Special Committee on Cooperatives Committee on July 10th, 2012
Evidence of meeting #3 for Special Committee on Cooperatives in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cooperatives.
A recording is available from Parliament.
On the agenda
MPs speaking
Also speaking
- Claude Carrière Associate Deputy Minister, Agriculture and Agri-Food Canada
- John Connell Associate Assistant Deputy Minister, Strategic Policy Sector, Department of Industry
- Jeremy Rudin Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance
- Denyse Guy Executive Director, Canadian Co-operative Association
- Marion Wrobel Vice-President, Policy and Operations, Canadian Bankers Association
- Stephen Fitzpatrick Vice-President, Corporate Services and Chief Financial Officer, Credit Union Central of Canada
- Nicholas Gazzard Executive Director, National Office, Co-operative Housing Federation of Canada
- Frank Lowery Senior Vice-President, Senior Counsel and Secretary, The Co-operators Group
- John Taylor President, Ontario Mutual Insurance Association
- Michael Barrett Chief Operations Officer, Gay Lea Foods Cooperative Ltd.
- Bob Friesen Farmers of North America
11:05 a.m.
NDP
Wayne Marston Hamilton East—Stoney Creek, ON
In your remarks you expressed the concern that there might have been a lack of understanding by government officials when they looked at this. Again, I would suggest that the summit would be an opportunity for people to gain a better understanding.
I'm really concerned, because when I asked previous witnesses if they were planning on making these cuts in due course, prior to the austerity measures the government started to put in to meet the goal of deficit reduction...and it's concerning because these—
11:05 a.m.
Conservative
11:05 a.m.
NDP
11:05 a.m.
Voices
Oh, oh!
11:05 a.m.
NDP
11:05 a.m.
Conservative
July 10th, 2012 / 11:05 a.m.
Conservative
Ray Boughen Palliser, SK
Thank you, Chair.
Welcome to the panel. I'll add my voice to those of other colleagues and thank you folks for appearing today on a warm, summery, blue sky, “I'd rather sit there than be in here” kind of environment. But we're glad you're here.
We've heard what's happened with your various operations and your institutions. My question to each of you is, what do you see in the future? We see economic upheaval. We look across the planet and we know we don't live on an island—what happens in Spain and in other parts of our planet affects all of us in one way or another. How do you look at that in terms of what's going to happen, probably—and maybe not, but certainly a change will occur in the financial institutions you represent. How will they deal with these changes on the horizon?
11:05 a.m.
Vice-President, Policy and Operations, Canadian Bankers Association
One thing we saw coming out of the global financial crisis was that the Canadian banking system is very resilient. We asked ourselves what the reasons are for that.
We think that in Canada we have a combination of things. We have good policy, generally, with respect to banking. That's come in place over a number of years. We have good, prudent management and practices. We have institutions that are well capitalized. We have a pretty good regulatory regime, and the advantage here is that we have a single bank regulator, and that's important. We have strong supervision. I think with all of that combined we saw the strength of the Canadian banking system.
Now going forward, because there's this concern that we don't want this to happen again, we see this huge regulatory onslaught. We have a number of new initiatives put in place since 2008–09. In magnitude, they are strong and they are coming in at a rapid pace. I think it's important to look at all of that and try to make sure that new regulatory initiatives actually achieve what they are meant to and they don't have negative and unintended consequences.
My colleague, Mr. Fitzpatrick, talked about compliance and the burden of compliance on small institutions. The Government of Canada wants to enhance competition in financial services. It wants to attract new entry, and often the entry of small institutions. We have to ask ourselves whether all these new regulatory initiatives are making it more difficult for new entrants to come into the market.
So we have to balance off that safety and soundness, which we should never ignore, as it's a really important part, but make sure we have a competitive financial system.
11:05 a.m.
Vice-President, Corporate Services and Chief Financial Officer, Credit Union Central of Canada
I'll answer second, then, and continue the flow.
We would agree with some of the comments Mr. Wrobel has made on the regulatory burden. We think of it more in terms of things such as FINTRAC, for example, to which there are millions of filings every year. In 2010 there were more than 20 million filings. Only 500 of them were actually followed up on for action, and we don't know whether any of them materialized into anything.
Things such as that you have to question. We don't question the purpose; we question the effectiveness of that kind of approach, especially when.... I could use the example of Surrey Credit Union in Prince Edward Island. It has 10 or 12 employees and has the same requirement as VanCity in Vancouver or the Royal Bank of Canada when meeting those FINTRAC requirements. This has a disproportionate effect on the administrative costs in that credit union. As far as the burden we work under is concerned, that would be the challenge we face.
Perhaps this is an answer to an earlier question as well. We embrace the rules that are coming in concerning enforcing the safety and soundness of financial institutions in Canada. Mr. Wrobel is right that the Canadian banks did quite well and the Canadian credit unions did very well also. There were no failures as a result of the economic crisis in Canada. That speaks to both the regulators and the organizations that were regulated and the way we operated.
11:10 a.m.
Conservative
The Chair Blake Richards
Thank you. The time has expired on that round.
Madame Brosseau, you have the next round.
11:10 a.m.
NDP
Ruth Ellen Brosseau Berthier—Maskinongé, QC
Thank you very much.
I think we all can agree that co-ops really help people: they lift people out of poverty; they promote gender equality. I haven't heard a bad thing about co-ops, so I don't really understand why we're cutting funding to them.
Has the Canadian Co-operative Association had a meeting with the Minister of Agriculture concerning the three recommendations that remain?
11:10 a.m.
Executive Director, Canadian Co-operative Association
Do you mean with Mr. Ritz? No, we have yet to have that meeting.
11:10 a.m.
NDP
11:10 a.m.
Executive Director, Canadian Co-operative Association
Certainly efforts were made.
11:10 a.m.
NDP