House of Commons Hansard #80 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was banks.

Topics

Financial System Review Act
Government Orders

1 p.m.

Conservative

The Acting Speaker Bruce Stanton

I would just remind hon. members to direct their comments and questions through the Chair.

Questions and comments, the hon. member for Brossard--La Prairie.

Financial System Review Act
Government Orders

1 p.m.

NDP

Hoang Mai Brossard—La Prairie, QC

Mr. Speaker, my colleague spoke about the fact that there was some issue with what happened in the U.S. with the banking sector. Some argue that some Canadian banks were bailed out in Canada. Obviously, it was not done directly. It was not a failure. However, the federal government, through the Canada Mortgage and Housing Corporation, offered to trade the banks up to $125 billion in mortgage debt for safety in T-bills during the height of the financial crisis.

What is my colleague's position regarding that?

Financial System Review Act
Government Orders

1 p.m.

Conservative

Ray Boughen Palliser, SK

Mr. Speaker, it was a banking situation and the banks dealt with it in a manner that all people did not like. Nevertheless, that was the financial institutions' prerogative to deal with it as long as they fell within the regulations of the Bank Act, and they did.

Again, we may not like everything we see with banking but the banking program is in place, is regulated and is what we have to rely on.

Financial System Review Act
Government Orders

1 p.m.

Blackstrap
Saskatchewan

Conservative

Lynne Yelich Minister of State (Western Economic Diversification)

Mr. Speaker, there were some comments this morning about the consultation process and that there was not a sufficient response. Would the member care to expand on the consultation process that was made available for comments?

Financial System Review Act
Government Orders

1:05 p.m.

Conservative

Ray Boughen Palliser, SK

Mr. Speaker, we know that the finance minister and finance in general consulted with over 30 different groups that submitted positions around the Bank Act when that was done back in 2007. From that input, the new bill is on the table here this morning. As to whether the bill was it well-consulted, it was indeed. Many groups presented their positions on it and we that here with the new bill.

Financial System Review Act
Government Orders

1:05 p.m.

NDP

Jinny Sims Newton—North Delta, BC

Mr. Speaker, there is no doubt that for every Canadian across the country the health of the banking sector is critical. The banking sector plays a critical role in all our lives, whether we are buying a house or applying for a credit card. Also, many of us get paid through our banks. Many people, not just those with a lot of money, have a vested interest in ensuring our banking sector is stable.

Knowing that a five year sunset clause was included in the legislation and knowing that the deadline for that review was April 20 this year, it interesting that my colleagues across the aisle would wait this long to table such critical legislation. Not only did they wait so long, but at the same time they tabled the legislation, they moved time allocation on it. Out of one side of their mouths they are telling us that this is critical and timely legislation and we must get it through the House. Out of the other side of their mouths they are telling us that they will not have open and transparent debate, where the opposition gets to take a look at the bill and could, and probably would, make some useful amendments.

I sat here for half an hour this morning and listened to the debate on the critical nature of the need to move time allocation. Once again, I would argue that time allocation is not needed. The bill requires thoughtful consideration because it would impact many Canadians. It would impact their savings as well as the homes in which they live.

Instead of us being given a reasonable amount of time to debate the legislation, the majority in the House once again used the duct tape approach of muzzling the voice of the opposition. Let me assure my colleagues that they might be able to move time allocation in the House, but we will send a message to our communities that we were not allowed to debate the bill in the thoughtful way we would have liked.

I am a new MP so the House will have to beg my forgiveness for saying this, but I was really taken aback this morning when a speaker on the government side said that the NDP opposing time allocation was like us bringing chaos into people's lives.

I am beginning to wonder what my colleagues across the way want. Do they want the opposition to just support any legislation they bring in? I am sure they would like that, but that is not the role of the opposition. If members of the opposition have things to say, we are immediately labelled, and some language is used that I find disturbing.

I am not a supporter of chaos, either in Parliament, in my personal life or back in my community. When I want to debate a legitimate piece of legislation, it is not because I want chaos. It is because I want to give thoughtful input as the representative of my community.

