Massimo Pacetti

[Income Tax Amendments Act, 2006, March 29th, 2007]

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

We believe that we have to use every tool at our disposal to combat tax evasion. However, the problem with this bill is that it has a lot of details that are difficult to understand. I do not think that this 500-page document will help us prevent all tax evasion. That is the problem.

The government has several tools at its disposal. Sometimes it seems as though the government is not prepared to react because we can be quite certain that some Canadians have money in other countries that they do not declare. Revenue earned with that money is not declared. There is a way to recover that money.

At the end of my speech, I was not talking about that bill in particular, because it is just one part of a long process that will bring additional revenues into government coffers so that it can provide services.

When I say the government, I do not mean just the federal government. I also mean provincial governments. If we can recover money that is not declared in this country—which is tax evasion—and if we bring that money back here, the provinces will also benefit. Every provincial finance department will be able to tax that revenue.

[Income Tax Amendments Act, 2006, March 29th, 2007]

Mr. Speaker, I am pleased to rise today to speak to this fascinating bill, Bill C-33, An Act to amend the Income Tax Act, including amendments in relation to foreign investment entities and non-resident trusts, and to provide for the bijural expression of the provisions of that Act.

The bill represents a necessary update to the Income Tax Act, particularly as it relates to foreign amendments and other domestic measures. The majority of the bill's provisions are taken from the Liberal government's budget of 1999. The government put the proposed changes up for public comment in July 2005. The changes we are debating today also contain revisions made to that July 2005 release.

Although the amendments to the income tax will be mainly administrative, it is important to highlight them to have a better understanding ahead of an eventual vote.

The bill can be broken down into three parts.

Part one deals with amendments to provisions of the Income Tax Act governing the taxation of non-resident trusts and their beneficiaries and of Canadian taxpayers who have interests in foreign investment entities.

Part two deals with technical amendments that were included in part one of a discussion draft entitled “Legislative Draft Proposals and Draft Regulations Relating to Income Tax”, released by the minister of finance in February 2004.

Part three deals with provisions of the act not opened up in parts one and two.

The proposed measures in part one deal with non-resident trusts and foreign investment entities designed to ensure Canada is properly taxing those Canadians who are earning income through foreign intermediaries in the same manner that income would have been taxed had it been earned directly.

It is essential that Canada close tax avoiding loopholes, not only to protect our own tax base but also to demonstrate our commitment to the international community. We must show our international partners that Canada takes its international responsibilities seriously and that Canada is not a destination for taxation loopholes.

If I look at the bill, it is over 500 pages long. It is not likely that anybody in the chamber has read it. Even if people have, I am not too convinced they can understand this type of bill. However, as vice-chairman of the finance committee, I look forward to sending the bill to the finance committee after second reading so we can further study to determine if any amendments will be needed to make it an even better bill than what it is today.

We need bills like this. They may be complex, but in debating the bill in the past, members have decided to concentrate their points on other areas. As an accountant, I know the foundation of these bills are important. They are just as important as any other bill we debate in the House. That is why, if read some of the debate that went on in previous sessions by members of the opposition, especially government members, they had trouble determining what was a tax haven, what was a tax treaty and what were international tax agreements.

Tax havens are jurisdictions where people park their money, or investments, and they pay no income tax on the income generated on these moneys. Tax havens are countries like Bermuda, Cayman Islands, Turks and Caicos, Gibralter, just to name a few, where people or companies put their money, leave it there and it accumulates tax free. The purpose of the bill is not to address tax havens.

The second point is government members feel these are tax treaties. This is not a tax treaty. A tax treaty is like one of the bills we discussed a few months ago, Bill S-5. Tax treaties are conventions between two countries. Normally the purpose of the tax treaty is to avoid double taxation so Canadians or residents of the other countries do not have to pay double tax. Bill S-5 was our agreement with countries like Mexico, South Korea and Finland.

