House of Commons Hansard #156 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was vote.

Topics

Krever Inquiry
Oral Question Period

2:55 p.m.

Cape Breton—East Richmond
Nova Scotia

Liberal

David Dingwall Minister of Health

Mr. Speaker, it is the supreme court.

Organization For Economic Development And Co-Operation
Oral Question Period

2:55 p.m.

Liberal

Charles Caccia Davenport, ON

Mr. Speaker, my question is for the Minister for International Trade.

Apparently the Organization for Economic Development and Co-operation is proposing a multilateral investment agreement which, if signed, would not allow Canada to set job creation targets or set conditions on future foreign investments.

Can the minister confirm that Canada will not sign the proposed agreement unless such restrictions are removed?

Organization For Economic Development And Co-Operation
Oral Question Period

3 p.m.

York Centre
Ontario

Liberal

Art Eggleton Minister for International Trade

Mr. Speaker, negotiations on the multilateral agreement on investment at the OECD are at a very early stage. As I indicated in answer to a previous question, they are not likely to be concluded this year but probably next year.

There is no agreement. Proposals are on the table but no agreement has been reached on the issue. Canada's sovereignty will not be undermined. As in the case of NAFTA, we will look for exemptions for our cultural industries and the right to review sensitive foreign investments.

Furthermore, Canada will not sign an agreement that inhibits its ability to link the granting of investment incentives to job creation. What we do see though as an advantage when eventually we do find the right terms is the greater access of investment for Canadians in foreign markets and a more appealing access into our market for foreign firms.

Organization For Economic Development And Co-Operation
Oral Question Period

3 p.m.

NDP

Nelson Riis Kamloops, BC

Mr. Speaker, my question is a supplementary to that issue. When the minister says that Canada's sovereignty will not be undermined that is exactly what the proponents of NAFTA told Canadians.

Considering the implications of this proposal that are now being carried on in high level secret negotiations, is it not time that Canadians know what is being negotiated? Should they not know what some of the issues are before the election or at least promise to raise it during the election so Canadians can evaluate this and make a judgment call themselves?

Organization For Economic Development And Co-Operation
Oral Question Period

3 p.m.

York Centre
Ontario

Liberal

Art Eggleton Minister for International Trade

Mr. Speaker, what is on the table in the MAI is substantially what is already in the NAFTA agreement and that is very public information.

It is at a very early stage in the discussions. Canada has not agreed to anything and Canada will not agree to anything that is not in its interest. If we can get further access to markets, fine. However, we want to make sure that we can continue to create jobs in this country. That is what Canadians want and we are not going to give that away.

Presence In Gallery
Oral Question Period

April 15th, 1997 / 3 p.m.

The Speaker

I draw the attention of hon. members to the presence in the gallery of Mr. Donald David Gay, MLA, my brother Speaker of the Legislative Assembly of New Brunswick.

Presence In Gallery
Oral Question Period

3 p.m.

Some hon. members

Hear, hear.

Presence In Gallery
Oral Question Period

3 p.m.

The Speaker

I have two points of order which I will entertain.

Points Of Order
Oral Question Period

3 p.m.

Etobicoke Centre
Ontario

Liberal

Allan Rock Minister of Justice and Attorney General of Canada

Mr. Speaker, my point of order arises from a response I gave yesterday in question period.

I was asked by the hon. member for Fraser Valley West whether I had solicited a letter from CAVEAT that has been referred to in the record. I said I had not, nor had I instructed anybody to do so on my behalf.

I did undertake to check the facts. The hon. member or other members might have concluded from my response that the letter had not been solicited. Last night in discussion with my staff I learned that a member of my staff, in speaking with the president of CAVEAT last Thursday, had asked that the thoughts she had expressed be put in writing and that she communicate by letter. That was done. That is the letter that I read from, freely sent by CAVEAT.

I answered yesterday to the best of my ability and I put on the record today the facts I have discovered in the interim.

Points Of Order
Oral Question Period

3 p.m.

Reform

John Williams St. Albert, AB

I rise on a point of order.

Mr. Speaker, as you will recall, during question period you asked the minister of immigration to withdraw certain words. I would like to draw the Speaker's attention to the point that these words were withdrawn conditionally.

