Okay.
Evidence of meeting #49 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was julian.
A recording is available from Parliament.
Evidence of meeting #49 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was julian.
A recording is available from Parliament.
3:35 p.m.
Conservative
The Chair Conservative James Rajotte
Mr. Julian, my advice here is it would be beyond the scope of this bill that we're studying today.
3:35 p.m.
Conservative
3:35 p.m.
NDP
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.
3:35 p.m.
General Director, Financial Sector Policy Branch, Department of Finance
I think what may be the concern you are getting at is that the decision point that is now being made by the superintendent wouldn't happen, while it would. The superintendent would still have to make a recommendation, based on her prudential assessment in favour of the transaction. What is now the final decision still has to take place, and then there's the additional....
3:35 p.m.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
That's not our understanding. You can perhaps correct me if we're wrong, but our understanding is that once the 30-day clock begins, if the minister doesn't make a decision and if there is no request for an extension into that decision, it is a default acceptance of the application.
3:40 p.m.
General Director, Financial Sector Policy Branch, Department of Finance
The 30-day clock starts once the superintendent's recommendation has been made.
3:40 p.m.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Yes, but again, under Bill S-5, if the minister does not make a decision and does not seek an extension, it is a default acceptance. Right?
3:40 p.m.
General Director, Financial Sector Policy Branch, Department of Finance
It's a deemed approval.
3:40 p.m.
General Director, Financial Sector Policy Branch, Department of Finance
That's consistent with the approvals process elsewhere in the legislation.
3:40 p.m.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
We understand that. The question still remains. If we are concerned about the deemed approval, how, then, since it is outside of the scope to change the Bank Act, do we change Bill S-5 to ensure that it is no longer a situation of deemed approval?
What we can gather from your response is that you're telling us the decision would have to remain with the Superintendent of Financial Institutions.
3:40 p.m.
General Director, Financial Sector Policy Branch, Department of Finance
No, you'd have to amend the legislation to make it an explicit approval.
3:40 p.m.
Director, Financial Institutions Division, Department of Finance
That's a much bigger question. If the question is, should the government reassess whether a 30-day timeline for the minister to make a decision is inappropriate, and should be longer or should be shorter, then there would have to be a bigger assessment done of all the approvals that are referred to in the Bank Act, the Trust and Loan Companies Act, the Insurance Companies Act.
Right now what we're proposing is that we're replacing what is currently a superintendent approval with what used to be, pre-2001, a ministerial approval process. We're not changing the balance between certainty for the private sector in being able to have an appropriate timeline or a reasonable timeline for that decision to be made, and the ability for the government to have a fulsome review process to make sure that approval is appropriate.
In the legislation, when we're moving it to a ministerial approval as well as in a number of other places in the financial sector legislation, we put a time limit on the amount of time that the department and the minister can take to review the superintendent's recommendation that sits on top of the approval for the purposes of giving the final approval to the transaction.
What we have decided in the past is that a 30-day period for the minister to consider that recommendation and transaction is a reasonable length of time for the minister. In effect, it gives the department and the minister the time to review the transaction, review the superintendent's advice and recommendation, and respond to the applicant on whether or not that approval is going to go through.
March 15th, 2012 / 3:40 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Yes, Mr. Chair. Thank you.
My interest in it is that I don't understand what the disadvantage is for Mr. Julian and the NDP generally, for this line of questioning, because I think it would be to their advantage. It certainly removes the political suppression opportunity for any government. It certainly takes the superintendent's position as an automatic instead of something that has to be deemed. In essence it seems, from most of the legislation I think we've both looked at in other committees, a very normal thing to have an automatic deemed provision for something of this nature, for the superintendent's decision.
Wouldn't this be fairly normal in most pieces of legislation, where something is innocuous.
3:40 p.m.
Director, Financial Institutions Division, Department of Finance
This would actually be the same format that we use for many approvals in the Bank Act, both for very important and serious changes for transactions as well as, as you say, innocuous ones. This is the model that we use in financial institutions legislation, yes.
3:40 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Maybe what we need is a minister of approvals.
Is that where you're going, Mr. Julian? You want to be minister of approvals? I just don't understand.
3:40 p.m.
Conservative
The Chair Conservative James Rajotte
My advice here is that if we cannot deal with this within the context of this bill. It may be an issue that members wish to raise or introduce in amendments to the Bank Act, but that would have to be done separately. I would like to move forward, if I can.
Mr. Julian, do you want to finish?
3:40 p.m.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Yes, I understand, Mr. Chairman. We'll make up time later. I commit to that.
I appreciate the answers from the ministry officials. I gather, then, the only way to make the amendment we're concerned about would be at report stage, and it would be to delete the section that changes it from the Superintendent of Financial Institutions to the minister. That is what I gather.
We've been talking a bit at cross-purposes, but from what I gather, it's only at report stage that we can really deal with this effectively within the scope of the bill.
3:45 p.m.
Conservative
The Chair Conservative James Rajotte
I don't know if it's fair to ask department officials for procedural advice on legislative matters.
3:45 p.m.
Conservative
The Chair Conservative James Rajotte
We do have a clerk here if you want to put questions. You could do it here or you could do it after the committee, certainly.
Do you want to speak to the procedural issues?
3:45 p.m.
Wayne Cole Procedural Clerk
I was only going to say that the scope of the bill doesn't change between its study in committee and its consideration in the House at report stage, so an amendment that can't be made in committee with respect to scope can't be made at report stage either.