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

1:30 p.m.

NDP

Jinny Sims Newton—North Delta, BC

Mr. Speaker, when I look at the credit unions I have had experience in dealing with, as well as other credit unions in my riding and province, I am so impressed with the incredible amount of work they do in their communities. I call them the heart and soul of my community because of the way they support not only programs for seniors but also for youth by way of scholarships. They also give their members a real say in the operations of the credit union. I have looked at, for example, the Vancity Credit Union and the many others in my riding that do an amazing job.

We absolutely need to support credit unions right across the country.

Financial System Review Act
Government Orders

1:35 p.m.

Conservative

Costas Menegakis Richmond Hill, ON

Mr. Speaker, I will be splitting my time with the hon. member for Yellowhead.

I stand today to speak in favour of Bill S-5, the financial system review act, at second reading. The bill, while largely technical in nature, is nonetheless a very important development as it is fundamental to ensuring the security and strength of the Canadian financial system. This is important not only because we depend on our financial system for day-to-day transactions like purchasing something from a store with a debit card or making a deposit in one's savings account, but because of the tremendous economic impact the financial sector has on the Canadian economy.

Indeed, Canada's financial sector is a key jobs driver providing employment to over 750,000 Canadians. This is especially important in my home province of Ontario and my riding of Richmond Hill where the financial services industry is a crucial part of the provincial economy.

The financial services sector employs nearly 400,000 people in Ontario directly. In addition, as noted by the Ontario minister of finance, the sector “supports an estimated 280,000 ancillary jobs, including in high-paying business service jobs, such as software design”. Its positive impact is especially important in the greater Toronto area where I live.

As stated by the Toronto Financial Services Alliance:

Toronto is the business and financial capital of Canada. It is the hub of Canadian commerce with a financial services infrastructure that has a reputation for safety, soundness and stability.

Toronto is home to the vast majority of Canada's largest financial services companies...and makes one of the largest contributions to the local economy.

In fact, according to Invest Toronto, the city's financial services sector contributes 13.2% directly and 7.9% indirectly to the GDP of the entire Toronto region. What is more, between 1999 and 2009 alone, the financial services sector added almost 70,000 jobs in the greater Toronto area, a cumulative growth rate of 42% or 4.2% per year on average.

Clearly, a strong and secure financial sector is vital to the economy and good, well-paying jobs in the greater Toronto area. The financial system review act would help to ensure the continued stability of the sector and the significant jobs and economic growth that depend on its health. It would accomplish this by undertaking a series of chiefly technical but very important modifications to the framework governing our already well-regulated financial system to further guarantee its stability.

I want to emphasize that these modifications and indeed this bill are the result of a mandatory process. Specifically, it is a direct product of Canada's long-established practice of undertaking mandatory five-year reviews of Canada's financial sector legislation. This review started in September 2010 when the finance minister initiated a public consultation process, open to all, where he sought the views of Canadians about our financial system. The regular review of the financial sector statutes allows the government to amend the framework so that the financial sector legislation and regulations continue to be as effective and efficient as possible.

Canada's practice of conducting such mandatory five-year examinations has been one of the key reasons we have maintained our reputation of having the safest and most secure financial system on the planet. Indeed, as we all recall, for four straight years the World Economic Forum has declared our country's banking system to be the soundest in the world. This has been a tremendous advantage for Canada and Canadians, especially during the recent global economic turbulence. While the United States, the United Kingdom and Europe has had to nationalize or bail out many of their banks, Canada's financial system has remained strong and secure.

Because of our resilience, Canada's financial system continues to be singled out as a model for other countries. As noted Toronto Sun columnist Peter Worthington remarked:

Canada's banking system is now widely recognized as arguably the world's best. No Canadians fear for their deposits as many Americans do.

This is what the Irish newspaper, The Independent, had to say:

[Ireland's] financial regulatory system is in line for a radical overhaul, with the Canadian system being held up as a model.

The Canadian system is undoubtedly an excellent model....

Even U.S. President Barack Obama has admitted that Canada's system is far superior, noting:

Canada has shown itself to be a pretty good manager of the financial system in the economy in ways that we haven't always been here in the United States.

Finally, this is what Great Britain's Prime Minister David Cameron declared when he addressed Parliament last year:

In the last few years, Canada has got every major decision right. Look at the facts. Not a single Canadian bank fell or faltered during the global economic crisis....Your economic leadership has helped the Canadian economy to weather the global storms far better than many of your international competitors.

Indeed, the financial system review act would build on and further reinforce Canada's sound and safe financial system with a range of important modifications. Specifically, the legislation would: modernize financial institution legislation to further assure financial stability and ensure that Canada's institutions continue to operate in a competitive, efficient and stable environment; provide important protection to consumers by boosting the powers of the Financial Consumer Agency of Canada; improve effectiveness both by cutting down on duplicative administrative red tape burdens on financial institutions and adding much needed regulatory flexibility.