As you know, Mr. Speaker, Beauchesne requires that anyone who is asked to withdraw unparliamentary language do so without any conditions whatsoever. I would like to draw to your attention that the minister did attach conditions. I ask that the record be corrected by requesting her to make an unconditional withdrawal now since she is still in the Chamber.

Points Of Order
Oral Question Period

3 p.m.

The Speaker

I will undertake to review the blues and Hansard but my recollection is that there was a straight withdrawal with no conditions attached. Should that not be the case I will return to the House if it is necessary.

The House resumed consideration of the motion that Bill C-82, an act to amend certain laws relating to financial institutions, be read the third time and passed.

An Act To Amend Certain Laws Relating To Financial Institutions
Government Orders

3:05 p.m.

Reform

Werner Schmidt Okanagan Centre, BC

Mr. Speaker, it is with pleasure that I continue the debate on Bill C-82, an act to review the legislation regarding certain financial institutions.

Before I get into the other part of my remarks, I wish to reply to certain statements that were made by the Parliamentary Secretary to the Minister of Finance. In particular, he said that the clauses dealing with tied selling would not be proclaimed until September 1998. It was almost a sanctimonious kind of concession that suggested that this is such an important issue that it will be put into the legislation but the government will not proclaim it until September 1998.

This was put under the rubric or in the context of saying that it is in the interests of the consumer and that the government is looking after the interests of the consumer.

I wish to point out as I go through the various remarks that the very amendments dealing with tied selling in the proposed Bill C-82 are not in the interests of the consumer. I will move into that with some dispatch at this point.

First of all, may I draw members attention to it not being in the interests of all categories of consumers. That is the individual consumer, that is the large business corporation, the small business corporation, the partnership, the medium sized corporation. All these people use in various shapes and forms and at various times, in larger or smaller amounts, with different degrees and conditions of repayment and rates of interest the function of the bank as it lends money to these various ventures.

Every Canadian who borrows money is affected by the provisions in proposed Bill C-82. These are loans that can be of short term, of longer term, of flexible interest rates or of fixed interest rates. It has to deal with bridge financing, if that is the instance, or it may deal with lines of credit. It deals with first mortgages and second mortgages, whatever the case might be.

What is the issue in this matter? The issue is that it will give to the banks increased power to do things that otherwise are not available to other financial institutions. How do I come to this conclusion? It comes from the two subclauses that are presented in clause 55 of Bill C-82. They refer to section 459.1 of the Bank Act.

How does this affect the consumer? I wish to read the sections of the bill so that we are each clear on what exactly it is that we are talking about. I want to go on record with this because the day will come, I am convinced, when a lot of Canadians will ask themselves why the government passed this legislation.

In order to put this into the appropriate context, we need to recognize that section 459.1 reads as follows:

459.1 (1) a bank shall not impose undue pressure on, or coerce, a person to obtain a product or service from a particular person, including the bank and any of its affiliates, as a condition for obtaining a loan from the bank.

Every consumer listening to this would say that is good and I agree. However, the bill does not stop there. It goes on to subclause (2) and (3). It is in subclause (2) that we need to read as follows:

For greater certainty, a bank may offer to make a loan to a person on more favourable terms or conditions than the bank would otherwise offer to a borrower, where the more favourable terms and conditions are offered on the condition that the person obtain another product or service from any particular person.

It is very clear that a preferred rate may be given on the condition that the borrower obtain insurance from a particular person, which could be a subsidiary of the bank or any institution with which the bank has an agreement.

Let us read subclause (3). It is in effect the mirror image of subclause (2) but written in a different way. It begins with the same words:

For greater certainty, a bank or one of its affiliates may offer a product or service to a person on more favourable terms or conditions than the bank or affiliate would otherwise offer, where the more favourable terms and conditions are offered on the condition that the person obtain a loan from the bank.

According to the amendments to Bill C-82, those two clauses are being used to replace the existing section 416 of the Bank Act. Section 416 reads as follows:

(1) A bank shall not undertake the business of insurance except to the extent permitted by this act or the regulations.

