Mr. Speaker, I appreciate the opportunity to speak to Bill C-8 which would implement the new policy framework for Canada's financial services sector.
At the outset I wish to reaffirm the government's commitment to provide a fair and balanced framework that preserves the health and strength of the sector, while at the same time allowing its evolution to proceed to the benefit of all Canadians.
The new policy framework is guided by four overriding principles. The principles are: First, the financial institutions must have the flexibility to adopt to the changing marketplace to compete here and abroad.
Second, there must be vibrant competition. This is necessary to ensure a dynamic and innovative sector.
Third, consumers, and I am talking about personal consumers and small businesses, regardless of income, regardless of whether the consumers be big or small or whether they reside in rural or urban areas, must receive the highest possible standard of quality and service.
Last, the regulatory burden should be lightened wherever possible, consistent with sound, prudential and public interest objectives.
Although each of these fundamental principles that guide the new framework is equally important, I have chosen to focus my remarks here today on the issue of consumer protection.
As we all know, the financial services sector plays a very important and vital role in the everyday lives of Canadian consumers. Financial institutions take consumers' deposits, supply access to payment services, such as cheques and point of sale debits, and provide mortgages and car loans. In short, financial institutions permeate every aspect of our financial lives.
While having regard to everyone, I am talking today about consumers and businesses who are all dependent on financial institutions. It is vital in Canadian society that consumers have protection when dealing with financial institutions.
The dramatic changes brought about by globalization and technological innovation, which other speakers have indicated here today, have contributed to a much more complex business environment. While consumers benefit from a far greater choice of products and services, these choices at the same time are being made more difficult by the greater complexity of products offered by financial institutions. Consumers often lack information to enable them to make the wisest choice. This lack of information may leave them exposed to unfair or abusive commercial practices.
To promote a better balance in the delicate relationship between consumers and financial institutions, it is important that the legislation, Bill C-8, ensure that consumer rights are protected adequately. The legislation, which was introduced here last week, would address the situation and better protect and empower all consumers of financial services.
Bill C-8 would implement a number of measures that go further to protect consumers than any previous legislation and, at the same time, and this is important, would address the need to provide financial institutions with an environment that is conducive to their continued growth and success.
We believe that in order to be effective any consumer protection legislation must include the following criteria: an assurance that all Canadians have fair access to Canadian banking services; accessible oversight and redress mechanisms; and strong consumer safeguards including an accountability framework.
With respect to access, I would note that many Canadians, for a variety of reasons, do not have access to basic financial services or are unable to access services in a way that fully meets their needs.
As members may recall, an agreement on access was reached in February 1997 between the major banks and the federal government. In that agreement the major banks committed to improving access to basic services for low income individuals by establishing minimum identification requirements for opening accounts and for cashing government cheques.
Bill C-8 would legislate key elements of that agreement. Banks would be required to open an account for anyone who has basic identification, and neither employment nor a minimum deposit will be a condition of opening such an account.
The legislation includes regulation making authority regarding the provision of such a low cost account. The government has agreed however to hold off introducing regulations for the time being. Instead, it has recently concluded a memorandum of understanding with individual banks regarding the provision of the low cost account.
While the low cost account offers a range of choices to consumers, it adheres to certain standards that will ensure that all Canadians have access to a bank account at an affordable price. This will help ensure that all Canadians have access to basic banking services and will address the concerns of consumers who do not feel comfortable with the new technology of automated banking services.
The financial consumer agency of Canada would monitor the banks' compliance with these undertakings and would consult with consumer groups representing low income Canadians as to how the self-regulatory approach is working.
Should the FCAC find at any point in time that the banks are not respecting the terms of the agreements, the government at that time will not hesitate to exercise its regulation making authority to require banks to offer a standard, low cost account with specified features.
Another area that merits government attention is branch closures. The legislation calls for a four month notice period to provide consumers, especially low income and disabled consumers, with the ability to make alternate arrangements. It also consults with community leaders, to bring everyone into the picture for a proper consultation. This issue was recognized in the MacKay task force and it is being legislated.
The financial consumer agency of Canada would be a regulatory agency, an information gathering and public advocacy agency, with the ability to regulate a whole milieu of consumer interests that are now dispersed throughout other government departments.
In summary, I state that the framework of Bill C-8 ensures that consumer protection will be at the forefront of Canada's financial services sector for the 21st century.
