House of Commons Hansard #132 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was bankruptcy.

Topics

Bank Act
Government Orders

5:10 p.m.

Bloc

Guy Côté Portneuf, QC

Madam Speaker, I have already, in this House, told my colleague from Scarborough—Guildwood how much I like having an opportunity to debate various issues with him and to show him that, too often, he contradicts himself. However, I must admit today that following this most interesting speech on Bill C-57, it would seem that, this time, for once, the government is on the right track, which I must say does not happen often enough.

Indeed, there seem to be a number of very interesting measures in Bill C-57. It should be understood, however, that I am still not convinced that this bill cannot be improved. But the government is certainly on the right track. That being said, the member mentioned earlier a number of provisions dealing with institutions that have between $1 billion and $5 billion in equity. He was talking more specifically about cooperatives. He mentioned in his speech that other types of institutions could also be exempted from these obligations.

Could the member elaborate on those other types of institutions that could be exempted from the obligations set out in this bill?

Bank Act
Government Orders

5:15 p.m.

Liberal

John McKay Scarborough—Guildwood, ON

Madam Speaker, I never thought I would actually miss the hon. member on the finance committee. I have never quite been able to resolve his ultimate contradiction of being a separatist in a federal Parliament, but that is another issue altogether. His contributions to the finance committee were quite reasonable within the caveat just stated.

The equity float is $1 billion and it only applies to financial institutions that are federally regulated, so there are no other businesses outside the purview of a financial institution for which this float would be required.

I hope that gives the hon. member a straightforward answer to a specific question.

Bank Act
Government Orders

5:15 p.m.

West Nova
Nova Scotia

Liberal

Robert Thibault Parliamentary Secretary to the Minister of Health

Madam Speaker, the Parliamentary Secretary to the Minister of Finance mentioned one key element that is important to all Canadians and that is that these stocks are widely held. A lot of people may not recognize what it means to them but if they are participating in pension plans, if they have insurance or if they are buying insurance from a company, it is important for that company to be stable.

We learned not too long ago what happens when the investments of these insurance companies go sour. We had our insurance rates greatly increased because the funds backing up our insurance were reduced when the market went sour. Investments were probably too high in the technology sector and we had to pay much higher premiums to rebuild the financial capacity of those institutions.

I come back to the question of our pension plans. As Canadians we participate in RRSPs, in defined contribution pension plans or invest not necessarily in the company for which we work but invest in the market through one of the larger insurance companies, trust companies or the banks and we have an interest in where these funds are invested and that they are properly governed. As individuals, we might be a little dissociated from that because we do not directly hold the shares. They are held in trust for us.

Could the parliamentary secretary tell us how this improves our confidence as indirect participants in these financial institutions that the moneys held in trust for us on our behalf are properly managed through proper governance procedures?

Bank Act
Government Orders

5:15 p.m.

Liberal

John McKay Scarborough—Guildwood, ON

Mr. Speaker, the hon. member is absolutely right and it is one of the things I probably should have pointed out in my speech. The shares are in fact widely held and constitute a significant portion of Canada's wealth both in pensions, in RRSPs and directly held by individual Canadians. Yes, this is an extremely important area for our financial stability.

The member is also right to point out that a year or two ago insurance companies, particularly in the property and casualty sections, were experiencing some extreme difficulties. I think their normal return on equity is somewhere in the order of about 8% to 12% and they were experiencing negative returns on equity in the order of 1% or 2%. That is not sustainable in a market where, if the stock market flattens out or goes down and claims go up, in very short order they would have some difficulties with the sustainability and viability of their insurance companies.

These are challenges that the government faces. I would like to think that the Government of Canada over the last number of years has faced that regulatory challenge quite well. Therefore what we see is improved wealth creation in the hands of pension funds and in the hands of individual Canadians through the increased viability of our financial institutions.

We see institutions like Scotiabank that has made significant inroads internationally and now generates something in the order of 40% of its gross revenues offshore. This is a significant accomplishment on the part of that particular bank.

Sun Life and Manulife are Canadian success stories and have achieved a level of success around the world which I think augers well for Canadian pension plans, Canadian RRSPs and Canadian individuals. All of their share values have increased quite dramatically.

I think the Royal Bank is either number one or number two and Manulife is either number one or number two depending on the day on the Toronto Stock Exchange. My recollection is that about $50 billion is the share value of the Royal Bank.

Those are rather important and critical investments for Canadian pensions and Canadian wealth creation.

Bank Act
Government Orders

5:20 p.m.

Conservative

Dick Harris Cariboo—Prince George, BC

Madam Speaker, it is my pleasure to speak today to Bill C-57. The Parliamentary Secretary to the Minister of Finance has given a pretty good explanation of what the bill is all about.

It is very important to mention the participation of the corporations, such as banks, bank holding companies, the insurance companies and all the corporations for which the bill would set, modernize and update governance rules.