(2) A bank shall not act in Canada as agent for any person in the placing of insurance and shall not lease or provide space at any branch in Canada of the bank to any person engaged in the placing of insurance-

(4) Nothing in this section precludes the bank from

(a)requiring insurance to be placed by a borrower for the security of the bank; or

(b) obtaining group insurance for its employees or the employees of any bodies corporate in which it has a substantial investment pursuant to section 468.

(5) No bank shall exercise pressure on a borrower to place insurance for the security of the bank with any particular insurance company, but a bank may require that an insurance company chosen by a borrower meet with its approval, which shall not be unreasonably withheld.

That is the part that works today and that is what Bill C-82 states shall not longer be the case.

I submit that is operating not in the interest of the consumer but in the direct beneficiary interest of the bank itself.

Having set the context, we need to ask ourselves how this can affect the consumer. First, we need to recognize that in 1992 the four pillars of the financial institutions were collapsed. They do not exist any more. Those four pillars constituted insurance companies, investment dealers, trust companies and banks. They are no longer in existence.

With the destruction or the elimination of the barriers between these four pillars of finance went competition and came the exchange of information between these various aspects. What does this mean in practical terms? It means, and has in practice turned out that way, that banks today may own insurance companies. There is a whole variety of different kinds of insurance companies. They may own life insurance companies. They may own health insurance companies. They may own property and casualty insurance companies, automobile insurance companies or trust companies. The experience now is that 80 per cent of the investment dealer business is done by the banks through its subsidiaries.

Under the umbrella of a single board are contained all four of these that were before distinct and separate financial functions.

Let us take a look at a couple of scenarios on how this would work in the individual case, how it can work and how it has worked. There has been the greater consolidation of information under one umbrella. There are instances where a bank can own a life insurance or a health insurance company. When a life insurance policy or a health policy is issued a lot of very personal information is collected.

Let us take a person who owes $100,000 to the bank. The loan is there. Lo and behold the bank recognizes that a set of claims has been issued against its insurance company by the individual with the loan. The bank may now very easily project forward and ask under what conditions or how favourable is the repayment possibility of the loan.

I presented this example to the finance committee when the bill was up for discussion. The president of the Canadian Bankers Association appeared before the committee. This is not a recollection from my memory but an exact quotation of what Mr. Protti said:

First, our privacy codes do not permit the sharing of information on health issues across subsidiaries. It doesn't happen.

That is very interesting. One bank, a member of the Canadian Bankers Association, sent a policy statement sent to clients of a subsidiary of the bank, an investment dealer subsidiary, which stated:

Its officers and employees must scrupulously observe in letter and spirit all laws governing business and securities activities. Its officers and employees must deal fairly, honestly and in good faith with clients-The confidentiality of client information is a fundamental principle of our firm. No employee may release confidential client information unless required by law or with the client's consent.

I will refer to this point later when we go through the policy statement. It further stated:

The misuse of confidential information or misuse of any inside information not generally disclosed for personal gain or for the benefit of anyone else is prohibited and grounds for immediate dismissal of an employee.

What is the nature of the bank and its relationship with a subsidiary? The subsidiary is a wholly owned subsidiary of the bank and the bank guarantees all the liabilities of the subsidiary.

What about the sharing of private information? The subsidiary may give confidential client information to the bank. This type of information includes a client's name, address, phone number, income, assets, debts, investment objectives and financial plans.

The bank may use this information for the following purposes: to sell its services to the client; and to survey the relationship between its subsidiaries and their clients. It is the beginning of a sharing of information among subsidiaries. It may use it to determine the amount of debt one has outstanding to the subsidiary and to the bank. The comes the catch all phrase. It says:

This information may be used for any other purpose about which the subsidiary will inform you, the client, in writing.

Earlier it stated that the bank would not disclose the information unless it was required to be shared by law or without the consent of the client. Before an account is opened with the subsidiary there is a client consent statement which reads:

By opening an account with this subsidiary you are consenting to the bank's use of this information.

It does not say how. There are no conditions placed on it. It is simply an agreement that the bank may use the information. If a client wants to end the consent written notice must be given to the subsidiary and addressed and delivered to the subsidiary's branch. Notice would be in effect when a written acknowledgement from the subsidiary is received. Should a client wish to close an account,

the subsidiary would give at least 30 days written notice before doing so.