Some of the other problems we get into when we speak about tax treaties, tax havens and international conventions is our tax base does not get protected. Canada's tax base needs to be protected. If people start taking their hard-earned money and parking it elsewhere, Canada will be unable to maintain the revenue stream that we need so we can rely on the social programs.

The other item that makes Bill C-33 important is there are advantages to using a non-resident trust. If we do not put limits on it, the foreign investment entities will be eliminated.

There are a lot of points on which I would like to speak, but one of the items is the international tax agreements. We can sign these international tax agreements because this affects foreign entities. From what I understand, in the 1990s, although I was not in the House then but perhaps the Speaker was, a tax treaty with Italy was passed by the House. Italy has yet to ratify that treaty.

Italy now has two members of Parliament from other countries who sit in the House of Commons. It has an elected member of Parliament representing the riding of North America. One member of Parliament was born in the United States. The other one was born in Canada. It even has a senator. These elected members of Parliament and senator live outside of Italy but they have full right of vote. One MP seems to be lobbying. He has asked what has happened with the treaty. It was signed with Canada but it has not been ratified.

This is a typical example of a treaty we signed with a developed country and there has been no advancement. Some residents of both countries have had to pay double tax. Then they have to file their tax returns to get some of the money back, all because one country has ratified the treaty and the other country has not.

We can talk about the tax treaties and what these types of bills do on the international scene. When we look at what the government has done in the last little while on its international tax position, we think about regulation. I read in the today's paper that we have a regulation as to foreign ownership in the telecom sector, but we still see foreign entities trying to take over one of our biggest corporations in Canada, BCE, formerly Bell Canada.

Some of the articles say that they are looking for Canadian partners. If we do not protect ourselves with agreements like this, foreign corporations can come here, set up non-resident trusts, with Canadian owners but not really beneficial owners, and take over our corporations. We have seen that in the last few years. We just saw it last year when Inco was taken over by another foreign company.

If things continue as they are, all our historic corporations, which have added to the country's past, will slowly slip away. CN has its head office in Montreal, but it is just a skeleton. Most of the decisions are made in Chicago. We have lost part of that.

These agreements are important. The government has to realize that when it makes a decision, it has to be an overall decision to protect Canadian interests. Canada's financial markets represent 1% or 2% of worldwide markets. We need to protect Canada's corporations or they will be swallowed up in this international global economy that we live in today.

In the budget just tabled one of the items concerns me when it comes to the international tax system and fairness. Canada and the U.S. apparently have agreed in principle to update the Canada-U.S. tax treaty. They want to eliminate the non-resident withholding tax on interest payments and Canada also plans to unilaterally remove the withholding tax from arm's length interest payments to other countries.

What does that mean? Does that mean we will not collect any money on interest payments that are made to foreign companies? How about having an agreement with the U.S. in this case to ensure that the money will be taxed on the other side? When companies from the U.S. pay Canadians, we can collect our taxes from those Canadians.

The government then says that we need to promote more business investment. We turn around and look at the budget. Budget 2007 proposes to eliminate the deductability of interest incurred to invest in businesses and business operations abroad.

How does that make any sense? The government wants Canadian businesses to buy foreign entities. Does it want foreign entities to buy Canadian businesses? This will eliminate the deductability of interest incurred to invest in business operations abroad.

How will that help Canadians to expand, to go abroad and increase productivity? It will not. I am not sure what the government is trying to avoid here. There is no basis for saying it is going to affect revenues in Canada. Most Canadian companies that borrow to purchase foreign affiliates borrow from Canadian financial institutions. The Canadian financial institutions from what I understand pay taxes here.

Perhaps the government should have put a disclaimer that said if a Canadian business was to purchase an operation abroad, as long as it borrowed the money from a Canadian financial institution, that interest could be deducted.

When other members spoke on the bill, they spoke about income trusts. Income trusts have a non-resident aspect to it. We see now that the rules were changed. Some REITs are still allowed, but the government has put a limit as to how much foreign ownership or foreign property they are allowed to invest in.

In the news it said that Canadian REITs were not allowed to invest in foreign entities or foreign real estate up to a certain level. How will that help Canadian companies if they cannot go abroad? As we say in French, “Les bâtons dans les roues”.

