House of Commons Hansard #12 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was post.

Topics

Motions in amendment
Supporting Vulnerable Seniors and Strengthening Canada's Economy Act
Government Orders

3 p.m.

NDP

Peggy Nash Parkdale—High Park, ON

moved:

Motion No. 1

That Bill C-3 be amended by deleting Clause 20.

Motion No. 2

That Bill C-3 be amended by deleting Clause 21.

Motion No. 3

That Bill C-3 be amended by deleting Clause 22.

Motion No. 4

That Bill C-3 be amended by deleting Clause 23.

Motion No. 5

That Bill C-3 be amended by deleting Clause 24.

Motion No. 6

That Bill C-3 be amended by deleting Clause 25.

Motion No. 7

That Bill C-3 be amended by deleting Clause 26.

Oral Questions
Points of Order
Government Orders

3 p.m.

Conservative

James Lunney Nanaimo—Alberni, BC

Mr. Speaker, during question period the member for Timmins—James Bay repeatedly made reference to the absence of a member from the chamber. The member is not new in the House and he would know that violates the Standing Orders of the House. I would ask the Speaker ensure he does not continue to do this in the future.

Oral Questions
Points of Order
Government Orders

3 p.m.

Conservative

The Speaker Andrew Scheer

I thank the hon. member for raising that. I will take a look at the blues and see what exactly was said.

Oral Questions
Points of Order
Government Orders

3 p.m.

NDP

Yvon Godin Acadie—Bathurst, NB

Mr. Speaker, on the same point of order, I do not recall that he said he was not present. He said that he was hiding under his seat.

Oral Questions
Points of Order
Government Orders

3 p.m.

Conservative

The Speaker Andrew Scheer

I will take a look for myself and see what was said. I thank the hon. member for his help.

Oral Questions
Points of Order
Government Orders

3 p.m.

NDP

Charlie Angus Timmins—James Bay, ON

Mr. Speaker, I want to clarify the record because I do think it is very important. I take my choice of words very seriously. When I said “the missing member for Muskoka” I was not implying that he was missing from the House. I said that he was missing from doing his job.

I want to make it clear that he was in the House, but he refused to stand and be responsible for his portfolio.

Oral Questions
Points of Order
Government Orders

3 p.m.

Conservative

The Speaker Andrew Scheer

We have heard enough on this matter.

The House resumed consideration of Bill C-3, An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011, as reported (without amendment) from the committee, and of the motion in Group No. 1 to 7.

Supporting Vulnerable Seniors and Strengthening Canada's Economy Act
Government Orders

3 p.m.

NDP

Peggy Nash Parkdale—High Park, ON

Mr. Speaker, I rise to speak in support of the amendments, which would have the impact of removing part 7 from the bill.

The rush by the government to pass the budget implementation act is ostensibly to get increased benefits out to seniors. This is something we have campaigned on and supported. We certainly want to see every senior get out of poverty. However, what takes up almost half of the bill is a section on mortgage insurance. It is a section we believe requires further debate and examination. It needs to have the light of day shine in. What is the rush to pass this part of the bill? That is why we would argue, with our amendments, to take this section out of the bill and examine it in good time.

We are talking about the delivery of a fundamental social good, and that is housing. We have a crisis of affordability in housing in the country. We have many people under or poorly housed.

We are talking about the delivery system for housing in Canada and breaking off part of that delivery system where profits can be made, mortgage insurance, and handing it to U.S. multinational mortgage companies that played a role in creating the housing bubble in the United States, which led to the global financial crash. They provided mortgages at extremely appealing terms to people who could not assess the risk and many of whom could not afford to take on that risk.

In many respects, this is the housing equivalent of privatizing a service like health care, something that is so fundamental to Canadians. In the current system with CMHC, the risk is shared by all Canadians so as to achieve the widest public benefit. In this case, it is meeting the housing needs of Canadians effectively and with affordability.

The government argues that speed is of the essence. Yet further reinforcing the privatization of the mortgage insurance market is a major public issue that deserves further debate. Canadians needs to know if this is truly in their best interest, but the government would rather not open this up for debate.

Effective lobbying of both previous Liberal and Conservative governments by U.S. insurance giants like AIG, Genworth and PMI was rewarded when first the Liberals and then the Conservatives welcomed this competition into our housing insurance market.