Who is closing the account? The client chooses to close the account. If the client does so or if the client will not give permission to send the information, the subsidiary may close the account without any further consultation with the client. The bank is virtually guaranteeing the information will be made available to other of its subsidiaries and that the client, in order to keep the account, must give consent to the sharing of that information with the various subsidiaries. It is not far fetched that the information could be used by the bank in its decision making process.

Scenario No. 1 depicts a situation where a particular piece of personal information may be used to make a decision against clients or change their financial status.

Let me move on to another scenario. This time it is implicit rather than explicit. We will consider the following. A business has a loan. The bank advises that it is a big loan and asks about it being paid back by the business going public.

We all know what going public means. It means issuing shares which allows the public to buy parts of the business through the purchase of shares. Lo and behold the bank also has a subsidiary which deals in securities. One of the functions of a securities dealer is to underwrite new stock issues, which would be the case in this scenario.

First we had a private company that went to the bank and, in order to pay its loan, went to the public market to sell equity shares. Now the bank suggests to the individual to keep a bit of the loan on which it will give a preferred rate on the condition, according to subsection (2), the underwriting service of its subsidiary is used. On the other hand it says the company can go all the way with the underwriting and will be given a preferred rate but the underwriting has to be done through our subsidiary. The rate will only be given on the condition that if in the future the company needs to borrow money it will borrow it from the bank in question.

One could argue that is good business. However, when a person is in trouble it is tantamount to coercion. It is certainly tantamount to undue pressure. It is not good business. That scenario is not far fetched. It is a very real possibility.

I will outline a third scenario. This one concerns a business which at this point in time is in serious trouble. Under the umbrella provision it has given the bank all its business. The company pension plan, mortgage, personal RRSPs and home mortgage are all with the bank, in one place. The bank has knowledge of the affairs of the business, its proprietor, its family and its members. It knows the business is in trouble and that even if the company pension, the group RRSPs, the individual RRSPs, the house and the other mortgages were liquidated, there would not be enough money to cover the debt.

By consolidating everything under one roof the bank has an unusual power and a coercion possibility that otherwise would not exist. That is dangerous and imprudent. It should not be considered prudent management of financial affairs if all products or services are subsumed under one bank or one financial institution.

Who benefits from all this? It is the bank that benefits. If we take the first scenario, the information is given by the client to the bank and shared with the subsidiary to the advantage of the bank and not of the client.

In the second case the banks underwrite through its subsidiary the share issue. The subsidiary gets the underwriting fees for writing the share issue. Its brokers collect the fees from the distribution of the shares to the general public. It also gets an overriding commission. Then there is the continued trading of that set of securities. The company, which was previously private, now has the additional difficulty of having to meet all obligations a public company has to meet. These are substantial. In all three instances the bank is favoured rather than to the individual.

I will review exactly what we have done so far. Bundling it all together, as the hon. parliamentary secretary said, will somehow be to the benefit of the consumer. By bundling all these products and services we can offer either a preferred rate on the loan or a preferred rate on services or products being purchased.

What is not in the act is important. The act does not require the bank to disclose the prices of these component parts or whether the specifications of the component parts would have been the same before they were bundled together.

There is no protection. It may not even be the same set of products the customer thought he was buying. Tied selling is a very dangerous.

What do other people have to say about this section of the act? Members have heard my interpretation. Let me read what Mr. Yakabuski, director of government relations of the Insurance Bureau of Canada, had to say in his brief to the committee:

If there is an area where the committee may choose to make Bill C-82 an even better piece of legislation, it is with respect to the tied selling provisions proposed under section 459.1 of the Bank Act.

Our view is that subsections 2 and 3 have been worded too broadly and may in fact permit the bundling of certain bank products and other financial services in a way which may not be beneficial to the consumer.

Mr. Yakabuski added to that section of his brief by saying:

With respect to those proposed subsections it seems perfectly absurd to us that the government would decide to put into law definitions regarding some things that might be good for consumers and some things that might not be good for consumers when everyone knows that it is not an exhaustive list. That is precisely why you have proposed section 455.5, which we support, which gives the governor in council the ability to make regulations determining exactly what is and is not beneficial for consumers.

