House of Commons Hansard #87 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was agreements.

Topics

Financial Literacy Leader Act
Government Orders

4:20 p.m.

NDP

Ève Péclet La Pointe-de-l'Île, QC

Mr. Speaker, what the hon. member is saying is very interesting. But public funds were spent to create this task force, whose membership was widely criticized by Canadians. With this government, that does not surprise me at all. But, most of all, after spending taxpayers' money and taking time, the government is accepting only one of the task force's recommendations. Is that really going to help people who need to learn about this, people likely with low incomes, who pay no taxes and so will not be able to take advantage of the tax credits? They say that the NDP spends taxpayers' money for nothing, but here we have taxpayers' money being spent on a job that has not been done.

Financial Literacy Leader Act
Government Orders

4:25 p.m.

Conservative

Brian Jean Fort McMurray—Athabasca, AB

Mr. Speaker, I hope we never get to see what an NDP government could do with public funds. It would be pretty embarrassing indeed.

The proposed amendments to the Financial Consumer Agency of Canada Act aim to establish the financial literacy leader within the agency. There is already an agency involved. It is a key step in addressing the task force's recommendations.

However, the difference between our government and a potential NDP government is not just that our government would not waste taxpayers' money on wishes and wants, but also that the NDP or the Liberals would impose what they wanted, what its leadership wanted, on Canadians instead of listening to Canadians as we are doing with this legislation. We are going to appoint a coach, someone who can listen to Canadians, someone who can understand and work with stakeholders and other agencies across Canada, including financial experts.

We are going to listen to them and then bring forward legislation based on stakeholders' best wants and desires in the best interests of Canadians.

Financial Literacy Leader Act
Government Orders

4:25 p.m.

Conservative

The Acting Speaker Bruce Stanton

It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Winnipeg North, aboriginal affairs; the hon. member for Montcalm, persons with disabilities; and the hon. member for Brome—Missisquoi, the firearms registry.

Financial Literacy Leader Act
Government Orders

4:25 p.m.

NDP

Tarik Brahmi Saint-Jean, QC

Mr. Speaker, I would like to start off by responding to the hon. member for Fort McMurray—Athabasca. In light of the events we are currently seeing, he should not be so confident because he might be disappointed in the next election if he ends up in the opposition.

I would like to speak to Bill C-28 as the deputy critic for consumer protection. I would first like to criticize the parliamentary manoeuvre that we have just witnessed, which sought, once again, to reduce the time allotted to the opposition members so that they do not have an opportunity to point out the shortcomings and flaws in the bill. The Conservatives use this method constantly, and it is our duty to denounce it.

This bill has a number of obvious flaws. The first one that jumps out is that the financial literacy leader will not be required to be bilingual. Being bilingual does not just mean knowing a few words in French or being able to read a few documents in French. Being bilingual also means being able to explain provisions, to present choices, to listen and to meet with people across Canada, especially in provinces with francophones, not just Quebeckers.

Hon. members from Quebec and from other francophone regions in Canada and I myself, as the member for Saint-Jean, want first to know where in the bill is the provision that ensures that the financial literacy leader is capable of communicating in both languages correctly, using decent French, and is capable of putting himself at the level of the people he intends to serve.

Above all, I do not want to hear the government say that we should not worry because, once he is appointed, the leader will take French courses, which is what we have been hearing over the past few months in the House. The government claims that it is possible to learn French and that there is no need to worry. No. That is not true. It takes years, it takes skills and a will to learn a foreign language. So that is an obvious flaw in the bill. That goes against the bilingualism requirements of this country and against Canada's will to stay bilingual and able to serve all its people in both official languages.

Now, let us talk a bit about financial literacy programs. Their goals are often criticized. We know that, more often than not, these programs are not intended to give consumers the tools that will enable them to pay fewer fees and have more control over their expenses. Instead, they are used by large financial institutions—banks and insurance companies—to gain more clients who will spend more money.

