Thierry St-Cyr

[Bank Act, December 7th, 2006]

Not all my colleagues agree, but that is a matter for discussion.

This experience allowed me to learn a little about the mortgage market. People are being given mortgages at increasingly lower rates—with a 5% or 10% down payment, and less in some cases. It is easy to get a mortgage. One might wonder why insurance would be mandatory with a down payment of up to 25% when the minimum down payment might now be decreased to 20%. This is only normal evolution.

The purpose of the second measure is to readjust the levels of equity capital to allow sole ownership or to force wide ownership. In 2001, a new size-based ownership regime was implemented. Under the new regime, the equity threshold above which a bank is required to be widely held was set at $5 billion to capture the largest banks whose potential failure would have the greatest impact on the Canadian financial system and the economy.

Medium-sized banks with equity between $1 billion and $5 billion can be closely held, but are subject to a 35% public float requirement, unless a ministerial exemption is obtained. The threshold for small banks, which can be wholly owned by a single shareholder, was set at $1 billion to encourage new entrants.

Bill C-37 would therefore change the equity thresholds in order to account for the new reality of the considerable growth in the banking industry since 2001. The equity threshold allowing sole ownership would be raised to $2 billion, or doubled.

Banks whose equity varies between $2 billion and $8 billion must henceforth have a minimum of 35% of their voting shares listed on the stock market. Banks whose equity is greater than $8 billion must be widely held, which means that no single shareholder can hold more than 50% of the voting shares.

The last measure in this section involves increasing the limit, which is currently one third, on the number of foreign members permitted on the board of directors of Canadian banks. As announced in the Advantage Canada plan—which, I would remind the House, says almost nothing about the fiscal imbalance, but that is not the topic of my speech here today—Bill C-37 amends the Bank Act by proposing a new measure that would make the boards of directors of Canadian banks subject to a new Canadian quota.

At present, a minimum of two thirds of board members of Canadian banks must be Canadian residents. However, Bill C-37 would lower that threshold to a simple majority.

To justify this measure, the Conservatives argue that this new standard will foster the creation of international ties and open the Canadian banking sector to the rest of the world. Following the moratorium on all bank mergers in Canada, Canadian banks soon began acquiring foreign banks in order to increase their growth. Thus, a greater foreign presence on their boards of directors would allow Canadian banks to continue in that direction.

In closing, the Standing Committee on Finance still has a great deal of work to do on this. The Bloc Québécois will help with this work. For now, we support this bill in principle.

[Bank Act, December 7th, 2006]

Mr. Speaker, I am pleased to address the House on the subject of Bill C-37, which we are debating today.

Every time it has to decide whether to support a bill or not, the Bloc Québécois considers its value for Quebeckers. If the bill offers real benefits for them, the Bloc Québécois supports it; if not, it does not.

We have examined Bill C-37 closely and, after weighing the pros and the cons, we have concluded that we support the principle underlying the bill.

What factors did we take into consideration in our analysis? There are several. First, the bill would implement mechanisms to transmit information to consumers, which would enable them to make more informed choices about banking services. Second, the bill would implement a regulatory framework to permit electronic cheque processing, which would reduce the time during which institutions hold cheques, thereby addressing an issue our citizens have often raised. I will come back to this later on.

Third, this bill would reduce the regulatory burden on foreign banks, credit unions and insurance companies, thereby making the regulatory approval régime more efficient.

We have also found a fourth advantage: Bill C-37 would change regulations governing mortgage loans, thereby enabling more people to take advantage of that financial tool. That is very good.

Last, the government would increase the equity threshold from $1 billion to $2 billion, thereby making it possible for a single shareholder to wholly own a bank, thus encouraging new entrants and promoting competition.

The Bloc Québécois supports the bill in principle, but we have some reservations. As members of the Standing Committee on Finance, my colleague from Joliette and I will work to ensure a number of things.

We will begin by ensuring that the regulations are changed, and we will make certain that those changes do not allow the kind of uncontrolled mergers and acquisitions we have seen before in the banking sector.

We will continue to insist that any change to the moratorium on bank mergers be in the best interests of the public, and not made just to satisfy the financial market. To that end, the Bloc Québécois will be ensuring that the Standing Committee on Finance will hear the appropriate witnesses. We will also be proposing the amendments that are needed for this bill to pass.