We recognize that some bundling of products can be good for consumers, but why should you want to restrict the regulation making power now?

That is at the heart of the issue. That is what the insurance bureau had to say.

What did insurance brokers have to say? A letter to Mr. Frank Swedlove of the Insurance Brokers of Canada stated:

We believe that there is a cause for concern regarding the proposed amendments to the Bank Act and in particular section 459.1. In our opinion subsections 2 and 3 may limit the regulation making power of the Bank Act. To remove this potential problem it may be preferable to delete subsections 2 and 3. This can be done, if you agree, during the parliamentary review of this legislation which is expected to resume as early as this week.

That did happen but the government chose not to agree with that. Mr. Speaker, I submit to you and to this House that the day will come when we will ask ourselves, and the government will ask itself, why we did not do that? If the people of Canada elect a Reform government then that will be looked after and consumer interests will be preferred. They will be balanced off against the powers of the banking and financial institutions. That is what we need to do.

This same Madam Brown who wrote the original letter that I just read also said this at the committee: "There are other angles to tied selling that I think we overlooked. They are not just simple ones. We can tell you that favourable tied selling clauses that are in proposed subclauses 459.1(2) and (3) will be unenforceable". What do you think of that, Mr. Speaker?

The supervision of these activities will be almost impossible because we go through this ourselves now in the business of tied selling. This is not some amateur making this observation. This is someone who is in the business of insurance brokering. This is someone who understands property and casualty insurance in great depth. She says that it will be unenforceable to do something like this.

Why then does the government insist that this legislation be passed? Last Thursday we presented amendments. This afternoon we voted on those amendments and the government voted them down. What did those amendments say? They said to keep what exists in legislation now and make tied selling illegal.

Why did the government not accept those amendments? Why did the government bring to this House legislation that it has stated will not be proclaimed until September 1998 until the committee has had a chance to study it?

Let the committee study it. Let the issue come forward strongly and clearly and then make the appropriate changes to the legislation as necessary, but do not anticipate what the committee might find, or pass legislation which will not be promulgated until some time in the future. It is absurd.

There is more. This point has to do with some very significant issues. So far we have seen that the proposed amendments invite imprudent consolidation of various aspects of a business. It makes possible the sharing of information that is personal and private. It does not deal with the conflicts of interest between a subsidiary and the lending institution, the bank. It is silent about complete disclosure on price and specifications of elements of products and services that may be bundled together.

I cannot help but read into the record a case where the individuals in question were a hardworking couple in Ottawa. Over many years of hard work and perseverance they took themselves from the proverbial rags to riches. They were diligent about keeping their financial records in order. Their relationship with their bank was top-notch. So sound was their financial record and their relationship with their bank that written in their files were the words "no collateral required". No collateral was required by the bank whenever the couple needed to get a loan.

In keeping with their practice of fiscal responsibility, the couple planned for their retirement by investing in gas and oil stocks, but somewhere along the way a substantial stock certificate went missing. This discovery was made just as the couple was getting ready to retire and turn their family business over to their son.

The wife worried for months over the missing stock certificate she had so carefully placed in her safety deposit box. It was gone. The bank took no responsibility for it and insisted that the couple must have misplaced it. Only because of the diligence of a loyal daughter, often in the face of great adversity which included veiled threats from the bank, did the story begin to come together.

The missing stock certificate was in the possession of the bank during the entire time. This stock certificate had been removed from the couple's safety deposit box without any authorization from the couple, an illegal manoeuvre by the bank.

Despite reporting this to the bank manager, the bank president, the inspector general of banks which today is the of the Office of

the Superintendent of Financial Institutions and the Minister of Finance at the time, nothing was done.

The bank refused to admit that it was at fault, claiming that the stocks had been taken as collateral for a $15,000 loan. These were customers where no collateral had been deemed necessary. They were stocks that the bank had no knowledge of unless it had illegally entered into the couple's safety deposit box.

The result took a grave toll. The father died before the matter was ever resolved. The mutual fund froze the couple's investment, meaning that the mother never saw a dime before she passed away. Because of the bank's refusal to own up to a mistake, this hard working, honest family suffered.