Getting back to income trusts, the government has imposed a 31.5% tax on income trusts, which is fine if it chooses to do that. Now it has totally eliminated that sector because it says it did not pay tax or claimed too much tax. The government keeps flip-flopping in terms of its position.

Now we have income trusts that are now going to have to pay 31.5%. People were interested in investing in income trusts, especially the energy sector, because these allowed corporations to go out and get capital at a cheaper price because they were selling units instead of shares. Then the government decided to implement this 31.5% tax. It said that trusts were no longer allowed to operate as of 2011. Existing corporations cannot be converted to trusts.

What has happened is there are no restrictions for foreign entities to buy these companies and turn them into private entities or private trusts to be controlled by foreign entities? There are no restrictions on the actual way in which incomes trusts can now function.

The Liberal way would have been to tax earnings only, to keep the income trusts and tax the non-residents who benefit from the tax free distribution from these income trusts.

Before I get to my next point on private members' bills, I want to go over the tax treaties. The government has also decided to unilaterally provide U.S. companies to borrow in Canada on these limited partnership payments.

What has happened again, if we look at what is in the news, is these limited partnership entities that are allowed to operate in Canada and are allowed to deduct interest payments in the United States are now going to be able to buy up Canadian companies and get a deduction in the United States as well as here in Canada. The only problem is that Canada is not getting cooperation from the U.S. They will probably be able to deduct the interest here in Canada, buy up Canadian companies and use Canadian capital. There is no consistency in how these fee agreements are treated.

There is a whole page on the interest deductibility on the foreign affiliates. There are going to be a lot of problems when we go through this in the finance committee. We are already hearing that Canadian corporations with foreign affiliates are not happy that they are not able to deduct these payments. These items will have to be dealt with when the budget implementation bill is sent to the finance committee.

There was just one more aspect that I want to talk about. If the government is serious about getting a handle on money offshore or making sure that people are not hiding income from Revenue Canada, there are certain procedures that could be used. Some of the departments here in Canada could monitor these moneys or shifts in large sums of money that seem to go offshore and are not accounted for.

FINTRAC, the Financial Transactions and Reports Analysis Centre of Canada was established a couple of years ago. We just did the five year review so it has been around for five or six years. There are financial institutions that have to report to FINTRAC whenever they receive payments of more than $10,000, so FINTRAC could easily monitor any payments that are going offshore.

The problem is that FINTRAC's basic responsibility is to look at whether sums of money are used for terrorist financing or money laundering. It is for crime proceeds. Tax avoidance does not seem to be within its mandate. This is one of the amendments that I had asked for when we were doing the five year review of its mandate, to see if FINTRAC could look at the way tax avoidance is handled in this country.

Another idea that I had was similar to an initiative which has been done in Europe and a couple of countries. It was to provide Canadians with a once in a lifetime opportunity to declare all their worldwide income, and if they repatriated back here, to charge them something like 10% or 20%, and split that amount with the provinces. It would be a good way to generate some revenue even for the provinces. If somebody had forgotten to declare some money or they happened to have some money in another country, they could bring it back. We could assess a tax of 10% or 20% tax. They would not have to pay any interest or penalties on those sums of money.

This initiative seems to have worked in a few other countries. I do not have the stats but apparently there was a good take on it and it increased government revenues by a good 10% or 15%.

There are other ways in which we can look at how tax havens and tax treaties are handled. A 500 page bill is definitely an interesting way to look at all these complex items. The bill tries to amend the Income Tax Act. The Income Tax Act is one of the more complex pieces of legislation, although apparently, the Employment Insurance Act is much more complex.

These are all issues the government should be looking at. I am looking forward to seeing Bill C-33 come to committee so we can analyze it and get a better understanding of what this 500 page document is all about.

[Premio Awards, March 29th, 2007]

Mr. Speaker, on March 17, 2007, the Montreal chapter of the Canadian Italian Business and Professional Association held its biennial Premio Awards ceremony in Montreal. I had the honour of attending as the member for Saint-Léonard—Saint-Michel.

