House of Commons Hansard #41 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was provinces.

Topics

Employment Insurance Act
Government Orders

1:10 p.m.

The Deputy Speaker

All those in favour of the motion will please say yea.

Employment Insurance Act
Government Orders

1:10 p.m.

Some hon. members

Yea.

Employment Insurance Act
Government Orders

1:10 p.m.

The Deputy Speaker

All those opposed will please say nay.

Employment Insurance Act
Government Orders

1:10 p.m.

Some hon. members

Nay.

Employment Insurance Act
Government Orders

1:10 p.m.

The Deputy Speaker

In my opinion the nays have it.

And more than five members having risen:

Employment Insurance Act
Government Orders

1:10 p.m.

The Deputy Speaker

The recorded division on Motion No. 9 stands deferred.

Pursuant to order made earlier today, the recorded divisions stand deferred until the end of government orders today.

The House resumed from March 30 consideration of the motion that Bill C-8, an act to establish the Financial Consumer Agency of Canada and to amend certain acts in relation to financial institutions, be read the third time and passed.

Financial Consumer Agency Of Canada Act
Government Orders

April 2nd, 2001 / 1:10 p.m.

NDP

Joe Comartin Windsor—St. Clair, ON

Mr. Speaker, I want to speak to the bill particularly surrounding the manner in which it affects credit unions. As my colleague from Regina—Qu'Appelle has already indicated when he addressed the House, we have serious reservations about the bill generally but do support it to the degree that it deals with credit unions. Some recommendations for additions to the bill have not been accepted by the government.

It is really important to set in context the role the credit union movement from our viewpoint and that of the government's needs to play in the country. That role is one of the only alternate systems of financial services we have. Those services unfortunately are spotty across the country because of the history of the development of the credit union movement.

Although the bill is designed to provide some strengthening of the movement to allow and permit for some expansion of the credit union movement, it simply does not go far enough.

It would allow for the development of what is being called a national services entity, or potentially even more than one. It would allow credit unions from various provinces to come together in a strengthened position. It is still fairly late in the game. They are at a distinct disadvantage with the banking system as it exists because of all the privileges and rights the banking system has been given historically in Canada.

It is important to draw to the attention of the country the role credit unions can play. Last week I asked one of my colleagues in the Bloc Quebecois about the role the Desjardins movement has played in Quebec in solidifying a financial service sector that is broadly based in response to the needs of its communities. In Quebec, and to a somewhat lesser degree in British Columbia, it has been very successful.

I also draw attention to something that I do not think is fully appreciated: the small and medium enterprise area which it has been of great of assistance to these communities. There have been a number of surveys which have shown that small or medium size businesses get much better services from the credit union movement. Unfortunately, with probably the exception of Quebec and maybe British Columbia, in the rest of the country's small and medium sized enterprises simply do not have sufficient services available from the credit union movement and institutions to meet their needs. These amendments in the form of Bill C-8 will go some distance in strengthening the movement across the country. However, as I indicated, it is not enough.

The other area where I think it is really important to note the strength that the credit unions have provided is direct services to individuals. In that regard, it brings to mind the movement by the big banks to close local branches. Of course, we have heard protests and opposition to the banks when they do this.

An area where the credit union movement helped was in one of the western provinces when one of the big banks was closing a large number of local branches. I think it was 13 or 14 branches. The credit union movement moved in and in effect bought the services, took over those branches and kept them alive and open for a number of small communities in western Canada. That, in smaller scales, has occurred right across the country.

One of the recent credit unions in my home province of Ontario got started specifically because the big banks were pulling out of a small community in southwestern Ontario. Nobody was going to be there to provide services, either to individuals or the small local businesses. As a result of a movement on the part of that local community, a new credit union was formed and is flourishing after several years of operation.

It is important to acknowledge those types of endeavours by the credit union movement at the same time this bill is passing through the House.

Again, it does not go far enough. I will not take up my full 20 minutes, but I want to make a few more points with regard to perhaps encouraging the government to look a little into the future at other programs and policies it might implement to facilitate the further development of the credit union movement, in particular, outside of the provinces of Quebec and British Columbia where they are already quite strong. However, in the rest of Canada, the maritimes and Ontario in particular, if endeavours were made and policies implemented, they might very well be able to duplicate the success and provide alternate services we so badly need in the financial services sector.

In that regard, I draw the attention of hon. members to one of the things the province of Quebec did to assist in expanding the caisse populaires and the Desjardins movement. It recognized the need for additional funds to be available to the movement and to be used in the community to foster local business and allow the development of smaller communities. It turned the pension funds traditionally controlled by the government over to the Desjardins movement. That put at its disposal a huge amount of additional liquidity.

Although one can argue that no system is perfect, it certainly had the effect of making that movement in that province very competitive with the big banks. Small and medium sized enterprises had alternatives. A financial service was available to get better services than they traditionally received from big banks.

I am aware of another area that could be considered in terms of enhancing the strength of the credit union movement. That has been to allow them to provide to their members insurance services such as home insurance, auto insurance and others. This has been done to some degree in the province of British Columbia. From my personal knowledge of the experience in British Columbia involving some very large institutions, they have been able to use the insurance financial service sector as a profit making centre, one that in the smaller credit unions and smaller branches has made them financially viable in small communities.