More important, the relationship between this family and the bank has been marred for good, which means that the relationship between the bank and all of us has suffered to some degree. The bank did not live up to its fiduciary responsibility.

Despite an investigation that ruled in favour of the family, the bank has not compensated the family for the value of the stocks, the loss of the retirement funds and the time in personal sacrifice it cost.

To this day, the bank in question refuses to accept full responsibility for its mistake. Small amounts of compensation have been offered which neither reflect the dollar value of the family's financial loss or the value or their personal loss. The amounts, in the form of cheques, are offered on the condition that the family speak not another word of the injustice levelled against them by the bank. Needless to say, the cheques have not been cashed because they refuse to allow themselves to be muzzled this way.

I have been asked to tell this story to warn Canadians that it is unwise to fully trust an institution with such power to always act in their best interest. It is a warning, too, that legislative powers do not necessarily protect the consumer.

In 1979, in 1980 and in 1982, this case was raised again and again in this House. Neither the then Minister of Finance nor the inspector general of banks, now the Superintendent of Financial Institutions, did anything to ensure that the bank took responsibility for its mistake.

Banks in this country are powerful, indeed, more powerful than our elected government. That is precisely the reason why we should not allow clause 55, section 459.1(2) and (3) to stand as is.

Can we be assured that the banks will not unduly pressure or coerce consumers? I submit no, we cannot. That is why we must be diligent in protecting the interests of the consumer and the small business person against the ultimate power exercised by financial institutions. We can never take for granted that the consumer will be protected or the small business person treated fairly. We have heard too many cases where it has not happened.

There is going to be, I am sure, some people saying: "But Mr. Schmidt, that is one case". Yes, that is one case but it is an example of many other cases.

Does this mean that banks deal this way with most customers? Of course not. That is not the point I am making. We ought not to create a situation where it is always a predetermined condition where the bank may do this kind of thing with impunity. That is the issue.

I remember one bank that is proud of itself. In fact, it had a national advertising campaign. One of the characteristics of that advertising campaign was that it said it had become the largest bank in Canada one customer at a time. It is one anecdote at a time that has brought this kind of thing to pass.

As legislators we need to have the interests of the consumer at heart first and foremost. We need stable and solid financial institutions. Our banks are second to none in the world but that does not mean that we have to keep expanding their power. That is the issue.

The point has come where we need to balance the power of all our financial institutions, not just banks. They are not the only institutions that do these kinds of things. There are other groups that do this. Credit unions do this kind of thing. Trust companies do this kind of thing. The insurance companies who are opposing this legislation do some of these kinds of things. The issue is one of fairness. The issue is one of adequacy. The issue is one of justice. That is what I am concerned about. That is what we should all be concerned about. It can be done.

I am sorry the amendments were not passed, but surely to goodness before this legislation is promulgated we will at that time come to a clear understanding that these kinds of provisions cannot be allowed to continue to stand in the Bank Act as it exists in our legislation today.

An Act To Amend Certain Laws Relating To Financial Institutions
Government Orders

3:40 p.m.

Reform

Chuck Strahl Fraser Valley East, BC

Mr. Speaker, in your usual non-partisan manner you announced that very well. I always enjoy working with you in your new role. I am sorry to see you muzzled, of course, of your former ability to parry and thrust in the debate in the House. Still, you are doing a fine job there and we appreciate your work.

I want to talk for a few minutes today about the financial institutions act, in particular because it is one of the areas that the Reform Party says that the federal government needs to be

involved in very aggressively if Canada is to have that common economic union that will strengthen the nation.

We have suggested that in our vision of what Canada should look like. There are some areas from which the federal government should dissociate itself. For example, the federal government should not be involved in tourism. That should be a provincial jurisdiction. Manpower training should be a provincial jurisdiction and all provinces should have responsibility for that. Municipal affairs is something best left with the provinces and the municipalities. Things such as housing, language and culture should be left with the provinces. The provinces and the municipalities are much closer to the needs in their regions and they will do much better job of managing things than will the federal government.

In our fresh start document we detail the areas that we think should be handed off to lower levels of government. It goes so far as to say that municipalities should be officially recognized as the level of government closest to the people and they should be included in federal-provincial arrangements such as the infrastructure programs that are being announced here on the cusp of the election. Once again, it is the municipalities that are going to have to contribute a third of the money in these infrastructure plans and they getting in on the deal after it is completed.