The Premio is awarded to individuals of Italian origin who distinguish themselves in the business community, humanitarian work or creative endeavour, and have had great success in their respective fields.

I want to congratulate the recipients of the Premio: Jean G. Gattuso, president and CEO of A. Lassonde Inc., winner of the award for business; Luigi Liberatore, president of Investissement Elmag, winner of the award for humanitarian work; and Umberto Bruni, painter and sculptor, winner of the award for creativity.

These remarkable people and their accomplishments in our society, whether social, economic or political, are a testament to the exceptional contribution of the members of the Italian community here in Canada.

[The Budget, March 26th, 2007]

Mr. Speaker, it is always interesting to engage in debate with the member and his colleague sitting next to him.

It is just a difference of opinion.

If there is a proven science for cervical cancer, I am definitely for it. I think we had it included in our prebudget report.

I think additional funding for foundations was also in our report.

I have no problem with providing money for post-secondary education, but the problem is in the way it is delivered.

The past Liberal government was accused of swimming in surpluses. Now the present government has been given the same opportunity. The first thing it should be doing is reducing income tax. We heard that from every type of group imaginable during the prebudget consultations. I do not see why that cannot be done. That is the first step.

The other step is on post-secondary education. Sure, we should be breaking it down, but that still does not help students. This is going to help unload some of the obligations, but this is not going to help students. We heard from student groups that once students have graduated they have problems with debt. There needs to be direct help.

There are a lot of good things in the budget, but that does not necessarily mean that the budget overall is a positive budget, so I still cannot support it.

[The Budget, March 26th, 2007]

Mr. Speaker, I cannot speak for the finance minister. That was part of my presentation. No matter what the finance minister says, it does not necessarily mean those are the facts.

Regarding tax havens I am not sure what the member was referring to, but I understand that one of the items he was referring to was income trusts. I am not sure what the tax loophole was in income trusts. Income trusts are a vehicle. People or companies were not necessarily using them to avoid income tax.

I know that some members from the NDP chose to take income trusts as being a way to avoid income tax, but in actual fact money earned from income trusts by individuals is actually taxed at a higher rate than revenue generated directly from a corporation, which would be taxed at a lower rate. So I am not sure what the finance minister was talking about.

[The Budget, March 26th, 2007]

Mr. Speaker, I stand today to speak to the Conservatives' budget that was tabled March 19.

Traditionally, budget time is the most exciting time of the year for any government, with intense media speculation and buzz surrounding which initiatives will be included and will be left out. The anticipation around a budget is so high because it is the centrepiece of a government's forecast for the country. It is the clearest message a government can send to its citizens about the path on which it wants to lead our nation.

This is the second opportunity during this parliamentary session that my colleagues and I have had to address this House on the government's most important piece of legislation and, boy, what a disappointment.

I remember how years ago, while I was a full time practising accountant, the employees at the firm where I worked would sometimes be working on last minute tax planning for our clients until the night before the federal budget was tabled in case certain policies would be introduced on budget day that would adversely affect our clients. In those years, the speculation always surrounded what new tax policies would to be introduced that would increase income taxes and sometimes those new tax policies would come into effect the same day of the budget.

When the Liberals took power, the country's financial house began to be put back in order. The Liberals did not have to punish hard-working Canadians by announcing drastic last minute tax measures to cut into their incomes. As the former Liberal government started to reduce the deficit, the country began to see budgets that had a vision for the future of this country.

In light of the excellent financial situation it was in, the government committed an unforgiveable act when it tabled its budget, giving our leader a reason to declare, “—so little with so much”.

Last week's budget should have been about a vision for the future, a vision that would continue to lead Canada into the 21st century. All the ingredients were there. Thanks to the previous Liberal governments, the Conservatives inherited the biggest surplus and the best economic situation this country has ever seen. The Conservatives could have used this budget to make real improvements to keep Canada on the cutting edge of innovation and prosperity in the global economy. Instead, the budget tells Canadians nothing about a vision for this country.