The Bloc Québécois will also be stepping up the pressure on the federal government to adopt the necessary measures to protect people’s savings, in particular by appointing a federal ombudsman for the financial sector. The ombudsman will have the powers needed to defend the public based on Canadian banking law and thus enable members of the Canadian public to exercise their rights without having to go through the endless and tedious legal battles that the banking institutions wage. We therefore believe that this is a flaw that must be remedied, and we will be working to persuade the federal government to create such an ombudsman position.

That is our stand on the bill that is before us. Nonetheless, it might be worthwhile to consider the context here and recall why we are dealing with this bill today.

Every five years, to ensure that the banking system has a degree of flexibility while remaining stable, the government must hold consultations leading to the review of the financial institutions statutes.

October 24 was the date on which the financial institutions legislation expired. The government extended the sunset date for the legislation to April 24, 2007, so that Parliament could examine the matter.

Bill C-37 follows on the document entitled “Proposals for an Effective and Efficient Financial Services Framework”, released in June 2006, and the document entitled “Advantage Canada” published by the government at the time of the latest economic and fiscal update. Unfortunately, that document says nothing about the fiscal imbalance. We understand, of course, that this is not the topic of debate today, but I find it hard not to mention this serious omission in the economic update.

The object of Bill C-37 is to put in place new mechanisms to improve the efficiency of the Canadian financial system. There are three main components to this bill. The objectives of those components are, first, enhancing the interests of consumers; second, increasing legislative and regulatory efficiency; and third, adapting this regulatory framework to new developments.

I would now like to analyze the bill in more detail. Of course, I will come back to the three components I have listed.

The first component is enhancing the interests of consumers. This bill provides for a set of measures, the first of which is to improve the rules for disclosing information to consumers.

In order to allow consumers to make informed choices among their investment vehicles, the government will raise the standards concerning disclosure of charges, obligations and penalties relating to different accounts and investment vehicles. That is important because people often make that comment to us, as well as people with savings who are making choices. Later, when they realize the consequences, the charges and the penalties associated with their choice, they are often angry and feel that they have been betrayed by their financial institution. In fact, they were not in a position to have the full details of the information that would have allowed them to make proper choices.

The government will require those institutions to clearly disclose that information by means of the Internet, in all their branches, and in writing for any person who makes that request.

In the same vein, there is a second measure. This one will change the regulatory framework to enable the introduction of electronic imaging in the processing of cheques.

This bill will establish a regulatory framework to enable the introduction of electronic cheque imaging to facilitate processing and reduce the hold time in banking institutions.

That is a good example—I mentioned it previously—of the necessary evolution of the Banking Act. It is understandable that with the development of new technologies, the regulatory framework must also evolve to enable the use of digital imaging in processing cheques. We will have a legal financial framework for that, thanks to this bill.

Another measure involves the reduction of the time that banking institutions can hold a cheque. Following publication of the 2006 financial institutions legislative review, the government made a commitment to reduce cheque hold times to make life easier for small businesses and other Canadians.

Bill C-37 gives the superintendent the power to set cheque hold times. The white paper proposed an immediate reduction of the maximum hold time to seven days, and to five days once the digital cheque imaging system is in place.

Cheque holds affect not only consumers who need to have access to those funds to pay their bills, but also small and medium businesses that must pay their employees and keep the business operating out of the funds they deposit.

In addition, the government wants all users of the payments system—including, obviously, consumers—to benefit from the increased efficiency resulting from the Canadian Payments Association initiative that involved changing the payments system to facilitate electronic imaging of cheques.

In my opinion, this need for faster processing of cheques may be seen quite concretely in the explosion of small businesses that cash cheques quickly and that are proliferating throughout our towns and villages. This clearly shows that there is a need and that people want to use the money available to them quickly, but that they cannot do so in the standard banking institutions, because their money is held for several days.

Probably everyone has already experienced something like this. It has happened to me personally to make a withdrawal and for it to be drawn on my line of credit instead of on my regular account, even though the money was in my account. The money was simply being held while waiting for the necessary checks to be made. It is a bit frustrating when we pay interest on funds that are already in our bank account. This is a real problem and if these delays can be reduced, it will be to the great advantage of consumers. So I was talking about the first objective, pertaining to consumers.

The second objective is to increase legislative efficiency. In this section, a first measure consists of lightening the regulatory burden on foreign banks so as to facilitate their access to the Canadian market and stimulate competition. This measure arises from the concerns expressed during the consultations pertaining to the review of the Financial Institutions Act. The Canadian market is already fairly open to foreign competition in the banking field. But certain problems were raised concerning the regulations governing foreign banks doing business in the Canadian market.