One of the things that should grab our attention about the famous task force on financial literacy is who is on it. It has 13 members. Don Stewart, the CEO of Sun Life Financial, is the chair of the group, and his vice-chair is Jacques Ménard, the chairman of BMO Nesbitt Burns and the president of BMO Financial Group Quebec. The very make-up of this task force should give us an indication of its objectives. The recommendations clearly show that they are basically designed to help financial institutions boost their clientele, obtain more clients. They do not aim to give consumers the ability to manage their money better and save by using what banks or financial organizations have to offer.

This is an important element. This is the make-up of the famous task force. Beyond that are the recommendations. This task force issued 30 recommendations, from which the government has plucked only one. The only one it took was the first, which involves appointing a financial literacy leader. It is too bad, because the second recommendation was much more worthwhile. It focused on creating a task force, an advisory board, that would give the leader direction and would have control over the actions of this financial literacy leader. So the task force would lend the financial literacy leader greater legitimacy because he would be accountable. This is an important part that this government ignored, intentionally in my opinion, because it is the second recommendation. It is not some subsidiary recommendation tucked away at the end of the document; it is truly the second recommendation.

Another aspect of this legislation is that it attempts to lay a guilt trip on consumers by claiming that they are not competent enough to properly manage their money. But it is absurd to try and educate consumers about how to save money when they do not have any. That is the main problem: consumers, currently, do not have money and, therefore, do not have the ability to save. They can be taught as many strategies as possible, but when the average family is indebted to the tune of over 150% of their income, in other words, the equivalent of half of their income in debt, how can this family of average consumers save money when they do not even have the means to pay off their debts? What is most striking about this legislation is that it does not deal with the problem, but with the consequence, the consequence being that now that consumers are in debt, we are going to explain to them how to avoid going further into debt.

A French comedian once said: “Write to us and tell us what you need, and we will explain to you how to make do without it.” That is this government's logic: do not create ways to help consumers; instead, explain to them, after the fact, how to get out of their predicament.

Another very interesting aspect of this report is that it confuses a complement and a substitute. Indeed, what we call financial literacy, which is also known as “financial education” or “financial knowledge”, must complement any government measures to assist consumers. It must not be a substitute.

A very interesting report was published in 2009 by the OECD and is entitled “Financial Literacy and Consumer Protection: Overlooked Aspects of the Crisis”. This report was prepared by the OECD following the financial crisis in order to demonstrate that the fact that consumers had started to use increasingly complex financial mechanisms that they did not understand jeopardized not only consumers' financial security, but the financial security of the whole system. Moreover, this very interesting report states that some recent financial innovations are incomprehensible not only to consumers, but also to bankers themselves.

One of the things mentioned was floating interest rate loans. When the time comes to choose between a floating rate and a fixed rate loan, most consumers are unable to understand the difference between them and how their choice will affect their future indebtedness. And yet, they are the ones who make the choice.

Subprime mortgage loans were what caused a crisis that had never been seen before, mainly in the United States. Why? Because consumers were given the opportunity to get involved in innovative mechanisms that were different from traditional financing mechanisms. The end result was that their own financial health as consumers was endangered, as well as the financial health of the whole system. As it happens, the whole system collapsed because some little financial geniuses devised instruments that are very difficult to understand.

If most people who work in the field of finance cannot understand them, how can the average consumer avoid being confused? The very interesting OECD report stated that most consumers greatly overestimate their financial skills. Here is a personal example. In a previous life, I was in charge of a team that conducted social population surveys for Statistics Canada. One of the projects was to evaluate the literacy and numeracy of the people being surveyed.

The results of these surveys were disastrous. Not only that, but what does not show clearly in these studies is that most people who are unable to respond will not respond, because they are ashamed. Quite simply, people who are unable to add or subtract will not participate in these studies. This means that the pool of respondents is biased from the very outset. When the sample is biased at the outset because those who are not capable of responding are ashamed of taking part in the study, then the results clearly do not reflect just how disastrously uninformed most consumers are.

This proposal is meaningless not because it would be impossible to do something worthwhile with it, but because the government has decided to blame indebtedness on consumers, households and families who find themselves unable to control their spending because they do not have enough money, rather than take action that would truly enable consumers to first get themselves out of debt and perhaps then set money aside for the future.