With the overall inaction and lack of vision in last week's budget, all Canadians can now realize that the Conservative government wants to sacrifice our country's long term prosperity.

Some have called the budget a piece of electioneering. Even if that is the case, the budget fails miserably. It is an unfocused document that delivers practically no substantial help to Canadians. Some have called the budget a paint ball budget that sprays paint everywhere but never fully hits its targets. Some have called it a chocolate cake budget but without the chocolate and just the sprinkles and, therefore, no sweetness.

As I listened to the budget speech, I was astounded at how many times the finance minister took credit for positive Liberal initiatives and tried to pass them off as Conservative ones.

The finance minister is getting the label of being able to deliver a speech with so much and yet end up delivering so little for Canadians.

After last year's budget, the last fiscal update and the budget tabled this year, it is obvious that the Minister of Finance can say what he wants, but at the end of the day, the numbers do not lie.

Canadians are just now beginning to see the effects of how negligible last year's budget was in terms of tax fairness. Canadians see it as they file their 2006 income tax returns.

As vice-chair of the Standing Committee on Finance, I want to focus the remainder of my time on the ideas and items all members of the committee from all political parties heard about during the prebudget consultations. My statements today will be based on the facts that the committee heard and will not be the usual political grandstanding we hear from the other side.

Without question, the top two items the committee heard most about, whether it was from individuals, businesses, community groups or non-profit organizations, were about how Canada needs to maintain a balance between, first, a competitive tax regime and, second, the ability to guarantee Canadians the social programs they cherish.

Most groups understood the correlation between having government provide tax cuts to promote and enhance productivity while at the same time needing to collect enough revenue to provide for social programs. Canadians understand that this balance needs to be maintained. They look to the government to balance the two, but Canadians also expect the government to provide new and innovative programs to make sure that in today's Canada, as the member for LaSalle—Émard, our former prime minister, indicated on many occasions, no one is left behind.

Unfortunately, the government does not understand the balancing act. This was evident in last week's budget. It is primarily for this reason that I cannot support the budget.

At a minimum, the personal income tax at the lowest rate needs to be reduced to 15% to match the 2005 rate. The finance minister claimed that this new budget would take thousands of Canadians off the tax rolls, but what about the hundreds of thousands of Canadians put back on the tax rolls when the Conservative government increased the basic amount to 15.5% in its last budget?

Just because the finance minister says something does not necessarily make it true. At least the government had the good sense to abandon its ill-advised plan to lower the GST by another percentage. However, I suspect that it had no choice but to abandon the proposal it announced in its last budget in order to pay for the incredibly high expenditures contained in the current budget.

Last week's budget saw a year over year increase in spending of 5.6%. Economists have stated that this is way too high. Even 3% is tough to sustain. An astronomical increase in spending does not equate to a vision for the country, but in fact equates with simple vote buying and electioneering. This budget is not a plan of spending for the long term prosperity of our country.

In 2007, given the surplus this government had, we might wonder why the programs abolished in the previous budget were not reinstated in this budget. I am talking about programs such as the court challenges program, the Law Commission of Canada, the women's program at Status of Women Canada, and literacy programs, just to name a few.

New and innovative social programs start with national leadership. It is up to the federal government to undertake great new projects and to have Canadians embark on new ideas that will keep us the envy of the world, programs such as those the former Liberal government started: a national early learning and child care plan; a real and effective environmental plan to address climate change; a plan to respect our Kyoto engagement and lower our country's greenhouse gas emissions; and education strategies to ensure that all Canadians from coast to coast to coast have access to post-secondary institutions.

National leadership would also do what is right and would ratify agreements such as the Kelowna accord to make sure that first nations and Métis people have the same opportunities as all other Canadians.

The government needs to tell its citizens that our country is in a position to provide for the future of all Canadians, not just the chosen few, whether it is people entering their retirement years, young families with children or young people entering the education field or the workforce.