Bill C-37 aims to clarify the measures applying to foreign banks operating in Canadian territory by refocusing the regulatory framework on the chartered banks and simultaneously excluding the near banks. The near banks are companies that offer banking-type financial services. Unlike chartered banks, near banks cannot change their basic money supply, that is, they cannot borrow money from or lend money to the Bank of Canada to make new deposits or new loans.

Still in the same section, a second measure aims to streamline the regulatory approval regime. This measure is designed to simplify the process pertaining to routine transactions not having any implication for public policies. Thus the power to approve or refuse certain operations or transactions will be transferred from the minister to the Superintendent of Financial Institutions.

The Bloc Québécois is really concerned about this and it is a part of the bill that will need further study in committee to ensure that only decisions that have no public policy implications are put in the hands of the superintendent. In other words, we will not agree to any hint that the minister is allowing operations with public policy implications to be de-politicized.

The purpose of the third measure is to loosen the federal framework governing cooperative credit associations. In order to make it easier for new associations to emerge, the government will reduce the number of establishments needed to constitute a cooperative credit association to two.

At the present time, 10 cooperative credit associations are needed to form an association under the terms of the Cooperative Credit Associations Act. However, in light of the new commercial possibilities offered by retail associations and the continued consolidation in the credit union system, the current requirement places too high a threshold for new entry. A lower requirement would add flexibility to the federal framework for the credit union system, improve the system’s capacity to adapt to new developments and enable it to better serve consumers and mall businesses.

That was in regard to the second aspect.

There are a number of measures as well in the third aspect. The first consists of increasing from 75% to 80% the loan-to-value ratio for which insurance is mandatory on residential mortgages.

Mandatory insurance on mortgages with high loan-to-value ratios was instituted more than 30 years ago—quite a while ago—as a precautionary measure to ensure that lenders were protected against fluctuations in property values and possible defaults by borrowers.

The threshold was originally set at 66.7% or a two-thirds ratio. It was then increased to three-quarters or 75% following the Porter Commission in 1966. Markets have obviously continued to evolve ever since and we know, first, that lenders’ risk-management practices have improved considerably and second, regulatory risk-based capital requirements have been implemented. Financial markets have evolved and stabilized, and the supervisory framework for financial institutions under federal government regulation has been strengthened considerably.

It seems that restriction no longer plays the same prudential role it once did and, accordingly, a legal requirement by which borrowers must contract mortgage insurance at a fixed loan-to-value ratio of 75% could mean that some consumers are paying more for their mortgage than is justifiable on a prudential basis.

I know that because this summer I bought a house in Verdun—which is one of the most beautiful places in Quebec, and even Canada, as everyone knows.

[Petitions, December 6th, 2006]

Mr. Speaker, I am honoured to present a petition containing some 4,000 names. The petitioners are calling on Parliament to take measures to ensure that every young Canadian who wishes to do so may volunteer their services either nationally or internationally.

[Canada Post, November 24th, 2006]

Mr. Speaker, today, November 24, at 5 p.m., Canada Post will close the Verdun post office despite opposition from nearly 1,000 people who signed petitions—petitions I tabled in this House—and despite a number of initiatives that I took with Canada Post.

I would like to pay tribute to the dedicated people who gave part of their lives to serving the people of Verdun.

I want to acknowledge the contribution of Claude Rochon in particular. He spent nearly 33 years working for Canada Post in Verdun. It was his welcoming smile behind the desk at the post office on Église street. I know, through the many testimonials I have received, that his work was greatly appreciated. I want to pay tribute to him for his dedicated work. I want to thank him on behalf of the people of Verdun.

I would be remiss if I did not mention the contribution of his colleague, Diane Ross, a woman who also gave 17 years of service to Canada Post. I want to pay tribute to her and thank her as well.

[Proceeds of Crime (Money Laundering) and Terrorist Financing Act, November 10th, 2006]

Any time the government loses revenue to big businesses and large corporations around the world, this has an effect on the daily lives of Canadians.

For example, this means less money for the Quebec government and other provincial governments. This is really a matter of fiscal imbalance, but the fiscal imbalance is not just an abstract notion. It means less money invested in hospitals and schools.

Our entire society is robbed of revenue when the government does not receive this money. In order to provide good service to our citizens, it is important to cover the entire tax base. Every individual, every corporation and every company must contribute their fair share.

Tax havens trigger some degree of cynicism in Canadians and undermine our tax system. People are honest, pay their taxes, work hard and hand over a large portion of their wages in taxes, and then they see businesses, companies and corporations going to Barbados to avoid paying taxes.