Unlike the Conservatives, who think that education and financial literacy are substitutes for programs, the NDP proposed concrete measures in our election platform in May 2011. For instance, we proposed—and it was our leader, the late Jack Layton, who drew attention to this—capping interest rates at 5% above prime, which is based on the Bank of Canada's key interest rate. The NDP proposed this concrete measure, which would give all Canadian families who are struggling with record debt levels—that is what Statistics Canada is reporting—a little breathing room and hope that they will one day get out of debt.

One interesting thing that came out of the 30 recommendations in the task force's report was this: “the Government of Canada...integrate a financial literacy component into the Canada student loans program for students receiving funding.” Helping students, most of whom have a lot of debt, would be very beneficial. This report recommends that the Government of Canada integrate programs, concrete measures to help students manage and deal with their level of debt, which can be huge. That is recommendation number 10 in the report. But where is that recommendation in the bill before us today? It is missing. Why is the government ignoring things that could help change the lives of consumers?

Instead, the Conservatives prefer to create a very well-paid executive position, but they will not even give that individual an advisory board to make recommendations and give the position some legitimacy. Of the 30 recommendations, the Conservatives took only one, and they drafted a bill that is nothing but a smokescreen. That is how I would describe it.

In closing, the NDP will not be supporting this bill, because we believe we can do better. The resources that resulted from the deliberations of the task force—even though it seems to favour the financial institutions—could be put to better use. We cannot support this bill today.

Financial Literacy Leader Act
Government Orders

4:40 p.m.

NDP

Christine Moore Abitibi—Témiscamingue, QC

Mr. Speaker, as many of us know, there is a major movement against tuition hikes in Quebec. Student debt is also a hot topic of debate. Could my colleague tell us what would be more effective than this bill when it comes to helping students improve their financial literacy and reaching them for that purpose?

Financial Literacy Leader Act
Government Orders

4:40 p.m.

NDP

Tarik Brahmi Saint-Jean, QC

Mr. Speaker, I thank my colleague from Abitibi—Témiscamingue for her question. There is a problem in Quebec. The younger generation does not understand that previous generations had certain privileges, such as no tuition hikes. The younger generation is also asking for help to get out of this situation.

The NDP suggested increasing federal transfers to the provinces to help the provincial governments increase loans and bursaries. That was the principal measure in our platform, because the federal government cannot meddle in the provincial management of loans and bursaries.

Financial Literacy Leader Act
Government Orders

4:45 p.m.

NDP

Ève Péclet La Pointe-de-l'Île, QC

Mr. Speaker, I would like my colleague to comment on two things. First, most government tax credits will not benefit those most in need. There is a disconnect. We are going to help people better understand the system and make good decisions. And yet, those most in need, those targeted by these measures, will not even be able to take advantage of tax credits. Their income is so low that they do not pay tax.

Would it not be smarter for the government to start by helping people find a job and pay taxes instead of spending public money to put together a group that is totally useless and whose recommendations will not even be put into action?

Financial Literacy Leader Act
Government Orders

4:45 p.m.

NDP

Tarik Brahmi Saint-Jean, QC

Mr. Speaker, I want to thank the hon. member for La Pointe-de-l'Île. That is a very good question.

The non-refundable tax credits are just more smokescreens. Most of the time, non-refundable tax credits are used for making announcements so that the government can say it provides tax credits. That being said, as the hon. member pointed out so well, these tax credits do not benefit the people who need them the most.

For example, in the NDP platform, financial institutions would be required to lower their transaction fees, since we know that the cost of transactions is practically nil. The infrastructure carries a certain cost, but every individual or additional financial operation costs nothing. Those are indeed the measures that the NDP has proposed. They are concrete measures and not smokescreens, as my colleague was saying when she was talking about non-refundable tax credits.

Financial Literacy Leader Act
Government Orders

4:45 p.m.

NDP

Mike Sullivan York South—Weston, ON

Mr. Speaker, I appreciate my colleague's comments on this apparent attempt at a bill. When I read it, I could not find anything captivating in it. However, having read the recommendations from the task force, I realized that the bill was smoke and mirrors to try to keep what we really need out of the legislative agenda of the government. What we really need are these recommendations.