It is also about businesses having the knowledge and assurance that investing in Canada will provide them with a competitive advantage. How can any business, national or foreign, have confidence in this government after witnessing the surprise Halloween attack on companies structured as income trusts?

Not only did the Conservatives' decision to tax income trusts eliminate the opportunity for companies to convert themselves into trusts, but now all existing trusts will be treated as corporations. After this Halloween treat, businesses must be wondering what horror lies in store for them next.

Businesses need choice. Income trusts gave companies an additional mechanism to invest in Canada and obtain the capital needed for their businesses. It was not an ideal structure for everyone, but it was an additional option.

How can a business have the confidence to invest in Canada when it cannot have confidence in Canada's government? The insensitive and meanspirited manoeuvre to tax income trusts will harm Canada's economy for years to come, as investors must now reassess whether or not Canada is a safe place to put their money.

Moving on to another point, the finance minister made concrete claims that this budget favoured hard-working Canadian families, but just because the finance minister says something does not make it a fact.

Last week the Conservatives announced a $300 non-refundable tax credit to families for children under 18, but at the same time they are levying a $4,000 tax on the purchase of their minivans. They talk of helping families, but not one child care space has been created in the last year. How does that help hard-working families?

I will wrap up, although there are a few other issues I would like to speak on. There is one positive thing. The changes for accelerated CCA are definitely a good thing but, for the other reasons I have mentioned and many more, I am opposing the government's budget for doing so little with so much and for failing to offer a vision for a prosperous Canada. All members should oppose it as well.

[Acknowledgment, Commemoration, and Education Program, March 1st, 2007]

Mr. Speaker, in 2005, the Liberal government signed agreements in principle worth several millions of dollars with various cultural communities as part of its acknowledgment, commemoration and education program, the ACE program.

The program was designed to repair the damage caused in the past to members of communities that had experienced injustices. For example, some Italians were imprisoned and labelled enemy aliens during the second world war. Without warning, the Conservatives decided not to respect these commitments.

This agreement was signed in good faith with representatives of the Italian and Ukrainian communities. This government does not have the right to not honour it. Once again, these mean-spirited withdrawals are just one more example of this government's extreme arrogance.

I would also like to know why it thinks it can intimidate and betray these communities that have given so much to Canada, and sully the memory of victims of past injustices.

[Bank Act, February 27th, 2007]

Mr. Speaker, customers should know about any type of information banks have on them. It is a big problem. We know that sometimes financial institutions do trade information but they tell us that they do not. I would be in favour of any type of disclosure that banks could provide the consumers on what is in their file so they could at least make comments if that information is not accurate. That was not an issue in the committee but we did have issues regarding criminality and theft and identity theft, but again that did not seem to be within the scope of the bill.

I am all in favour of better protecting the privacy of Canadians.

[Bank Act, February 27th, 2007]

Mr. Speaker, the member made a lot of comments and I am not sure how many questions he asked but I will try to answer him as best I can.

If the hon. member had asked me the question about bank closures a couple of years ago I would have agreed with him. I am not about to defend banks but in the last couple of years there has actually been an increase in bank openings in my riding. They have actually increased the number of hours.

We have Caisse Populaires in Quebec. Credit unions would be the equivalent. The Caisse Populaires have put together a great network of banking systems which have enabled them to compete against banks. This has the banks worried. We are receiving a lot of services in my riding.

I have gotten to know some of the regional managers in my area and when I hear a complaint I tell them about it and tell them that I do not like what I am hearing. We have had problems with some of the banks in terms of banking with individuals and businesses and we have been able to rectify those problems. We also have a very competitive BDC bank that is doing a lot of good work in my riding. I disagree with the member in that aspect.

We do not have payday lenders in my riding but a lot of cash-chequing services are sprouting up, and that worries me a bit. We do not have pawnshops but we have something similar and I do not like what I am seeing. The problems and issues are there.