I can say from the last infrastructure deal, where about 82 to 84 per cent of the money went to ridings controlled by provincial MLAs in the NDP government of British Columbia, there was a lot of dissatisfaction with the fact that municipalities are treated as the weak sisters, or the poor brothers or whatever they can be called, but they do not have the influence on policy that they should have.

All that said, one of the things that should not be weakened in the federal government is regulation of financial institutions. That forms one of the 10 main areas where the Government of Canada should concentrate its efforts.

I should read those areas into the record. They include defence, foreign affairs, monetary policy, regulating financial institutions, the Criminal Code, facilitating national standards, equalization, international trade, domestic trade and reform of national institutions such as Parliament. On the last point I know, Mr. Speaker, as the co-author of a report that talks about reforming the national institution of Parliament, even going so far as recommending that the position that you now have be given to one of the opposition parties, for example, you would be, as many others are as well, in favour of reforming national institutions here in Parliament.

The reason that these 10 areas need to be emphasized is because these are the 10 areas of commonality that I think all Canadians can agree to and that all provinces can agree to, that if we are going to have a nation we need to have these areas under the control of the federal government.

There is no use in the power to regulate domestic trade disputes being held within a province. Obviously one province could say it is looking after its best interests so it will not give in or allow another province to buy supplies or whatever it might be. This cannot be and should not be.

In recent times the Liberal government attempted to put together an internal trade agreement in Canada. Whole sections of the internal trade agreement were left blank, including the section on energy. It is a completely blank page because the provinces cannot agree among themselves.

The federal government needs to step in more aggressively and take control of the 10 areas that I mentioned. The federal government should not acquiesce to any one province. It should aggressively use its constitutional right to regulate financial institutions and internal trade disputes and force them to a conclusion. If one province does not want to sign on, it will have to be pushed a little. One thing that makes a country is a common economic market. By extension we also need a common monetary policy. That is one thing a Reform government would stress. We need the regulation of financial institutions. We also need control of the Criminal Code and issues like international and domestic trade.

It is important for people to realize that a decentralized government or a rebalancing of the powers of the federation does not mean the federal government will not have a lot to do. Our view of what will happen under a Reform Party government is that some $94 billion will be used on program spending. Those kinds of dollars in 10 areas will focus our energies, limit the influence of the federal government and allow it to have a substantial role so that people are competent and know the roles. The provinces including the province of Quebec will see where we are heading, what kind of vision we have and so on.

Today in question period again I was a bit disappointed. The Bloc Quebecois raised the idea of where the country was heading. The Prime Minister was asked about a distinct society and what it means. His response was that Quebecers would stay because we have the best country in the world.

That is what he said during the last referendum campaign. The gist of what he proposed was that no one would want to leave because it was the best country in the world. I agree it is the best country in the world, but it is not a vision for the country just to repeat that ad infinitum. We need something to communicate to the separatists in Quebec, to the federalists who are disenchanted with the status quo and to others indicating that we have something better, a third option.

There is separatism, the status quo and a third option in the middle. Reformers want to tell Quebecers we want them to stay in Canada. They should know up front that the third option includes strengthening some provisions of the federal government to make them solid. It would also make many other things solidly provincial.

When they are concerned about their culture, we could say that by all means culture should be handed off to the provincial governments, lower levels of government, private institutions, individuals, private organizations and so on. There is a lot of support for cultural activities in many provinces, regions, districts and whatnot.

We want to make clear that we will give the provinces plenty of powers which I believe are theirs constitutionally. The federal government will hang on to certain powers. We are not prepared to sell the country by diluting those powers.

The reason the previous speaker spoke about financial institutions in such detail is that a Reform government would continue to regulate financial institutions. That mandate will not reside with the provinces. The provinces need to know that. There would be discussions with finance ministers, interest groups and other parties, but the federal government, led by the Reform Party, would continue to hold the trump card. Financial institutions would not be given away to a lower level of government because they come knocking on the door asking for it. They need to be regulated by the federal government if a a common economic union is to be maintained. That is something we need from coast to coast and we want to emphasize.

