Evidence of meeting #5 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 video is available from Parliament.
2:20 p.m.
Conservative
The Chair Conservative Blake Richards
You don't have the number for Alberta, but would you hazard a guess? Or would that be fair?
2:20 p.m.
President and Chief Executive Officer, Alterna Savings
They'd probably shoot me, my friends in Alberta, if I got it wrong.
2:20 p.m.
Conservative
The Chair Conservative Blake Richards
All right. I know you don't want to be put on the spot, and I appreciate that. That's not a problem.
So what I will do now is turn the floor to Monsieur Bélanger. You have five minutes.
2:20 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Thank you, Mr. Chairman.
Incidentally, if we do have a business session, I might mention that there's one area that I think everyone forgot, including me, and that is to perhaps consider inviting sports teams. I think that three of the Canadian Football League teams are cooperatives or cooperatively owned. I don't know if there are any more in the other...but if we have a chance we should perhaps consider that. I gather, also, the Green Bay Packers are, but I don't think we should be inviting them.
2:20 p.m.
Conservative
The Chair Conservative Blake Richards
Sorry, Mr. Bélanger, I'm not using your time for this, but do you know the three teams?
2:20 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Saskatchewan is one for sure, and I believe Winnipeg, and perhaps Calgary—but Calgary is a different kind of arrangement.
2:20 p.m.
Conservative
The Chair Conservative Blake Richards
Yes, I don't know that they're a cooperative. I could be a mistaken, but....
2:20 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
All the proceeds have been reinvested into the community, into the team, and it's owned by a small group, which may be a cooperative model, but I'm not sure.
2:20 p.m.
Conservative
The Chair Conservative Blake Richards
Okay, that's a great suggestion. I appreciate that.
As I said, that didn't come out of your time. You've got about four-and-a-half minutes remaining.
2:20 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
All right.
Mr. Lahey, I thought Alterna was the first one in the country—but we'll leave that in abeyance for now. But to my understanding you're also the only credit union that owns a bank charter. Correct?
2:20 p.m.
President and Chief Executive Officer, Alterna Savings
Yes, they own one as well.
2:20 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Okay. And the reason you have used it, if I understand correctly, is its origins as part of the civil service, and that you have clients on both sides of the Outaouais River. You just couldn't walk away from them.
2:20 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Okay.
As you mentioned in your text, the government approved in the 2010 budget the creation of a banking co-op. Coincidentally, just before we met on July 10, the government pre-published on July 6 the regs, so you have a sense of what those are.
Without prying into your business development plan or any proprietary information, is Alterna satisfied with the conditions that have been created for the co-op banking universe in Canada?
2:20 p.m.
President and Chief Executive Officer, Alterna Savings
Under the proposed regulations?
2:20 p.m.
President and Chief Executive Officer, Alterna Savings
Yes, I'd say we are. I think what we have to recognize is that this is the first iteration, so it's not perfect, and everybody knew it wouldn't be perfect. So I think it will evolve over a period of time, but there's nothing in the regulations that we object to.
2:20 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
So you include in that the minimum capital requirement, and things like that.
2:20 p.m.
President and Chief Executive Officer, Alterna Savings
We think it's appropriate. Certainly the regulatory standards that OSFI applies are a significant step up, probably, for most credit unions. So that will be a challenge for them.
2:20 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Okay.
On the matter of compliance costs, we are all aware now of the FINTRAC requirements, and I hope that we're not looking at going any lower than what those currently are—and certainly I wasn't aware of our maybe doing that—but are there other examples of compliance costs that apply in an unfair manner to smaller entities?
2:25 p.m.
President and Chief Executive Officer, Alterna Savings
In our estimation, most of the regulatory requirements in this country are because the financial services industry is dominated by the big companies. It's really designed for their needs.
For instance, we run this small bank, as you've said. The new CDIC—I forget what they call it exactly—fast-tracks deposit arrangements, which are designed to allow CDIC to take quick control of an organization that's in trouble. They're quite substantial for a small organization like ours to put in place.
We have met their requirements—we used some chewing gum and baling wire to do it—and we're in full compliance, but it was a significant effort.
We think it's a bit like trying to kill a fly with a sledgehammer. The requirements were really designed for a large organization.
2:25 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
On the matter of CMHC and the notes, I've had a meeting with the CMHC officials and they've clearly indicated that their hands are tied. Because of the nature of the mortgages being closed mortgages, they have to recover it all.
I'm not blaming CMHC. I gather that if the government were to direct CMHC to behave differently, the money these mortgages represent, mortgages that are at fairly low rates now, could easily be relocated and engaged in other matters.
As a financial expert, would you believe that's possible?
2:25 p.m.
President and Chief Executive Officer, Alterna Savings
I'm not sure I fully understand what you mean when you say—