We addressed that issue in the finance committee during our deliberations on Bill C-37. I want to remind the member that we were just looking at the statutory five year review of the Bank Act so it did not really fit in. We tried to fit in certain amendments to address bank closures. We requested the banking association to provide us with an analysis of the different branches and banks that closed during the year. We asked for this by geographical location and the reasons behind the closure. We hope to get that information. If not, we can always bring bank officials back before committee. They will be appearing before committee for ATM fees and the way the whole system works for electronic payment services.

[Bank Act, February 27th, 2007]

Mr. Speaker, I am pleased to speak to Bill C-37, An Act to amend the law governing financial institutions and to provide for related and consequential matters or, in other words, the bill that represents a statutory five year review of the Bank Act.

I would like to state that during the finance committee's deliberations or hearings on Bill C-37, I had the pleasure of chairing the committee because of the problem with the chairman having to excuse himself. I would like to take two minutes to thank all the members who were quite understanding that this important piece of legislation with over 450 clauses had to be passed in a relatively short period of time.

I would like to thank the witnesses who appeared before the finance committee on short notice and gave us pretty detailed presentations. I would also like to thank those people who participated in the deliberations.

I would like to talk about the current session of Parliament where the Standing Committee on Finance, of which I am the vice-chair, has seen its share of contentious issues and serious studies.

First, committee members undertook the long, cross-country prebudget consultation with Canadians that spanned over months, eight provinces and one territory.

Thanks in part to the diligence of the Liberal members, the finance committee also reviewed the finance minister's astounding decision to tax income trusts. This unbelievable policy reversal has taken $25 billion from the pockets of hard-working Canadians and billions of dollars in income taxes that would have been collected on the capital gains to pay for some of the requirements that will be needed by the government in its next budget.

The committee has not tabled its report, just in case anybody in the House is unaware. We will table that tomorrow. This controversy is probably the most contentious piece of legislation related to tax legislation that I have seen since I have been here in the House.

The committee is also not adverse to controversy and is now studying the tax implications on the oil sands sector, an initiative that was also supported by the Liberals. The committee, with the support of the Liberals, is also once again studying how ATM fees are charged by the banks, their subsidiaries, other financial agents, and other networks that provide these financial service organizations, and any other things related to these communications services outlets.

To this I am hoping to add as well that the whole issue of the timeliness and charges that relate to electronic payments also get addressed during the study in finance committee.

With all these issues before us during the last few months, it is understandable that the finance committee members breathe a small sigh of relief when a straightforward bill like Bill C-37 comes before us.

Bill C-37 represents legislation that is likely to receive support from all parties. Recently, I heard the Prime Minister complain about the difficulties of receiving the will of Parliament to pass legislation, but with Bill C-37, it seems that the Conservative Party has finally discovered the secret to obtaining unanimous support for one of its bills, and that secret is easy. All the Conservatives have to do is introduce Liberal bills.

The Conservative government has presented a bill that mostly follows Liberal policy. Just to give a little bit of history, in 2005 the Liberal government commissioned a white paper to make recommendations for the review of the Bank Act, which is what we are discussing today. I am pleased that the Conservatives have seen the wisdom in these recommendations and have adopted most of them. They have ended up in what we are seeing today, Bill C-37.

The purpose of the bill is to ensure that Canada continues to be a world leader in financial services and I believe that the current bill takes important steps toward that end. As technologies related to financial institutions evolve, it is important that Parliament keeps our country's laws in step. We, as parliamentarians or legislators, must continue to keep our laws up to date as we did during the past 13 years of Liberal government in an ever changing global economy where Canada will quickly fall behind other more proactive nations if the Conservative government does not follow Liberal policy.

Bill C-37 amends a number of acts governing financial institutions as well as legislation related to the regulation of financial institutions. These amendments are essentially designed with three objectives in mind.

The first one is to improve service to consumers. For example, and I will speak a little bit more on it later, it is to harmonize online and in-branch disclosure requirements. We are looking at decreasing the hold periods for cheques from ten days to seven days and we hope it will get down to four days.