Promoters of private insurance talked about the innovation that the private sector would foster. In fact, that was said in the U.S. before the housing crash. Innovation meant dressing up high-risk mortgages and veiled financial instruments that no one understood or whose risks were hidden. Canada does not need that kind of innovation. The fact remains that the case for offering private multinationals access to Canada's mortgage insurance market has not been convincingly made. We would like to have more time for examination.

The effect of having U.S. private mortgage insurance giants like the now defunct AIG or Genworth enter the Canadian market was to sign up borrowers for risky mortgages: $56 billion in 40-year mortgages, the most expensive and least flexible mortgages there are, $10 billion of which requires no money down. These instruments entice many Canadians into debt far over their heads.

The finance minister justified the arrival of the U.S. giants by arguing greater choice and innovation, that this would benefit consumers and promote home ownership. The housing bubble, especially south of the border, showed that these companies created tragic results. One U.S. executive told the Globe and Mail in a story at the time that the 40-year mortgage, “just becomes a mechanism for borrowing more than you probably should have”.

Since the government backs 100% of CMHC's mortgage insurance risks, it concluded that it should level the playing field for private mortgage insurers by guaranteeing their liabilities, too. The deal is it guarantees 90% of up to $300 billion in insurance liabilities for a 10% premium, $300 billion of public money to guarantee the liabilities of private insurers, most of whom would be foreign or American insurers.

Why would Canadians want to sign up for this? It is certainly something we need to examine. Have we really learned nothing? Why are these companies still around? Why are we still guaranteeing their liabilities?

Canada is the second largest mortgage insurance market in the world. Until the Liberals opened the door to GE, now Genworth, Canadians provided their own insurance and shared their own risk. Now we still share the risk, but pay profits to U.S. multinationals. This fits a pattern the government likes to repeat.

One argument for welcoming U.S. competition for CMHC, the mortgage insurer Canadians already own, was that Canadian insurance rates were too high and competition would bring them down. What happened? The Globe and Mail said that the rates stayed the same. In committee Monday, the head of CMHC, Karen Kinsley, said that the CMHC price was still better. Therefore, competition has not reduced the cost to consumers.

Also in the committee meeting on Monday, Ms. Kinsley told us that CMHC also ensures the social housing sector, apartments, low-income housing, non-profits and other affordable housing both in urban and rural areas and she pointed out that the private insurers chose not to go after that business. Therefore, we have a situation where the government and its private sector allies like the C.D. Howe Institute talk a good line about competition, but instead are cherry-picking and leave the CMHC to cover the social housing and rental sectors, where the risks are higher and the returns are lower. Why would we willingly put the mortgage insurer taxpayers own in that situation? In other words, it undermines its sustainability.

Do members know how man other industrialized countries guarantee the policies of non-government mortgage money? Experts in committee on Monday could not name one, not one other country in the world that backs the risks of private mortgage insurers, but Canada wants to increase our liability. Why are we being so generous?

In May 2006, the government announced more U.S. mortgage insurers were welcome and increased the value of the taxpayers' guarantee to $200 billion. Five years later, in this bill, it is saying that guarantee should be $300 billion. The government has done no studies that we have been privy to on the impact of that decision. Nor has it done due diligence to date on the implications of yet again broadening the taxpayers' liability in guaranteeing $300 billion in private obligations today. It is very curious behaviour for people who like to betray themselves as better economic managers.

What do Canadians get in return for such generosity that they would not have gotten from their own company, the CMHC? When the committee and its Senate counterpart were holding hearings on the private mortgage insurance provisions back in 2006, AIG's top executive in Canada had this to say:

In terms of exposure to the government, the practical likelihood of AIG, an organization with $800 billion in assets, ever coming to the government for anything as it relates to a claim is not nil, but it is as close to nil as it possibly could be.

The government was all too happy to take that assurance for its ill-thought out policies. Two years later, the U.S. government had to pump $150 billion into AIG when its practices drove it into the ground. Why would we again place the same faith, $300 billion worth, in these companies today?

I would urge reflection and reconsideration. For that reason, we are urging, with these amendments, that this section on mortgage insurance be taken out of the bill and postponed for debate at a later date.