The government shows a lack of respect toward members of the opposition. I should not be puzzled by that; I should expect that. The legislation had its first unveiling in the Senate. It is a bill that would impact so many Canadians. I find it really disturbing that it was first put before an unelected, unrepresentative Senate. Why? What prevented that bill from being in the House first?

It also interesting to note that despite the patronage appointments and the payola that has gone into many of the appointments to the Senate, even that house commented that it had to look at a significant piece of legislation, with many technical components, and had concerns that with three weeks it did not have enough time and that the government was trying to rush the bill through.

We have until April 12, What is the rush? If the government knew it had until April 12 as the sunset clause, why did we not start talking about this last May, or June, or October, or November or December? Instead, we are today looking at this significant piece of legislation.

Despite all of those things, the NDP welcomes the review of the financial systems review act. We should be very proud of the banking regulations that are in place. It is because of those regulations that Canada was buffered from the worst aspects of the economic meltdown.

I also think there is an irony that has to be pointed out. We have a majority in the House that is absolutely committed to deregulation. When we look at almost everything else, like the gun registry, the Wheat Board and many of the other issues that have come before the House, they have all been for deregulation. Yet when it suits the Conservatives, they wax eloquent about the existing banking regulations. However, those regulations exist because of the work of some other governments. It was the opposition that prevented my colleagues across the way from deregulating our banking system at a certain time in our history.

When I look at the need to review the area of banking and banking regulation, I am also hit by what is missing from the legislation. I am not sure if members have read some of the newspaper articles and emails. There is nothing in the bill to limit and regulate user fees charged by banks.

Recently a senior citizen came to my constituency office. I have many of them coming in these days because they are getting very disturbed. This is what the senior citizen told me. She put her money in the bank, and when the bank wanted to automate and introduce the ATM machine, she started to use that thinking it would save the bank and her money. Remember, bank profits are very high now, yet there is always a threat of new user fees or increased user fees. This senior citizen is so puzzled because she believes she has saved so much money for the bank by it not needing the personnel in place, which I think is a huge mistake, and it being so automated. However, her fees keep going up.

This was an opportunity, with this legislation, for the government to start looking at regulating user fees that banks are gouging their customers. Some banks are even beginning to introduce fees for people to get their own money out of their bank accounts. At one time, it was only if they went to a different ATM. Now one of the banks has put out the idea that there could be user fees even if customers uses their own bank's ATM machines. That makes no sense. Canadians look to us to regulate things like that.

The other concern I have is the interest rates on credit cards. It is time the government put regulations in place that are tighter and more closely regulated to ensure banks do not charge the kinds of rates they are. People who put their money in banks are lucky to get 1% interest. With that money, the banks get to play with it and make money on it. On the other hand, if people use their credit cards, which are banking credit cards, banks charge interest rates from 12% up to 22%. If that is not gouging, I do not know what is. As far as I am concerned, a critical component that is missing in this is tackling the area of user fees for citizens who are being hurt by them. We also have to look at the rates banks charge for people who use those credit cards.

I know some people will say that people should not use credit cards. However, in today's reality some people live from paycheque to paycheque. They often end up having to spend on their credit card, hoping they can pay part of it back if they get some money coming in within the following month. I am talking about just a few people. A lot of people survive like that and not because they go out to buy some big fancy toys or go on big holidays. They are trying to make ends meet from month to month.

I would be the first one to argue that if we are getting into luxury items, then we are looking at choices. I am talking about credit cards people are using because they have no other choice. They need that flexibility to survive. Because of that, I feel the scope of this bill is really limited and needs to be widened.

I was also interested in finding out what kind of consultation occurred. I heard that 30 groups were consulted. For a country the size of Canada, only 30 groups were consulted, and 27 of those were anonymous. What kind of consultation is that? Was this consultation open and transparent?

One thing I do not like about anonymous submissions, or whatever, is people get to say whatever they want and they are never held accountable. I have a primary rule that if I get something that is not signed, I put it aside. The government has had consultations with three groups, three groups for a country the size of Canada on an issue as important as banking.