This triggers a great deal of cynicism and must be shut down altogether by immediate action.

[Proceeds of Crime (Money Laundering) and Terrorist Financing Act, November 10th, 2006]

Mr. Speaker, before handing over to other speakers for members' statements and oral question period, I was in the process of explaining the voluntary disclosure mechanism provided for in the legislation.

All things considered, the timing of that interruption turned out not to be too bad, because this mechanism is in fact at the heart of the privacy protection regime, while at the same time promoting efficiency in the work and fight against money laundering.

Let me explain how it works. The reality is that none of the data collected by FINTRAC can be accessed directly by police, the intelligence service, the secret service or other agencies.

These agencies may, however, voluntarily disclose information. For example, someone might say they are with the RCMP and that they are investigating so and so, who is suspected of laundering money in one financial institution or another, and so on, and submit this information to FINTRAC. This centre then checks the information received against its own to determine if it has any additional information worth disclosing to the agency that made the voluntary disclosure. The procedure is pretty tight, with committees ensuring that this additional information is disclosed only if it is deemed necessary for the purposes of the investigation in question.

It is somewhat like a black box mechanism—really quite ingenious—that prevents the organizations from directly consulting the vast data base and the incredible amount of information it contains but that, at the same time, enables this information to be useful to an investigation.

Once FINTRAC has established that the information is pertinent, it is disclosed to the organization in question. However, FINTRAC will not undertake the investigation or legal proceedings. That is not its role.

Earlier this morning, we spoke of the committee's work. I was somewhat surprised and rather amused to see Liberals and Conservatives trying to capitalize on or score political points with the work of our committee.

I believe that the committee's work was useful. An amendment proposed by the Liberals was that an organization report to the committee annually. This organization did not seem to be the most appropriate one because it was under the authority of the intelligence service, with which FINTRAC is not really aligned. We supported the amendment in order to continue debate on this matter. It proved to be a good approach because the Conservatives put forward a proposal which, in my opinion, is much more interesting than the original one. It has two components. Initially, the Privacy Commissioner of Canada will be asked to report every two years on the privacy aspect of the bill. I was very pleased with this because I had placed a great deal of emphasis on this issue. We must carefully examine the privacy aspect.

Under the law, the Privacy Commissioner already has the authority to investigate if she receives a complaint. I did not believe that was sufficient because having the right to conduct a systematic investigation every two years and having the duty to do so are not the same thing.

Indeed, in order to receive a privacy-related complaint, the individual whose rights were violated must be aware of it. Of course, if someone had illegal access to your private files, chances are you will not know about it. Thus, it becomes difficult to file a complaint.

I believe that some work was accomplished by everyone, and the committee was able to achieve a significant result.

The committee also discussed a Liberal amendment to allow the Canada revenue agency to directly consult FINTRAC's files, in order to be more effective. I strongly opposed that amendment, because I felt it would create a major breach in privacy protection, as I explained earlier.

Why, for efficiency's sake, would we allow an organization to directly consult these files, considering that the Canada revenue agency can, like any other government agency, submit a voluntary disclosure to FINTRAC and eventually receive relevant information, if any, from FINTRAC's database? The committee agreed with me that we should not open that breach, and I was very pleased about that.

I think this is a good bill. It has been improved by the committee, and it definitely deserves to be supported by the House. The next logical step for the government would be to work on the issue of tax havens. Tax havens are places where a lot of money laundering is going on. These countries have tax and financial rules that are much more lax than ours. This is why terrorists use them to fund their activities, or simply for money laundering purposes.

By signing agreements with tax havens, we are opening a door and making the work of those people easier. The second reason to work on the tax havens issue is obviously the fiscal inequity. Major companies invest in Barbados, Bermuda or other tax havens of this kind and do not pay taxes in Canada thanks to these little manoeuvres. This makes for a lot of lost revenue for Canada.

By addressing tax havens, we would be killing two birds with one stone: we would be fighting money laundering and terrorist activity financing, and we would be broadening the tax base, and that would create greater fiscal equity among corporations. I believe that the Minister of Finance has opened the door on this matter a few times. He has done so in this House. When I spoke to him about it, he said he would review the issue. Yesterday, in committee, following a question from my Bloc Québécois colleague, the hon. member for Joliette, he also showed interest in this issue.

I am very pleased to see this openness. All that I hope for is that this openness will translate into concrete action in the short term. We have to take action in this matter. In my opinion it would be a natural extension of the bill before us today.