The parliamentary secretary did not mention this but it is also important to thank the members of the official opposition finance team for the input they gave to the government. I know the government, on many occasions, sought the advice of our finance critic, the member for Medicine Hat; the member for Edmonton—Spruce Grove; the member for Peace River; and the member for Portage—Lisgar, who all played a part in the formation of this bill. They have given input to the government over the years at committee and in the House. I know the government appreciated the fact that the members of the official opposition's finance group were able to participate and help the government out when it was seeking advice on some very complex issues of this bill.

The bill would make changes to the corporate governance framework of banks, bank holding companies, insurance companies, insurance holding companies, trust and loan companies and cooperative credit associations to bring them in line with the Senate Bill S-11, which was updated in 2001 for business corporations under the Canada Business Corporations Act. That is a mouthful to the average person out there watching this debate but what it means is to modernize the governance framework that the banks and financial institutions operate under so that what they do becomes more open and more transparent to shareholders and the general public at large that may do business or invest in these corporations or be part of credit unions and cooperatives. They would now be able to sleep a little better at night knowing that these governance regulations on how these corporations operate would be open and transparent. It would give them an extra measure of comfort when they are placing their money in the trust of these people.

The bill also enhances the ability of shareholders to exercise their rights by allowing for the electronic participation at meetings, which is important because many times shareholders may be living in Vancouver or Toronto and they just cannot afford to jump on a plane, fly across the country and be part of a shareholders meeting, even though they may have something important to say or to cast their votes. This would let them cast those votes electronically, something we have talked about in the House here. I am sure the day will come when members of Parliament may be able to cast their votes electronically from the other side of the country if they cannot make it to the House of Commons, which certainly would be a savings to the taxpayer given the cost of air travel these days.

The bill seeks to improve the flow of information from financial institutions to the Office of the Superintendent of Financial Institutions. The important part of the bill is that it would allow medium sized insurers and trust companies to apply for an exemption to the public holder requirement which requires institutions with equity holdings between $1 billion and $5 billion to make at least 35% of their voting shares available for trading on the public stock exchange. That is going to be a huge benefit to credit unions and co-ops that have been seeking this modernization of the rules.

The bill proposes changes to the policyholder governance framework and the Insurance Companies Act, which would be intended to increase disclosure in regard to participating in adjustable policies.

Millions of Canadians have insurance policies and millions of Canadians invest in insurance companies. These companies are reputable and have demonstrated that they are trustworthy, and although Canadians may feel comfortable investing in them, I would hazard a guess that many shareholders and policyholders really do not understand the fine print in their policies. This legislation would give that more disclosure.

It is important to point out that after the next election a Conservative government, this Conservative Party, will protect the best interests of consumers by fostering competition and ensuring that the financial services sector is appropriately regulated for the protection of shareholders and balanced with stability and the opportunity for success and growth. This is a written policy of our party, which we intend to follow through on when we become the next government in this House.

Cooperative organizations and banks have all expressed a level of comfort with Bill C-57. I think it is important to keep a line of communication open to the very companies that Bill C-57 would apply to, particularly banks and other financial institutions in our country.

In many cases, the government has failed to do this. Many times, banks have been left hanging by the indecision of the Minister of Finance on some very key issues such as bank mergers and cross-pillar merging. Credit unions have been seeking some administrative changes.

Bank Act
Government Orders

5:25 p.m.

The Acting Speaker (Hon. Jean Augustine)

I am sorry to interrupt the hon. member.

The House resumed from October 4 consideration of the motion that Bill C-25, An Act governing the operation of remote sensing space systems, be read the third time and passed.

Remote Sensing Space Systems Act
Government Orders

5:25 p.m.

The Acting Speaker (Hon. Jean Augustine)

It being 5:29 p.m., the House will now proceed to the taking of the deferred recorded division on the motion at third reading stage of Bill C-25.

Call in the members.

(The House divided on the motion, which was agreed to on the following division:)

Remote Sensing Space Systems Act
Government Orders

6 p.m.

The Acting Speaker (Mr. Marcel Proulx)

I declare the motion carried.

(Bill read the third time and passed)

The House resumed from September 28 consideration of the motion.

Committees of the House
Routine Proceedings

October 5th, 2005 / 6:05 p.m.

The Acting Speaker (Mr. Marcel Proulx)

Pursuant to order made on Wednesday, September 28, 2005, the House will now proceed to the taking of the deferred recorded divisions on the motion to concur in the fourteenth report of the Standing Committee on Health.

(The House divided on the motion, which was agreed to on the following division:)

Committees of the House
Routine Proceedings

6:15 p.m.

The Acting Speaker (Mr. Marcel Proulx)

I declare the motion carried.

The House resumed from September 29 consideration of the motion.

Committees of the House
Routine Proceedings

6:15 p.m.

The Acting Speaker (Mr. Marcel Proulx)

The House will now proceed to the taking of the deferred recorded division on the concurrence motion.

Committees of the House
Routine Proceedings

6:15 p.m.

Liberal

Karen Redman Kitchener Centre, ON

Mr. Speaker, I believe if you would seek it, you would find consent that all Liberal members present will be voting for this motion.