The other area we do not often talk about is the co-operative banks in our communities and how we need to support them and find ways to do that. The co-operative banks in my area do an amazing job of giving back to the community in many different ways. I am a bit saddened that this is not being addressed in the bill.

Once again, Bill S-5 is being used by the government as a prop to hold up the banks. It is being rushed through the House. From what I have read, the profits of banks has increased incredibly. It has not really gone down. We should take a look at the consumer debt, which is at a record level of 151% of disposable income. I want every one of us in the House to take a second to comprehend that. Consumer debt is at record levels of 151%, which is so high.

It is because this debt level is so high that we are becoming increasingly concerned about some risky mortgage lending practices and home equity credit lines by banks and other lending institutions.

Currently, if I go through websites or look at some of the mail that comes through my door, it is clear that a person can actually get his or her house financed fairly easily for up to 90%. That is an advantage for some, but in the long term it is also the basis for potential instability. Right now our interest rates are fairly reasonable and low, as many would say, but if they were to go up by even half of 1%, that would put many of these people in jeopardy.

To avoid the kind of housing slump that happened in the United States, surely we should be taking the time with this legislation to put protections in place. When we take a look at our regulations, we absolutely must take our time.

Mr. Speaker, how much longer do I have?

Financial System Review Act
Government Orders

1:20 p.m.

Conservative

The Acting Speaker Bruce Stanton

There are three and a half minutes remaining.

Financial System Review Act
Government Orders

1:20 p.m.

NDP

Jinny Sims Newton—North Delta, BC

Mr. Speaker, I am appealing to my colleagues across the way. Not often is there much love in this House, but this is Valentine's Day, so I am pleading with them to let us take the time to fix this legislation in a way that would give Canadians more security and assurances about their financial houses, so they can keep their places straight and so that seniors, for example, who come into my office and are being gouged through credit cards or user fees will not have all of those complaints. Remember the banks involved are the same ones that get incredible tax breaks from us as well.

Mr. Speaker, it is Valentine's Day, so with the indulgence of everyone in the House, I will wish the constituents in my riding a wonderful day with their loved ones, their families, their friends and their neighbours.

I would also like to say that I am thinking a lot about my three wonderful grandchildren, Jacob, Jessica and Emily, and that I wish them a happy Valentine's Day. I wish I were there to eat the cupcakes they have made, because when they phoned me this morning, they told me they had made me a cupcake. It is going in the freezer for when I go home, and I will enjoy it at that time.

As I was saying earlier, there are a number of problems with this piece of legislation, including in the process or way it is being rushed through this House with unseemly haste, and substantively with some problems with it. I believe this is our opportunity as parliamentarians to address issues like the very high interest rates and to have some regulations around those, and to address issues around user fees and issues around foreign takeover of some Canadian assets.

With that in mind, Mr. Speaker, I want to thank you.

Financial System Review Act
Government Orders

1:25 p.m.

Blackstrap
Saskatchewan

Conservative

Lynne Yelich Minister of State (Western Economic Diversification)

Mr. Speaker, I would like the member to clarify that the purpose of the bill derives from the government having to review the statutes governing federally regulated financial institutions every five years and that the bill will ensure that Canada remains a global leader in financial services and will maintain the safety and soundness of the sector.

It is the government's commitment and need to look at the bill, particularly its implications and timing, which is important. I would like the member to recognize that the timing of the legislation is very important. It is not a time to review domestic policy as much as policy that makes us global leaders, so that the financial sector does indeed remain a stable sector globally and so that we do not confuse the debate with day-to-day regulations involving credit cards and financing.

I just want to see if the member really understands the legislation she is talking about today.

Financial System Review Act
Government Orders

1:25 p.m.