The financial system review act contains numerous important measures that would make our financial system stronger which I would like to briefly highlight. They include: improving the ability of regulators to share information efficiently with international counterparts while respecting the privacy of Canadians; ensuring that Canadians, especially those who may be disadvantaged, are able to cash government cheques under $1,500 free of charge at any bank in Canada; promoting competition and innovation by enabling co-operative credit associations to provide technology services to a broader market; reducing the administrative burden for federally regulated insurance companies; and, offering adjustable policies in foreign jurisdictions by removing duplicative disclosure requirements.

In summary, the financial system review act would further strengthen our already world-leading financial system by reinforcing stability in the financial sector, fine-tuning the consumer protection framework and modernizing the regulatory framework to adapt to new developments.

As I mentioned earlier, the financial services sector is of critical importance to the economic health and jobs in the greater Toronto area and indeed for all of Canada. That is why I strongly urge all members of the House from all parties to vote in favour of this bill, in favour of a strong financial sector, and in favour of the jobs it supports for Canadians.

I have appreciated the opportunity to speak to an issue important to my riding and to the economic well-being of all Canadians.

Financial System Review Act
Government Orders

1:45 p.m.

NDP

Carol Hughes Algoma—Manitoulin—Kapuskasing, ON

Mr. Speaker, I listened intently to my colleague who spoke about the importance this will have for jobs, but the government is actually reducing jobs at Service Canada, the department that helps Canadians who find themselves unemployed at this time.

We have known for quite some time about the sunset clause, so why is it that the government took so long to send this bill to committee? Why did the government send it to the Senate as opposed to the House of Commons committee, where it should have been? There was only a three-week window of opportunity for the Senate to study this, and the Senate also said it was not enough time.

Why is the government in such a rush to pass a piece of legislation without really taking into consideration the impact it will have and without further debate on the issue?

Financial System Review Act
Government Orders

1:45 p.m.

Conservative

Costas Menegakis Richmond Hill, ON

Mr. Speaker, I would like to remind the hon. member that this review is mandated by law. It is legislation that we need to do. It must be renewed by April 20, 2012 to allow the financial institutions to carry on business.

Indeed, the consultation process began in 2010. The government invited the views of all Canadians on to how to improve our financial system. Approximately 30 submissions were received from a wide range of stakeholders. The proposed bill takes into account the concerns of major interest groups, including consumer groups, stakeholders, policyholder groups and financial industry associations.

I would urge the hon. member to consider how important it is to have a strong financial system in our country. By supporting this bill—

Financial System Review Act
Government Orders

1:45 p.m.

Conservative

The Acting Speaker Bruce Stanton

Order. There may be other hon. members who wish to put a question. The hon. member for Winnipeg North.

Financial System Review Act
Government Orders

1:45 p.m.

Liberal

Kevin Lamoureux Winnipeg North, MB

Mr. Speaker, there has been a great deal of concern in terms of the government's management of this particular file and why it has chosen to bring in time allocation. I understand that the deadline is April 20 of this year. That is when the legislation has to have passed.

Given the member's background and what he has commented on, why is it that the government waited so long before bringing forward this legislation? In fact, with respect to many of the points the member referred to, we probably could have better legislation had the government been more co-operative in bringing forward the legislation, thereby allowing for more input and debate inside the House, as opposed to it being brought forward at the last minute.

Why did the government wait so long before it brought the legislation to the House?

Financial System Review Act
Government Orders

1:45 p.m.

Conservative

Costas Menegakis Richmond Hill, ON

Mr. Speaker, I would like to thank the hon. member for the good work he does on the committee. I certainly appreciate his input.

The government wanted to allow enough time for the consultation process to take place. In fact, today we are debating the bill at second reading. Once this bill is passed, and I hope it will be passed unanimously by this House later today, it will go to committee for further study. There will be plenty of opportunity for the bill to be studied further in committee.

It is very important that we understand our role as parliamentarians. We must put partisan politics aside and support important legislation like this that keeps our financial system and our financial sector strong and stable for Canadians.

Financial System Review Act
Government Orders

1:45 p.m.

Blackstrap
Saskatchewan

Conservative

Lynne Yelich Minister of State (Western Economic Diversification)

Mr. Speaker, I would just like clarification. Some of the questions the opposition is asking I believe are outside the scope of the bill. I understand that the statutes that govern the financial sector are reviewed every five years. It appears that some of the opposition to this bill is outside the scope of the bill.

I wonder if the member would clarify that for the benefit of those listening.

Financial System Review Act
Government Orders

1:50 p.m.

