Mr. Speaker, on May 8, I asked the Liberal government to support my motion before the industry committee to hold hearings into the impact of the bank mergers on small business, consumers and rural Canada. The minister misunderstood my question, believing it was a private member's motion.
There is a new math in Canada. It is the math of mergers. It is not the math we learned when I went to school. In this math the rich get richer, the poor get poorer, the big get bigger, the small get smaller, the centre gets the cream and the regions get overlooked. Here is what it adds up to for the people in my riding.
Of the 42 bank branches in Regina, 33 belong to one of the merger partners. Customers and employees can read the writing on the wall and it is not good news.
Lesson number one in the math of mergers is bank branches. The Royal Bank has nine branches in Regina and the Bank of Montreal has eight. Will the new bank really keep 17 branches in Regina open? Will the second megabank really keep 16 branches open? I think not.
These are the questions people are asking. In the math of mergers, 9 plus 8 will not equal 17 branches and the CIBC and TD merger of 9 plus 7 will not equal 16 branches. When some of those branches close, jobs will go with them.
Lesson number two in the math of mergers is executive's salaries. Look at the salaries of top 19 executives of the 4 banks that want to merge. They have combined salaries and bonuses of almost $50 million and unexercised share option gains worth almost $222 million. That is a total pay package for 19 people of over a quarter of a billion dollars. In the math of mergers, that would also pay the salary of 10,000 bank tellers.
Here is the catch. When the bank executives negotiate the mergers, the market goes up and the value of their unexercised stock options goes up. Once the mergers are approved, the tellers lose their jobs.
Lesson number three in the math of mergers is bank profits. The banks say they need to merge to become profitable and compete in the global marketplace. The last week's second quarter earnings report show they are certainly already profitable. Earnings increased 15% at the Royal Bank, 19% at the Bank of Montreal and 28% at TD. Meanwhile depositors get dinged with one service charge hike after another.
I should mention there was a year about 10 years ago when the Royal Bank as a corporation actually paid less tax than one of its tellers.
Lesson number four in the math of mergers is fewer banks equal more consumer choice, or at least some people like the C.D. Howe Institute today are trying to make that argument.
The Bank of Montreal has even written me a letter making more or less the same promise, but CIBC chair Al Flood was a little more frank with the Toronto Star editorial board. He said last Wednesday: “We've got more consumer choice and corporate choice if we leave it the way it is, but I think it's too late for that”.
The NDP is the only party saying that the bankers' math does not add up. You do not cut the number of banks without risking the number of branches and the number of jobs. You do not build incentives for bank executives to hike their salaries with mergers and expect them not to take the opportunity. You do not get more consumer choice with fewer banks.
Opposition to the bank mergers among small businesses and consumers in Saskatchewan is growing every day. The provincial government is taking steps to strengthen our credit unions so they can step in to fill some of the void in rural Saskatchewan.
The bankers' math does not add up and Canadians are going to want a thorough audit. That is why the NDP has been pushing for immediate hearings with all five political parties into the impact the bank mergers will have on Canadians. We are sorry the government and the other parties do not share that sense of urgency.