I believe the Liberal government would agree with me that it is obvious that a country must regulate the monetary policy of its financial institutions. We are asking the federal government, in the time remaining before the next referendum, not to play games like the Prime Minister did today in question period. He said that everything was good, that it was a wonderful country and that no one would leave.

If we continue to use that argument heading into the next referendum, it will be like going into a battle of wits unarmed. When we say to people who are determined to leave that we know they will not leave because it is a great country, they will say that it is not working the way they want it to. They will ask: "What is your vision of the country?" If the attitude is to stand and say it is a great country and no one will leave, I am fearful we will lose the country.

We need to indicate where we are, where we are going, a step by step plan to take us there, and a vision of the country we can grab hold of. If the Prime Minister could lay out the vision he holds for the country, where he would like to take Quebec and the rest of the country, what he is offering, the division of powers and his constitutional proposals, Quebecers might grab it. If he continues to keep the cards close to his chest, wait until a crisis and hope he has the right card to play at the right time, it is a poker game he will lose.

The separatists know exactly what they want. I do not agree with them in any way, shape or form. The only thing they are countering is more of the same. Brian Mulroney in his speech last night said that we had to go back to offering them what he tried a couple of times. I do not agree. There must be something in the middle, a third option. The Reform Party has one. Maybe they do not like it but at least it is an option.

The Liberals would be wise to come up with an option. They are playing a dangerous game. They are going to court. They are saying those people cannot leave, that it is the greatest country so no one will want to leave. If those are the two arguments they are using in the debate, I fear for the next referendum.

On the other hand the Liberals should say that the regulation of financial institutions is a federal mandate and will remain a federal mandate, and that is the way it will be. Canadians and Quebecers want it that way. They want a common Criminal Code. They want federal control over monetary policy, defence, domestic trade and international trade. If a bunch of this other stuff is given in a third option because the provinces deserve it, they have a vision to sell. They have something to put out there. They cannot say that maybe financial institutions are on the table. They cannot say that maybe it is a provincial matter. Who knows? The liberals do not lay it out. They come to the table with an uncertain list of things they are dabbling with. The people who know what they want play them like a fiddler plays a fiddle. They just play them along and ask what else they will be given.

The end result, as I mentioned earlier, is that we came within a smidgen of going over the cliff in the last referendum. Mr. Bouchard is rubbing his hands in glee at the thought of facing a Prime Minister who does not know where he wants to take the country. Unless he gets out of the mindset he came here with 30 years ago that playing along and hoping to get by will somehow get us through the next set of crises, all it will take is one wrong step or a misstatement at the wrong time and the 40,000 votes on the no side last time will be on the yes side. Then what? Then we will have a real battle on our hands, a real problem.

I am pleased to reconfirm for Canadians that some things under the federal government need to be strengthened and maintained in a federal Parliament. We cannot have a country unless there is a strong central government on some issues.

The people of Quebec need to know that on many other issues there is a party offering a third option. It does not have to stay the

way it is. Quebec does not have to separate. The third option is a clear division of federal and provincial powers. They take what is constitutionally correct to take provincially and the federal government keeps control of the things it needs to control to maintain the country.

If Quebecers hear that option they will embrace it. The federal government would be wise to put forward its vision of the country rather than just say: "I am okay, you are okay, everything is good". If the Liberals put forward their vision of the country maybe Quebecers and the rest of Canada will say in the next election they are willing to take a vote on it.

That is what the Reform Party will be doing. I challenge the Liberals and any other party to come forward with a third option that makes sense for all Canadians and certainly for Quebecers.

An Act To Amend Certain Laws Relating To Financial Institutions
Government Orders

3:55 p.m.

Hillsborough
P.E.I.

Liberal

George Proud Parliamentary Secretary to Minister of Labour

Mr. Speaker, I listened to the hon. member over the last few minutes speak on many issues. Sometimes he mentioned the bill we were debating.

However one part of his speech concerned centralization and decentralization. I understood the member to say there were things the federal government should be involved in and some it should not be involved in. We are talking about financial institutions in this debate.

Could the member give his views on what the role the federal government should play when dealing with provinces? What other things should we give to the provinces? What areas should we deal with in the governance of financial and other institutions?