Conservative

Costas Menegakis Richmond Hill, ON

Mr. Speaker, the only response I can offer is that the opposition has voted down every significant piece of legislation the government has brought forward in this Parliament. This is the first time I have been elected. I am sure that is their goal and their objective. That is the only answer I can offer as to why the questions are outside the scope of what it is we are actually discussing today.

Financial System Review Act
Government Orders

1:50 p.m.

Conservative

Rob Merrifield Yellowhead, AB

Mr. Speaker, it is a privilege to speak to Bill S-5, the financial system review act.

The bill has cleared the Senate and is now in the House. Some of my colleagues on the other side are asking why now and why so fast. It is not really fast. The consultation process started in September. We had to use that process to be able to get it to this place. Then we need to get it to committee and move it through so that it can actually be implemented by April of this year. That is very simple to understand.

We have a very strong and stable financial system in Canada. In fact, we came through the financial crisis with flying colours as a country, as did our financial institutions. Why? It is because we do these regular reviews. We ensured we made changes as we moved along and that nothing would be left on the back burner. We are actually moving forward and doing something with it to accommodate Canadians and their interests in the changing world in which we live.

Bill S-5 would make a number of improvements to key areas in the Canadian economy. The financial sector is very stable, and there are reasons for that. It is stable because of these mandatory reviews we are doing. It is also very big. We must realize that 750,000 people work in the system, all in well-paying jobs. It makes up about 7% of the GDP of this country. A lot is made up of the oil sands in my province, being 6% of the GDP in this country, and yet the financial institutions are larger than that and is doing very well.

The bill is not only big but also good. Why would it not be good when we have the number one Minister of Finance in all of the world? That is something that has never happened before to Canada. In fact, we are rated number one in the world in many different areas, especially in the field of financial management. In fact, the World Economic Forum has ranked Canada as having the soundest banking system in the world. Forbes magazine has ranked Canada number one in its annual review as the best country to do business with as we move forward. Bloomberg has recently listed our five big banking institutions in Canada as the world's strongest banks, more so than in any other country in the world.

There is a competitive environment in this place and opposition members do what opposition members do, they oppose.

I have a quote here from a past Liberal finance minister, the now president of the Canadian Council of Chief Executives, John Manley, who said:

Our financial system and institutions were tested during the financial crisis and have proved sound. Canada’s banking system is now widely viewed as the most stable and efficient in the world.

That is high praise from a former opposition individual who knows the financial system very well.

Last month, an independent financial stability board appeal review praised the government's swift and effective response to the global financial crisis. We did come through it quite well. In its review, it highlighted the resilience of the financial system that we have as a model for other countries to follow. As Canadians, we should be proud of that.

We must realize that as we went through the financial crisis in Europe there were many problems with a lot of the banks there, as well as south of the border in the United States. If we compare ourselves to our number one trading partner, there was a meltdown of the financial systems. Not one of the financial institutions in Canada failed. Not one failed or required direct government support in the form of cash injections or debt guarantees during the global financial crisis. That is something that did not and does not happen by accident. It happened because there was good management of the Canadian financial systems and it is directly related to what we are doing here today with this legislation.

In fact, the report stated:

This resilience, which was achieved in spite of Canada’s relatively complex regulatory structure, highlights a number of key lessons for other jurisdictions.

What are those lessons that Canada can teach other jurisdictions? The first is to be proactive with targeted macroeconomic policies supported by adequate fiscal space and flexible exchange rates that will help absorb the external shocks.

The second is a prudent banking system management so that we do not become over-leveraged, as has happened in Europe, the United States and other banking systems and sectors. This is particularly important if we are to go through a crisis, such as what is happening around the world. We hope that we are through it now and that we will not revisit it, although what is happening around the world should make us a bit cautious, particularly the debt crisis in Europe and perhaps some overspending in the United States that could impact us in years to come.

The third thing is the comprehensive regulatory supervisory framework that effectively addresses the domestic prudent concerns including, when necessary, adopting regulatory policies that go beyond the international minimum standards.

Those are three lessons that other jurisdictions can learn from.

As the board noted, since 2008, the Conservative government has taken significant steps to make our financial system more stable and to reduce systematic risk to Canadians and to the system. In fact, the first thing we did in the 2008 budget was to modernize the authorities of the Bank of Canada to support the stability of the financial system.

We came through it in glowing fashion, as far as our financial institutions, but in budget 2009 we suggested other changes. Just in case we were to run into problems with our banking system, we wanted to ensure we were able to capitalize our banks so that they would not go into receivership. This is very important. What it really allowed for was, if there was an injection needed into our banking system to sustain it, the Canadian Deposit Insurance Corporation would have the flexibility to do that. That is actually a very wise thing. We did not need it, thankfully, and, hopefully, we never will. A bridging institution was what we needed. In banking terms it is called a bridged bank. Bill S-5 includes a number of technical refinements to ensure that the efficient implementation of those bridged bank tools are there.