A number of individuals in my riding could really use some financial literacy when it comes to their daily banking and their ability to exchange their cheques for money. We have payday loan companies that operate with a 1,000% interest but there is nothing in the bill that talks about how we would put those payday loan companies out of business, which is what we should be aiming at. We should be aiming at financial literacy in a way that helps the poorest of the poor in this country but the bill does none of that.

Would my colleague like to comment further on that?

Financial Literacy Leader Act
Government Orders

4:45 p.m.

NDP

Tarik Brahmi Saint-Jean, QC

Mr. Speaker, it is absolutely absurd to try to teach consumers how to save money that they do not have in the first place. That is the problem with the bill. It contains no measures to help consumers save money and to get more money in their pockets. Teaching people to save money that they do not have is useless.

Financial Literacy Leader Act
Government Orders

4:50 p.m.

NDP

Christine Moore Abitibi—Témiscamingue, QC

Mr. Speaker, another point in my colleague's speech that raises questions is that bilingualism is not a requirement for this new position. Since my colleague is bilingual, I would like to ask him his opinion on this. When a text is translated, a simple change in a modifier can completely change the meaning of the sentence. Financial documents are rather complex to understand.

If a person who does not speak French is analyzing a translated text or is trying to analyze a French text with only limited knowledge of the language, does this not pose the risk that the person will miss certain traps or aspects that are misleading to the consumer and that are found in the details?

Financial Literacy Leader Act
Government Orders

4:50 p.m.

NDP

Tarik Brahmi Saint-Jean, QC

Mr. Speaker, my colleague is absolutely right. She identified one of the bill's major shortcomings: not only does it not require the financial literacy leader to be able to interpret very complex texts, it does not even require this person to have the vaguest idea of what the texts are about.

My colleague was absolutely right when she said that there can be subtleties in either language or in translation that might be missed by someone who understands just one of the two official languages.

Financial Literacy Leader Act
Government Orders

4:50 p.m.

NDP

Jean Rousseau Compton—Stanstead, QC

Mr. Speaker, I would like to thank my colleague for his excellent speech.

In his opinion, how can a segment of the population be educated about a very complex subject when their main concerns are the business of day-to-day living, providing enough food for their families, and solving truly essential survival problems? The gap between rich and poor is getting bigger, and as we all know, the poor are always less well educated than those who are better off. So there is also a problem with access to education. There are some things that the government always forgets, and now it wants to educate a segment of the population with extremely complex legislation.

Someone in my riding told me that if he called the government, the person answering the phone would not even be able to explain the legislation and what he should do about it.

Can my colleague explain why the government is determined to introduce hastily conceived bills without even considering the people these bills are for?

Financial Literacy Leader Act
Government Orders

4:50 p.m.

NDP

Tarik Brahmi Saint-Jean, QC

Mr. Speaker, my colleague from Compton—Stanstead hit the nail right on the head. It is right there in black and white in the OECD report entitled “Financial Literacy and Consumer Protection: Overlooked Aspects of the Crisis”: “...consumers have low levels of financial literacy and often overestimate their skills, knowledge and awareness when it comes to credit products.” That sums up the situation nicely.

Consumers are being asked to be their own doctor and their own neurosurgeon. Average consumers cannot be expected to make informed decisions about such complex subjects. It is up to the government to implement measures that restrain financial institutions and prevent them from developing products that, though innovative, are impossible to understand and can trap people, such as subprime mortgages.

Financial Literacy Leader Act
Government Orders

4:50 p.m.

NDP

Raymond Côté Beauport—Limoilou, QC

Mr. Speaker, I am going to share my precious time with the hon. member for Vaudreuil-Soulanges. This is another one of the government's tactics. It wastes the precious time of the servants of the people of Canada by limiting debate. It is very important to fully debate the meaning and consequences of Bill C-28.

I would like to start with what I could call my conclusion. It is extraordinary and unbelievable to see this government's stubbornness and its unwavering willingness to completely abandon the people of Canada to the forces of the market or what we might call the market to use classic economics terms. The word “abandon” is not too strong.