NDP

Jinny Sims Newton—North Delta, BC

Mr. Speaker, I absolutely understand that this piece of legislation has a sunset clause of April 12. The government has known for five years that this legislation has a sunset clause, and since May 2, when this newly constituted Parliament was put in place, the government has had the opportunity to introduce this bill and discuss it in a thoughtful manner. However, once again the government has used bullying tactics to shut down debate, to push through a piece of legislation using the argument of the sunset clause to do so. I would argue that it is doing this so that we do not have time for a detailed debate.

Financial System Review Act
Government Orders

1:25 p.m.

NDP

Carol Hughes Algoma—Manitoulin—Kapuskasing, ON

Mr. Speaker, my colleague talked about the fact this bill was actually introduced in the Senate. Here, the question of transparency is something that we on this side of the House and members of the general public are always asking ourselves about. Was this important bill tabled in the House via the Senate because the Conservative government was trying to avoid transparency?

Even more, the Conservatives have tried to tell us that they had heard from plenty of witnesses on this. Instead, the government conducted online consultations and collected about 30 submissions, which it cannot make public because it did not acquire the necessary permissions. Of the 30 submissions, 27 respondents remained anonymous and only 3 identified themselves.

Could my colleague talk about the transparency aspect? How can we accept such testimony without being able to tell the public where we got it from?

Financial System Review Act
Government Orders

1:25 p.m.

NDP

Jinny Sims Newton—North Delta, BC

Mr. Speaker, we hear a lot from the other side of the House about the need for transparency and accountability. When we look at the online consultation, I know that in this age of technology we think that everyone is online, but I would argue that they are not.

There were 30 submissions and we did not get permission to share them, not even with parliamentarians. That causes me concern. Out of those 30 submissions, 27 are anonymous. As far as I am concerned, these should be set aside, because no one should be able to have that kind of an input and be given that kind of weight when they are not willing to put their names to the submissions they are making. How can we hold people accountable for these?

Once again, this is an example of the lack of accountability and transparency by the government, and a real push by it to rush legislation through with the pretext of it having held consultations already. However, when we look underneath the layers, very little consultation has taken place.

Financial System Review Act
Government Orders

1:30 p.m.

NDP

Jean Rousseau Compton—Stanstead, QC

Mr. Speaker, I would like to congratulate my colleague on her speech.

What does she think about the fact that the middle class has been forgotten once again? As she put it so well, a slight increase in the interest rate in Canada could have a disastrous impact on the middle class. The middle class has also been affected by the financial scandals of the past few years and, yet again, we are not talking about including these sorts of crimes or monitoring the banks. What does my colleague think about that?

Financial System Review Act
Government Orders

1:30 p.m.

NDP

Jinny Sims Newton—North Delta, BC

Mr. Speaker, I think if I were not a parliamentarian today and were instead sitting at home in my riding listening to this debate and looking at the significant piece of legislation we are debating, I would be shaking my head and saying, these are the problems I am facing day to day.

We know that the ratio of consumer debt to disposable income is a critical factor in the stability of a nation's well-being, and we can see that is very high now. We can also look at the kinds of practices out there for granting mortgages, which are actually resulting in a play on the housing market, a market that has not slowed down at all. In this regard I would point out that most young people in my community cannot even afford to buy a house because house prices are so high.

When I look at all of these things, I keep thinking, why do my colleagues across the aisle not want to take the time to do a comprehensive and meaningful review but just deal with technicalities instead, and why do we not want to hold the banks more accountable for their actions?

Financial System Review Act
Government Orders

1:30 p.m.

Liberal

Kevin Lamoureux Winnipeg North, MB

Mr. Speaker, we recognize the importance of the legislation and how critically important it is that it pass by April. It is in the industry's best interests for that to occur. Just as the member stated in her comments, we expressed disappointment at the government taking so long to bring the bill forward and now at it bringing in time allocation.

However, I want to pick up on one of the points the member made, that being the other alternatives such as credit unions. I want to take the opportunity to at least acknowledge that in Winnipeg North, the Assiniboine Credit Union has really filled a significant need in the north end, in providing alternative banking opportunities for people. I think this industry has great potential in communities throughout Canada.

Perhaps the member might want to comment on how important our credit unions are to the population as a whole.