In closing, my colleagues from the Bloc Québécois and I would be pleased to support this bill. In my opinion it demonstrates interesting progress.

[Judicial Appointment, November 10th, 2006]

Mr. Speaker, in June 2005, the Bloc Québécois achieved the creation of a special committee whose mandate was to improve transparency in the judicial appointment process. The committee did not have the time, however, to complete its work.

Instead of going ahead with these reforms surreptitiously, why does the Minister of Justice not bring back this committee, which could make impartial recommendations after consultation?

[Judicial Appointment, November 10th, 2006]

Mr. Speaker, the Chief Justice of the Supreme Court of Canada opposes the Minister of Justice's plans to change, without consultation, the current judicial appointment process and the membership of the selection committee.

Are the minister's true intentions not simply to give himself full discretion to appoint whomever he chooses, thus politicizing the judicial appointment process even further?

[Proceeds of Crime (Money Laundering) and Terrorist Financing Act, November 10th, 2006]

Mr. Speaker, I am pleased to speak a second time about the bill that is before us today, which deals with money laundering and financing terrorist activities. The Bloc Québécois will support this bill, as it has indicated and as it has always supported sound bills.

The Bloc Québécois has a history of fighting against crime. Hon. members will recall the work done in 1993 by the member for Saint-Hyacinthe—Bagot with regard to people who were growing marijuana in fields in Saint-Hyacinthe and farmers throughout Quebec. It was a tough battle, which the member for Saint-Hyacinthe—Bagot led very energetically.

We have also talked about the reversal of the burden of proof with respect to proceeds of crime. This is a great victory by the Bloc Québécois. The Bloc Québécois has also helped toughen anti-gang legislation, making it easier for police to fight organized crime gangs. Our commitment to fighting crime extends to money laundering and international terrorism. That is why the Bloc will support this bill.

When I spoke for the first time about this bill in this House, I said that I would be taking a close look at privacy issues. I am fairly happy with what this bill does. We had discussions earlier in this House, and we also had discussions in committee about how we can fight effectively against crime and terrorist financing and yet protect people's privacy. I want to personally make sure that the bill does not have any loopholes. I am very happy that all the parties have reached agreement on this.

I would like to explain how FINTRAC works. This agency collects financial data on transactions in Canada and abroad and will continue to do so. Under this bill, more data will be collected and more companies will be required to disclose information to FINTRAC so that it can do its job properly.

To understand how this works, hon. members need to know that FINTRAC does not conduct investigations. It is not an investigating body, but an agency that gathers and analyzes information and passes it on to the proper authorities.

With respect to collecting information, the legislation provides that banks and insurance companies, as well as other financial institutions and organizations, must report a certain number of transactions to FINTRAC. Obviously, we are talking about large transactions that involve a lot of money. Any transaction that appears odd or suspicious must be reported and added to the FINTRAC database.

Then the information is analyzed. Analysts look for connections that suggest some kind of fraud has been committed. They use two techniques to do this. The first is searching the data for patterns in the volume of financial transactions, which makes it possible to spot activities typical of people attempting to launder money or finance terrorist activities. Clearly, it makes sense to centralize this information.

It makes sense because a single transaction might appear quite ordinary, but finding connections among series of transactions can alert analysts to suspect illegal activity.

The first way to detect illegal activity is to analyze the data collected in order to identify typical patterns.

The second is voluntary disclosure by entities, police forces or security forces that suspect illegal activity. Voluntary disclosure can happen anytime.

I will conclude my remarks after question period.

[Criminal Code, November 9th, 2006]

Mr. Speaker, I would like to thank my Bloc Québécois colleague for his speech, which I found extremely interesting.

I, too, was quite surprised to hear our Conservative colleague's statements. He claimed it is dangerous to live in Quebec and walk around there. I am from a riding in southwestern Montreal. The Saint-Henri neighbourhood used to have a terrible reputation. Now, people from all over Quebec are coming to live there because it is a peaceful haven where people feel safe. I think there is a disconnect between reality and what some people say to scare others.

I find that in Canada, there are two very different ways of viewing the fight against crime. For years, Quebec has been working to prevent crime, while the rest of Canada has focused on suppressing it. This has happened a lot, and we have seen it with young offenders. The work Quebec is trying to do is always hampered by the federal government.

I would like my Bloc Québécois colleague to tell me if there is some other way Quebec could go about making its own laws the way it wants to and its own choices about how to handle crime, instead of having the federal government impose its way of doing things.