Budget 2011 also announced our government's intention to establish a legislative framework for covered bonds, which are debt instruments secured by high quality assets, such as residential mortgages. This bill would make it easier for Canadian financial institutions to assess the low cost sources of funding and help to create a robust market for covered bonds in Canada.

Let us look ahead. We have this five year review. It is very important that we do this review, mainly adding to some of the changes that we have made over the last number of years, chiefly technical. One of the changes that would actually make it a little stronger goes back to one of the changes that was made by Liberals in 2001. It would back that off so that any bank that invests in more than 10%--

Financial System Review Act
Government Orders

1:55 p.m.

Conservative

The Speaker Andrew Scheer

Order please. I will stop the member there. He still has two minutes left to conclude his speech.

Black Communities in Quebec
Statements By Members

1:55 p.m.

Bloc

Maria Mourani Ahuntsic, QC

Mr. Speaker, for more than 300 years, Quebeckers from the black communities have been sharing their know-how and talents with Quebec. As a child of Africa, I am proud to honour the memory of those who have distinguished themselves.

In 2011, two remarkable persons passed away. There was Ousseynou Diop, a pioneer of African and Senegalese Montreal, and a host for 25 years at Radio-Canada International. He played an active role in creating the Vues d'Afrique festival in the early 1980s. And there was Papi Djo, a cultural revolutionary who left Haiti for Montreal in the 1960s. He was involved in creating a new Haitian folklore group, Mapou Ginen. In 1979 he returned to Haiti and became a host at Radio-Soleil, a station whose broadcasts helped bring about the fall of the Duvalier regime.

Long live the black communities of Quebec and Happy Valentine's Day to all Quebeckers.

Valentine's Day
Statements By Members

February 14th, 2012 / 2 p.m.

Conservative

Bruce Stanton Simcoe North, ON

Mr. Speaker, today we should take the time to give extra attention to our loved ones, wanting them to be our valentine and hoping, with every measure of our being, that they will want us to be theirs.

Today I would like to express my love and gratitude to my incredible family: our eldest daughter, Stephanie, whose determination is there at every turn, and her wonderful children, Sienna and Carter; our only son, Jason, whose kindness and laughter are contagious to everyone he meets, along with his devoted wife, Amanda, and their bright young daughter, Lyla; our daughters, Lauren and Valerie, who grace each and every day for both of us; and finally, Heather, a wife who is without equal, who is an incredible strength for our family and who holds us together.

I am so proud of each and every one of them. I humbly ask on this special day that they be my valentine.

Public Transit
Statements By Members

2 p.m.

NDP

Mike Sullivan York South—Weston, ON

Mr. Speaker, on this Valentine's Day I just want to tell the House that I love public transit. Too bad about Toronto.

Three years of construction has started on the air rail link between Union Station and Pearson Airport. It was a Liberal scheme for a private train that would not cost taxpayers one nickel. It will now cost federal and Ontario taxpayers well over $1 billion and the private operator is long gone.

Is public transit not good for the environment and good for the poor and the middle class to get home quicker from work? Not this one. It is designed to be a premium service for business-class passengers to the airport. Those people do not want to rub shoulders with ordinary Torontonians going to work, so the fares will be high enough to discourage ordinary folk from using it. It will have only two stops, so it will whiz by transit-starved neighbourhoods in Toronto.

We will be the only country in the world running diesel trains to an airport. They will actually pollute more than the cars they replace.

The federal government needs to step in, demand that it be electric and that it serve the taxpayers who are paying for it.

It is a great opportunity for the government to help Mayor Ford put in rapid transit that does not take up roadways.

Agriculture
Statements By Members

2 p.m.

Conservative

Dan Albas Okanagan—Coquihalla, BC

Mr. Speaker, this past summer I was excited to represent the hon. Minister of Agriculture in presenting a $261,000 grant for a new innovative program occurring in my riding of Okanagan--Coquihalla.

The funding helped support a new food packaging technology developed in partnership with the Pacific Agri-Food Research Centre. This technology can greatly extend the shelf life of fresh fruit and produce. A longer shelf life also means more economical shipping options will soon be available to fruit growers throughout the Okanagan Valley.

Why is that exciting? On February 9, our Prime Minister was in China and I was pleased to learn that a new trade agreement was signed that will open up the Chinese market to many Canadian foods, including cherries. In my riding, we not only make some of the greatest wines but we also grow some of the world's best cherries.

This is great news for my riding and a great example of how our government supports innovation and technology in the agricultural sector. This leadership creates jobs and helps grow our local economies.