how it would make one iota of difference what can be assigned to a subcommittee. The board is ultimately liable for the decisions of the subcommittee, and the whole board generally has to ratify these decisions. So I don't see how answering Mr. Brison's question would be constructive.

[The Chair, Conservative, James Rajotte]

The argument, Mr. Brison, is that it wouldn't change in terms of voting on the clause or not. I'm just saying that's the argument; I'm not passing judgment. We would get that information even if we vote on that. Does that satisfy your concern?

[Scott Brison, Liberal, Kings—Hants, NS]

No. I'll just explain why.

On a very practical level, and not on a financial one, it has been part of boards.... I know that when subcommittees report back, usually their recommendations are carried by the boards, and subcommittees do extremely important work. This does change the residency requirement for subcommittees.

We are uncertain.... Ms. Hardy is able to provide later this morning what types of decisions we're speaking about and what specific subcommittees this would potentially apply to or what subcommittees may be exempt from these changes. I think it's really important.

Our financial institutions and the governance over our financial institutions have helped significantly to protect the prudential strength of our Canadian financial system. There has been, certainly over time, a different culture of lending and borrowing, as an example, in Canada compared to the U.S. and Europe. There was a deregulation of process—

[The Chair, Conservative, James Rajotte]

Okay, Mr. Brison.

[Scott Brison, Liberal, Kings—Hants, NS]

—that precipitated that decline in prudential oversight in Europe and the U.S. in the 1990s. We did not follow that route.

I think having Canadian.... It may prove to be materially important that residency requirements continue to be maintained for what are very material decisions being made at the subcommittees.

[The Chair, Conservative, James Rajotte]

Thank you very much.

I don't think I have the consent of the committee to table. Is that correct?

[Shelly Glover, Conservative, Saint Boniface, MB]

That's right.

[The Chair, Conservative, James Rajotte]

That's correct. Okay.

(Clauses 104 to 109 inclusive agreed to)

Let's deal with clauses 110 to 125. They deal with the Federal-Provincial Fiscal Arrangements Act.

Is there any...?

[Peggy Nash, NDP, Parkdale—High Park, ON]

Clause 125.

[The Chair, Conservative, James Rajotte]

Clause 125? Okay.

[Scott Brison, Liberal, Kings—Hants, NS]

I have a question.

[The Chair, Conservative, James Rajotte]

On which one, Mr. Brison?

[Scott Brison, Liberal, Kings—Hants, NS]

I think the NDP have flagged that they have a question too.