This allowed a small branch of a credit union to continue to function by providing all the other financial services such as mortgages, personal loans et cetera, as well as house and auto insurance. By combining the two, they were quite viable as an economic institution. They could service the community by providing all those financial services. This is something the government should look at as a way of providing some incentive, initiative and strengthening of the credit union movement across the country.

We recognize the resistance the government has in allowing banking institutions to deliver insurance services. The same need not be true for the credit union movement. The credit union movement is dedicated to its members and its communities, not just to the bottom line. The authority for credit unions to move into that area would be a boom for them and a very large plus for their communities.

In conclusion, it is obvious that the bill is going to pass with the form being proposed at this time. Some of the suggestions I made with regard to credit unions need to be pursued by the government. It is very important to Canada that an alternative source of funding for the financial sector be available to both small and large communities. Some of the proposals we made as a party and that I recounted today would take us somewhere down that route.

Financial Consumer Agency Of Canada Act
Government Orders

1:20 p.m.

NDP

Pat Martin Winnipeg Centre, MB

Mr. Speaker, I was interested in my hon. colleague's remarks regarding the service that the credit union movement provides to our neighbourhoods and communities, specifically in my riding and the inner city core area of a major city.

The main charter banks have shown the opposite. They have shown a lack of commitment. They have shown a flight from inner cities. In my riding alone, 12 branches of chartered banks have closed in recent years.

Could the hon. member comment on the community reinvestment act which is a popular theme in the American financial sector? It mandates that any financial institution operating within a community show a certain commitment to reinvest in that community, whether it is with venture capital or keeping its branches open. Is the hon. member aware of the community reinvestment act movement? Does he think that charter banks could do a better job in meeting the needs of inner cities?

Financial Consumer Agency Of Canada Act
Government Orders

1:25 p.m.

NDP

Joe Comartin Windsor—St. Clair, ON

Mr. Speaker, I am aware of the legislation, being less than a half a mile from the state of Michigan. It has that type of legislation because of some of the problems it had in its inner cities and its need to force large financial institutions to meet their responsibilities by providing funds to the local communities.

I must admit I have a mixed response in terms of whether that would be of much assistance. My general comment would be to strengthen the credit union movement because it does not need the legislation. The credit unions are already there and doing that. They fund all sorts of endeavours.

I can think of some endeavours in my local area. We badly needed an arena because there was not one in the local geographical area. The credit union movement, in this case the caisse populaire, was instrumental in arranging the financing for the arena. The county could not get it from the big banks. We already do that. I am not sure that we need legislation as far as the credit unions.

Do we need it as far as the banks begs the question. It is obvious that we do. The difficulty I have with that legislation is the lack of interest on the part of the banks to carry it through. Even though we could pass the law that would require and mandate them to spend a certain percentage of their funds, make them available for lending purposes and provide service in the local community, it would be done without any enthusiasm on their part. It is important that a financial institution be committed to the local community in that regard.

If we pass the legislation, I am doubtful about any kind of a positive reaction from the banking institutions. From my talks with some of them in regard to that kind of legislation, they have responded with less than great enthusiasm.

Financial Consumer Agency Of Canada Act
Government Orders

1:25 p.m.

NDP

Pat Martin Winnipeg Centre, MB

Mr. Speaker, one of the other things that Canadians find galling about the major chartered banks is the financial compensation of the chief executive officers, when they are closing down bank branches in an era of record profits. I once went to a shareholders' meeting of the Bank of Montreal and the Royal Bank. I moved a motion to limit the salary of the CEO to 20 times that of the average bank teller. From a morale point of view Canadians would really appreciate that.

Would the hon. member comment on the unbelievable salaries of CEOs with the five chartered banks?

Financial Consumer Agency Of Canada Act
Government Orders

1:25 p.m.

NDP

Joe Comartin Windsor—St. Clair, ON

Mr. Speaker, the answer is obvious. What bothers me about those huge recompenses we give to CEOs and several other layers of bank executives is the competitive position it puts us in internationally. We always hear from the private sector about the need to be competitive internationally. If we compare those incomes with others around the world, the reality is they are almost unheard. About the only other place we see them is in the United States.

Senior bankers, CEOs of banks in Europe make nowhere near the same types of incomes or benefits that our CEOs and senior executive people get. They try to keep some kind of a ratio between their employees and their senior people. That is important for morale. It is also important for the financial well-being of the institution.

I do not know how many times we have seen reports, not just in the banking system but elsewhere where CEOs will derive these huge incomes or benefits in stock options, et cetera, when in fact the institution is not doing very well. That is a shame, but it is also something that from a competitive standpoint should not be followed as a policy.

Financial Consumer Agency Of Canada Act
Government Orders

1:30 p.m.

The Deputy Speaker

Is the House ready for the question?

Financial Consumer Agency Of Canada Act
Government Orders

1:30 p.m.

Some hon. members

Question.

Financial Consumer Agency Of Canada Act
Government Orders

1:30 p.m.

The Deputy Speaker

The question is on the motion. Is it the pleasure of the House to adopt the motion?