The second objective is to increase legislative and regulatory efficiency in the Canadian banking system. This basically means to allow foreign entities and allow more competition to come into the markets, and have what we call these near banks or entities that provide banking type services to be regulated on a national level as well.

The third objective of this bill is to give our financial institutions the ability and flexibility to adapt to changing trends and technologies in the industry, which also means allowing for cheque imaging and providing the financial institutions with the ability to process cheques at a quicker pace so that there is less of a hold period on these cheques.

One of the innovative items in this bill is the writing of electronic cheque imaging into law. We finally got it in this bill. It will require the banks to use new technologies to better serve the needs of Canadians. As it stands right now, the maximum hold period on a deposit cheque is 10 business days.

That can be an excessively long time for some Canadians, especially as we have heard from low income Canadians who need access to these funds much quicker in order to pay their bills, buy food, and whatever else they deem a necessity. Bill C-37 will immediately lower this hold period to seven days, allowing Canadians faster access to their own money.

This can be done even faster. I am speaking specifically to electronic cheque imaging which Canada's banks have already begun to implement. By adopting electronic cheque imaging, banks will no longer need to physically exchange copies of cashed cheques with other institutions. Instead, a captured electronic image of the cheque can be sent instantaneously to other financial institutions.

While we were discussing imaging we heard that banks easily clear about 20 million to 30 million transactions a day. We heard of the logistics involved of having to transport a cheque from one part of the country to another part of the country and having to criss-cross and decide which cheques go to which institution. Now with this ability to electronically image a copy of the cheque, we should be able to speed up the process. Hopefully, we will cut down the holding period to a matter of one or two days, instead of the seven days that is in the legislation, and the four days which the finance minister has promised us will be the norm of financial institutions.

A second aspect of Bill C-37 that I approve of is the provision for an increased disclosure regime which will provide Canadian consumers and businesses alike with the information that they need in order to make the most informed investment decision possible.

Bill C-37 will ensure that the savings product disclosure regime is just as effective for the millions of online bankers as it is for in-branch customers. We have spoken about this before. I think it makes sense to have that in the bill.

Strong competition and information disclosure are two of the best tools available to ensure that the needs of Canadian customers are being served well by our financial institutions.

On the disclosure front, however, I am disappointed that the Conservatives have ignored one strong suggestion from the white paper regarding the complaints process that financial institutions use.

I imagine that many Canadians are not very familiar with the complaints process that they have at their local bank or anywhere actually. It should be legislated. By legislating the complaints process, it would have been readily available and a good idea. I can guarantee that there are not too many Canadians who even know that there is an ombudsman for banking services and that they can use those avenues when the opportunity arises.

The Canadian banking ombudsman and his office do fine work from what I understand. It is a question of knowing that it actually exists. I would have liked to have seen a requirement for information about its services being made readily available and more money being spent so that its services are actually put on websites so that people know about its services.

Canada's mortgage loan insurance threshold will also be changed by this bill. Currently, any homebuyer who provides less than a 25% deposit is required by law to ensure a mortgage through the Canada Mortgage and Housing Corporation or similar private sector providers.

Bill C-37 will reduce this minimum required from 25% to 20%, allowing more Canadians to secure a home mortgage without having to pay for the additional cost of mortgage insurance. Obviously, it is sensible to have some sort of legal threshold under which Canadians must purchase their mortgage insurance.

During the Mulroney years of uncontrolled inflation, it was far more than sensible. It was both prudent and necessary. After a decade of strong Liberal leadership, however, this country is enjoying both low inflation and record low unemployment. As a result, I think it is more than reasonable to reduce the minimum deposit that Canadians must have in order to secure a mortgage without insurance.

In conclusion, I am pleased to support Bill C-37 at this stage. I am glad to see that the Conservatives are continuing to implement the Liberal agenda on so many fronts. It is, after all, the same Liberal agenda that saw Canada make a complete economic U-turn after years of Conservative fiscal mismanagement. It was not that long ago when The Wall Street Journal referred to Canada as a third world economic basket case because of the damage done by the previous Conservative government.