Some government members—self-professed libertarians—convey what seems to be a respectful message by saying that they are going to lower taxes and give people back their money because they know how to spend it. However, in reality, they are abandoning and letting people down. People have to deal with their own problems and, if they are not able to watch their own backs, then too bad for them. They will freeze to death. The government will be subject to more and more attacks in this regard. If it refuses to pay attention to this type of message and warning, the anger will continue to grow. This government should beware because it is facing hard times ahead, and I will be there to remind it of its turpitude. The word “abandon” could just be an empty word that I am throwing around, but it is not. It is supported by facts.

I am not going to repeat the eloquent speeches that my colleagues made about Bill C-28's shortcomings and problems. Instead, I would like to illustrate my point in a different way.

It is absolutely unbelievable that this government, which created total chaos by handing over the reins to the large financial institutions—banks, insurance companies and all sorts of investment companies—has the audacity to tell people that it is going to appoint an official who will give them all the documentation available, whether or not they are literate and whether or not they have the ability to understand the complex financial products that exist today. It is absolutely unbelievable. I can say this because my statements are based on real and substantiated facts.

The government is talking out of both sides of its mouth. On one hand, it is running a marketing ploy—yet another one—and, on the other, the budget is coming. The government will likely continue to announce useless little tax measures that are unnecessarily complex and that most taxpayers are unable to understand let alone use.

A number of months ago, a poll showed that half of all Canadians do not prepare their tax return themselves because it is too complicated. Preparing one's tax return is a duty that is as essential and as basic as voting. This government has no qualms about treating that with contempt, but it throws up its hands in horror and gets indignant about the revelations, each one based in fact, about problems during the recent election. We could probably go back to the beginning of the 2000s and find all kinds of completely dirty electoral tricks.

One out of every two Canadians is not even able to fulfill a basic requirement, preparing his income tax return, by himself. He has to rely on a family member or friend or pay a professional to do it. There is something really scandalous in that. I know, because one of the greatest gifts my father gave me when I was growing up was to make me prepare my tax return myself, to make an effort as a Canadian to do it myself and to understand what it represented. Now that I have a reasonable idea of what to do—and I will not hide the fact that it is still a decent challenge—I still do them for people close to me.

If I did not fill out their tax returns for them for free—we are talking about people who really do not have a lot of money, who earn less than $20,000 a year—they would be paying a professional accountant $25 or $30 an hour to do it. They do not even have a high enough income to claim tax credits, like that darned public transit credit, for example. I know, I see it, I fill out their tax returns. It is a sham of a tax credit, it is totally useless, and it does absolutely nothing to help our cities develop their public transit systems. The people whose tax returns I fill out have nowhere near the resources to qualify for it.

This government is just laughing in the face of most Canadians. That is the reality. Bill C-28 is another insult to Canadians everywhere. I am as comfortable with it as I am watching hon. members with their noses stuck in their papers or their computers and pretending not to listen to me. It is really extraordinary. We are here debating the future of our fellow Canadians, debating the fact that they are going to be buried in documents, which they will only half understand. They will be the victims of all kinds of tricks. There is no need to go looking for very complex financial products.

I recently had to shop for a credit card that would give me additional benefits. In connection with that, an expert showed me that credit cards with points and bonus systems are an excellent trick to attract a clientele that will be eager to use the cards again and again, which then increases their level of spending. One explanation for the famous household debt in Canada is this type of credit card, and that is just one example. When we visit the website of any Canadian bank, not to mention the astronomical number of offers we get in our mailboxes for new and supposedly exceptional cards, we cannot help but notice the extraordinary number of cards offering all kinds of incredible advantages, with all kinds of different fees and totally different interest rates.

Even the experts can get confused. One of my colleagues talked about this and he is absolutely right. It is complicated. Given that the government does not put a cap on this type of bloat, which is completely useless and counterproductive, except for the institutions that benefit greatly from it, to the detriment of the most vulnerable, it is basically using Bill C-28 to tell the Canadian population to take a hike. It is truly outrageous.

I can no longer stand watching this government pose as the poor victim when it has a majority and, in addition, use every possible means to shut us up, when we are defending true Canadian values and all of our fellow citizens. The government should not be surprised if we systematically refuse, for all its bills, to be truly complicit in immoral and, ultimately, almost criminal actions.

Before I get carried away, I will leave it at that. I think I have made my point.