Supporting Vulnerable Seniors and Strengthening Canada's Economy Act
Government Orders

3:10 p.m.

Conservative

Brian Jean Fort McMurray—Athabasca, AB

Mr. Speaker, fortunately, I also had the opportunity to be at that meeting and I recognize that the member was there as well.

I would like the member's comments in relation to the response that was given by the witnesses stating that the increase the government was proposing would not increase percentage risk to Canadians by 1%. In fact, they suggested that this would be good for the economy and good for Canadians and, quite frankly, bragged significantly about the current good news story of CMHC, how well it was doing and what a great profit it was giving back to the Canadian people who own it and ultimately will receive the benefit of it. They stated clearly that we have an excellent marketplace here in Canada and that things are going very well in Canada relative to the rest of the world. It actually was a very good news story.

I do not know how the member can take something bad out of that but I would like to hear her comments in relation specifically to the fact that no increase in risk to Canadians would happen as a result of this particular amendment.

Supporting Vulnerable Seniors and Strengthening Canada's Economy Act
Government Orders

3:15 p.m.

NDP

Peggy Nash Parkdale—High Park, ON

Mr. Speaker, any time we increase the potential liability in the tens of billions of dollars, that it is something that requires greater reflection and greater study.

As I said, in 2006, our liability for these private insurers was $200 billion. With this bill, our liability would be $300 billion.

If there are no defaults, then it is true that we are not paying anything out. However, should there be defaults there could be future liability. In fact, we have heard real concern from the Bank of Canada regarding the steep rise in housing prices, the lack of affordable housing in Canada and the incredible indebtedness that Canadians are faced with.

This needs greater examination, which is why we are proposing a delay.

Supporting Vulnerable Seniors and Strengthening Canada's Economy Act
Government Orders

3:15 p.m.

Saint Boniface
Manitoba

Conservative

Shelly Glover Parliamentary Secretary to the Minister of Finance

Mr. Speaker, I would like to offer my new colleague an opportunity here to correct the record.

First and foremost, if claims are made in this House, they must be accurate and they must be factual. They must be based on things that have actually been said if one says that they are what was said.

I would invite my colleague to correct the record. She talked about other countries that have this type of system but not one country was mentioned. Let us start with Norway, which was mentioned, and which, oddly enough, happens to be a socialist country.

I would also encourage her to correct the record when it comes to the numbers she is using. It was repeatedly stated in committee, and we repeatedly attempted to correct her numbers, that it is presently at $250 billion, not $200 billion, and will go to $300 billion.

I invite the member to correct the record on those two issues, please.

Supporting Vulnerable Seniors and Strengthening Canada's Economy Act
Government Orders

3:15 p.m.

NDP

Peggy Nash Parkdale—High Park, ON

Mr. Speaker, I welcome the opportunity to again clarify that in 2006 the limit of taxpayers' liability was $200 billion. It was subsequently increased to $250 billion. The proposal today is to take that liability to $300 billion, which is a huge amount of dollars that Canadians would have to back up.

Secondly, when asked which countries around the world have public money backing private mortgage insurers, there was no country that was named that had a system like that. There are private insurers that pay their own premiums and self-insure, but not one country was named where the government backstops the risk of private insurers operating in the housing mortgage market.

Supporting Vulnerable Seniors and Strengthening Canada's Economy Act
Government Orders

3:15 p.m.

Conservative

Brian Jean Fort McMurray—Athabasca, AB

Mr. Speaker, if she is objecting to this particular section now, I would like to know from the member why, at that particular meeting when she and the NDP had an opportunity to vote against the bill, they actually voted for it. They did not vote against it. As we mentioned earlier, this is a classic example of sucking and blowing at the same time.

The member opposite should make up her mind. If she is now going to vote against the bill that she had voted for in committee, it sends the wrong message to Canadians. They want to see this Parliament work and that is what we are trying to do.

Supporting Vulnerable Seniors and Strengthening Canada's Economy Act
Government Orders

3:20 p.m.

NDP

Peggy Nash Parkdale—High Park, ON

Mr. Speaker, we did vote against this section of the bill.

I would also take this opportunity to correct the record. It may have sounded as though I called the CEO of CMHC by the name of Tinsley. It is in fact Karen Kinsley. I just want to better enunciate that for the record.